Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1 Filing Table of Contents
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1: S-1/A Amendment 1 to Form S-1 HTML 3.29M
2: EX-1.1 Form of HTML 194K
11: EX-10.1.10 Amendment # 1 to Loan Agreement HTML 27K
12: EX-10.1.11 Capital Note HTML 22K
13: EX-10.1.12 Amendment No. 1 to Capital Note HTML 22K
14: EX-10.1.13 Guarantee Fee Agreement HTML 22K
15: EX-10.1.14 Reimbursement Agreement HTML 25K
16: EX-10.1.15 Services Agreement HTML 40K
3: EX-10.1.2 Amended and Restated Bridge Loan Agreement HTML 100K
4: EX-10.1.3 Bank Hapoalim Credit Facility Agreement HTML 386K
5: EX-10.1.4 Credit Agreement Dtd 12/31/02 HTML 730K
6: EX-10.1.5 Credit Agreement Dtd 12/18/03 HTML 1.09M
7: EX-10.1.6 Eximbank Credit Agreement HTML 557K
8: EX-10.1.7 Indenture HTML 703K
9: EX-10.1.8 First Supplemental Indenture HTML 39K
10: EX-10.1.9 Loan Agreement HTML 38K
84: EX-10.10 Indemnification Agreement HTML 46K
17: EX-10.2.1 Purchase and Sale Agreement HTML 360K
18: EX-10.3.1 Power Purchase Contract HTML 121K
23: EX-10.3.11 Amended and Restated Power Purchase and Sale Agmt HTML 237K
24: EX-10.3.13 Power Purchase Contract HTML 197K
25: EX-10.3.14 Amendment No. 1 Power Purchase Contract HTML 64K
26: EX-10.3.16 Power Purchase Contract Dtd 4/16/85 HTML 206K
27: EX-10.3.17 Amend 1 to Power Purchase Contract Dtd 10/25/85 HTML 46K
28: EX-10.3.18 Amend 2 to Power Purchase Contract Dtd 12/20/89 HTML 25K
29: EX-10.3.19 Interconnections Facilities Agreement HTML 77K
30: EX-10.3.20 Interconnection Facilities Agreement HTML 35K
31: EX-10.3.21 Interconnection Facilities Agreement HTML 58K
32: EX-10.3.22 Interconnection Agreement HTML 31K
33: EX-10.3.23 Plant Connection Agreement HTML 58K
34: EX-10.3.24 Plant Connection Agreement HTML 96K
35: EX-10.3.25 Transmission Service Agreement HTML 87K
36: EX-10.3.26 Plant Connection Agreement HTML 53K
37: EX-10.3.27 Plant Connection Agreement HTML 61K
38: EX-10.3.28 Plant Connection Agreement HTML 64K
39: EX-10.3.29 Plant Connection Agreement HTML 186K
19: EX-10.3.3 Power Purchase Contract HTML 111K
40: EX-10.3.30 Plant Connection Agreement HTML 187K
41: EX-10.3.31 Transmission Service Agreement HTML 81K
42: EX-10.3.32 Transmission Service Agreement HTML 83K
43: EX-10.3.33 Transmission Service Agreement HTML 85K
44: EX-10.3.34 Transmission Service Agreement HTML 100K
45: EX-10.3.35 Plant Amendment No. 1 HTML 28K
46: EX-10.3.39 Agreement Addressing Renewable Energy Pricing HTML 74K
47: EX-10.3.40 Amnd No.1 to Agrt Address Renewable Energy Pricing HTML 58K
48: EX-10.3.41 Agreement Addressing Renewable Energy Pricing HTML 72K
49: EX-10.3.42 Amend No. 1 to Agrnt Addr Renewable Energy Pricing HTML 64K
50: EX-10.3.43 Energy Services Agreement HTML 79K
51: EX-10.3.44 Purchase Power Contract, Dated March 24, 1986 HTML 92K
52: EX-10.3.45 Firm Capacity Amendment HTML 78K
53: EX-10.3.46 Amendment to Purchase Power Contract HTML 32K
54: EX-10.3.47 Third Amendment to Purchase Power Contract HTML 76K
55: EX-10.3.48 Performance Agreement HTML 167K
56: EX-10.3.49 Agreement to Design 69 Kv Transmission Lines HTML 79K
20: EX-10.3.5 Amendment #1 to Power Purchase and Sales Agreement HTML 49K
21: EX-10.3.6 Settlement Agreement HTML 37K
22: EX-10.3.7 Power Purchase Contract Dtd 4/16/85 HTML 155K
57: EX-10.4.1 Ormesa Blm Geothermal Resources Lease HTML 160K
63: EX-10.4.12 Lease Agreement, Dated 3/17/64 HTML 89K
64: EX-10.4.13 Lease Agreement, Dated 2/16/64 HTML 72K
65: EX-10.4.18 Geothermal Lease Agreement, Dated 7/18/79 HTML 79K
66: EX-10.4.19 Lease Agreement HTML 82K
58: EX-10.4.2 Ormesa Blm License for Electric Power Plant HTML 42K
67: EX-10.4.20 Lease Agreement, Dated 6/14/71 HTML 56K
68: EX-10.4.21 Lease Agreement HTML 63K
69: EX-10.4.23 Geothermal Lease Agreement HTML 55K
70: EX-10.4.24 Geothermal Lease Agreement, Dated 8/31/83 HTML 128K
71: EX-10.4.26 Geothermal Resources Lease - Guisti HTML 55K
72: EX-10.4.27 Amendment to Geothermal Lease HTML 27K
73: EX-10.4.28 Second Amendment to Geothermal Lease HTML 39K
74: EX-10.4.29 Geothermal Resources Sublease HTML 144K
59: EX-10.4.3 Geothermal Resources Mining Lease, Dated 2/20/81 HTML 126K
75: EX-10.4.30 Klp Lease HTML 265K
76: EX-10.4.31 Klp Lease Amendment No. 1 HTML 341K
77: EX-10.4.32 Second Amendment to Klplease HTML 25K
60: EX-10.4.4 Geothermal Lease Agreement, Dated 10/20/75 HTML 55K
61: EX-10.4.5 Geothermal Lease Agreement HTML 78K
62: EX-10.4.6 Geothermal Resources Lease, Dated 11/18/83 HTML 77K
78: EX-10.5.1 Engineering, Procurement and Construction Contract HTML 434K
79: EX-10.5.3 Engineering, Procurement and Construction Contract HTML 1.00M
80: EX-10.5.4 Patent License Agreement HTML 144K
81: EX-10.7 Executive Employment Agreement of Lucien Bronicki HTML 70K
82: EX-10.8 Exec Employment Agreement of Yehudit Bronicki HTML 75K
83: EX-10.9 Executive Employment Agreement of Yoram Bronicki HTML 82K
85: EX-23.1 Consent of Independent Accountants HTML 22K
86: EX-23.3 Consent of Dani Falk HTML 21K
87: EX-23.4 Consent of Edward Muller HTML 21K
88: EX-23.5 Consent of Lester P. Silverman HTML 21K
89: EX-23.6 Consent of Jacob Worenklein HTML 21K
90: EX-99.3 Material Terms Deviations HTML 21K
EXHIBIT 10.1.4
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CREDIT AGREEMENT
dated as of
December 31, 2002
among
ORMESA LLC,
as Borrower
UNITED CAPITAL,
a division of Hudson United Bank,
as Administrative Agent and Collateral Agent
and
The Lenders party to this Agreement
from time to time
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INTERPRETIVE MATTERS...................................................................1
1.01 Certain Defined Terms..........................................................................1
1.02 Classes and Types of Loans.....................................................................1
1.03 Rules of Interpretation........................................................................1
1.04 Accounting Terms...............................................................................3
ARTICLE II COMMITMENTS...........................................................................................4
2.01 Loans..........................................................................................4
2.02 Borrowings.....................................................................................5
2.03 Reduction of Commitments.......................................................................6
2.04 Fees...........................................................................................6
2.05 Lending Offices................................................................................7
2.06 Several Obligations; Remedies Independent......................................................7
2.07 Notes..........................................................................................7
ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST...................................................................9
3.01 Repayment of Loans.............................................................................9
3.02 Interest......................................................................................10
3.03 Optional Prepayments..........................................................................12
3.04 Mandatory Prepayments; Etc....................................................................12
3.05 Prepayment Mechanics..........................................................................13
ARTICLE IV PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC......................................................14
4.01 Payments......................................................................................14
4.02 Pro Rata Treatment............................................................................16
4.03 Computations..................................................................................16
4.04 Minimum Amounts...............................................................................16
4.05 Notices.......................................................................................17
4.06 Non-Receipt of Funds by the Administrative Agent..............................................18
4.07 Sharing of Payments; Etc......................................................................18
ARTICLE V YIELD PROTECTION; ETC.................................................................................20
5.01 Additional Costs..............................................................................20
5.02 Limitation on Eurodollar Loans................................................................22
5.03 Illegality....................................................................................23
5.04 Treatment of Affected Loans...................................................................23
5.05 Compensation..................................................................................24
5.06 Taxes.........................................................................................24
8.11 [Intentionally Omitted].......................................................................58
8.12 Prohibition of Fundamental Changes............................................................58
8.13 Restricted Payments...........................................................................58
8.14 Liens.........................................................................................59
8.15 Investments...................................................................................59
8.16 Hedging Arrangements..........................................................................59
8.17 Indebtedness..................................................................................60
8.18 Transactions with Affiliates..................................................................60
8.19 Nature of Business............................................................................60
8.20 Maintenance of Properties.....................................................................60
8.21 [Intentionally Omitted].......................................................................61
8.22 Project Documents; Etc........................................................................61
8.23 Annual Operating Plans and Budgets; Operating Statements......................................63
8.24 Speculative Activities........................................................................66
8.25 Status........................................................................................67
8.26 Updated Surveys and Title Policy Following Upgrade Project....................................67
8.27 Accounts......................................................................................68
8.28 No Subsidiaries...............................................................................68
8.29 SCE Consent...................................................................................68
ARTICLE IX EVENTS OF DEFAULT....................................................................................68
9.01 Events of Default.............................................................................68
9.02 Rights upon an Event of Default...............................................................73
ARTICLE X THE AGENTS............................................................................................73
10.01 Appointment, Powers and Immunities............................................................73
10.02 Reliance by Agents............................................................................75
10.03 Defaults......................................................................................75
10.04 Rights as a Lender............................................................................76
10.05 Indemnification...............................................................................76
10.06 Non-Reliance on Agents and Other Lenders......................................................76
10.07 Failure to Act................................................................................77
10.08 Resignation or Removal of Agents..............................................................77
10.09 Consents......................................................................................78
10.10 Collateral Agent..............................................................................78
ARTICLE XI MISCELLANEOUS........................................................................................79
11.01 Waiver........................................................................................79
11.02 Notices.......................................................................................79
11.03 Expenses; Etc.................................................................................79
11.04 Amendments; Etc...............................................................................82
11.05 Successors and Assigns........................................................................83
11.06 Assignments and Participations................................................................83
11.07 Marshalling; Recapture........................................................................85
11.08 Confidentiality...............................................................................85
11.09 Non-Recourse..................................................................................86
11.10 Survival......................................................................................87
11.11 Counterparts; Integration; Effectiveness......................................................87
11.12 NO THIRD PARTY BENEFICIARIES IN RELATION TO DISBURSEMENTS.....................................87
11.13 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC................................................88
11.14 WAIVER OF JURY TRIAL..........................................................................88
11.15 SPECIAL EXCULPATION...........................................................................88
11.16 Service of Process............................................................................89
11.17 Service of Process............................................................................89
11.18 Severability..................................................................................89
SCHEDULES
SCHEDULE I Definitions
SCHEDULE II Applicable Lending Offices
SCHEDULE III Commitments
SCHEDULE IV Insurance
SCHEDULE V Filing Jurisdictions
SCHEDULE VI Government Approvals
SCHEDULE VII Deferred Government Approvals
SCHEDULE VIII Environmental Claims
SCHEDULE IX Upgrade Acceptance Test Parameters
EXHIBITS
EXHIBIT A-1 Form of Initial Term Loan Note
EXHIBIT A-2 Form of Additional Term Loan Note
EXHIBIT B-1 Form of Borrower Security Agreement
EXHIBIT B-2 Form of Borrower Equity Interest Pledge
EXHIBIT C Form of Depositary Agreement
EXHIBIT D Form of Notice of Borrowing
EXHIBIT E Form of Conversion/Continuation Notice
EXHIBIT F Form of Distribution Certificate
CREDIT AGREEMENT (this "AGREEMENT") dated as of December 31, 2002 among
ORMESA LLC, a limited liability company duly formed and validly existing under
the laws of the State of Delaware (the "BORROWER"), each of the lenders that is
a signatory hereto or which, pursuant to Section 11.06(b), shall become a
"Lender" hereunder (individually, a "LENDER" and, collectively, the "LENDERS"),
UNITED CAPITAL, a division of Hudson United Bank, a New Jersey banking
corporation ("UNITED"), not in its individual capacity, but solely as
administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVEAGENT"), and UNITED, not in its individual capacity, but solely as collateral
agent for the benefit of the Secured Parties (in such capacity, the "COLLATERALAGENT").
WHEREAS, the Borrower directly owns 100% of the assets comprising each
Project and has requested that the Lenders make Loans to it in an aggregate
principal amount not exceeding $27,500,000 in order to enable the Borrower to:
(a) fund the Debt Service Reserve Account as provided herein; (b) fund certain
of its working capital needs in connection with the operation of each Project;
(c) pay costs associated with the transactions contemplated by the Financing
Documents; and (d) make a distribution to the Sponsor;
WHEREAS, the Lenders are prepared to make the Loans upon the terms and
conditions hereof;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETIVE MATTERS1.01 CERTAIN DEFINED TERMS. Unless otherwise specified herein, capitalized
terms used in this Agreement shall have the meanings assigned to such
terms in Schedule I. Capitalized terms and other terms used in this
Agreement shall be interpreted in accordance with Sections 1.02, 1.03 and
1.04, as applicable.
1.02 CLASSES AND TYPES OF LOANS. Loans hereunder are distinguished by "Class"
and by "Type". The "CLASS" of a Loan refers to whether such Loan is an
Initial Term Loan or an Additional Term Loan, each of which constitutes a
Class of Loans. Commitments to make Loans and Notes evidencing Loans may
be correspondingly referred to hereunder by the Class of Loan to which
such Commitment or Note, as applicable, relates. The "TYPE" of a Loan
refers to whether such Loan is a Prime Rate Loan or a Eurodollar Loan,
each of which constitutes a Type of Loan. Loans may be identified by both
Class and Type.
1.03 RULES OF INTERPRETATION. Unless the context of this Agreement otherwise
requires:
(a) words of any gender include each other gender;
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(b) words using the singular or plural form also include the plural or
singular form, respectively;
(c) any reference to any Person in any capacity includes a reference
to its successors and assigns in such capacity to the extent such
succession or assignment is permitted or not prohibited hereunder
and, in the case of any Government Authority, any Person
succeeding to its functions and capacities;
(d) the terms "hereof", "herein", "hereby", "hereto" and similar words
refer to this entire Agreement and not any particular Section,
Schedule, Exhibit or other subdivision of this Agreement;
(e) references to "Section", "Schedule" or "Exhibit" are to such
subdivisions contained in or annexed to this Agreement;
(f) the words "include" and "including" shall be deemed to be followed
by "without limitation" or "but not limited to", whether or not
they are followed by such phrases or words of like import;
(g) references to any statute or statutory provision shall be
construed as a reference to the same as it may have been, or may
from time to time be, amended, modified or re-enacted;
(h) references to any agreement or document (including this Agreement)
shall (unless otherwise expressly provided) be construed as a
reference to such agreement or document as amended, modified,
novated or supplemented (to the extent such amendment,
modification, novation or supplement is permitted or not
prohibited by the terms of such agreement or document, this
Agreement and any other Financing Document) and in effect from
time to time and shall (unless otherwise expressly provided)
include a reference to any document that amends, modifies, novates
or supplements it, or is entered into, made or given pursuant to
or in accordance with its terms;
(i) "this Agreement" and words of similar import shall mean this
Agreement, together with all Schedules and Exhibits;
(j) the headings and table of contents contained in this Agreement are
inserted for convenience of reference only and shall not affect
the interpretation of this Agreement;
(k) references to days shall refer to calendar days, unless Business
Days are expressly specified; references to weeks, months or years
shall be to calendar weeks, months or years, respectively, unless
expressly specified otherwise; and
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(l) to the extent capitalized terms used in this Agreement are defined
by reference to any other Transaction Document (or by reference in
such Transaction Document to any other Transaction Document), for
purposes of this Agreement, such terms shall continue to have
their original definitions notwithstanding any termination or
expiration of such agreements, except to the extent the parties
hereto agree to the contrary.
1.04 ACCOUNTING TERMS.
(a) Accounting Principles, Etc. Except as otherwise expressly provided
in this Agreement, all accounting terms used herein or in any
other Financing Document shall be interpreted, and all financial
statements, certificates and reports as to financial accounting
matters required to be delivered hereunder or thereunder, shall
(unless otherwise notified as provided in Section 1.04(b)) be
prepared or made in accordance with the Accounting Principles of
the relevant Person to which such terms, financial statements,
certificates and/or reports relate, applied on a basis consistent
with those used in the preparation of the latest financial
statements of such Person furnished hereunder or thereunder, as
the case may be, except for such changes as are required by such
Accounting Principles.
(b) Accounting Variations. In respect of any relevant period, the
Borrower shall, except to the extent already required by the
relevant Accounting Principles, deliver (or cause the relevant
other Person to deliver) to the Administrative Agent, at the same
time as the delivery of any financial statement for that period
under Section 8.01, a description in reasonable detail of any
material variation (and the consequence thereof) between the
application of the Accounting Principles employed in the
preparation of such statement and the application of the
Accounting Principles employed in the preparation of the financial
statements for the immediately preceding period.
(c) Fiscal Periods. To enable the ready and consistent determination
of compliance with this Agreement, the Borrower shall not change
the last day of its fiscal year from December 31 of each year, or
the last days of the first three fiscal quarters in each of its
fiscal years from March 31, June 30 and September 30 of each year,
respectively, except to the extent required by any Government
Rule. The Borrower shall notify the Administrative Agent promptly
upon becoming aware of such proposed Government Rule requirement
of the nature and the effective date of such proposed change.
Promptly after the delivery of such notice, the Borrower and the
Administrative Agent (acting at the direction or with the consent
of the Majority Lenders) shall negotiate in good faith any
amendments to the provisions of the Financing Documents that may
be necessary to give fair effect to the intention of such
provisions.
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ARTICLE II
COMMITMENTS2.01 LOANS.
(a) Initial Term Loan Facility. Each Lender severally agrees, on the
terms and conditions of this Agreement, to make a loan
(collectively, the "INITIAL TERM LOANS") to the Borrower in
Dollars on the Closing Date in an aggregate principal amount equal
to the amount of the Initial Term Loan Commitment of such Lender;
provided that: (i) there shall be no more than one borrowing of
Initial Term Loans; and (ii) in no event shall the aggregate
principal amount of all Initial Term Loans at any one time
outstanding exceed the aggregate amount of the Initial Term Loan
Commitments as in effect from time to time. Amounts prepaid or
repaid in respect of the Initial Term Loans may not be reborrowed.
(b) Additional Term Loan Facility. Each Lender severally agrees, on
the terms and conditions of this Agreement, to make a loan
(collectively, the "ADDITIONAL TERM LOANS") to the Borrower in
Dollars during the Additional Term Loan Availability Period in an
aggregate principal amount at any one time outstanding up to, but
not exceeding, the amount of the Additional Term Loan Commitment
of such Lender as in effect from time to time; provided that: (i)
there shall be no more than one borrowing of Additional Term
Loans; and (ii) in no event shall the aggregate principal amount
of all Additional Term Loans at any one time outstanding exceed
the aggregate amount of the Additional Term Loan Commitments as in
effect from time to time. Amounts prepaid or repaid in respect of
the Additional Term Loans may not be reborrowed.
(c) Terms Applicable to All Loans; Conversions and Continuations.
(i) Borrowings of Loans shall be made and Continued solely in
the form of Eurodollar Loans; provided that the Borrower
may, subject to all other applicable terms and conditions
of this Agreement (including Section 5.04):
(A) Subject to its prior delivery to the Administrative
Agent of a Conversion/Continuation Notice, convert
any Loans that are Eurodollar Loans into Prime Rate
Loans as provided in Sections 5.02 and 5.04;
(B) in any other circumstance where the Borrower and the
Administrative Agent concur that, taking account of
the expected timing of repayment of any such Loan
and the duration of the Interest Periods available
for selection by the Borrower, Converting such Loan
into a Prime Rate
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Loan will enable the Borrower to avoid breakage
costs pursuant to Section 5.05, make such
Conversion; and
(C) borrow Loans initially as Prime Rate Loans with the
consent of the Administrative Agent (not to be
unreasonably withheld or delayed) as and to the
extent necessary to synchronize the Interest Period
of such Loans with other outstanding Loans that are
Eurodollar Loans; provided that the Borrower shall,
subject to its prior delivery to the Administrative
Agent of a Conversion/Continuation Notice, Convert
such Prime Rate Loans to Eurodollar Loans as soon as
possible to achieve synchronization of such Loans.
(ii) Borrowings of Loans may be made initially in the form of
Prime Rate Loans if the Borrower is unable to provide
sufficient advance notice pursuant to Section 4.05 of the
borrowing of such Loans as Eurodollar Loans; provided that
such Loans shall be Converted as soon as practicable after
the initial borrowing thereof into Eurodollar Loans (unless
the Borrower and the Administrative Agent concur that,
taking account of the expected timing of repayment of any
such Loan and the duration of the Interest Periods
available for selection by the Borrower if such Loan were
so Converted, the Conversion of such Loan into a Eurodollar
Loan will likely subject the Borrower to additional costs
pursuant to Section 5.05).
(iii) Following the occurrence of any Default or Event of
Default, the Administrative Agent may suspend the right of
the Borrower to Continue any Loans as, or to Convert any
Loans into, Eurodollar Loans.
(iv) In connection with any Conversion hereunder, and
notwithstanding anything to the contrary contained in this
Agreement, a Lender may (in its sole discretion, subject to
Section 5.07(a)) change its Applicable Lending Office with
respect to the Loan so Converted.
(d) Limit on Eurodollar Loans. Only one Interest Period in respect of
Eurodollar Loans may be outstanding at any one time.
2.02 BORROWINGS. The Borrower shall give the Administrative Agent (which shall
promptly notify the Lenders) notice of each borrowing hereunder as
provided in Section 4.05 pursuant to a Notice of Borrowing. Not later
than 11:00 a.m., New York time, on the date specified for each borrowing
hereunder, each Lender shall make available the amount of the Loan to be
made by it on such date to the Administrative Agent at its
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Principal Office, in immediately available funds, for the account of the
Borrower. The aggregate principal amount of the Initial Term Loan
Commitment shall, subject to the terms and conditions of this Agreement,
be made available to the Borrower by the Administrative Agent's
depositing the same in immediately available funds to such accounts as
agreed between the Borrower and the Administrative Agent; provided that
an amount equal to $724,000 of the proceeds of the Initial Term Loans
shall, pursuant to said agreement between the Borrower and the
Administrative Agent, be deposited to the Revenue Account.
2.03 REDUCTION OF COMMITMENTS.
(a) Optional Reduction of Additional Term Loan Commitments. Subject to
Section 2.03(b), the Borrower may at any time reduce the aggregate
unused amount of the Additional Term Loan Commitments that are
surplus to the needs of the Borrower; provided that: (i) the
Borrower shall give notice of each such reduction as provided in
Section 4.05; and (ii) each partial reduction shall be in an
aggregate amount at least equal to $500,000 and in integral
multiples of $500,000 in excess thereof.
(b) No Reinstatement. Any Commitments reduced pursuant to paragraph
(a) above shall for all purposes hereof be terminated and may not
be reinstated.
(c) Termination of Commitments. Unless previously terminated, the
Commitments of each Class shall terminate at 5:00 p.m., New York
time, on the last day of the Initial Term Loan Availability Period
or Additional Term Loan Availability Period, as the case may be.
2.04 FEES.
(a) Up-Front Fee. On the Closing Date the Borrower shall pay to the
Administrative Agent, for the account of each Lender, an up-front
fee in an amount equal to 2.00% of the sum of such Lender's
Commitments; provided, however, that such fee payable to United,
as Lender, shall be reduced by an amount equal to $50,000.
(b) Commitment Fees. The Borrower shall pay to the Administrative
Agent, for the account of each Lender, a commitment fee on the
daily average unused amount of such Lender's Commitments for the
period from (and including) the Execution Date through (and
including): (i) in the case of the Initial Term Loan Commitments,
the earliest of (A) the Closing Date, (B) the day on which the
Initial Term Loan Commitments are reduced to zero or terminated,
and (C) the last day of the Initial Term Loan Availability Period
and, (ii) in the case of the Additional Term Loan Commitments, the
earliest of (A) the Second Closing Date, (B) the day on which the
Additional Term Loan Commitments are reduced to zero or
terminated, and (C) the last day of the Additional Term Loan
Availability Period, in each case in the amount of 0.375% per
annum.
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(c) Commitment Fees Generally. All accrued commitment fees payable
pursuant to Section 2.04(b) shall be payable in arrears on each
Quarterly Date and, with respect to the Commitments of any Class,
on the earliest to occur of the date on which of the Commitments
of such Class expire, the date the Commitments of such Class are
terminated or reduced to zero, and the Final Maturity Date.
(d) Administrative Agency Fees. Commencing on the first anniversary of
the Closing Date, and annually on each subsequent anniversary
thereafter, the Borrower shall pay to the Administrative Agent,
for the account of the Administrative Agent, an annual agency fee
in an amount equal to $25,000. The Administrative Agent shall not
be required to refund any fee it has already received.
2.05 LENDING OFFICES. The Loans of each Type made by each Lender shall be made
and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
2.06 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The obligations of the Lenders
hereunder are several and not joint. The failure of any Lender to make
any Loan to be made by it, or any payment required to be made by it
hereunder, on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan, or its payment, on such date.
Neither any Lender nor any Agent shall be responsible for the failure of
any other Lender to make a Loan, or a payment, to be made by such other
Lender.
2.07 NOTES.
(a) Initial Term Loan Notes. The Initial Term Loan of each Lender
shall be evidenced by a single promissory note of the Borrower
(each, an "INITIAL TERM LOAN NOTE") substantially in the form of
Exhibit A-1, dated the Closing Date, payable to such Lender in a
principal amount equal to the amount of its Initial Term Loan
Commitment as in effect on the Closing Date and otherwise duly
completed.
(b) Additional Term Loan Notes. The Additional Term Loan of each
Lender shall be evidenced by a single promissory note of the
Borrower (each, an "ADDITIONAL TERM LOAN NOTE") substantially in
the form of Exhibit A-2, dated the Closing Date, payable to such
Lender in a principal amount equal to the amount of its Additional
Term Loan Commitment as in effect on the Closing Date and
otherwise duly completed.
(c) Loan Records. Each Lender shall maintain in accordance with its
usual practice records evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder. The Administrative
Agent shall maintain records in which it shall record: (i) the
amount of each Loan made hereunder, the Class and Type thereof and
each Interest Period therefor; (ii) the amount of any principal or
interest due and
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payable or to become due and payable from the Borrower to each
Lender hereunder; and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and
each Lender's share thereof. The entries made in the records
maintained pursuant to this paragraph (c) shall be prima facie
evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the
Administrative Agent to maintain such records or any error therein
shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.
(d) Subdivision. No Lender shall be entitled to have any of its Notes
subdivided, by exchange for promissory notes of lesser
denominations or otherwise, except in connection with a permitted
assignment of all or any portion of such Lender's related
Commitment, related Loan and related Notes pursuant to Section
11.06(b).
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ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST3.01 REPAYMENT OF LOANS.
The Borrower hereby promises to pay to the Administrative Agent for the
account of each Lender the outstanding principal of such Lender's Loan in
twenty (20) consecutive quarterly installments payable commencing on the
first Quarterly Date following the Closing Date, on the next eighteen
succeeding Quarterly Dates and on the Final Maturity Date, each such
installment in the amount set forth below (a) if prior to the Second
Closing Date, under the heading "Initial Term Loan Principal Payment" and
(b) if on or after the Second Closing Date, under the heading "Initial
and Additional Term Loan Principal Payment", in each case opposite the
reference to such Quarterly Date, less any portion of any such Initial
Term Loans prepaid in accordance with Sections 3.03 and 3.04:
INITIAL AND
ADDITIONAL TERM
INITIAL TERM LOAN LOAN PRINCIPAL
PAYMENT DATE PRINCIPAL PAYMENT PAYMENT
March 31, 2003 $ 698,000 $ 698,000
June 30, 2003 $ 434,000 $ 434,000
September 30, 2003 $1,696,000 $1,696,000
December 31, 2003 $1,698,700 $1,698,700
March 31, 2004 $ 594,171 $ 869,000
June 30, 2004 $ 369,596 $ 540,550
September 30, 2004 $1,446,369 $2,115,375
December 31, 2004 $1,446,369 $2,115,375
March 31, 2005 $ 649,177 $ 950,000
June 30, 2005 $ 403,856 $ 591,000
September 30, 2005 $1,579,208 $2,311,000
December 31, 2005 $1,579,209 $2,311,000
March 31, 2006 $ 709,544 $1,039,000
June 30, 2006 $ 441,161 $ 646,000
September 30, 2006 $1,726,399 $2,528,000
December 31, 2006 $1,726,399 $2,528,000
March 31, 2007 $ 446,306 $ 683,000
June 30, 2007 $ 277,062 $ 424,000
September 30, 2007 $1,085,379 $1,661,000
December 31, 2007 $ 993,095 $1,661,000
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Notwithstanding anything to the contrary herein, to the extent not
otherwise repaid in full prior to the Final Maturity Date, the Borrower
unconditionally promises to pay to the Administrative Agent for the
account of each Lender the outstanding principal amount of the Loans made
by such Lender, and such Loans shall mature, on the Final Maturity Date.
3.02 INTEREST.
(a) General. The Borrower hereby promises to pay to the Administrative
Agent for the account of each Lender, interest on the unpaid
principal amount of each Loan made by such Lender for the period
from and including the date of such Loan to but excluding the date
such Loan shall be paid in full, at the following rates per annum:
(i) during such periods as such Loan is a Prime Rate Loan, the
Prime Rate (as in effect from time to time) plus the
Applicable Margin; and
(ii) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate
for such Loan for such Interest Period plus the Applicable
Margin.
(b) Default Interest. Notwithstanding the foregoing, the Borrower
hereby promises to pay to the Administrative Agent for the account
of each Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by such Lender, and on any other amount
payable by the Borrower hereunder or under any Note held by such
Lender, to or for the account of such Lender, which shall not be
paid in full when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof to but excluding
the date the same is paid in full.
(c) Payment. Accrued interest on each Loan shall be payable: (i) in
the case of a Prime Rate Loan, quarterly on the Quarterly Dates;
(ii) in the case of a Eurodollar Loan, on the last day of each
Interest Period therefor; and (iii) in the case of any Loan, upon
the payment or prepayment thereof or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so
paid, prepaid or Converted).
Interest payable at the Post-Default Rate as provided in Section
3.02(b) shall be payable from time to time on demand (or, if no
demand is made during any month, on the last day of such month).
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(d) Determination of Interest Rate. Promptly after the determination
of any interest rate provided for herein or any change therein,
the Administrative Agent shall give notice thereof to the Lenders
to which such interest is payable and to the Borrower.
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3.03 OPTIONAL PREPAYMENTS.
(a) Subject to Section 4.04, the Borrower shall have the right to
prepay any Loans, at any time and from time to time following the
second anniversary of the Closing Date; provided that: (a) the
Borrower shall give the Administrative Agent and the Collateral
Agent notice of each such prepayment, as provided in Section 4.05
(and, upon the date specified in any such notice of prepayment,
the amount to be prepaid shall become due and payable hereunder);
and (b) Eurodollar Loans may be prepaid only on the last day of
the Interest Period for such Loans unless the Borrower pays all
applicable breakage costs pursuant to Section 5.05 at the time of
such prepayment.
(b) Simultaneously with any optional prepayment, in whole or in part,
of the principal of any Loans pursuant to the foregoing clause (a)
(other than any prepayment made pursuant to the final sentence of
Section 5.07(a)) or any mandatory prepayment pursuant to Sections
3.04(b) or 3.04(c), the Borrower agrees to pay to the
Administrative Agent for the account of each Lender a prepayment
commission in respect of each such prepayment in an amount equal
to that percentage of the principal amount of the Loans so prepaid
set forth below opposite the period in which such prepayment
occurs:
Period in Which Prepayment is Made Prepayment Commission
---------------------------------- ---------------------
From and including the second anniversary 2.00%
of the Closing Date through and including the
day prior to the third anniversary of the
Closing Date
From and including the third anniversary 1.00%
of the Closing Date through and including the
day prior to the fourth anniversary of the
Closing Date
From and including the fourth anniversary 0.00%
of the Closing Date through and including the
Final Maturity Date
3.04 MANDATORY PREPAYMENTS; ETC. The Borrower shall make the following
mandatory payments in the amounts and at the times set out below, in each
case, except as otherwise provided in Section 3.03(b), without any
commission, premium or penalty:
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(a) Event of Loss.
(i) If a Project is declared a Total Loss by its insurers, then
on the later of the date of actual receipt of Loss Proceeds
with respect thereto and the date of such declaration; and
(ii) not later than the date specified for prepayment in
accordance with Section 8.05(d) with respect to: (A) any
Event of Loss (or upon such earlier date as the Borrower
shall have determined not to Restore the related Affected
Property); or (B) any period during which any of the
conditions of the Restoration under Section 8.05(d) shall
have ceased to be satisfied,
in each case, the Borrower shall prepay the Loans in an amount
equal to 100% of the Loss Proceeds with respect to such Event of
Loss (less the amount expended on the Restoration of the related
Affected Property as permitted by, and as expended in accordance
with, Section 8.05(d)).
Nothing in this paragraph (a) shall be deemed to limit any
obligation of the Borrower to deposit (or cause to be deposited)
in the Restoration Sub-Account the Loss Proceeds in respect of any
Event of Loss.
(b) Project Documents. If any Project Document at any time is amended
or terminated by any party thereto and in a manner that could
reasonably be expected to result in a Material Adverse Effect and
generate a current cash payment to the Borrower, then the Borrower
shall, promptly upon receipt of such payment, prepay the Loans in
an amount equal to the proceeds of such payment.
(c) Certain Asset Sales. If the Borrower at any time shall transfer,
assign, sell or otherwise dispose of any material asset or
Property pertaining to any Project, other than in accordance with
Section 8.12 hereof, then the Borrower shall, promptly upon
receipt of the proceeds of any payment relating to such
transaction, prepay the Loans in an amount equal to the proceeds
of such payment.
(d) Cash Sweeps. If, as of any Quarterly Date, the Borrower shall fail
to comply with Section 8.13(iii) hereof, the Borrower shall, at
its sole option as provided in Section 4.1(e) of the Depositary
Agreement, prepay the Loans in the amounts set out in, and
otherwise in accordance with, such Section 4.1(e).
3.05 Prepayment Mechanics. All prepayments described in Sections 3.03 and 3.04
(other than any prepayment made pursuant to the final sentence of Section
5.07(a) which prepayment shall be applied in accordance with such Section
5.07(a)) shall be applied to the Initial Term Loans and the Additional
Term Loans pro rata, and in the inverse order of the maturities of the
installments of the Loans then outstanding. Amounts prepaid may
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not be reborrowed. Any prepayment made or required to be made pursuant to
Sections 3.03 or 3.04 shall be made together with all accrued but unpaid
interest thereon and all other amounts (including, without limitation,
any amounts due pursuant to Article V) then due from the Borrower
hereunder.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.4.01 PAYMENTS.
(a) General. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by
the Borrower under this Agreement and the Notes and, except to the
extent otherwise provided therein, all payments to be made by the
Borrower under any other Financing Document, shall be made in
Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Administrative Agent at its
Principal Office, or to such account as the Administrative Agent
may specify in writing to the Borrower, not later than 1:00 p.m.,
New York time, on the date on which such payment shall become due
(each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
(b) Application of Payments. The Borrower shall, at the time of making
each payment under this Agreement or any Note for the account of
any Lender, specify to the Administrative Agent (which shall so
notify the intended recipient(s) thereof) the Loans or other
amounts owing by the Borrower hereunder to which such payment is
to be applied. In the event that the Borrower fails to so specify,
or if an Event of Default has occurred and is continuing, the
Administrative Agent may distribute such payment to the Lenders
for application in such manner as the Administrative Agent or the
Majority Lenders, subject to Section 4.02, may reasonably
determine to be appropriate.
(c) Forwarding of Payments by Administrative Agent. Each payment
received by the Administrative Agent under this Agreement or any
Note for the account of any Lender or the Collateral Agent or the
Depositary Bank shall be paid by the Administrative Agent promptly
to such Person, in immediately available funds, for the account of
such Lender's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made or for the
account of the Collateral Agent or the Depositary Bank, as
applicable.
(d) Extensions to Next Business Day. If the due date of any payment
under this Agreement or any Note would otherwise fall on a day
that is not a Business Day, such date shall instead be extended to
the first Business Day thereafter, and interest shall be payable
for any principal so extended for the period of such
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extension, unless such Business Day shall fall in a subsequent
calendar month, in which case such payment shall be due on the
immediately preceding Business Day.
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4.02 PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(a) each borrowing of Loans from the Lenders under Section 2.01 shall
be made from the relevant Lenders, each payment of commitment fees
under Section 2.04 in respect of Commitments shall be made for the
account of the relevant Lenders, and each termination or reduction
of the amount of the Commitments under Section 2.03 shall be
applied to the respective Commitments, pro rata according to the
amounts of their respective Commitments;
(b) the making of Loans shall be made pro rata among the relevant
Lenders according to the amounts of their respective Commitments;
(c) except to the extent indicated in Section 4.07(b) and except for
prepayments made pursuant to the final sentence of Section
5.07(a), each payment or prepayment of principal of Loans by the
Borrower shall be made for the account of the relevant Lenders pro
rata in accordance with the respective unpaid principal amounts of
the Loans held by them; provided that if immediately prior to
giving effect to any such payment in respect of any Loan the
outstanding principal amount of the Loans shall not be held by the
Lenders pro rata in accordance with their respective Commitments
in effect at the time such Loans were made (by reason of a failure
of a Lender to make a Loan hereunder in the circumstances
described in the penultimate paragraph of Section 11.04), then
such payment shall be applied to the Loans in such manner as shall
result, as nearly as is practicable, in the outstanding principal
amount of the Loans being held by the Lenders pro rata in
accordance with their respective Commitments; and
(d) each payment of interest on Loans by the Borrower shall be made
for the account of the relevant Lenders pro rata in accordance
with the amounts of interest on such Loans then due and payable to
the respective Lenders.
4.03 COMPUTATIONS. Interest on Eurodollar Loans and on other obligations of
the Borrower or the Lenders that are computed on the basis of the Federal
Funds Rate shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable. Interest on Prime Rate Loans,
on other obligations of the Borrower or the Lenders that are computed on
the basis of the Prime Rate and commitment fees payable in accordance
with Section 2.04 shall be computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which
payable.
4.04 MINIMUM AMOUNTS. Except for mandatory prepayments pursuant to Section
3.04 and the borrowing of Additional Term Loans, each borrowing and
partial prepayment of principal of Loans shall be in an amount at least
equal to $500,000 and in multiples of $100,000 in excess thereof.
Borrowings or prepayments of Loans of different Types or, in the case of
Eurodollar Loans, having different Interest Periods, at the same time
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hereunder shall be deemed separate borrowings and prepayments for
purposes of the foregoing, one for each Type or Interest Period.
4.05 NOTICES.
(a) Certain Notices.
(i) Notices by the Borrower to the Administrative Agent (and,
as applicable, the Collateral Agent) of optional
terminations or reductions of the Commitments, borrowings
of Loans, optional prepayments of Loans, Continuations of
Eurodollar Loans and Conversions of Loans shall be
irrevocable and shall be effective only if received by the
Administrative Agent (and, as applicable, the Collateral
Agent) not later than 11:00 a.m., New York time, on the
number of Business Days prior to the date of the relevant
termination, reduction, borrowing, prepayment, Continuation
or Conversion or the first day of such Interest Period
specified below:
Number of
Business Days
Notice Prior
---------------------------------------------------------------- -------------
Optional termination or reduction of the Commitments; optional 5
prepayment of Loans
Borrowing of, Continuation of, or Conversion into Eurodollar Loans 3
Borrowing of or Conversion into, Prime Rate Loans 1
(ii) Each such notice of optional termination or reduction of
Commitments shall specify the amount of such Commitments to
be terminated or reduced.
(iii) Each such notice of borrowing, Conversion, Continuation or
optional prepayment shall specify the Class and Type of
Loans to be borrowed, Converted, Continued or prepaid, the
amount (subject to Section 4.04) of each Loan to be
borrowed, Converted, Continued or prepaid, and the date of
borrowing, Conversion, Continuation or optional prepayment
(which shall be a Business Day).
(iv) Each such notice of Conversion shall contain a
certification of an Authorized Officer of the Borrower that
the requirements of
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Section 2.01(c) have been satisfied with respect to such
Conversion.
(v) The Administrative Agent shall promptly notify the Lenders
of the contents of each such notice. In the event that the
Borrower fails to select the Type of Loan, within the time
period and otherwise as provided in this Section 4.05, such
Loan will be made or Continued, as applicable, as a
Eurodollar Loan having an Interest Period of three months.
4.06 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT(a). Unless the
Administrative Agent shall have been notified by the Borrower prior to
the date on which the Borrower is to make payment to the Administrative
Agent for the account of one or more of the Lenders hereunder (each such
payment being herein called the "REQUIRED PAYMENT"), which notice shall
be effective upon receipt, that the Borrower does not intend to make the
Required Payment to the Administrative Agent, the Administrative Agent
may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient(s) on such date. If the
Borrower has not in fact made the Required Payment to the Administrative
Agent, the recipient(s) of such payment shall, on demand, repay to the
Administrative Agent the amount made available by the Administrative
Agent pursuant to the previous sentence, together with interest thereon
in respect of each day during the period commencing on the date (the
"ADVANCE DATE") such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at a
rate per annum equal to the Federal Funds Rate for such day.
4.07 SHARING OF PAYMENTS; ETC.
(a) Right of Set-Off. The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option, to offset balances held by it for the
account of the Borrower at any of its offices, in Dollars or in
any other currency, against any principal of or interest on any of
such Lender's Loans, or any other amount payable to such Lender
hereunder, that is not paid when due (regardless of whether such
balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Administrative Agent thereof;
provided that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) Sharing. If any Lender shall obtain from the Borrower payment of
any principal of or interest on any Loan owing to it or payment of
any other amount under this Agreement or any Note held by it or
any other Financing Document through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or
otherwise (other than: (i) from the Administrative Agent as
provided herein; or (ii) in connection with any reimbursement or
indemnification under Section 11.03
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or any similar provision of any other Financing Document to which
less than all of the Lenders are entitled under the terms hereof
or thereof, as the case may be; or (iii) in connection with any
assignment or participation pursuant to Section 11.06 or any
replacement of any Lender pursuant to Article V) and, as a result
of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or such
other amounts then due hereunder or thereunder to such Lender than
the percentage received by any other Lender(s) who were also
entitled to receive such payments, it shall promptly purchase from
such other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans or such
other amounts, respectively, owing to such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit
of such excess payment (net of any expenses that may be incurred
by such Lender in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid principal of and/or interest on
the Loans or such other amounts, respectively, owing to each of
the Lenders; provided that if at the time of such payment, the
outstanding principal amount of the Loans shall not be held by the
Lenders pro rata in accordance with their respective Commitments
in effect at the time such Loans were made (by reason of a failure
of a Lender to make a Loan hereunder in the circumstances
described in the penultimate paragraph of Section 11.04), then
such purchases of participations and/or direct interests shall be
made in such manner as will result, as nearly as is practicable,
in the outstanding principal amount of the Loans being held by the
Lenders pro rata according to the amounts of such Commitments. To
such end all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored.
(c) Consent by the Borrower. The Borrower agrees that any Lender so
purchasing such a participation (or direct interest) may exercise
all rights of set-off, banker's liens, counterclaims or similar
rights with respect to such participation as fully as if such
Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Rights of Lenders; Bankruptcy. Nothing contained in this Section
4.07 shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower. If, under any
applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a set-off to which this
Section 4.07 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery
on such secured claim.
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ARTICLE V
YIELD PROTECTION; ETC.5.01 ADDITIONAL COSTS.
(a) Costs of Making or Maintaining Eurodollar Loans. The Borrower
shall pay directly to each Lender from time to time such amounts
as such Lender may determine to be necessary to compensate it for
any costs that such Lender determines are attributable to its
making or maintaining of any Eurodollar Loans or its obligation to
make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of
such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "ADDITIONAL
COSTS"), resulting from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable Lending Office
for any of such Loans) to any tax, duty or other charge in
respect of such Loans or changes the basis of taxation of
any amounts payable to such Lender under this Agreement or
the Notes in respect of such Loans (other than taxes
imposed on or measured by the overall net income of such
Lender or of its Applicable Lending Office for such Loans
by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized
in the determination of the Eurodollar Rate for any
Interest Period for such Loan) relating to any extensions
of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including any of such Loans or
any deposits referred to in the definition of "Eurodollar
Base Rate"), or any Commitment of such Lender to make any
such Loans hereunder; or
(iii) imposes any other condition affecting this Agreement or the
Notes (or any of such extensions of credit or liabilities)
or its Commitments.
If any Lender requests compensation from the Borrower under this
paragraph (a), the Borrower may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such
Lender to make or Continue Eurodollar Loans or to Convert Prime
Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case
the
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provisions of Section 5.04 shall apply); provided that such
suspension shall not affect the right of such Lender to receive
the compensation so requested.
(b) Election by Lender to Suspend Obligations. Without limiting the
effect of the provisions of paragraph (a) above, in the event
that, by reason of any Regulatory Change, any Lender either:
(i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes
deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this
Agreement or a category of extensions of credit or other
assets of such Lender that includes Eurodollar Loans; or
(ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets that it may hold,
then, if such Lender so elects by notice to the Borrower (with a
copy to the Administrative Agent), the obligation of such Lender
to make or Continue, or Convert Prime Rate Loans into, Eurodollar
Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section
5.04 shall apply).
(c) Capital Costs. Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Borrower shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the parent
company of such Lender) for any costs that it determines are
attributable to the maintenance by such Lender (or any Applicable
Lending Office or such parent company) of capital in respect of
its Commitments or Loans, pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the
force of law) of any court, Government Authority or monetary
authority:
(i) following any Regulatory Change; or
(ii) implementing any risk-based capital guideline or other
requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be
unlawful) heretofore issued but not implemented, or
hereafter issued, by any Government Authority or
supervisory authority implementing at the national level
the Basle Accord (including the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225,
Appendix A) and the Final Risk-Based Capital Guidelines of
the
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Office of the Comptroller of the Currency (12 C.F.R. Part
3, Appendix A)).
Such compensation shall include an amount equal to any reduction
of the rate of return on assets or equity of such Lender (or any
Applicable Lending Office or such parent company) to a level below
that which such Lender (or any Applicable Lending Office or such
parent company) could have achieved but for such law, regulation,
interpretation, directive or request.
(d) Notification and Certification. Each Lender shall notify the
Borrower of any event occurring after the date of this Agreement
that will entitle such Lender to compensation under paragraph (a)
or (c) above as promptly as practicable after such Lender obtains
actual knowledge thereof. Each Lender will furnish to the Borrower
a certificate setting out in reasonable detail the basis and
amount of each request by such Lender for compensation under
paragraph (a) or (c) above. Determinations and allocations by any
Lender, for purposes of this Section 5.01, of the effect of any
Regulatory Change pursuant to paragraph (a) or (b) above, or of
the effect of capital maintained pursuant to paragraph (c) above,
on its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in
respect of Loans, and of the amounts required to compensate such
Lender under this Section 5.01, shall be conclusive absent
manifest error.
(e) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section 5.01 shall not
constitute a waiver of such Lender's right to demand such
compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section 5.01 for any
increased costs or reductions incurred more than 60 days prior to
the date that such Lender notifies the Borrower of the Regulatory
Change giving rise to such increased costs or reductions and of
such Lender's intention to claim compensation therefor; provided,
further, that, if the Regulatory Change giving rise to such
increased costs or reductions is retroactive, then the 60-day
period referred to above shall be extended to include the period
of retroactive effect thereof.
5.02 LIMITATION ON EURODOLLAR LOANS. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar
Base Rate for any Interest Period:
(a) the Administrative Agent determines, which determination shall be
conclusive absent manifest error, that quotations of interest
rates for the relevant deposits referred to in the definition of
"Eurodollar Base Rate" are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining
rates of interest for Eurodollar Loans as provided herein; or
(b) the Majority Lenders determine, which determination shall be
conclusive absent manifest error, and notify the Administrative
Agent that the relevant rates of
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interest referred to in the definition of "Eurodollar Base Rate",
upon the basis of which the rate of interest for Eurodollar Loans
for such Interest Period is to be determined, are not likely to
adequately cover the cost to such Lenders of making or maintaining
such Eurodollar Loans for such Interest Period,
then the Administrative Agent shall give the Borrower and each Lender
prompt notice thereof, and so long as such condition remains in effect,
the obligation of the Lenders to make additional Eurodollar Loans,
Continue existing Eurodollar Loans or Convert Prime Rate Loans into
Eurodollar Loans shall be suspended, in which case the provisions of
Section 5.04 shall be applicable.
5.03 ILLEGALITY. Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful or any central bank or other Government
Authority asserts that it is unlawful for any Lender or its Applicable
Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, and, in the opinion of such Lender (as stated in
writing), the designation of a different Applicable Lending Office would
either not avoid such unlawfulness or would be disadvantageous to such
Lender, then such Lender shall promptly notify the Borrower thereof in
writing (with a copy to the Administrative Agent) and such Lender's
obligation to make or Continue, or to Convert Prime Rate Loans into,
Eurodollar Loans shall be suspended until such time as such Lender may
again make and maintain Eurodollar Loans (in which case the provisions of
Section 5.04 shall be applicable).
5.04 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make or
Continue, or to Convert Prime Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 5.01, 5.02 or 5.03 (the "AFFECTED LOANS"),
such Lender's Affected Loans shall be automatically Converted into Prime
Rate Loans on the last day(s) of the then-current Interest Period(s) for
the Affected Loans (or, in the case of a Conversion required by Section
5.01(b) or 5.03, on such earlier date as such Lender may certify to the
Borrower with a copy to the Administrative Agent as being the last
permissible date for such Conversion under, or by reason of, the relevant
Regulatory Change or circumstances described under Section 5.03, such
certification to be conclusive absent manifest error) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 5.01, 5.02 or 5.03 which gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be
applied instead to its Prime Rate Loans; and
(b) all Loans that would otherwise be made by such Lender as
Eurodollar Loans shall be made instead as Prime Rate Loans.
If such Lender gives notice to the Borrower with a copy to the
Administrative Agent that the circumstances specified in Section 5.01,
5.02 or 5.03 that gave rise to the Conversion
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of such Lender's Eurodollar Loans of any Class pursuant to this Section
5.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist): (i) at a time when Eurodollar Loans made
by other Lenders are outstanding, each of such Lender's Prime Rate Loans
shall be automatically Converted to Eurodollar Loans, on the first day of
the next succeeding Interest Period for, and having the same Interest
Period as, such outstanding Eurodollar Loans and to the extent necessary
so that, after giving effect thereto, all Prime Rate Loans and Eurodollar
Loans are allocated among the Lenders ratably (as to principal amounts,
Types and Interest Periods) as nearly as possible in accordance with
their respective Commitments; and (ii) at any other time, the Borrower
may thereafter provide to the Administrative Agent a notice of
Conversion, in accordance with Section 4.05, of such Lender's Prime Rate
Loans to Eurodollar Loans.
5.05 COMPENSATION. The Borrower shall pay to the Administrative Agent for the
account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in
the reasonable opinion of such Lender) to compensate such Lender for any
loss, cost or expense that such Lender reasonably determines is
attributable to:
(a) any payment, prepayment or Conversion of a Eurodollar Loan made by
such Lender for any reason (including the acceleration of the
Loans pursuant to Section 9.02) on a date other than the last day
of an Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including the failure
of any of the conditions precedent specified in Article VI to be
satisfied) to borrow a Eurodollar Loan from such Lender on the
date for such borrowing specified in the relevant Notice of
Borrowing given pursuant to Section 2.02.
Without limiting the effect of the preceding sentence, such compensation
shall include an amount equal to the excess, if any, of: (i) the amount
of interest that otherwise would have accrued on the principal amount so
paid, prepaid, Converted or not borrowed for the period from the date of
such payment, prepayment, Conversion or failure to borrow to the last day
of the then-current Interest Period for such Loan (or, in the case of a
failure to borrow, the Interest Period for such Loan which would have
commenced on the date specified for such borrowing) at the applicable
rate of interest for such Loan provided for herein; over (ii) the amount
of interest that otherwise would have accrued on such principal amount at
a rate per annum equal to the interest component of the amount such
Lender would have bid in the London interbank market for Dollar deposits
of the Reference Banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by
such Lender).
5.06 TAXES.
(a) General. All payments to be made hereunder and under the Notes and
any other Financing Document by the Borrower shall be made free
and clear of and without
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deduction for or on account of, any Taxes (other than Taxes
imposed on either Agent or any Lender by the jurisdiction in which
such Person is organized or has its principal office or, in the
case of any Lender, by the jurisdiction in which its Applicable
Lending Office is organized or located or, in each case, any
political subdivision or taxing authority thereof or therein or
otherwise imposed by any taxing authority upon, or measured by,
income or assets as a result of the organization or location of
such Lender in such taxing authority's jurisdiction (unless such
organization or location is attributable to the execution of, or
the exercise of any rights or remedies under or in connection
with, the Transaction Documents)) (such Taxes being herein
referred to as the "APPLICABLE TAXES").
If any Applicable Taxes are imposed and required to be withheld
from any amount payable by the Borrower hereunder or under the
Notes or any other Financing Document, the Borrower shall (subject
to the second sentence of Section 5.06(c)) be obligated to: (i)
pay such additional amount so that the Agents and the Lenders, as
applicable, shall receive a net amount (after giving effect to the
payment of such additional amount and to the deduction of all
Applicable Taxes) equal to the amount due hereunder; (ii) pay such
Applicable Taxes to the appropriate taxing authority for the
account of the Administrative Agent, for the benefit of the Agents
and the Lenders, as applicable; and (iii) as promptly as possible
thereafter, send to the Administrative Agent a certified copy of
any original official receipt showing payment thereof, together
with such additional documentary evidence as the Administrative
Agent or such other Agent or Lender (as applicable) may from time
to time reasonably require.
If the Borrower fails to pay any Applicable Taxes when due to the
appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall be obligated to indemnify
each Agent and each Lender for any incremental Taxes, as well as
interest and penalties that may become payable by such Agent or
such Lender as a result of such failure. The obligations of the
Borrower under this Section 5.06(a) shall survive the termination
of the Commitments and the repayment of the Loans.
(b) Evidence of Payment. Within 30 days after paying any amount to
either Agent or any Lender from which it is required by law to
make any deduction or withholding, and within 30 days after it is
required by law to remit such deduction or withholding to any
relevant taxing or other authority, the Borrower shall deliver to
the Administrative Agent, for delivery to such Person, evidence
reasonably satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
(c) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any treaty
to which such jurisdiction is a party, with
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respect to payments by the Borrower under this Agreement, the
Notes or any other Financing Document shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or
times reasonably requested by the Borrower, such properly
completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at
a reduced rate. For any period during which a Foreign Lender has
failed to provide the Borrower with the appropriate documentation
as required by the preceding sentence, the Borrower shall not be
obligated to pay, and such Foreign Lender shall not be entitled to
receive, additional amounts under Section 5.06(a) with respect to
Applicable Taxes imposed by the United States to the extent that
such additional amounts would not have arisen but for such failure
of such Foreign Lender. If a Foreign Lender that is otherwise
exempt from or subject to a reduced rate of withholding tax
becomes subject to Applicable Taxes, or a higher amount thereof,
because of its failure to deliver documentation described in the
first sentence of this paragraph (c), the Borrower shall take such
steps as such Foreign Lender shall reasonably request to assist
such Foreign Lender to recover such Applicable Taxes.
(d) Tax Refunds. If an Agent or a Lender receives a refund of, or in
respect of, any Applicable Taxes with respect to which the
Borrower has paid additional amounts pursuant to Section 5.06(a)
and (i) either: (A) such refund (as received by such Agent or such
Lender) is specifically referable to such Applicable Taxes; or (B)
such Agent or such Lender determines (in its sole discretion) that
such refund is in respect of, such Applicable Taxes; and (ii) such
Agent's or such Lender's (as applicable) tax affairs for its tax
year in respect of which such refund was obtained have been
finally settled, then in each case such Agent or such Lender
shall, to the extent it can do so without prejudice to the
retention of such refund, pay to the Borrower an amount equal to
such refund (but only to the extent of additional amounts paid by
the Borrower under Section 5.06(a) with respect to the Applicable
Taxes giving rise to such refund), net of all out-of-pocket
expenses and Taxes incurred by such Agent or such Lender with
respect thereto and without interest (other than any interest paid
by the relevant Government Authority with respect to such refund).
Any such payment by any Agent or any Lender shall be applied
toward payments of amounts then owed by the Borrower under this
Agreement if, at the time of such payment, an Event of Default has
occurred and is continuing.
The Borrower shall indemnify each Agent and each Lender on an
after-tax basis for any Taxes that are imposed on such Person as a
result of the disallowance, unavailability, recapture or reduction
of any such refund, as to which such Person has already made
payment in full to the Borrower as required by this paragraph (d).
Nothing herein shall oblige any Agent or any Lender to disclose
any of the tax returns, books or other records of such Person, nor
shall anything herein interfere with the right of any Agent or any
Lender to arrange its tax and
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commercial affairs and its dealings with its various customers in
whatever manner it thinks fit. In particular, no Agent or Lender
shall be under any obligation to claim credit, relief, remission
or repayment from or against its corporate profits or similar tax
liability in respect of the amount of any Tax, deduction or
withholding as aforesaid in priority to any other claims, reliefs,
credits or deductions available to it or that it determines in its
sole discretion to be inadvisable.
5.07 MITIGATION OBLIGATIONS; PREPAYMENTS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office; Prepayments. If any
Lender requests compensation under Section 5.01 or 5.06, or if the
Borrower is required to pay any additional amount to any Lender or
any Government Authority for the account of any Lender pursuant to
Section 5.06, then such Lender shall use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office
for the Loans of such Lender affected by such event or to assign
its rights and obligations therein to another of its offices,
branches or Affiliates, if, in the sole opinion of such Lender,
such designation or assignment: (i) would eliminate or reduce
amounts payable pursuant to Section 5.01 or 5.06, as the case may
be, in the future; and (ii) would not be disadvantageous to such
Lender; provided that such Lender shall have no obligation to
designate an Applicable Lending Office located in the United
States if such Lender's Applicable Lending Office is not then
located in the United States. The Borrower shall pay all
reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment. In the event any such
Lender requesting compensation is unable or, for any reason,
declines to so designate a different Applicable Lending Office of
its Loans, the Borrower shall have the right to prepay such Lender
in whole or in part pursuant to the terms of Section 3.03(a) and
Section 3.05, and such prepayment shall be exclusive of the
prepayment commission described in Section 3.03(b).
(b) Replacement of Lenders. If any Lender requests compensation under
Section 5.01 or 5.06, or if the Borrower is required to pay any
additional amount to any Lender or any Government Authority for
the account of any Lender pursuant to Section 5.06, or if any
Lender exercises its rights under Section 5.03, then the Borrower
may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and
delegate (in accordance with and subject to the restrictions
contained in Section 11.06), without recourse and without
compensation or payment of any type other than amounts referred to
in clause (i) below, all its interests, rights and obligations
under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that: (i) such Lender shall
have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to
the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case
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of all other amounts); and (ii) such assignment will: (A) result
in a reduction in such compensation or payments; or (B) effect the
availability of Eurodollar Loans, as applicable. A Lender shall
not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
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ARTICLE VI
CONDITIONS PRECEDENT6.01 INITIAL TERM LOANS. The obligation of any Lender to make its Initial Loan
Term Loan hereunder is subject to the receipt by the Administrative Agent
of each of the documents and the satisfaction of the conditions precedent
set out in this Section 6.01, each of which shall be satisfactory to the
Lenders in form, scope and substance.
(a) Certain Financing Documents. Each of the following Financing
Documents, each such document to be duly executed and delivered by
each of the intended parties thereto:
(i) this Agreement;
(ii) each of the Initial Term Loan Notes; and
(iii) the Consent and Agreement of each of the Operator and
Imperial Irrigation District relating to the Project
Documents to which such Project Party is a party or by
which it is otherwise bound, except as otherwise agreed in
writing by the Administrative Agent on or prior to the
Closing Date.
(b) Security Documents. Each of the following Security Documents, each
such document to be duly executed and delivered by each of the
intended parties thereto:
(i) the Borrower Security Agreement;
(ii) the Borrower Equity Interest Pledge;
(iii) the Deed of Trust; and
(iv) the Depositary Agreement.
(c) Project Documents. A copy (which, in the case of the Project
Documents referred to in clauses (v), (viii), (ix) and (x) below,
may be in electronic, CD-ROM format), certified by an Authorized
Officer of the Borrower to be true, correct and complete, of each
of the following Project Documents, each such document to be duly
executed and delivered by each of the intended parties thereto:
(i) each PPA;
(ii) each Plant Connection Agreement;
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(iii) the O&M Contract;
(iv) each Transmission Services Agreement;
(v) each Real Property Document;
(vi) the Water Supply Agreement;
(vii) the Energy Services Agreement;
(viii) each Acquisition Document;
(ix) each Restructuring Document;
(x) each Merger Document;
(xi) the Funding and Construction Agreement; and
(xii) the Unit Agreement.
(d) Limited Liability Company Documents. A certificate of the
Secretary or Assistant Secretary of the Borrower or of its
managing member, dated as of the Closing Date, certifying: (A)
that attached thereto is a true, correct and complete copy of the
Charter Documents (including the LLC Agreement) of the Borrower as
in effect on the date of such certificate; (B) that attached
thereto is a true, correct and complete copy of resolutions duly
adopted by the managers or member of the Borrower, authorizing the
execution, delivery and performance of the Financing Documents to
which the Borrower is or is intended to be a party, and that such
resolutions have not been modified, rescinded or amended and are
in full force and effect; and (C) as to the incumbency and
specimen signature of each officer of the Borrower executing each
of the Financing Documents, to which the Borrower is or is
intended to be a party and each other document to be delivered by
the Borrower from time to time in connection therewith (and each
Financing Party may conclusively rely on such certificate until it
receives notice in writing to the contrary from the Borrower).
(e) Officers' Certificates. A certificate of an Authorized Officer of
the Borrower, dated as of the Closing Date, certifying that: (A)
the representations and warranties of the Borrower contained in
Article VII and the material representations and warranties of the
Borrower in each other Transaction Document to which it is a party
are true and correct in all material respects as if made on and as
of such date (or, if stated to have been made solely as of an
earlier date, were true and correct as of such date); (B) the
Borrower is in compliance with all of its covenants and
obligations under each of the Financing Documents to which it is a
party, and is in compliance in all material respects with all of
its covenants and obligations under each of the Project Documents
to which it is a
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party; (C) all Transaction Documents are in full force and effect;
and (D) no Default or Event of Default has occurred and is
continuing on such date, in each case, both immediately prior to
the initial extension of credit hereunder and after giving effect
thereto and to the intended use thereof.
(f) Real Property Documents; Title Insurance; Survey.
(i) Title Insurance. A title policy or policies issued by the
relevant Title Company or Title Companies which is in ALTA,
extended coverage, Lender's Fee Policy form 1970 (revised
10/17/84) or such other form approved by the Lenders, or a
binding marked commitment to issue such policy or policies,
in form, scope and substance satisfactory to the Lenders,
insuring the Collateral Agent for the benefit of the
Secured Parties, in an amount satisfactory to the Lenders,
that the Borrower is lawfully seized and possessed of a
valid and subsisting leasehold interest in the Leasehold
Properties and estate or interest in the ROW and the Site
Licenses, as the case may be, in the Project and that such
interests are free and clear of all defects and
encumbrances except those approved by the Lenders.
Each Title Policy shall contain:
(A) full coverage against Mechanics' Liens (filed and
inchoate);
(B) a reference to the relevant Initial Survey with no
survey exceptions except those theretofore approved
by the Lenders; and
(C) such affirmative insurance and endorsements as the
Lenders may require.
(ii) Initial Survey. An as-built survey of the Site current to
within 90 days of the Closing Date (each such survey, an
"INITIAL SURVEY"), which survey shall:
(A) be a current "as-built" metes and bounds survey of
the Site, including easements that benefit such
Site;
(B) be made in accordance with the "Minimum Standard
Detail Requirements for ALTA/ACSM Land Title
Surveys" jointly established and adopted by ALTA,
ACSM and NSPS in 1999 with all measurements made in
accordance with the "Minimum Angle, Distance and
Closure
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Requirements for Survey Measurements Which Control
Land Boundaries for ALTA/ACSM Land Title Surveys";
(C) be prepared by a surveyor satisfactory to the
Lenders;
(D) contain "Optional Survey Responsibilities and
Specifications" 2, 3, 8, 10 and 16 as specified on
Table A to the "Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys"; and
(E) contain a certification from said surveyor
satisfactory to the Lenders.
(iii) Fees. Evidence that the Borrower shall have paid to each
Title Company all of its expenses and premiums in
connection with the issuance of the Title Policy and in
addition shall have paid to each Title Company an amount
equal to the relevant recording and stamp taxes payable in
connection with recording the Deed of Trust in the
appropriate county land offices.
(g) Financial Statements. The most recent unaudited quarterly
financial statements (consolidated as appropriate) of the
Borrower, prepared in accordance with the relevant Accounting
Principles, together with a certificate from an Authorized Officer
of the Borrower stating that: (A) no material adverse change in
its consolidated assets, liabilities and operations or financial
condition has occurred from those set out in such most recent
financial statements; and (B) such financial statements fairly
present in all material respects the financial condition of the
Borrower.
(h) Government Actions.
(i) Government Approvals. Copies, certified by an Authorized
Officer of the Borrower to be true, correct and complete,
of all Government Approvals referred to in Schedule VI
(other than those listed on Schedule VII or otherwise
designated on such Schedule VII as unavailable), all of
which shall be in form and substance satisfactory to the
Lenders, together with a certificate from an Authorized
Officer of the Borrower stating that all such Government
Approvals, other than those listed on Schedule VII, are in
full force and effect.
(ii) Status. Evidence in form and substance satisfactory to the
Lenders that each of the Projects is a QF.
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(i) Independent Engineer's Report and Certificate. A report of the
Independent Engineer, dated as of a recent date and in form, scope
and substance satisfactory to the Lenders addressing (among other
matters reviewed at the request of the Lenders as determined in
their sole discretion): (i) the historical and projected operating
and maintenance costs; (ii) the historic operation of the Project,
including capacity ratings and actual energy production; (iii) the
capability of the Resource, including (A) a review of Resource
temperature, well production and operation and maintenance costs
associated with the production and injection wells; (B) the
historic production and injection volumes and temperature; (C) the
ability of the Resource to continually provide sufficient
temperatures and volumes of geothermal fluid to maintain the
Project's electricity production and costs as set forth in the
Closing Pro Forma; (D) the expected degradation of the Resource
during the period beginning on the Closing Date and ending on the
Final Maturity Date; (E) a review of the Resource management and
well drilling plans, and the capabilities of the Operator to
operate and maintain the Resource; (F) a review of the costs
associated with management, maintenance, and development of the
Resource to maintain temperature and production; and (G) the
expected useful life of the Resource as currently used and as
anticipated to be used following the Upgrade Project; (iv) the
assumptions, formulae, methodologies and structure of the Closing
Pro Forma; (v) the technical and economic ability and feasibility
of the Project to produce and transmit the capacity and energy,
and generate Project Cash Flow, in accordance with the Closing Pro
Forma; (vi) the technical ability and feasibility of the Project
to supply capacity and energy and otherwise fulfill its
obligations under the PPAs; (vii) the projected availability of
the Project; (viii) the Borrower's ability to perform under the
Project Documents; (ix) the adequacy of the Plant Connection
Agreements, the Transmission Services Agreements, and all other
arrangements relating to interconnection; (x) the adequacy of the
O&M Contract and the reasonableness of the costs and expenses of
the Operator for performing services under the O&M Contract; (xi)
the existence of skilled third party operators capable of
performing such services at a comparable cost to the fees paid to
the Operator under the O&M Contract; (xii) any environmental
matters at or in relation to the Site, including (A) the
Borrower's and the Project's compliance with all applicable
Government Rules, including all Environmental Laws and all
applicable Government Rules relating to health and safety; (B)
whether the Borrower or the Project is subject to any federal,
state or local investigation regarding any actual or potential
remedial action or involving any actual or potential expenditure
in excess of $100,000 in the aggregate with respect to any
Environmental Law or in response to any Release; and (C) whether
the Borrower or the Project has any contingent liability in excess
of $100,000 in the aggregate in connection with any Release;
(xiii) the adequacy of the plans relating to the Upgrade Project
and an opinion that the expectations of the Upgrade Project are
obtainable within the cost and time frame anticipated; and (xiv)
any other technical or regulatory issue that may arise in
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connection with the Independent Engineer's review of the Project
on behalf of the Lenders.
(j) Closing Pro Forma. The Closing Pro Forma.
(k) Insurance.
(i) Acceptable Insurance Broker Certificate. A certificate of
an Acceptable Insurance Broker as to the Borrower's
compliance with Section 8.05(a) and Schedule IV, such
certificate to be in form and substance satisfactory to the
Administrative Agent.
(ii) Compliance Certificate. A certificate of an Authorized
Officer of the Borrower, dated as of the Closing Date,
certifying that insurance complying with Section 8.05(a)
and Schedule IV, covering the risks referred to therein,
has been obtained and is in full force and effect and, as
of the date thereof, no notice of cancellation has been
issued thereunder.
(iii) Insurance Advisor's Report. A report of the Insurance
Advisor, dated as of a recent date and satisfactory in
form, scope and substance: (A) addressing (among other
matters reviewed at the request of the Lenders as
determined in their sole discretion): (I) the adequacy of
the insurance required by Section 8.05 and Schedule IV and
confirming that such insurance and reinsurance provides
adequate cover for the Project and adequately protects the
interests of the Agents and the Lenders; and (II) the
comparability of such insurance with insurance maintained
with respect to similar projects by prudent power
producers; and (B) confirming that insurance complying with
Section 8.05 and Schedule IV, covering the risks referred
to therein: (I) is reasonably likely to remain available
through the Final Maturity Date; and (II) has been obtained
and is in full force and effect and as of the date thereof,
no notice of cancellation has been issued thereunder.
(l) Filings, Registrations and Recordings; Fees and Taxes.
(i) Financing Statements. Acknowledgment copies of all
financing statements under the Uniform Commercial Code (and
copies of Uniform Commercial Code search reports and tax
lien, judgment and litigation search reports) with respect
to the Borrower, in each jurisdiction (and, to the extent
applicable, county land offices) listed under the name of
such Person on Schedule V and in each other jurisdiction in
which such financing statements are necessary or, in the
opinion of special counsel to the Lenders, desirable to
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perfect the Liens created by the Security Documents
(including Liens in fixtures created by the Deed of Trust
and all other instruments to be recorded or filed or
delivered in connection with the Security Documents).
(ii) Recordation. Evidence satisfactory to the Administrative
Agent that the Security Documents have been duly recorded
and filed in all places wherein such recording and filing
are necessary to perfect the interests of the
Administrative Agent in and to the Collateral covered
thereby.
(iii) Fees and Taxes. Evidence that all filing, recordation,
subscription and inscription fees and all recording and
other similar fees, and all recording, stamp and other
taxes and other expenses related to such filings,
registrations and recordings necessary for the consummation
of the transactions contemplated by this Agreement and the
other Financing Documents have been paid in full by or on
behalf of the Borrower or otherwise provided for.
(iv) Other Action. Evidence satisfactory to the Administrative
Agent that all other action necessary in order to
effectively establish, create and perfect the Liens,
charges and security interests contemplated by the Security
Documents shall have been duly taken or made and remains in
full force and effect.
(m) No Proceedings.
(i) As of the Closing Date there is no: (I) injunction, writ,
preliminary restraining order or any order of any nature
issued by any Government Authority, arbitral tribunal or
other body directing that any of the transactions provided
for herein or in the other Transaction Documents not be
consummated as herein or therein provided; or (II)
litigation, proceeding or, to the Borrower's knowledge,
investigation, of or before any Government Authority,
arbitral tribunal or other body pending or, to the
Borrower's knowledge, threatened with respect to or
affecting any Project, this Agreement or any other
Transaction Document or any of the transactions
contemplated hereby or thereby.
(ii) A certificate of an Authorized Officer of the Borrower,
dated as of the Closing Date, certifying as to such effect.
(n) No Material Adverse Change.
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(i) As of the Closing Date, there has been no Material Adverse
Effect since November 7, 2002, and no act, event or
circumstance affecting the Borrower has arisen since such
date that could reasonably be expected to result in a
Material Adverse Effect.
(ii) A certificate of an Authorized Officer of the Borrower,
dated as of the Closing Date, certifying as to such effect.
(o) Opinions of Counsel. The following opinions of counsel, each
acceptable in form and substance to the Agents and the Lenders:
(i) An opinion of Chadbourne & Parke LLP, as special New York
counsel to the Borrower and the Sponsor, and addressing
certain New York State and Federal law matters;
(ii) An opinion of David Chanover, special California counsel to
the Borrower; and
(iii) An opinion of Morris, Nichols, Arsht & Tunnell, as special
Delaware counsel to the Borrower and the Sponsor and
addressing certain general Delaware corporate, limited
liability Company, and Uniform Commercial Code matters.
(p) Fees and Expenses. Evidence that the Borrower shall have paid in
full, on or before the Closing Date, all fees and expenses then
due under or pursuant to this Agreement.
(q) Establishment and Funding of the Accounts. Each of the Accounts
shall have been established as of the Closing Date in accordance
with the terms of the Depositary Agreement. The Debt Service
Reserve Account shall have on deposit a credit balance of
immediately available funds in an amount not less than the Debt
Service Reserve Required Amount, provided that the initial funding
of the Debt Service Reserve Account may be made with the proceeds
of the Initial Term Loans.
(r) Borrower's LLC Agreement. The Borrower's LLC Agreement shall be in
form and substance satisfactory to the Administrative Agent.
(s) No Default. Immediately before and after giving effect to such
proposed Loan, no Default or Event of Default shall have occurred
and be continuing and no Default would result therefrom.
(t) Representations and Warranties. Immediately before and after
giving effect to such proposed extension of credit, all
representations of the Borrower and the Sponsor contained in the
Financing Documents shall be true and correct on and as
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of the Closing Date in all material respects as if made on and as
of such date except for any such representations and warranties
that were initially stated to have been made solely as of an
earlier date, in which case such representations shall have been
true and correct in all material respects as of such earlier date.
(u) Absence of Material Adverse Effect. Immediately before and after
giving effect to such proposed extension of credit, no Material
Adverse Effect shall have occurred and be continuing or would
result therefrom.
(v) Government Approvals. All Government Approvals that are necessary
for each Project as of the Closing Date shall have been obtained
on or prior to the Closing Date and shall be in full force and
effect and not subject to appeal. (w) Notice of Borrowing. The
Borrower shall have delivered to the Administrative Agent (with a
copy to the Collateral Agent) a Notice of Borrowing with respect
to Initial Term Loans in an amount equal to the aggregate Initial
Term Loan Commitments.
(x) Payment Instructions. Evidence that the Borrower shall have
irrevocably instructed in writing each of SCE and Imperial
Irrigation District to make all payments owing to the Borrower
under any Project Document to which either SCE or Imperial
Irrigation District is party to the Depositary Bank for deposit
into the Revenue Account.
6.02 ADDITIONAL TERM LOANS. The obligation of any Lender to make its
Additional Term Loan is subject to the receipt by the Administrative
Agent of the documents and the satisfaction of the conditions precedent
set out below on the date of such Loan, each of which shall be in form
and substance satisfactory to the Administrative Agent and the Majority
Lenders.
(a) No Default. Immediately before and after giving effect to such
proposed extension of credit, no Default or Event of Default shall
have occurred and be continuing and no Default would result
therefrom.
(b) Representations and Warranties. Immediately before and after
giving effect to such proposed extension of credit, all
representations of the Borrower and the Sponsor contained in the
Financing Documents shall be true and correct on and as of the
date of such Additional Term Loan in all material respects as if
made on and as of such date except for any such representations
and warranties that were initially stated to have been made solely
as of an earlier date, in which case such representations shall
have been true and correct in all material respects as of such
earlier date.
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(c) Absence of Material Adverse Effect. Immediately before and after
giving effect to such proposed extension of credit, no Material
Adverse Effect shall have occurred and be continuing or would
result therefrom.
(d) Government Approvals. All Government Approvals that are necessary
for the then current stage of the Development of each Project
shall have been obtained on or prior to the date of such extension
of credit and shall be in full force and effect and not subject to
appeal.
(e) Upgrade Acceptance Test. The Project has successfully passed the
Upgrade Acceptance Test on or before December 31, 2003.
(f) Upgrade Pro Forma. The Upgrade Pro Forma, containing assumptions
and otherwise in form and substance satisfactory to the Lenders
and the Independent Engineer, taking into account the effect of
the Upgrade Project on the Projects' performance, and
demonstrating an annual Debt Service Coverage Ratio of at least
1.5:1.
(g) Independent Engineer's Upgrade Report; Defective Tower Repair. An
update to the report of the Independent Engineer that was
delivered on the Closing Date, confirming that the Upgrade
Acceptance Test has been satisfied in all material respects in
form and substance satisfactory to the Lenders, and a certificate
of an Authorized Officer of the Borrower, dated no later than July1, 2003 certifying that the Tower Repairs have been substantially
completed and that, as a result, the cooling towers subject
thereof are, as of such date, in good working order and condition
in accordance with generally accepted prudent utility practices.
(h) Title Policy Endorsement. An endorsement to the Title Policy to
the date of such extension of credit, in the form approved by the
Administrative Agent and setting out no additional exceptions
(including survey exceptions).
(i) Notice of Borrowing. The Borrower shall have delivered to the
Administrative Agent (with a copy to the Collateral Agent) a
Notice of Borrowing with respect to Additional Term Loans in an
amount not exceeding the present value, as calculated by the
Administrative Agent, discounted at ten percent (10%), of
two-thirds (2/3) of Additional Project Cash Flow, as set forth in
the Upgrade Pro Forma, for the period from the date the Project
passes the Upgrade Acceptance Test to the Final Maturity Date, but
not to exceed the aggregate Additional Term Loan Commitments.
(j) Other. Such other statements, certificates, documents and
information with respect to any Project or matters contemplated by
this Agreement as either Agent or the Majority Lenders may
reasonably request.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders and each Agent that:
7.01 EXISTENCE. The Borrower is duly organized or formed, validly existing and
in good standing under the laws of the State of Delaware. The Borrower is
duly qualified to do business and is in good standing in the State of
California. The Borrower is duly qualified to do business and is in good
standing in all other places where necessary in light of the business it
conducts and the Property it owns and intends to conduct and own and in
light of the transactions contemplated by this Agreement and the other
Transaction Documents, except where the failure to so qualify or be in
good standing could not reasonably be expected to have a Material Adverse
Effect. No filing, recording, publishing or other act that has not been
made or done is necessary in connection with the existence or good
standing of the Borrower or the conduct of its business.
7.02 FINANCIAL CONDITION.
(a) Financial Statements. The financial statements delivered to the
Administrative Agent pursuant to Section 8.01, and any related
statements of income, owner's equity and cash flows: (i) fairly
present, in all material respects, the financial condition of the
Borrower as of the date delivered and the results of its
operations for the period covered thereby (subject, in the case of
any quarterly financial statements to normal year-end audit
adjustments); and (ii) have been prepared in accordance with the
Accounting Principles applicable to such Person.
(b) No Material Contingent Liabilities. As of the date of the relevant
balance sheet included in such financial statements, the Borrower
has no contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments or any other liabilities
or obligations of a nature required to be reflected in a balance
sheet for the period to which such financial statements relate
that were not disclosed in such balance sheet and, either
individually or in the aggregate would be material to the
Borrower.
(c) No Material Adverse Change. The Borrower knows of no reasonable
basis existing as of the date of its most recent balance sheet in
accordance with Section 8.01 for the assertion against it of any
liability or obligation of a nature required to be reflected in a
balance sheet that is not fully reflected in its most recent
balance sheet. Since the date of delivery of such balance sheet,
there has been no material adverse change in the financial
condition, operations or business of the Borrower from that set
out in such financial statements as at such date.
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7.03 ACTION.
(a) Borrower. The Borrower has full limited liability company power,
authority and legal right to execute and deliver the Transaction
Documents to which it is or is intended to be a party and to
perform its obligations thereunder. The execution, delivery and
performance by the Borrower of each of the Transaction Documents
to which it is or is intended to be a party and the consummation
of the transactions contemplated thereby have been duly authorized
by all necessary limited liability company action on its part.
Each of the Transaction Documents to which the Borrower is a party
has been duly executed and delivered by or on behalf of such
Person and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by: (i) applicable
bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally; and (ii) the
application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in
equity).
(b) Other Major Project Parties.
(i) Each of the other Major Project Parties has full corporate,
limited liability company or partnership power, authority
and legal right to execute and deliver each of the
Transaction Documents to which it is or is intended to be a
party and to perform its obligations thereunder;
(ii) the execution, delivery and performance by each other Major
Project Party of each of the Transaction Documents to which
it is or is intended to be a party and the consummation of
the transactions contemplated thereby have been duly
authorized by all necessary corporate, limited liability
company or partnership action on the part of such other
Major Project Party; and
(iii) each of the Transaction Documents to which any other Major
Project Party is a party has been duly executed and
delivered by such other Major Project Party and constitutes
the legal, valid and binding obligation of such other
Project Party enforceable against such other Major Project
Party in accordance with its terms, except as the
enforceability thereof may be limited by: (A) applicable
bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally;
and (B) the application of general principles of equity
(regardless of whether such enforceability is considered in
a proceeding at law or in equity);
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provided that these representations shall be made only to the
knowledge of the Borrower with respect to any other Major Project
Party that is not an Affiliate of the Borrower.
7.04 NO BREACH.
(a) Execution, Etc. of Transaction Documents. The execution, delivery
and performance by the Borrower of each of the Transaction
Documents to which it is or is intended to be a party and the
consummation of the transactions contemplated thereby do not and
will not: (i) require any consent or approval of any Person that
has not been obtained (except for consents from the BLM, SCE and
for certain consents by third parties to the right of the
Collateral Agent on behalf of the Secured Parties under the
Security Documents to step into, cure defaults under or substitute
a counterparty to, certain Project Documents) and each such
consent and approval that has been obtained is in full force and
effect; (ii) violate any material Government Rule or material
Government Approval applicable to any Project; (iii) conflict
with, result in a breach of or constitute a default under: (A) the
Borrower's Charter Documents or any corporate, limited liability
company action or any resolution of the member of the Borrower; or
(B) any Project Document other than with respect to the Consents
described in clause (i) above that have not been obtained or any
indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Borrower is a party or
by which it or its Property may be bound or affected in any
material respect; or (iv) result in, or create any Lien (other
than a Permitted Lien) upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower.
(b) No Breach. The Borrower is not in violation of any Government Rule
or Government Approval that could reasonably be expected to result
in a Material Adverse Effect. The Borrower is not in breach of or
default under any indenture, loan or credit agreement or any other
agreement, lease or instrument referred to in paragraph (a)(iii)
above, except such breaches or defaults that, in the aggregate
could not reasonably be expected to result in a Material Adverse
Effect.
7.05 GOVERNMENT APPROVALS; GOVERNMENT RULES.
(a) Borrower. All Government Approvals necessary under Government
Rules to be obtained by or on behalf of the Borrower on or prior
to the Closing Date are set out in Schedules VI and, except for
those Government Approvals set out in Schedule VII which are not
currently required for any Project, have been duly obtained, were
validly issued, are in full force and effect, are not subject to
appeal, are held in the name, or on behalf of, such Person and are
free from conditions or requirements compliance with which could
reasonably be expected to result in a Material Adverse Effect or
which such Person does not reasonably expect to be able to satisfy
on or prior to the time when necessary.
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(b) Other Major Project Parties. To the Borrower's knowledge: (i) each
other Major Project Party has obtained all Government Approvals
necessary under Government Rules that are required to be obtained
on or prior to the Closing Date in order for such other Major
Project Party to perform its obligations under the Transaction
Documents to which it is or is intended to be a party, other than
those Government Approvals not currently required for any Project;
and (ii) such Government Approvals are in full force and effect,
are not subject to appeal, are held in the name of such other
Major Project Party and are free from conditions or requirements
compliance with which could reasonably be expected to result in a
Material Adverse Effect or which the Borrower does not reasonably
expect such other Major Project Party to be able to satisfy on or
prior to the time when necessary.
(c) No Material Omission. The information set out in each application
and all other written materials submitted by the Borrower (and to
the Borrower's knowledge, each other Major Project Party) to the
applicable Government Authority in connection with each of its
Government Approvals is accurate and complete in all material
respects as of the date submitted to such Government Authority and
does not omit to state any material fact necessary to make such
information not misleading.
(d) Future Government Approvals. The Borrower has no reason to believe
that any Government Approvals that have not been obtained by it or
any other Major Project Party as of the date of this Agreement,
but which will be required in the future, will not be obtained in
due course on or prior to the time when necessary and will be free
from any condition or requirement, compliance with which could
reasonably be expected to have a Material Adverse Effect.
(e) Compliance of Upgrade Project. The Upgrade Project, if constructed
in accordance with the Plans and Specifications therefor and
otherwise Developed as contemplated by the Project Documents, will
conform to and comply, in all material respects, with all
covenants, conditions, restrictions and reservations in the
Government Approvals applicable thereto and all Government Rules.
(f) Copies Provided to Administrative Agent. In accordance with
Section 6.01(h), the Administrative Agent has received a certified
copy of each Government Approval heretofore obtained.
7.06 PROCEEDINGS. There is no action, suit or proceeding at law or in equity
or by or before any Government Authority, arbitral tribunal or other body
now pending or, to the knowledge of the Borrower, threatened against or
affecting it, any of its Property (including any Project) or, to the
knowledge of the Borrower, any other Major Project Party, that could
reasonably be expected to result in a Material Adverse Effect. No winding
up, dissolution or similar process is pending or threatened against the
Borrower or (to the knowledge of the Borrower) any other Major Project
Party except, after the
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Closing Date, to the extent such process, if adversely determined, could
not reasonably be expected to result in an Event of Default.
7.07 ENVIRONMENTAL MATTERS.
(a) Environmental Claims. Except as described in Part A of Schedule
VIII, to the knowledge of the Borrower, there are no facts,
circumstances, conditions or occurrences regarding any Project
that could reasonably be expected to form the basis of an
Environmental Claim arising with respect to any Project or against
such Project, the Borrower or, in connection with its involvement
in any Project, any other Environmental Party, that individually
or in the aggregate could reasonably be expected to result in a
Material Adverse Effect.
(b) Threatened Environmental Claims. Except as set out in Part B of
Schedule VIII, there are no pending or, to the knowledge of the
Borrower no past or, threatened Environmental Claims arising with
respect to any Project or against such Project, the Borrower or,
in connection with its involvement in the Development of any
Project, any other Environmental Party, that individually or in
the aggregate could reasonably be expected to result in a Material
Adverse Effect.
(c) Hazardous Materials. Except as set out in Part C of Schedule VIII,
to the Borrower's knowledge no Hazardous Materials have been Used
or Released at, on, under or from any Project in an amount or
concentration that is not otherwise in compliance with applicable
Environmental Law and that individually or in the aggregate could
reasonably be expected to result in a Material Adverse Effect.
(d) Other Materials. There are not now and, to the knowledge of the
Borrower, never have been any underground storage tanks located at
any Project. There is no asbestos contained in, forming part of,
or contaminating any part of any Project, and no polychlorinated
biphenyls are used, stored, located at or contaminate any part of
any Project.
(e) Investigations. There have been no environmental investigations,
studies, audits, reviews or other analyses conducted by or that
are in the possession of the Borrower (or, with respect to such
investigations, studies, audits, reviews and other analysis
conducted prior to April 15, 2002, known by the Borrower to be in
its possession) in relation to any Project that have not been
provided to the Administrative Agent and the Lenders.
7.08 TAXES. The Borrower has filed or caused to be filed all tax returns that
are required by applicable law to be filed, and has paid all Taxes shown
to be due and payable on said returns or on any assessments made against
the Borrower or any of its Property and all other Taxes imposed on the
Borrower by any Government Authority (other than Taxes the payment of
which are not yet due or that are being Contested) except, in each case,
where such failure could not reasonably be expected to have a Material
Adverse Effect.
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No Liens for Taxes (other than Permitted Liens) against the Borrower or
any of its Property exist and no claims are being asserted against the
Borrower or any of its Property with respect to any Taxes. The aggregate
amount of sales, excise or property taxes imposed or reasonably expected
to be imposed on the Borrower or any of its Property does not exceed the
amounts provided therefor in the Closing Pro Forma. The charges, accruals
and reserves on its books in respect of Taxes are, in the opinion of the
Borrower, adequate.
7.09 TAX STATUS.
(a) For Federal and state income tax purposes, the Borrower is
disregarded as an entity separate from its owner.
(b) Neither the execution and delivery of this Agreement, the other
Transaction Documents or the Non-Material Project Contracts nor
the consummation of any of the transactions contemplated hereby or
thereby shall affect the classification of the Borrower as set out
in paragraph (a) above.
7.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected
to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87)
did not, as of the date of the most recent financial statements
reflecting such amounts, materially exceed the fair market value of the
assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such
amounts, materially exceed the fair market value of the assets of all
such underfunded Plans.
7.11 NATURE OF BUSINESS. The Borrower has not engaged in any business other
than the Development of the Projects and with respect to the SIGC Lease.
Neither the business nor any Properties of the Borrower are or have been
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance) that
could reasonably be expected to have a Material Adverse Effect.
7.12 TITLE; SECURITY DOCUMENTS.
(a) Title. The Borrower owns and has good, legal and marketable title
to the Collateral purported to be covered by the Security
Documents to which it is a party, except for that portion of the
Collateral which is Real Property, in which the Borrower has a
valid estate or interest, and all such interests of the Borrower
are free and clear of all Liens other than Permitted Liens.
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(i) The Borrower is lawfully possessed of a valid and
subsisting estate in and to the Real Property and rights to
the Real Property described in the Deed of Trust free and
clear of all Liens other than the Liens granted to the
Collateral Agent for the benefit of the Secured Parties
under the Security Documents and:
(A) as at the Closing Date, exceptions shown on the
Title Policy delivered on the Closing Date in
relation thereto; and
(B) Permitted Liens.
(ii) The Borrower enjoys peaceful and undisturbed possession of,
all of its Properties (subject only to the Permitted Liens
described above) that are necessary for the Projects.
(b) Security Documents. The provisions of the Security Documents are
effective to create, in favor of the Collateral Agent for the
benefit of the Secured Parties, a legal, valid and enforceable
Lien on and security interest in all of the Collateral purported
to be covered thereby in accordance with state law and as
permitted pursuant to the rules and regulations of the BLM. All
necessary and appropriate recordings and filings have been made,
or are being made concurrently herewith, in all necessary and
appropriate public offices (including in the jurisdictions set out
in Schedule V), and all other necessary and appropriate action has
been, or is concurrently herewith being, taken, so that, subject
to the rules and regulations of the BLM, each such Security
Document creates, or as to after-acquired property will create, to
the extent set forth in such Security Document, a perfected Lien
on and security interest in all right, title, estate and interest
in the Collateral covered thereby, prior and superior to all other
Liens other than Permitted Liens. Except as otherwise agreed by
the Lenders, all necessary and appropriate consents to the
creation, perfection and enforcement of such Liens have been
obtained from each of the parties to the Project Documents except
for the BLM and SCE. Subject to the rules and regulations of the
BLM, no mortgage or financing statement or other instrument or
recordation covering all or any part of the Collateral purported
to be covered by the Security Documents is on file in any
recording office, except such as may have been filed in favor of
the Collateral Agent for the benefit of the Secured Parties or in
respect of any Permitted Lien.
7.13 SUBSIDIARIES.
(a) No Subsidiaries. The Borrower has no subsidiaries.
(b) Ownership Interests in Borrower. There are no ownership interests
in the Borrower other than the 100% member interest held by the
Sponsor.
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7.14 UTILITY REGULATION.
(a) Holding Company. The Borrower is not a "public-utility company" or
a "holding company", or an "affiliate" of a "holding company" or
of a "public-utility company", or a "subsidiary company" of a
"holding company", within the meaning of PUHCA nor is Borrower
subject to regulation under PUHCA. None of the Projects is a
"public-utility company" or a "holding company", or an "affiliate"
of a "holding company" or of a "public-utility company", or a
"subsidiary company" of a "holding company" within the meaning of
PUHCA.
(b) Status. Each of the Projects is a QF. The Borrower is not, nor
will any of the Secured Parties (solely as a result of its
execution, delivery or performance of this Agreement or the other
Financing Documents or the transactions contemplated thereby,
other than the exercise of remedies under the Security Documents
except to the extent that, following such exercise of remedies,
the Borrower will remain as the owner of the Projects, and the
Operator will remain as the operator thereof) be, subject to
regulation as a "public-utility company", a "holding company" or a
"subsidiary company" or an "affiliate" of any of the foregoing,
under PUHCA.
(c) Public Utility. Except as set out on Schedule VII and provided in
the Government Approvals identified therein, the Borrower is not,
nor will any of the Secured Parties be (solely as a result of its
execution, delivery or performance of this Agreement or the other
Financing Documents or the transactions contemplated thereby,
other than the exercise of remedies under the Security Documents
except to the extent that, following such exercise of remedies,
the Borrower will remain as the owner of the relevant Projects,
and the Operator will remain as the operator thereof), subject to
regulation: (i) respecting the rates of electric utilities or
material financial and organizational regulation of electric
utilities under the FPA or the applicable Government Rules of the
State of California other than, solely with respect to the Secured
Parties' exercise of remedies under the Security Documents,
Section 203 of the FPA; or (ii) otherwise as a gas or other
regulated utility, however denominated, under applicable
Government Rules of the United States of America or the State of
California.
(d) Investment Company. The Borrower is not an "investment company" or
a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940 or an "investment
advisor" within the meaning of the Investment Company Act of 1940.
7.15 FINANCING DOCUMENTS; PROJECT DOCUMENTS; NON-MATERIAL PROJECT CONTRACTS;
LICENSES, ETC.
(a) Financing Documents; Project Documents; Non-Material Project
Contracts. The Financing Documents, Project Documents and the
Non-Material Project Contracts constitute and include all
contracts and agreements relating to the Projects. As at
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the Closing Date, all Project Documents are set out in the
definition thereof in Schedule I. There are no material services,
materials or rights (other than Government Approvals) required for
any Project other than those granted by, or to be provided to the
Borrower pursuant to, the Project Documents. The Borrower has no
reason to believe that any services, materials or rights (other
than Government Approvals) that have not been obtained as of the
date of this Agreement, but that will be required for a future
stage of the Development of any Project (including, without
limitation, the Upgrade Project), will not be obtained in due
course on or prior to the commencement of the appropriate stage of
Development of such Project and will not contain any condition or
requirement compliance with which could reasonably be expected to
have a Material Adverse Effect.
(b) Copies of Documents. The Administrative Agent has received a copy
(certified by the Borrower) of each Project Document, in
accordance with Section 6.01(c), in each case as in effect on the
date of delivery and each amendment, modification or supplement
thereto.
(c) No Amendment. Since their certification and delivery in accordance
with Section 6.01(c) and except as permitted pursuant to Section
8.22, none of the Project Documents has been amended, modified or
supplemented or has been Impaired and all of the Project Documents
are in full force and effect in all material respects. All
conditions precedent to the obligations of the respective parties
under the Project Documents have been satisfied or waived except
for such conditions precedent that need not and cannot be
satisfied until a later stage of Development of the relevant
Project, and the Borrower has no reason to believe that any such
condition precedent cannot be satisfied on or prior to the
commencement of the appropriate stage of Development of such
Project.
(d) Representations and Warranties. All material representations,
warranties and other factual statements made by the Borrower and,
to the knowledge of the Borrower, made by each other Person in the
Project Documents are true and correct in all material respects
(or, if stated to have been made solely as of an earlier date,
were true and correct as of such date) and do not omit to state
any material fact necessary to make such representations,
warranties and other factual statements not misleading.
(e) No Default. The Borrower is not in default in the performance of
any covenant or obligation set out in any Project Document in a
manner that could reasonably be expected to result in a Material
Adverse Effect. To the knowledge of the Borrower, no other party
to any Project Document is in default in the performance of any
covenant or obligation set out therein in a manner that could
reasonably be expected to result in a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
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(f) Licenses. All material permits, licenses, trademarks, patents or
agreements with respect to the usage of technology or other
property (other than those constituting Government Approvals) that
are necessary for each Project have been obtained, are final and
are in full force and effect in all material respects and any such
permits, licenses, trademarks, patents or agreements not currently
necessary for each Project can reasonably be expected to be
obtained when needed, free from conditions or requirements,
compliance with which could reasonably be expected to result in a
Material Adverse Effect.
7.16 UTILITY SERVICES. All utility services necessary for the Development of
each Project, including, as necessary, water supply, storm and sanitary
sewer, electric and telephone services and facilities, are available to
such Project.
7.17 DISCLOSURE. All factual information in writing (taken as a whole)
furnished by the Borrower or any Affiliate of the Borrower on its behalf,
whether in print or electronic form, to any Financing Party was true and
accurate in all material respects: on the dates as of which such
information was furnished, and was not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided; provided,
however, that, except as otherwise expressly provided in this Agreement,
the Borrower's sole representation with respect to projections, estimates
or other expressions of view as to future circumstances shall be that
such projections, estimates or other expressions of view as to future
circumstances: (i) were prepared in good faith and with due care; (ii)
fairly present in all material respects the Borrower's expectations as to
the matters covered thereby as of their respective date(s) of delivery;
(iii) were based on reasonable assumptions as to all factual and legal
matters material to the estimates therein as of their respective date(s)
of delivery; (iv) were in all material respects consistent with the
provisions of the Transaction Documents as of their respective date(s) of
delivery; and (v) contain no statements or conclusions that are based
upon or include information known to the Borrower to be misleading or
that fail to take into account material information regarding the matters
reported therein as of their respective date(s) of delivery. There are in
existence no documents or agreements that have not been disclosed to the
Lenders that are material in the context of the Transaction Documents or
that have the effect of varying any of the Transaction Documents or the
Projects. There is no fact known to the Borrower that has not been
disclosed in writing to the Lenders and that has had, or that could
reasonably be expected in the future to have, a Material Adverse Effect.
7.18 USE OF PROCEEDS. The proceeds of each Loan will be used solely in
accordance with, and solely for the purposes contemplated by, Section
8.09. No part of the proceeds of any Loan hereunder will be used for the
purpose, whether immediate, incidental or ultimate, of buying or carrying
any Margin Stock or to extend credit to others for such purpose.
7.19 FEES. On the Closing Date, except with respect to the financial advisor
to the Borrower in connection with the transactions contemplated hereby,
the Borrower does not have any
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obligation to any Person in respect of any finder's, broker's, investment
banking, legal or accounting or other similar fee (including any fee
payable to engineers, environmental consultants, fuel consultants or
similar experts) in connection with any of the transactions contemplated
by the Transaction Documents for services rendered more than 60 days
prior to the Closing Date other than fees payable to Lenders or fees
specifically contemplated in the Closing Pro Forma.
7.20 INDEBTEDNESS. The Borrower is not directly or indirectly liable with
respect to any Indebtedness outstanding as of the Closing Date other than
Permitted Indebtedness.
7.21 INVESTMENTS. The Borrower has no Investments except Permitted
Investments.
7.22 NO FORCE MAJEURE. No event, condition or circumstance has occurred on the
basis of which the Borrower has either given a notice of "force majeure"
or received such notice from any other Person that could reasonably be
expected to entitle the Borrower or such notifying Person to excuse,
defer or suspend the performance of any of the material obligations of
the Borrower or such notifying Person under any Transaction Document to
which it is a party on the basis of "force majeure."7.23 ASSETS. The Borrower owns, leases and otherwise has full legal right to
use all Real Property, subject to the rules and regulations of the BLM,
buildings, machinery, equipment and other assets, whether tangible or
intangible, that are necessary or useful for the conduct of its business
as presently conducted and as proposed to be conducted through the Final
Maturity Date. On and as of the Closing Date, each such asset is, except
for the assets to be repaired and/or upgraded as part of the Upgrade
Project and the Tower Repairs, free from defects (patent and latent), is
in good operating condition and repair (subject to normal wear and tear),
and is suitable for the purposes for which it is presently used and as
proposed to be used through the Final Maturity Date. Since April 15,2002, each such asset, except for the assets to be repaired and/or
upgraded as part of the Upgrade Project and the Tower Repairs, has been
maintained in accordance with prudent and good industry practice.
ARTICLE VIII
COVENANTS
The Borrower covenants and agrees with the Lenders and the Agents that until the
Termination Date:
8.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower shall deliver to
the Administrative Agent (in sufficient copies for distribution to each
of the Lenders):
(a) as soon as available and in any event within 60 days after the end
of each quarterly fiscal period of each fiscal year of the
Borrower, unaudited statements
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of income, owners' equity and cash flows of the Borrower, for such
period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related unaudited
balance sheet as at the end of such period, setting out in each
case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by
any material accounting variation report required by Section
1.04(b) and a certificate of a senior financial officer of the
Borrower, which certificate shall state that said financial
statements fairly present in all material respects the financial
condition and results of operations of the Borrower, in accordance
with the Accounting Principles applicable to the Borrower as at
the end of, and for, such period (subject to normal year-end audit
adjustments);
(b) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, audited statements of
income, owners' equity and cash flows of the Borrower for such
year and the related audited balance sheets as at the end of such
year, setting out in each case in comparative form the
corresponding figures for the preceding fiscal year, and
accompanied by any material accounting variation report required
by Section 1.04(b) and an opinion thereon of independent certified
public accountants of recognized standing reasonably acceptable to
the Lenders, which opinion shall state that said financial
statements fairly present in all material respects the financial
condition and results of operations of the Borrower as at the end
of, and for, such fiscal year in accordance with the Accounting
Principles applicable to the Borrower, and a certificate of such
accountants stating that, in making the examination necessary for
their opinion, they obtained no knowledge, except as specifically
stated, of any Default or Event of Default (which certificate may
be limited to the extent required by accounting rules or
guidelines or customary accounting practice);
(c) promptly upon their becoming available, copies of all registration
statements and regular periodic reports, if any, that the Borrower
shall have filed with the Securities and Exchange Commission or
any national securities exchange;
(d) prompt written notice of receipt by the Borrower of written notice
of the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower in an aggregate
amount that could reasonably be expected to result in a Default or
have a Material Adverse Effect;
(e) promptly after the Borrower knows or has reason to believe that
any Default or Event of Default has occurred, a notice of such
event describing the same in reasonable detail and, together with
such notice or as soon thereafter as practicable, a description of
the action that the Borrower has taken or proposes to take with
respect thereto;
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(f) promptly after the Borrower knows or has reason to believe that
any fact, event, circumstance, condition or occurrence has
occurred that results in, or could reasonably be expected to
result in, a Material Adverse Effect, a notice of such fact,
event, circumstance, condition or occurrence describing the same
in reasonable detail and, together with such notice or as soon
thereafter as practicable, a description of the action that the
Borrower has taken or proposes to take with respect thereto;
(g) promptly after the Borrower knows or has reason to believe that
any event, circumstance or condition in the nature of force
majeure has occurred which could reasonably be expected to result
in a materially adverse change from the Closing Pro Forma or, if
the Second Closing Date has occurred, the Upgrade Pro Form, a
notice of such event, describing the same in reasonable detail
and, together with such notice or as soon thereafter as
practicable, a description of the action that the Borrower has
taken or proposes to take with respect thereto;
(h) promptly upon their becoming available, copies of all material
notices or material documents received by the Borrower pursuant to
any Project Document (including any notice or other document
relating to a failure by the Borrower to perform any of its
covenants or obligations under such Project Document);
(i) promptly upon their becoming available, copies of all material
periodic reports received from the Operator and other material
notices relating to any Project received from any Project Party;
(j) the notices required by Section 8.06;
(k) as soon as practicable as they are available, copies of each
insurance policy relating to the Projects, together with a
certificate of an Authorized Officer of the Borrower, dated as of
the date of such delivery, certifying that the policies comply
with Section 8.05(a) and Schedule IV, cover the risks referred to
therein, are in full and effect, as of the date of such delivery,
no notice of cancellation has been issued thereunder, and that all
premiums then due and payable thereon have been paid; and
(l) from time to time such other information regarding the financial
condition, operations, business or prospects of the Borrower
(including any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA) as any Lender
(through the Administrative Agent) or Agent may reasonably
request.
8.02 MAINTENANCE OF EXISTENCE; ETC.The Borrower shall: (a) preserve and
maintain its legal existence; (b) preserve and maintain its good standing
and all material licenses, rights, privileges and franchises necessary
for the proper operation of each Project and its qualification to do
business; and (c) conduct its business in an orderly, efficient and
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regular manner, unless the failure to so comply could not reasonably be
expected to result in a Material Adverse Effect.
8.03 COMPLIANCE WITH GOVERNMENT RULES; ETC.
(a) Compliance with Government Rules. The Borrower shall comply with
all applicable Government Rules and from time to time obtain,
maintain, comply with and renew all Government Approvals as shall
now or hereafter be necessary under applicable Government Rules
(except any thereof the non-compliance with or non-renewal of
which could not reasonably be expected to result in a Material
Adverse Effect). The Borrower shall promptly upon receipt or
publication furnish a copy (certified by the Borrower or, if
available, the applicable Government Authority) of each such
Government Approval to the Administrative Agent.
(b) No Amendment. Except as provided in Section 8.22(b)(vi), the
Borrower shall not petition, request or take any legal or
administrative action that seeks to amend, supplement or modify
any Government Approval unless: (i) the Borrower theretofore shall
have furnished to the Administrative Agent and the Lenders a
detailed description of the proposed amendment, supplement or
modification and the actions that the Borrower proposes to take
with respect thereto; and (ii) such amendment, supplement or
modification could not reasonably be expected to result in a
Material Adverse Effect. The Borrower shall promptly upon receipt
or publication thereof furnish a copy (certified by the Borrower
or the applicable Government Authority) of each amendment,
supplement or modification to any Government Approval to the
Administrative Agent.
(c) QF Status. The Borrower shall maintain the status of the Projects
as QFs.
8.04 ENVIRONMENTAL COMPLIANCE.
(a) No Use or Release. The Borrower shall not Use or Release, or
permit the Use or Release of, Hazardous Materials at any Project
other than in compliance with all applicable Environmental Laws
and where such Use or Release could not reasonably be expected to
result in a Material Adverse Effect.
(b) Investigation. The Borrower shall conduct and complete any
investigation, study, sampling and testing and undertake any
cleanup, removal, remedial or other action necessary to remove and
clean up all Hazardous Materials Released at, on, in, under or
from any Project, to the extent required by and consistent with
the requirements of all applicable Environmental Laws except where
failure to conduct or complete such clean-up, removal, remedial or
other action could not reasonably be expected to result in a
Material Adverse Effect.
(c) Environmental Claim. The Borrower shall deliver to the
Administrative Agent and each Lender:
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(i) promptly upon obtaining knowledge of: (A) any fact,
circumstance, condition or occurrence that could form the
basis of an Environmental Claim arising with respect to any
Project or against such Project, the Borrower or, in
connection with its involvement in any Project, any other
Environmental Party, in each case, which could reasonably
be expected to have a Material Adverse Effect; or (B) any
pending or threatened material Environmental Claim arising
with respect to any Project or against such Project, the
Borrower or, in connection with its involvement in any
Project, any other Environmental Party, a notice thereof
describing the same in reasonable detail and, together with
such notice or as soon thereafter as practicable, a
description of the action that the Borrower has taken or
proposes to take with respect thereto and, thereafter, from
time to time such detailed reports with respect thereto as
the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request; and
(ii) promptly upon their becoming available, copies of all
material written communications with any Government
Authority relating to any violation or alleged violation of
any Environmental Law or any Environmental Claim relating
to any Project.
8.05 INSURANCE; EVENTS OF LOSS.
(a) Insurance Maintained by the Borrower. The Borrower shall keep its
present and future properties and business insured as required by
and in accordance with the terms and conditions described in
Schedule IV.
(b) Compromise, Adjustment or Settlement. The Administrative Agent
shall be entitled at its option to participate in any compromise,
adjustment or settlement in connection with any Event of Loss
under any policy or policies of insurance or any proceeding with
respect to any condemnation (including a Condemnation) or other
taking of Property of the Borrower in excess of $1,000,000. The
Borrower shall, within five Business Days after request therefor,
reimburse the Administrative Agent for all reasonable
out-of-pocket expenses (including reasonable attorneys' and
experts' fees) incurred by the Administrative Agent in connection
with such participation. The Borrower shall not make any
compromise, adjustment or settlement in connection with any such
claim without the approval of the Administrative Agent, which
approval shall not unreasonably be withheld, conditioned or
delayed. The Borrower shall diligently pursue all claims and
rights to compensation against all relevant insurers and/or
Government Authorities, as applicable, in respect of any Event of
Loss.
(c) Loss Proceeds. In the event that the Borrower receives any amount
of Loss Proceeds in respect of any Event of Loss, the Borrower
shall deposit the amount
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of such Loss Proceeds in the Restoration Sub-Account. In the event
that the Borrower receives any amount of proceeds of business
interruption insurance and other payments received for
interruption of operations in respect of any Event of Loss, the
Borrower shall deposit the amount of such proceeds in the Revenue
Account. In the event that the amount of such Loss Proceeds with
respect to any Event of Loss is $2,500,000 or less, such amounts
shall be made available to the Borrower for the purpose of
Restoring the Affected Property and shall be applied by the
Borrower to the payment of the cost of the Restoration of the
Affected Property. In the event that the amount of such Loss
Proceeds with respect to any Event of Loss is greater than
$2,500,000, such amounts shall be made available to the Borrower
from time to time in accordance with paragraph (d) and shall be
applied by the Borrower to the payment of the cost of the
Restoration of the Affected Property.
In the event that the relevant Event of Loss has caused a Project
to be declared a total loss by its insurers, the Loss Proceeds
with respect to such Event of Loss shall be promptly applied by
the Administrative Agent in accordance with Section 3.04.
(d) Restoration. Amounts to be made available to the Borrower from the
Restoration Sub-Account to be applied to the Restoration of
Affected Property following any Event of Loss ("RESTORATION WORK")
shall be remitted to the Borrower by the Administrative Agent, in
the event that the amount of Loss Proceeds with respect to such
Event of Loss is greater than $2,500,000, subject to the
satisfaction of the following conditions:
(i) in the event that the amount of Loss Proceeds with respect
to such Event of Loss is less than or equal to $5,000,000,
the Borrower has delivered to the Administrative Agent
plans and specifications for the Restoration Work,
including reasonable estimates of the costs and time
required to complete such Restoration Work ("RESTORATION
PLANS") and has certified in writing to the Administrative
Agent that the conditions set out in paragraphs (ii)(B),
(C), (E) and (F) below have been satisfied; and
(ii) in the event that the amount of Loss Proceeds with respect
to such Event of Loss is greater than $5,000,000:
(A) the Borrower shall have delivered the relevant
Restoration Plan to the Administrative Agent and the
Independent Engineer;
(B) the Restoration Plans provide for Restoration Work
that is technically feasible and will, upon
completion thereof, result in the Project being at
least equal in value, general
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utility and levels of performance as the Project
prior to the Event of Loss;
(C) the Restoration Plans provide for the Restoration
Work to be completed within the period covered by
business interruption insurance, plus any additional
period agreed between the Borrower and the
Administrative Agent (after consultation with the
Independent Engineer) for a cost not to exceed the
relevant Loss Proceeds plus any necessary additional
funds ("ADDITIONAL RESTORATION FUNDS") to be
contributed towards such Restoration from: (I)
amounts then on deposit in the Revenue Account that
are distributable in accordance with Section 8.13,
which amounts shall be transferred to the
Restoration Sub-Account; or (II) cash actually
deposited into the Restoration Sub-Account by a
Person other than the Borrower;
(D) the Independent Engineer shall have delivered to the
Administrative Agent and the Lenders a certificate
to the effect that the amount of Loss Proceeds with
respect to such Event of Loss that has been
deposited in the Restoration Sub-Account together
with any Additional Restoration Funds, business
interruption insurance proceeds relating thereto and
any projected revenues from the Project are
sufficient to Restore the Affected Property and to
pay all Operation and Maintenance Expenses and all
maintenance expenditures for such affected Project
and Debt Service, in each case during the period of
time that is required, in the opinion of the
Independent Engineer, to Restore the Affected
Property (the "RECONSTRUCTION PERIOD");
(E) no Event of Default could reasonably be expected to
occur during Restoration as a consequence of
Restoration Work, assuming that Restoration Work on
such Project proceeds in accordance with the
Restoration Plan;
(F) the Property constituting the Restoration Work shall
be subject to the Lien of the Security Documents
(whether by amendment to the Security Documents or
otherwise) free and clear of all Liens other than
Permitted Liens; and
(G) Each request by the Borrower for a disbursement of
funds from the Restoration Sub-Account shall be made
on 10 days' prior written notice to the
Administrative Agent,
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Collateral Agent and the Depositary Bank and shall
be accompanied by: (I) a certificate of each of an
Authorized Officer of the Borrower and the
Independent Engineer that: (1) all of the
Restoration Work completed has been done
substantially in compliance with the Restoration
Plan therefor; (2) the sum requested is required to
pay, or to reimburse the Borrower for, costs
incurred in connection with such Restoration Work
(giving a brief description of the services and
materials provided in connection with such
Restoration Work); (3) the sum requested, when added
to all Loss Proceeds and Additional Restoration
Funds with respect to the relevant Event of Loss
previously paid out by the Depositary Bank, does not
exceed the cost of the Restoration Work done as of
the date of such certificate; and (4) the amount of
Loss Proceeds with respect to the relevant Event of
Loss remaining in the Restoration Sub-Account,
together with any remaining Additional Restoration
Funds, will be sufficient to complete the
Restoration Work (giving an estimate of the cost of
such completion in such reasonable detail as the
Administrative Agent may reasonably request); (II) a
certificate of an Authorized Officer of the Borrower
certifying that no Default or Event of Default shall
have occurred and is continuing at such date; and
(III) partial lien waivers executed by each
contractor and major subcontractor involved in the
Restoration Work that shall cover all labor,
materials (including equipment and fixtures of all
kinds), supplies or services done, performed or
furnished at, for or to the relevant Project in
connection with the Restoration Work performed to
the date of such payment.
Once such Restoration Work is complete (such completion to be
evidenced by a certificate of the Borrower delivered to the
Administrative Agent, the Collateral Agent and the Depositary
Bank), any remaining relevant Loss Proceeds shall be applied as
set out in Section 4.3 of the Depositary Agreement.
If the Borrower shall at any time abandon the Restoration Work or
otherwise fail to pursue the Restoration Work substantially in
accordance with the Restoration Plans, then, to the extent that
such Loss Proceeds shall not otherwise have been remitted as
aforesaid to the Borrower, such Loss Proceeds shall promptly (at
the direction of the Majority Lenders) be applied by the
Administrative Agent in accordance with Section 3.04(a). Anything
to the contrary in this Section 8.05 notwithstanding, if as the
result of such Event of Loss or Restoration Work an Event of
Default shall have occurred and be continuing, the Administrative
Agent
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may instruct the Depositary Bank to apply any amount of such Loss
Proceeds in the Restoration Sub-Account in accordance with Section
3.05.
8.06 PROCEEDINGS. The Borrower shall, promptly upon: (a) obtaining knowledge
of any action, suit or proceeding at law or in equity by or before any
Government Authority, arbitral tribunal or other body pending or
threatened against or otherwise affecting the Borrower or any other Major
Project Party or any of such Person's Property, any Transaction Document,
any Project or the Collateral, in each case that could reasonably be
expected to result in a Material Adverse Effect; or (b) becoming aware of
any other circumstance, act or condition (including the adoption,
amendment or repeal of any Government Rule or the Impairment of any
Government Approval or notice (whether formal or informal, written or
oral) of the failure to comply with the terms and conditions of any
Government Approval) that could reasonably be expected to result in a
Material Adverse Effect, in each case, furnish to the Administrative
Agent a notice of such event describing the same in reasonable detail
and, together with such notice or as soon thereafter as practicable, a
description of the action that the Borrower or such other Major Project
Party has taken and, with respect to the Borrower, proposes to take with
respect thereto.
8.07 TAXES. The Borrower shall pay and discharge all Taxes imposed on it or on
its income or profits or on any of its Property or on any Transaction
Document prior to the date on which penalties attach thereto and prepare
and file Tax returns on or before their due date.
8.08 BOOKS AND RECORDS. The Borrower shall keep proper books of record and
accounts in accordance with Accounting Principles applicable to it and
permit representatives of either Agent, upon reasonable notice, to visit
and inspect its properties, to examine, copy or make excerpts from its
books, records and documents and to discuss its affairs, finances and
accounts with its principal officers during normal business hours and at
such intervals as either Agent may reasonably request. The Borrower shall
notify the Agents of any change in its independent accountants. The
Independent Engineer shall have the right to inspect any Project in order
to perform its obligations under the Financing Documents, including, to
witness and verify any acceptance tests and to discuss the Borrower's
affairs with its principal officers and engineers, all at such reasonable
times and at such intervals as the Independent Engineer may reasonably
request. The Borrower shall at all times maintain and preserve a complete
set of Plans and Specifications for each Project (and any Restoration
Plans with respect to such Project) at such Project's Site, available for
inspection by the Independent Engineer (in order to perform its
obligations under the Financing Documents), the Agents and any Lender.
8.09 USE OF PROCEEDS. The Borrower shall utilize the proceeds of the Loans as
provided in the second paragraph of this Agreement.
8.10 MAINTENANCE OF LIENS. The Borrower shall maintain and preserve the Liens
created by the Security Documents and the priority thereof and shall from
time to time execute or
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cause to be executed any and all further instruments (including financing
statements, continuation statements and similar statements with respect
to any Security Document) reasonably requested by the Collateral Agent
for such purposes. The Borrower shall promptly discharge, at the
Borrower's cost and expense, any Lien (other than Permitted Liens) on the
Collateral.
8.11 [INTENTIONALLY OMITTED].8.12 PROHIBITION OF FUNDAMENTAL CHANGES.
(a) Merger or Consolidation. The Borrower shall not merge into or
consolidate with, or acquire all or any substantial part of the
assets or any class of stock or other ownership interests of, any
other Person without the prior written consent of the Majority
Lenders. The Borrower shall not convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of
transactions, any assets except sales of (without duplication) (A)
electrical energy or capacity or ancillary services pursuant to a
PPA or otherwise in the ordinary course of its business; (B)
assets in the ordinary course of its business, the proceeds of
which do not in any year exceed the aggregate sum of $250,000 as
to all Projects; and (C) assets made redundant by the Upgrade
Project.
(b) No Acquisition. The Borrower shall not purchase or acquire any
assets other than: (i) the purchase of assets reasonably required
for the repair of the Defective Towers, and the Upgrade Project,
in each case, in accordance with the respective plans therefor;
(ii) the purchase of assets reasonably required in connection with
Restoration of the Project in accordance with Section 8.05(d);
(iii) the purchase of assets in the ordinary course of business as
reasonably required in connection with the Project in accordance
with the Project Documents and the Non-Material Project Contracts
and as contemplated by the Closing Pro Forma or, if the Second
Closing Date has occurred, the Upgrade Pro Forma; and (iv)
Permitted Investments.
8.13 RESTRICTED PAYMENTS(a).
The Borrower shall not, directly or indirectly, declare or make any other
Restricted Payment unless each of the following conditions is satisfied
both immediately before and after the date of payment thereof:
(i) the date of payment of such Restricted Payment shall be on or
within 30 days after a Quarterly Date; provided that, if the
Borrower has been precluded from making any Restricted Payment
within such 30-day period solely as a consequence of the condition
set out in paragraph (ii) below being unsatisfied during such
period and such condition is subsequently satisfied, the Borrower
may make such Restricted Payment on any date (the "EXTENDED
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RESTRICTED PAYMENT DATE") within 10 days after the date such
condition is first satisfied as long as all other conditions of
this Section 8.13 are satisfied on and as of such Extended
Restricted Payment Date;
(ii) no Default (other than any Default that (i) provides a cure period
therefor of not less than 30 days, (ii) is reasonably capable of
being remedied during such 30-day period, (iii) as to which the
Borrower is diligently prosecuting or pursuing such remedy, and
(iv) following the occurrence of which not more than 30 days have
elapsed), or an Event of Default shall have occurred and shall be
continuing or would result from the making of such Restricted
Payment;
(iii) for any Quarterly Date on or prior to March 31, 2004, the
Projected Debt Service Coverage Ratio shall be at least 1.20:1,
and for any corresponding Quarterly Date thereafter, the Debt
Service Coverage Ratio for the relevant Historical Computation
Period shall be at least 1.20:1;
(iv) the balance on deposit in the Debt Service Reserve Account shall,
on the date of payment of such Restricted Payment after giving
effect thereto, be at least equal to the Debt Service Reserve
Required Amount;
(v) the Restricted Payment shall only be made from and to the extent
of Distributable Cash (as defined in the Depositary Agreement);
and
(vi) each of the Administrative Agent and the Depositary Bank has
received: (i) at least 10 days prior to the corresponding
Quarterly Date and, if applicable, Extended Restricted Payment
Date, a Distribution Certificate substantially in the form of
Exhibit G.
If any of the foregoing conditions to distribution are not satisfied, the
relevant monies shall be applied as set out in Section 4.1 of the
Depositary Agreement.
8.14 LIENS. The Borrower shall not create, incur, assume or suffer to exist
any Lien on any of the Collateral or any of the other Property of the
Borrower except Permitted Liens.
8.15 INVESTMENTS. The Borrower shall not make any Investments except Permitted
Investments.
8.16 HEDGING ARRANGEMENTS. The Borrower shall, not later than 30 days
following the Closing Date, enter into and at all times thereafter
maintain in full force and effect one or
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more Interest Rate Cap Agreements providing for the payment to the
Borrower of an amount equal to the excess of the Eurodollar Rate minus
(b) six percent (6%), and otherwise on terms reasonably acceptable to the
Administrative Agent and the Borrower, with one or more hedge providers
reasonably acceptable to the Administrative Agent and the Borrower, and
in a notional equivalent amount at least equal to 60% of the principal
amount of all Loans outstanding on any Quarterly Date prior to the Final
Maturity Date.
8.17 INDEBTEDNESS. The Borrower shall not, directly or indirectly, create,
incur, assume or otherwise be or become liable with respect to any
Indebtedness except Permitted Indebtedness.
8.18 TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by this
Agreement, the Borrower shall not, directly or indirectly, enter into any
transaction directly or indirectly with or for the benefit of an
Affiliate other than transactions that: (a) are in the ordinary course of
business, including, without limitation, the Upgrade Project; (b) are on
terms and conditions at least as favorable to the Borrower as would be
obtainable at the time in a comparable "arm's-length" transaction with a
Person other than an Affiliate; (c) would not result in any Default
hereunder; and (d) are not otherwise prohibited hereunder.
8.19 NATURE OF BUSINESS. The Borrower shall not engage in any business other
than the operation of the Projects as contemplated by the applicable
Project Documents and Non-Material Project Contracts and as contemplated
by the SIGC Lease.
8.20 MAINTENANCE OF PROPERTIES.
(a) Properties. The Borrower shall maintain and preserve all of its
Properties necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and
tear excepted, and in accordance with generally accepted prudent
utility practices (and all other standards and requirements, to
the extent more stringent, set out in any Project Document).
(b) Restoration. The Borrower shall Restore any of its Property now or
hereafter the subject of an Event of Loss (whether or not insured
against or insurable) except any of its Property that has been the
subject of an Event of Loss that the Borrower determines in good
faith (and, in relation to any Event of Loss for which the amount
of the Loss Proceeds exceeds $2,000,000, with the approval of the
Majority Lenders) not to be necessary to the conduct of its
business.
(c) No Removal. The Borrower shall not permit all or any portion of
any Project to be removed from such Project's Site (except in the
ordinary course of business with respect to maintenance of
components of such Project that is required to be conducted off of
such Project's Site), demolished or materially altered; provided
that spare parts and similar individual items of equipment may be
moved from one Project to another Project as the Borrower may
reasonably believe necessary.
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8.21 [INTENTIONALLY OMITTED]8.22 PROJECT DOCUMENTS; ETC.
(a) Project Documents. The Borrower shall, unless prior written
consent is obtained from the Majority Lenders: (i) perform and
observe in all material respects all of its material covenants and
obligations contained in each of the Project Documents to which it
is a party; and (ii) except as permitted by Section 8.22(b): (A)
take all reasonable and necessary action to prevent the
termination or cancellation of any Project Documents in accordance
with the terms thereof or otherwise; and (B) enforce against the
relevant Project Party each material covenant or obligation of
such Project Document in accordance with its terms, unless the
failure to so comply could not reasonably be expected to result in
a Material Adverse Effect. Anything in the foregoing to the
contrary notwithstanding, the Borrower shall pay, or cause to be
paid, when due, all claims for labor, material, supplies or
services (under the Project Documents or otherwise) that, if
unpaid, could by law result in a Mechanics' Lien; provided that:
(A) in the event that, in accordance with the provisions of the
relevant Project Document, any such claim may be paid in
installments or may be deferred (whether or not interest shall
accrue on the unpaid balance thereof), the Borrower may pay such
claim in installments (together with accrued interest on the
unpaid balance thereof, if any) as the same become due or prior to
the end of such period of deferral; and (B) the Borrower shall
have the right to contest the validity or amount of such claim.
(b) No Cancellation, Assignment, Etc. The Borrower shall not, without
the prior written consent of the Majority Lenders:
(i) cancel or terminate any Project Document to which it is a
party or consent to or accept any cancellation or
termination thereof;
(ii) sell, assign (other than pursuant to the Security
Documents) or otherwise dispose of (by operation of law or
otherwise) any part of its interest in any Project
Document, except as permitted by Section 8.12;
(iii) waive any default under, or material breach of, any Project
Document or waive, fail to enforce, forgive, compromise,
settle, adjust or release any material right, interest or
entitlement, howsoever arising, under or in respect of any
Project Document or in any way vary, or agree to the
variation of, any material provision of such Project
Document or of the performance of any material covenant or
obligation by any other Person under any Project Document;
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(iv) exercise any "price reopener" or quantity adjustment
provisions or similar contractual adjustment provisions
(whether or not such provisions relate to price or
quantity) under any Project Document or act upon any "price
reopener" or quantity adjustment provisions or any such
similar contractual adjustment provisions under any Project
Document exercised by any other Project Party (except, in
each case, upon instructions of the Majority Lenders (after
Expert Consultation));
(v) petition, request or take any other legal or administrative
action that seeks, or may reasonably be expected, to Impair
any Project Document or amend, modify or supplement any
Project Document; or
(vi) amend, supplement or modify any Project Document (in each
case as in effect on the Closing Date (or if executed
subsequently, its execution date) other than as
contemplated by the Energy Services Agreement and as
thereafter amended, supplemented or modified in accordance
with this paragraph (b)) in any material respect.
(c) Additional Project Documents. The Borrower shall not enter into
any Additional Project Document (other than Interest Rate Cap
Agreements) without the prior approval of the Majority Lenders
(such consent not to be unreasonably withheld or delayed) unless:
(i) the terms of such Additional Project Document are in
accordance with the terms of the then-current Annual Operating
Plan and Budget; (ii) entering into such Additional Project
Document could not reasonably be expected to have a Material
Adverse Effect; (iii) the terms and conditions of such Additional
Project Document are consistent with the Financing Documents; and
(iv) the Borrower shall take (or cause to be taken) all action
necessary to create and perfect the Lien and security interests of
the Secured Parties thereon (including execution of all Ancillary
Documents).
(d) Restrictions. The Borrower shall not enter into any contract or
agreement (other than the Financing Documents and any Project
Document related to the Upgrade Project) or take any other action
that, directly or indirectly, restricts its ability to: (i) enter
into amendments, modifications, supplements or waivers of any of
the Transaction Documents; (ii) sell, transfer or otherwise
dispose of its assets other than in the ordinary course of its
business; (iii) create, incur, assume or suffer to exist any Lien
upon any of its Property other than Permitted Liens; (iv) create,
incur, assume, suffer to exist or otherwise become liable with
respect to any Indebtedness other than Permitted Indebtedness; or
(v) declare or make any Restricted Payment except in accordance
with Section 8.13.
(e) Delivery of Documents. Promptly after the execution and delivery
thereof, the Borrower shall furnish each Agent and the Lenders
with: (i) copies (certified by
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the Borrower) of: (A) all amendments, supplements, change orders
or modifications of any Project Document to which such Person is a
party; and (B) all Additional Project Documents to which it is a
party; and (ii) all Ancillary Documents to which it is a party
relating to any Additional Project Document.
(f) Fees Under O&M Contract. The Borrower and the Operator shall not,
without the prior written consent of the Majority Lenders, permit
"Extraordinary Operation Expenses" under and as defined in the O&M
Contract to exceed $750,000 in any fiscal year of the Borrower.
8.23 ANNUAL OPERATING PLANS AND BUDGETS; OPERATING STATEMENTS.
(a) Annual Operating Plan and Budget.
(i) Scope of Annual Operating Plan and Budget. The Borrower
shall prepare and submit to the Administrative Agent (with
sufficient copies to permit distribution to each Lender and
the Independent Engineer), as and when required by this
Agreement, a consolidated annual operating plan and budget
for the Borrower for the upcoming Operating Year, including
operating and maintenance programs, capital expenditure
programs, and budgeted statements of income and sources and
uses of cash and balance sheets (the "ANNUAL OPERATING PLAN
AND BUDGET"). The Annual Operating Plan and Budget shall be
accompanied by a statement of a financial officer of the
Borrower to the effect that, to the best of such officer's
knowledge, such budget is a reasonable estimate for the
period covered thereby and is in compliance with the
requirements of this Section 8.23(a).
(ii) Contents. Each Annual Operating Plan and Budget shall
contain reasonable estimates of Project Revenues (broken
out by source), Operation and Maintenance Expenses,
Extraordinary Operation Expenses (as defined in the O&M
Contract (including a monthly breakdown thereof), capital
expenditures, projected working capital requirements of the
Borrower and production goals, including detailed
assumptions regarding the dispatch of each Project and
power prices, in each case, for each calendar month covered
by such Annual Operating Plan and Budget, based on the
reasonable projections at such time. Such projections shall
be based on all facts and circumstances then existing and
known to the Borrower and that reflect a reasonable
estimate of its future results for the upcoming Operating
Year and, in the case of its net income, the next
succeeding three (3) Operating Years. Each Annual Operating
Plan and Budget shall also address each Project's interface
requirements in relation to local utilities,
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proposed staffing levels and safety, regulatory and
environmental compliance programs. Each Annual Operating
Plan and Budget shall be prepared in good faith on the
basis of written assumptions stated therein which the
Borrower believes to be reasonable as to all factual and
legal matters material to such estimates.
(iii) Form of Annual Operating Plan and Budget. Unless otherwise
consented to by the Administrative Agent, which consent
shall not be unreasonably withheld, conditioned or delayed,
each Annual Operating Plan and Budget from year to year
shall be based on the same format as the "Data Import"
worksheet that is a part of the Closing Pro Forma and be
maintained on the same basis and provide sufficient detail
to permit a meaningful comparison to previous years.
(iv) At least 45 (but no more than 90) days prior to the end of
each Operating Year, the Borrower shall prepare and submit
to the Administrative Agent a draft Annual Operating Plan
and Budget for the upcoming Operating Year.
(v) Effectiveness and Approval of Annual Operating Plans and
Budgets. Subject to the following sentence, a draft Annual
Operating Plan and Budget shall become effective on the
first day of the relevant Operating Year. In relation to
any draft Annual Operating Plan and Budget delivered
pursuant to paragraph (iv) above in relation to a new
Operating Year, if: (A) expenses for the Operating Year
covered thereby for any Project exceed those set out for
such Project in the then-current Annual Operating Plan and
Budget by more than 10% on a consolidated basis; or (B)
actual expenditures for any Project in respect of Operation
and Maintenance Expenses in the then-current Operating Year
met the conditions set out in paragraph (b)(i)(B) below, in
each case: (I) the Borrower shall notify the Administrative
Agent thereof when submitting the draft Annual Operating
Plan and Budget pursuant to paragraph (a)(iv) above or (b)
below; and (II) Majority Lender approval of such draft
Annual Operating Plan and Budget shall be required, which
approval shall not unreasonably be withheld, conditioned or
delayed. If the Administrative Agent does not inform the
Borrower of the Majority Lenders' disapproval of the
submitted Annual Operating Plan and Budget within 30 days
after submission thereof to the Administrative Agent, such
Annual Operating Plan and Budget shall be deemed approved
by the Majority Lenders. If the Majority Lenders do not
approve an Annual Operating Plan and Budget, the
Administrative Agent shall
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advise the Borrower of the items that are disapproved and
the reason for such disapproval.
If all or any portion of an Annual Operating Plan and
Budget is disapproved, the Borrower shall adhere to all
approved aspects of such Annual Operating Plan and Budget.
With respect to those aspects of any Annual Operating Plan
and Budget that are not approved, the Annual Operating Plan
and Budget for the preceding Operating Year (if
applicable), adjusted (in relation to budgeted
expenditures) for inflation in a manner mutually acceptable
to the Borrower and the Administrative Agent (after Expert
Consultation), shall be applicable thereto (and shall for
all purposes hereof be deemed to be part of the approved
Annual Operating Plan and Budget for such Operating Year)
until such time as such aspects of the Annual Operating
Plan and Budget therefor have been approved by the Majority
Lenders.
(vi) O&M Contract Consistency. The Borrower shall ensure that
any budget or other applicable projection under the O&M
Contract is consistent with the Annual Operating Plan and
Budget hereunder (as modified from time to time hereunder).
(b) Operation and Maintenance Expenses.
(i) The Borrower shall not at any time during any Operating
Year make expenditures for any Project in respect of any
Operation and Maintenance Expenses for such Project in
excess of:
(A) in the case of any line item or category of the
proposed Annual Operating Plan and Budget which is
not approved by the Majority Lenders (and until such
time as such amounts are so approved), the amounts
applicable thereto pursuant to the second paragraph
of paragraph (a)(v) above for the period from the
beginning of such Operating Year to the end of the
current month thereof;
(B) in respect of all other such Operation and
Maintenance Expenses, any amount which would cause
the aggregate amount of such other expenditures to
exceed $250,000; or
(C) solely in respect of the "Compromise Payment" under
and as defined in the Energy Services Agreement, an
aggregate amount exceeding $724,000;
in the case of (A) and (B), without having first proposed
an amendment to the then-current Annual Operating Plan and
Budget and the Majority
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Lenders having approved such amendment in accordance with
paragraph (ii) below; provided, however, that no such
approval shall be required for the "Compromise Payment"
referred to in the foregoing clause (C) or for Emergency
Operating Costs up to $1,000,000 per Project in any
Operating Year (prorated on the basis of a 365-day year for
any Operating Year which is less than a full calendar
year).
(ii) If at any time during any Operating Year: (A) Operation and
Maintenance Expenses to be paid by the Borrower during the
balance of such Operating Year exceed or could reasonably
be expected to exceed the allowance provisions of paragraph
(i) above; or (B) the Borrower believes such costs for the
balance of such year will exceed such allowance provisions,
in each case, the Borrower shall propose an amendment to
the then-current Annual Operating Plan and Budget (with
copies thereof delivered to the Administrative Agent and
the Independent Engineer). Such amendment shall become
effective on the date that such proposal is approved by the
Majority Lenders. At the time the Borrower submits such
proposal, the Borrower shall certify the purpose of such
amendment and that such amendment is reasonably necessary
or desirable for the operation and maintenance of the
Projects. If the Majority Lenders do not approve a proposed
amendment, the Administrative Agent shall advise the
Borrower of the items that are disapproved and the reason
for such disapproval. If all or any portion of a proposed
amendment is disapproved, the Borrower shall adhere to the
Operation and Maintenance Expenses included in the approved
Annual Operating Plan and Budget (subject to the allowance
provisions of paragraph (i) above).
(c) O&M Contract Operating Reports. The Borrower shall furnish to the
Administrative Agent a copy of each Quarterly Operations Reports
received by it pursuant to the terms of the O&M Contract which
include: (i) technical performance of the Projects, including
production, (ii) an accident incident report, (iii) safety and
environmental compliance status, (iv) equipment operational
status, (v) a summary of all major maintenance performed in the
preceding quarter and that planned for the coming quarter,
including a summary of Major Corrective Maintenance Work (as
defined in the O&M Contract) performed in the preceding quarter,
(vi) any other known conditions which may adversely affect the
technical or financial performance of the Projects, and (vii) the
incurrence or payment of any "Extraordinary Operation Expenses"
under and as defined in the O&M Contract.
8.24 SPECULATIVE ACTIVITIES.
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The Borrower shall not engage in any speculative activities. Nothing in
this Section 8.24 shall prohibit the Borrower from entering into the
Interest Rate Cap Agreements.
8.25 STATUS.
(a) The Borrower shall take, or cause to be taken, all action required
to maintain the status of each of the Projects as a QF.
(b) The Borrower shall not take or permit any Affiliate to take, any
action that would cause the Borrower: (i) to become regulated as a
public utility under: (A) the FPA in a manner different than that
contemplated by its Government Approvals set out on Schedule VI or
any of its future Government Approvals regarding the rates of
public utilities granted by FERC, such future Government Approvals
not to be sought without the prior written consent of the Majority
Lenders; or (B) any other material utility regulation under any
Government Rule (excluding the FPA and the Government Rules
promulgated thereunder), other than as set out on Schedule VI; or
(ii) to become subject to any material utility regulation under
any Government Rule, other than as set out on Schedule VI.
(c) Neither the Borrower nor any of its Affiliates shall take, or
permit to be taken, any action that would cause the Borrower to be
an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company
Act of 1940.
8.26 UPDATED SURVEYS AND TITLE POLICY FOLLOWING UPGRADE PROJECT.
(a) Surveys. The Administrative Agent shall have received, no later
than 100 days following completion of the Upgrade Project, a
survey of the Site certified to the Borrower, the relevant Title
Company and the Administrative Agent, updated, with respect to all
relevant requirements and information required for the Initial
Surveys under Section 6.01(f)(ii), to within 60 days of the date
of receipt by the Administrative Agent.
(b) Title Policy. Promptly and in any event within 100 days after
completion of the Upgrade Project, the Borrower shall cause the
relevant Title Company to deliver to the Administrative Agent:
(i) an endorsement of the Title Policy issued in connection
with such Project deleting from the Title Policy: (A) any
exception in connection with pending disbursements; (B) any
exception with respect to unrecorded mechanics' and
materialmen's liens; and (C) any exception with respect to
survey matters; and
(ii) an abstractor's certificate or other title evidence showing
no Liens or other exceptions to the title of the Deed of
Trust Estate, other
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than Permitted Liens and those previously approved in
writing by the Administrative Agent.
8.27 ACCOUNTS. The Borrower shall not establish or maintain any account other
than (a) the Accounts established and maintained pursuant to the
Depositary Agreement and (b) any account that does not hold Project
Revenues.
8.28 NO SUBSIDIARIES. The Borrower shall not form, establish, acquire or
suffer to exist any Subsidiaries of the Borrower.
8.29 SCE CONSENT. The Borrower shall use commercially reasonable efforts to
obtain and deliver to the Administrative Agent, on or prior to the date
60 days following the Closing Date, an agreement among the Borrower, SCE
and the Collateral Agent providing for the consent by SCE to the
collateral assignment by the Borrower to the Collateral Agent of the
Borrower's rights under each PPA.
ARTICLE IX
EVENTS OF DEFAULT9.01 EVENTS OF DEFAULT. Each of the following events shall be and constitute
an "EVENT OF DEFAULT":
(a) The Borrower shall default in the payment when due hereunder of
any principal of or interest on any Loan and such default shall
continue unremedied for a period of three (3) Business Days after
such amount first became due.
(b) The Borrower shall default in the payment when due of any amount
payable by it hereunder or under any other Financing Document
(other than amounts described in paragraph (a) above) and such
default shall continue unremedied for a period of 30 days after
such amount first became due.
(c) Any material representation, warranty or statement confirmed or
made by the Borrower, the Sponsor or any other Major Project Party
under any Financing Document or contained in any certificate,
statement, notice or other document provided to any Financing
Party under or pursuant to any Financing Document shall have been
incorrect or misleading in any material respect when made or
deemed to be made or (except if stated to have been made solely as
of an earlier date) repeated.
(d) The Borrower shall default in the performance of any of its
obligations under any of:
(i) Section 8.02(a); (solely in relation to the maintenance of
its existence); 8.03(a) (in relation to the first sentence
thereof);
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8.03(b) (solely in relation to the first sentence thereof);
8.03(c); 8.04(a); 8.04(b); 8.04(c); 8.05(a); 8.05(b) (other
than in relation to the provisions of the second sentence
thereof); 8.05(d) (solely in relation to the provisions of
the first and second sentences thereof); 8.07; 8.09; 8.12;
8.13 (and such default shall continue for a period of five
(5) consecutive Business Days); 8.15 (and such default
shall continue for a period of five (5) consecutive
Business Days); 8.16; 8.17; 8.19; 8.22(b); 8.22(c);
8.22(d); 8.24; 8.25; 8.26; 8.27; or 8.28; or any other
provision of any Financing Document and such continues for
more than thirty (30) consecutive days after the Borrower
should reasonably become aware of such default;
(ii) Section 4.01(a), (b),(c) and(g); 4.02 (provided, that
solely if the Borrower has no knowledge of the existence of
any financing statement referred to therein, no Event of
Default shall occur until the date 30 days after the filing
of such financing statement); 4.04(a), 4.09, or 4.15 of the
Borrower Security Agreement;
(iii) Section 1.2, 1.3, 1.6, 1.7, 1.8, 1.9, 1.14 or 1.18 of the
Deed of Trust; or
(iv) Sections 3.1(a), 3.1(b) or 4.3 of the Depositary Agreement.
(e) The Sponsor shall default in the performance of any of its
obligations under Sections 4.01(a), 4.02, 4.03, 4.05, 4.06, 4.07,
4.09 or 4.10 of the Pledge Agreement; or any other provision of
the Pledge Agreement and such continues for more than thirty (30)
consecutive days after the Borrower should reasonably become aware
of such default.
(f) The Borrower or any other Major Project Party shall default in the
performance of any material covenant or undertaking contained in
any Project Document other than any obligation for the payment of
money, which default continues beyond the shorter of the
applicable period of grace specified therefor in such document or
(i) ten (10) days, in the case of a payment default, or (ii) 30
days, in the case of any other default provided that, if such
other default (x) is not capable of being remedied with diligent
effort within such 30-day period, and (y) is reasonably capable of
being remedied and the Borrower is diligently prosecuting or
pursuing such remedy, such other default shall not give rise to an
Event of Default unless such other default shall continue
unremedied for a period of ninety (90) days after an Authorized
Officer of the Borrower becomes aware or reasonably should have
become aware of such other default.
(g) The Borrower or the Sponsor shall: (i) admit in writing its
inability to, or be generally unable to, pay its debts as such
debts become due; (ii) apply for or consent to the appointment of,
or the taking of possession by, a receiver,
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custodian, trustee or liquidator of itself or of all or a
substantial part of its Property; (iii) make a general assignment
for the benefit of its creditors; (iv) commence a voluntary case
under the Bankruptcy Code; (v) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of
debts; (vi) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code; or (vii) take any
corporate, limited liability company or partnership action for the
purpose of effecting any of the foregoing.
(h) (i) A proceeding or case shall be commenced against the Borrower
or the Sponsor, in each case without the application or consent of
such Person, in any court of competent jurisdiction, seeking: (A)
its liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts; (B) the appointment of a
trustee, receiver, custodian, liquidator or the like of such
Person or of all or any substantial part of its Property; or (C)
similar relief in respect of such Person under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and, in each case, such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 90 or more days;
or (ii) an order for relief against such Person shall be entered
in an involuntary case under the Bankruptcy Code.
(i) Prior to the completion of its duties under all Transaction
Documents to which it is a party, any of SCE, the Operator or
Imperial Irrigation District shall: (i) admit in writing its
inability to, or be generally unable to, pay its debts as such
debts become due; (ii) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
Property; (iii) make a general assignment for the benefit of its
creditors; (iv) commence a voluntary case under the Bankruptcy
Code; (v) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts; (vi) fail to
controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code; or (vii) take any corporate or
partnership action for the purpose of effecting any of the
foregoing.
(j) (i) Prior to the completion of its duties under all Transaction
Documents to which it is a party, a proceeding or case shall be
commenced against any of SCE, the Operator or Imperial Irrigation
District, without the application or consent of such Person, in
any court of competent jurisdiction, seeking: (A) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts; (B) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Person or of
all or any substantial part of its Property; or (C) similar relief
in respect of such Person under any law relating to bankruptcy,
insolvency,
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reorganization, winding-up, or composition or adjustment of debts,
and, in each case, such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 90 or more days; or (ii) an order for
relief against such Person shall be entered in an involuntary case
under the Bankruptcy Code.
(k) Any Person referred to in paragraph (g) or (h) above shall be
terminated or dissolved (as a matter of Government Rule or
otherwise), or proceedings shall be commenced by any Person
seeking the termination or dissolution of any Person referred to
in paragraph (g) or (h) above and such proceedings shall continue
undismissed or unstayed for a period of 90 or more days (or such
shorter period of time which such Person has pursuant to
Government Rule to cause the dismissal of such proceeding or stay
the effectiveness of any such order, judgment or decree).
(l) A judgment or judgments for the payment of money is rendered by
one or more Government Authorities against the Borrower in an
aggregate amount (less any amount that applicable insurers have
acknowledged liability for) exceeding $500,000 in the aggregate,
and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not
be procured, within 45 days from the date of entry thereof, and
such Person shall not, within said period of 45 days, or such
longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal, or any action shall be taken by a
judgment creditor to attach or levy upon any assets of such Person
to enforce any such judgment.
(m) An ERISA Event shall have occurred that, in the opinion of the
Administrative Agent, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result
in a Material Adverse Effect.
(n) (i) Any Environmental Claim arising with respect to the
Development of any Project shall have been asserted against such
Project, the Borrower or the Operator or, in connection with its
involvement with the Development of a Project, any other
Environmental Party which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect; or (ii)
any Release or Use of any Hazardous Materials at, on, under or
from such Project shall have occurred which could reasonably be
expected to have a Material Adverse Effect.
(o) Any Indebtedness of the Borrower in excess of $500,000 is not paid
when due (after giving effect to any grace period applicable
thereto), becomes due and payable by reason of any default or
event of default with respect thereto (howsoever described), or
could under the terms of the documentation evidencing such
Indebtedness (after giving effect to any grace period applicable
thereto)
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become due and payable by reason of any default or event of
default with respect thereto (howsoever described).
(p) (i) The Borrower, the Sponsor, SCE, the Operator or Imperial
Irrigation District shall fail to obtain, renew, maintain or
comply with all Government Approvals as shall now or hereafter be
necessary or desirable; or (ii) any Government Approval related to
any Project shall be Impaired or shall cease to be in full force
and effect; or (iii) any action, suit, proceeding or investigation
shall be commenced by or before any Government Authority that
could reasonably to expected to result in the Impairment of any
such Government Approval and such action, suit, proceeding or
investigation is not dismissed or terminated within 90 days and,
in each such case, such failure, Impairment, cessation or
commencement could reasonably be expected to have a Material
Adverse Effect.
(q) (i) Except as expressly contemplated pursuant to paragraph (u)
below, any material provision of any Transaction Document shall at
any time for any reason cease to be valid and binding or in full
force and effect; or (ii) except as expressly contemplated
pursuant to paragraph (u) below, any Transaction Document shall be
Impaired in whole or part; or (iii) the validity or enforceability
of any Transaction Document shall be contested by any party
thereto (other than either Agent or the Lenders) or any Government
Authority; or (iv) the Borrower, the Sponsor, SCE, the Operator or
Imperial Irrigation District shall deny that it has any or further
liability or obligation under any Transaction Document and, in
each such case, such cessation, Impairment, contest or denial
could reasonably be expected to have a Material Adverse Effect.
(r) Any Security Document shall cease to be in full force and effect
or to be effective to grant a perfected Lien to the Collateral
Agent for the benefit of the Secured Parties, on any part of the
Collateral described therein having value in excess of $100,000 in
the aggregate with the priority purported to be created thereby
subject to the rules and regulations of the BLM.
(s) Any Material Adverse Effect shall occur and be continuing.
(t) One or more judgments or decrees is entered against the Borrower
in the form of an injunction or other similar relief requiring
suspension or abandonment of the Development of any Project (or a
material portion thereof) for a continuous period of at least 90
days, and such judgment or decree is not vacated, discharged or
stayed or bonded pending appeal within 90 days (or any shorter
appeal period as is available under applicable Government Rules
from the date of entry thereof).
(u) The Borrower or the Operator ceases to carry on or suspends all or
substantially all of its activities in connection with the
Development of a Project or otherwise abandons or permits the
abandonment of its Project, in each case for a period of 45 days
or more, other than where the cessation or suspension is for bona
fide
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operational reasons or due to an event of force majeure and the
Borrower is using commercially reasonable efforts to commence or
recommence such construction or operation.
(v) The Tower Repairs fail to be substantially completed on or prior
to July 1, 2003.
9.02 RIGHTS UPON AN EVENT OF DEFAULT. Upon the occurrence and during the
continuation of an Event of Default:
(a) the Administrative Agent may, and, upon request of the Majority
Lenders, shall, by notice to the Borrower and the Collateral
Agent, terminate the Commitments and/or declare the principal
amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Borrower hereunder and under
the Notes (including, without limitation, any amounts payable
under Section 5.05 or 5.06) to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower;
and
(b) in the case of the occurrence of an Event of Default referred to
in paragraph (g) or (h) above with respect to the Borrower, the
Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Borrower hereunder and under
the Notes (including any amounts payable under Section 5.05 or
5.06) shall automatically become immediately due and payable
without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower.
Notwithstanding anything else provided herein, upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent may
exercise any and all remedies available to it under law or equity and
any Lender may exercise any right of set-off available to it. Without
limiting the foregoing, remedies under any Security Document may only
be exercised by the Collateral Agent, although any Secured Party shall
have the right (but not the obligation) to cure any default under a
Security Document subject to the rules and regulations of the BLM.
ARTICLE X
THE AGENTS10.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby appoints and
authorizes each of the Administrative Agent and the Collateral Agent to
act as its agent hereunder and under the other Financing Documents to
which such Agent is or becomes a party with such powers as are
specifically delegated to such Agent by the terms of this
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Agreement and of such other Financing Documents, together with such other
powers as are reasonably incidental thereto. Each Agent (which term as
used in this sentence and in Section 10.05 and the first sentence of
Section 10.06 shall include reference to its Affiliates and its own and
its Affiliates' officers, directors, employees, representatives,
attorneys and agents):
(a) shall have no duties or responsibilities except those expressly
set out in this Agreement and in the other Financing Documents to
which such Agent is or becomes a party, and shall not by reason of
this Agreement or any such other Financing Document be a trustee
for any Lender or subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is
continuing;
(b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this
Agreement or in any other Financing Document, or in any
certificate or other document referred to or provided for in, or
received by any of them under, this Agreement or any other
Financing Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Financing Document or any other document referred to or
provided for herein or therein, or for the validity or sufficiency
of the security afforded hereby or thereby, or for any failure by
the Borrower or any other Person to perform any of its obligations
hereunder or thereunder;
(c) shall not, except (in the case of the Collateral Agent) to the
extent expressly instructed by the Majority Lenders with respect
to collateral security under the Security Documents, be required
to initiate or conduct any litigation or collection proceedings
hereunder or with respect hereto or under, or with respect to, any
other Financing Document;
(d) shall not be liable or responsible for any action taken, suffered
or omitted to be taken by it hereunder or under, or with respect
to, any other Financing Document or under any other document or
instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross
negligence or willful misconduct as finally determined by a court
of competent jurisdiction; and
(e) shall not be required to take any action which is contrary to the
Financing Documents or applicable Government Rules.
Each Agent may employ agents, experts and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents,
experts or attorneys-in-fact selected by it in good faith. The
Administrative Agent may deem and treat the payee of any Note as the
holder thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with the
Administrative
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Agent, together with the consent of the Borrower to such assignment or
transfer (to the extent provided in Section 11.06(b)).
10.02 RELIANCE BY AGENTS. Each Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any certification, notice or
other written communication (including any thereof by telex, telegram or
cable) reasonably believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and
other experts selected by such Agent. Each Agent may also rely upon any
statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying
thereon. As to any matters not expressly provided for by this Agreement
or any other Financing Document to which an Agent is intended to be a
party, such Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with
instructions given by the Majority Lenders or all of the Lenders as is
required in such circumstance, and such instructions of such Lenders and
any action taken, suffered or omitted or failure to act pursuant thereto
shall be binding on all of the Lenders.
Without limiting the foregoing, each Agent shall be entitled to advice of
counsel and other professionals concerning all matters of trust and its
duty hereunder, but no Agent shall be answerable or responsible for the
professional malpractice of any attorney-at-law or certified public
accountant or for the acts or omissions of any other professional in
connection with the rendering of professional advice in accordance with
the terms of this Agreement, if such attorney-at-law, certified public
accountant or other professional was selected by such Agent with due
care.
10.03 DEFAULTS. Each Agent shall be deemed not to have knowledge or notice of
the occurrence of a Default (other than, in the case of the
Administrative Agent, the non-payment of principal of or interest on
Loans or of commitment fees payable to the Administrative Agent and, in
the case of each Agent, fees payable to it under Financing Documents)
unless such Agent has received notice from a Lender or the Borrower
specifying such Default and stating that such notice is a "Notice of
Default". In the event that any Agent receives such a notice of the
occurrence of a Default, such Agent shall give prompt notice thereof to
the Lenders (and, in the case of the Administrative Agent, shall give
each Lender prompt notice of each such non-payment) and the other Agent.
Each Agent shall (subject to Section 10.07) take such action with respect
to such Default as shall be directed by the Majority Lenders or, if
provided herein, all of the Lenders, as applicable; provided that, unless
and until such Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable in
the best interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with
the consent or upon the authorization of the Majority Lenders or all of
the Lenders, as applicable.
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10.04 RIGHTS AS A LENDER. With respect to its Commitments and the Loans made by
it, United (and any successor acting as Administrative Agent or
Collateral Agent) in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Administrative Agent or the
Collateral Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include United in its individual capacity.
United (and any successor acting as Administrative Agent or Collateral
Agent, as applicable) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the Borrower
(and any of its Affiliates) as if it were not acting as the
Administrative Agent or the Collateral Agent, as applicable, and United
(and any successor acting as Administrative Agent or Collateral Agent, as
applicable) and its Affiliates may accept fees and other consideration
from the Borrower (and any of its Affiliates) for services in connection
with this Agreement or otherwise without having to account for the same
to the Lenders.
10.05 INDEMNIFICATION. The Lenders agree to indemnify each Agent (to the extent
not reimbursed under Section 11.03, but without limiting the obligations
of the Borrower under Section 11.03) ratably in accordance with the
aggregate principal amount of the Loans held by the Lenders (or, if no
Loans are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, fines, claims, demands,
settlements, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted
against such Agent (including by any Lender) arising out of or by reason
of any investigation or in any way relating to or arising out of this
Agreement or any other Transaction Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses which
the Borrower is obligated to pay under Section 11.03, but excluding,
unless a Default has occurred and is continuing, normal administrative
costs and expenses incident to the performance of its agency duties
hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents; provided that no Lender shall be liable for any
of the foregoing to the extent they arise from the gross negligence or
willful misconduct (as finally determined by a court of competent
jurisdiction) of the party to be indemnified. The obligations of the
Lenders under this Section 10.05 shall survive the termination of this
Agreement, the repayment of the Loans or the earlier resignation or
removal of either Agent.
10.06 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender agrees that it has,
independently and without reliance on either Agent or any other Lender,
and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Borrower and its Affiliates and its
own decision to enter into this Agreement and that it will, independently
and without reliance upon either Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any other Transaction Document. No Agent
shall be required to
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keep itself informed as to the performance or observance by the Borrower
or any other Person of this Agreement or any other Transaction Document
or any other document referred to or provided for herein or therein or to
inspect the Properties or books of the Borrower or such other Person.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by an Agent hereunder or under
the Financing Documents, such Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower
(or any Affiliate thereof) which may come into the possession of such
Agent or any of its Affiliates.
10.07 FAILURE TO ACT. Except for action expressly required of an Agent
hereunder and under the other Financing Documents to which such Agent is
or becomes a party, such Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 10.05 against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. No provision of this Agreement shall
require the Collateral Agent to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it shall
have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it. Each Agent shall be entitled to interest (calculated on a
per annum basis) on all amounts advanced by it hereunder in its
discretion at the Federal Funds Rate. Each Agent shall at any time be
entitled to cease taking any action if it no longer deems any indemnity
or undertaking from the Lenders to be sufficient.
10.08 RESIGNATION OR REMOVAL OF AGENTS. Subject to the appointment and
acceptance of a successor Agent as provided below, an Agent may resign at
any time by giving notice thereof to the Lenders and the Borrower, and an
Agent may be removed at any time with or without cause by the Majority
Lenders. Upon any such resignation or removal, the Majority Lenders shall
have the right to appoint, with the consent of the Borrower (unless a
Default or Event of Default has occurred and is continuing), such consent
not to be unreasonably withheld or delayed, a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation or the Majority Lenders' removal
of the retiring Agent, then the retiring Agent, at its discretion, may,
on behalf of the Lenders, appoint a successor Agent, which shall be a
bank which has an office in New York, New York with capital, surplus and
undivided profits of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article X and Section 11.03 shall continue in effect
for its benefit in respect of any actions taken,
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suffered or omitted to be taken by it while it was acting as such Agent.
Each Agent agrees not to resign solely as a result of the occurrence and
continuance of a Default or an Event of Default.
10.09 CONSENTS. Except as otherwise provided in Section 11.04, each Agent may,
with the prior written consent of the Majority Lenders (but not
otherwise), consent to any modification, supplement or waiver under any
Transaction Document; provided that, without the prior written consent of
each Lender, the Collateral Agent shall not (except as provided herein or
in the Security Documents) release any Collateral or otherwise terminate
any Lien under any Security Document, or agree to additional obligations
being secured by the Collateral (unless the Lien for such additional
obligations shall be junior to the Lien in favor of the other obligations
secured by such Security Document and is otherwise permitted hereunder)
or alter the relative priorities of the obligations entitled to the
benefits of the Liens created under the Security Documents with respect
to any of the Collateral, except that no such consent shall be required,
and the Collateral Agent is hereby authorized, to release any Lien
covering the Borrower's Property that is the subject of a disposition of
Property permitted under this Agreement or under the relevant Security
Document or to which the Lenders have consented.
10.10 COLLATERAL AGENT. The Collateral Agent shall:
(a) forward promptly after receipt thereof (and use its best efforts
to forward within five Business Days of such receipt): (i) to each
Secured Party a copy of each document furnished to such Agent for
such Secured Party under this Agreement, and any other Financing
Documents to which such Agent is a party; and (ii) to the
Administrative Agent any notice delivered to the Collateral Agent
pursuant to any Consent and Agreement;
(b) have the right, but not the obligation, to: (i) refuse any item
for credit to any Account except as required by the terms of the
Financing Documents; (ii) refuse to honor any request for transfer
in relation to any Account that is not consistent with the
Financing Documents; (iii) charge to any Account all applicable
charges; and (iv) pay fees, interest and other charges owing by
the Borrower as provided herein and in the other Transaction
Documents;
(c) except as otherwise provided herein and in the Depositary
Agreement (including by the provision of standing instructions
therein), and subject to the provisions of Section 10.07, take all
actions and make all determinations with respect to the Collateral
and the Security Documents, including as to the advisability of
taking additional steps to perfect, or cause the perfection of,
any security interest, as directed in writing by the
Administrative Agent; and
(d) have the right at any time to seek clarification and instructions
concerning the administration of the Financing Documents from the
Administrative Agent, legal
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counsel or any court of competent jurisdiction and shall be fully
protected in relying upon such instructions.
ARTICLE XI
MISCELLANEOUS11.01 WAIVER. No failure on the part of either Agent or any Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under this Agreement, any Note or any other
Financing Document shall operate as a waiver thereof, and no single or
partial exercise of any right, power or privilege under this Agreement,
any Note or any other Financing Document shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law.
11.02 NOTICES. All notices, requests and other communications provided for
herein and under the Financing Documents (including any modifications of,
or waivers or consents under, this Agreement) shall be given or made in
writing (including by telecopy) delivered to the intended recipient at
the "Address for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier with confirmation of
receipt received or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid;
provided, however, that if such transmission or delivery does not occur
by 4:00 p.m. recipient's time, then such transmission or delivery shall
be deemed to occur on the next Business Day.
11.03 EXPENSES; ETC.
(a) Expenses. The Borrower shall pay or reimburse each of the Lenders
and each Agent for paying:
(i) all reasonable out-of-pocket costs and expenses of the
Agents (including the reasonable fees and expenses of: (A)
Bingham McCutchen LLP, special counsel to the Lenders; (B)
the Independent Engineer; (C) the Insurance Advisor; (D)
such other counsel or experts engaged by the Administrative
Agent at the request of the Majority Lenders (and, except
during the occurrence and continuation of a Default, with
the consent of the Borrower, such consent not to be
unreasonably withheld or delayed) from time to time; and
(E) counsel engaged by the Collateral Agent from time to
time with (except during the occurrence and continuation of
a Default) the consent of the Borrower, such
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consent not to be unreasonably withheld or delayed), in
each case in connection with: (I) the negotiation,
preparation, execution and delivery of this Agreement and
the other Transaction Documents and the extension of credit
hereunder; or (II) any amendment, modification or waiver of
any of the terms of this Agreement or any other Transaction
Document;
(ii) all reasonable costs and expenses of the Lenders and each
Agent (including reasonable counsels' fees and expenses and
reasonable experts' fees and expenses) in connection with:
(A) any Default and any enforcement or collection
proceedings resulting therefrom or in connection with the
negotiation of any restructuring or "work-out" (whether or
not consummated) of the obligations of the Borrower under
this Agreement or the obligations of any Project Party
under any other Transaction Document; and (B) the
enforcement of this Section 11.03;
(iii) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any Government Authority
in respect of this Agreement or any other Transaction
Document or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing,
registration, recording or perfection of any Lien
contemplated by this Agreement or any other Financing
Document or any other document referred to herein or
therein; and
(iv) all costs, expenses and other charges in respect of title
insurance procured with respect to the Liens created
pursuant to the Deed of Trust.
In relation to payments referred to under clause (iii) above,
within 30 days after paying such amount, the Borrower shall
deliver to the Administrative Agent, evidence reasonably
satisfactory to the Administrative Agent of such payment.
(b) Indemnity. The Borrower shall indemnify each Agent, each Lender,
their respective Affiliates and their respective shareholders,
officers, directors, employees, representatives, attorneys and
agents (each, an "INDEMNITEE") from, and shall hold each of them
harmless against, any and all losses, liabilities, claims,
damages, expenses, obligations, penalties, fines, demands,
settlements, actions, judgments, suits, costs or disbursements of
any kind or nature whatsoever (including the reasonable fees and
expenses of counsel and consultants for each Indemnitee in
connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto, but excluding any such
losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or
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disbursements incurred solely by reason of the gross negligence or
willful misconduct of such Indemnitee) that may at any time
(including at any time following the Termination Date) be imposed
on, asserted against or incurred by any Indemnitee as a result of,
or arising out of, or in any way related to or by reason of:
(i) any of the transactions contemplated hereby or by any other
Transaction Document or the execution, delivery or
performance of this Agreement or any other Transaction
Document;
(ii) the extensions of credit hereunder or the actual or
proposed use by the Borrower of any of the extensions of
credit hereunder or the grant to the Collateral Agent for
the benefit of, or to any of, the Secured Parties of any
Lien on the Collateral or on any other Property of the
Borrower, the Sponsor or any ownership interest in the
Borrower;
(iii) the exercise by the Collateral Agent or the other Secured
Parties of their rights and remedies (including
foreclosure) under any agreements creating any such Lien;
and
(iv) any Environmental Law (including any Lien filed against any
Project by or in favor of any Government Authority) as a
result of the past, present or future operations of the
Borrower, the Sponsor (as it relates to the Projects) or
the Operator (or any predecessor in interest to any such
person), or the past, present or future condition of any
site or facility owned, operated or leased at any time by
the Borrower, the Sponsor or the Operator (or any such
predecessor in interest to any such person), or any Release
or Use or threatened Release of any Hazardous Materials at
any such site or facility, that is not otherwise in
accordance with applicable Environmental Law, including any
such Release or Use or threatened Release which shall occur
during any period when such Indemnitee shall be in
possession of any such site or facility following the
exercise by either Agent or any other Secured Party of any
of its rights and remedies hereunder or under any Financing
Document or any other Transaction Document.
(c) Records. Each relevant Financing Party shall maintain in
accordance with its usual practice records evidencing the amounts
payable by the Borrower under this Section 11.03; provided that
the failure of any Financing Party to maintain such records shall
not in any manner affect the obligation of the Borrower to make
such payments.
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11.04 AMENDMENTS; ETC. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be amended or modified
only by an instrument in writing signed by each of the Borrower, the
Administrative Agent, the Collateral Agent and the Majority Lenders, or
by each of the Borrower and the Collateral Agent and the Administrative
Agent acting with the consent of the Majority Lenders, and any provision
of this Agreement may be waived by the Majority Lenders or by the
Administrative Agent acting with the consent of the Majority Lenders;
provided that:
(a) no amendment, modification or waiver shall, unless by an
instrument signed by all of the Lenders or by the Administrative
Agent acting with the consent of all of the Lenders: (i) increase
or extend the term, or extend the time or waive any requirement
for the reduction or termination, of the Commitments; (ii) extend
the date fixed for the payment of principal of or interest on any
Loan or any fee hereunder; (iii) reduce the amount of any such
payment of principal; (iv) reduce the rate at which interest is
payable thereon or any fee is payable hereunder; (v) alter the
rights or obligations of the Borrower to prepay Loans; (vi) alter
the manner in which payments or prepayments of principal, interest
or other amounts hereunder shall be applied among the Lenders or
Types or Classes of Loans; (vii) alter the terms of this Section
11.04; (viii) amend the definition of the term "Majority Lenders"
or modify in any other manner the number or percentage of the
Lenders required to make any determinations or waive any rights
hereunder or to modify any provision hereof; (ix) waive any of the
conditions precedent set out in Section 6.01; or (x) release all
or any material portion of the Collateral; and
(b) any amendment, modification, waiver or supplement of the rights or
duties of either Agent hereunder shall require the consent of such
Agent.
Anything in this Agreement to the contrary notwithstanding, if at any
time when the conditions precedent set out in Article VI to any extension
of credit hereunder are, in the opinion of the Majority Lenders,
satisfied, any Lender shall fail to fulfill its obligations to make such
extension of credit, then, for so long as such failure shall continue,
such Lender shall (unless the Majority Lenders, determined as if such
Lender were not a "Lender" hereunder, shall otherwise consent in writing)
be deemed for all purposes relating to amendments, modifications, waivers
or consents under this Agreement or any other Financing Document
(including under this Section 11.04 and under Section 10.09) to have no
Loans or Commitments, shall not be treated as a "Lender" hereunder when
performing the computation of Majority Lenders, and shall have no rights
under the preceding paragraph of this Section 11.04.
Anything in this Agreement to the contrary notwithstanding, no waiver or
modification of any provision of this Agreement that has the effect
(either immediately or at some later time) of enabling the Borrower to
satisfy a condition precedent to the making of a Loan of any Class shall
be effective against the Lenders making Loans of such Class for purposes
of the Commitments of such Class unless the Majority Lenders making Loans
of such Class shall have concurred with such waiver or modification, and
no waiver or
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modification of any provision of this Agreement or any other Financing
Document that could reasonably be expected to adversely affect the
Lenders making Loans of any Class in a manner that does not affect all
Classes equally shall be effective against the Lenders making Loans of
such Class unless the Majority Lenders making Loans of such Class shall
have concurred with such waiver or modification.
11.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
11.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) Borrower. The Borrower may not assign its rights or obligations
hereunder or under the Notes without the prior consent of all of
the Lenders and the Administrative Agent.
(b) Lenders. Subject to the terms of clause (g) below, each Lender may
assign any of its Loans, its Notes and its Commitments (but only
with the consent of, in the case of an outstanding Commitment, the
Administrative Agent, not to be unreasonably withheld) to an
Eligible Assignee; provided that: (i) no such consent by the
Administrative Agent shall be required in the case of any
assignment to another Lender or an Affiliate (or Approved Fund) of
a Lender; (ii) except in the case of an assignment to a Lender or
an Affiliate (or Approved Fund) of a Lender or an assignment of
the entire remaining amount of the assigning Lender's Commitments,
any such partial assignment shall be in an amount at least equal
to $5,000,000; and (iii) each assignment by a Lender of its
Commitment, Loans or Note of a particular Class shall be made in
such a manner so that the same portion of its Commitment, Loans
and Note of such Class is assigned to the respective assignee.
Upon execution and delivery by the assignee to the Borrower and
the Administrative Agent of an instrument in writing pursuant to
which such assignee agrees to become a "Lender" hereunder (if not
already a Lender) having the Commitments and Loans specified in
such instrument, and upon consent thereto by the Administrative
Agent, to the extent required above, the assignee shall have, to
the extent of such assignment (unless otherwise provided in such
assignment with the consent of the Administrative Agent, to the
extent required above), the obligations, rights and benefits of a
Lender hereunder holding the Commitments and Loans (or portions
thereof) assigned to it (in addition to the Commitments and Loans,
if any, theretofore held by such assignee) and the assigning
Lender shall, to the extent of such assignment, be released from
the Commitments (or portion thereof) so assigned. Upon each such
assignment (other than such an assignment by United), the
assigning Lender shall pay the Administrative Agent an assignment
fee of $3,000.
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In furtherance of the foregoing, on the date of any such
assignment pursuant to this Section 11.06(b), the Borrower shall
deliver to the assigning Lender and the assignee Lender, in
exchange for the Notes theretofore delivered by the Borrower to
the assigning Lender, appropriately completed Notes, dated the
effective date of such assignment, payable to such assigning
Lender and to such assignee, in an aggregate amount equal to their
respective Commitments after giving effect to such assignment, and
otherwise duly completed.
[Intentionally omitted.]
(c) Participants. A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loan held
by it, or in its Commitments (provided that partial participations
shall be in an amount at least equal to $5,000,000 or the entire
remaining amount of the assigning Lender's Loans and Commitments,
whichever is the lesser). Each purchaser of a participation (a
"PARTICIPANT") shall be entitled to the rights and benefits of the
provisions of Section 8.01(m) with respect to its participation in
such Loans and Commitments as if (and the Borrower shall be
directly obligated to such Participant under such provision as if)
such Participant were a "Lender" for purposes of said Section,
but, except as otherwise provided in Section 4.07(c), shall not
have any other rights or benefits under this Agreement or any Note
or any other Financing Document (the Participant's rights against
such Lender in respect of such participation to be those set out
in the agreements executed by such Lender in favor of the
Participant). All amounts payable by the Borrower to any Lender
under Article V in respect of Loans and its Commitments, shall be
determined as if such Lender had not sold or agreed to sell any
participations in such Loans and Commitments, and as if such
Lender were funding each of such Loans and Commitments in the same
way that it is funding the portion of such Loans and Commitments
in which no participations have been sold. In no event shall a
Lender that sells a participation agree with the Participant to
take or refrain from taking any action hereunder or under any
other Financing Document, except that such Lender may agree with
the Participant that it will not, without the consent of the
Participant, agree to: (i) increase or extend the term, or extend
the time or waive any requirement for the reduction or
termination, of such Lender's Commitment; (ii) extend the date
fixed for the payment of principal of or interest on the related
Loans or any portion of any fee hereunder payable to the
Participant; (iii) reduce the amount of any such payment of
principal; (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to
receive such interest or fee; (v) alter the rights or obligations
of the Borrower to prepay the related Loans; or (vi) consent to
any modification or waiver hereof or of any Financing Document to
the extent that the same, under Section 10.09 or 11.04, requires
the consent of each Lender.
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Notwithstanding anything else provided herein, no Person
purchasing a participation in accordance with the terms hereof
shall be considered a "Lender" for any purposes of the Financing
Documents by reason of the purchase of such participation.
(d) Assignment to Federal Reserve Bank. Anything in this Section 11.06
to the contrary notwithstanding, any Lender may (without notice to
the Borrower, either Agent or any other Lender, and without
payment of any fee) assign and pledge all or any portion of its
Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) Information. A Lender may furnish any information concerning the
Borrower in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section
11.08.
(f) Assignment to Borrower. Anything in this Section 11.06 to the
contrary notwithstanding, no Lender may assign or participate any
interest in any Loan held by it hereunder to the Borrower or any
of its Affiliates without the prior consent of each Lender.
(g) United. Notwithstanding anything to the contrary in this Section
11.06, United shall not assign any interest in any Commitment or
Loan such that at any time it shall cease to own less than 50.1%
of the aggregate principal amount of the Loans from time to time
outstanding.
11.07 MARSHALLING; RECAPTURE. None of the Administrative Agent, the Collateral
Agent, or any Lender shall be under any obligation to marshal any assets
in favor of the Borrower or any other party or against or in payment of
any or all of the Secured Obligations. To the extent either Agent or any
Lender receives any payment by or on behalf of the Borrower, which
payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to the
Borrower or its estate, trustee, receiver, custodian or any other party
under any bankruptcy or insolvency law, state or Federal law, common law
or equitable cause, then to the extent of such payment or repayment, the
obligation or part thereof that has been paid, reduced or satisfied by
the amount so repaid shall be reinstated by the amount so repaid and
shall be included within the liabilities of the Borrower to such Agent or
such Lender as of the date such initial payment, reduction or
satisfaction occurred.
11.08 CONFIDENTIALITY. Each Lender and each Agent agrees (on behalf of itself
and each of its Affiliates, directors, officers, employees and
representatives) to keep confidential, any non-public information
supplied to it by the Borrower pursuant to this Agreement that is
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identified by the Borrower as being confidential at the time the same is
delivered to such Lender or such Agent; provided that nothing herein
shall limit the disclosure of any such information: (i) to the extent
required by any Government Rule or judicial process; provided that,
unless prohibited by applicable Government Rules or not reasonably
practicable: (A) notice shall be given to the Borrower of such request;
and (B) such Lender or such Agent, as applicable, shall reasonably
cooperate with the Borrower to the extent the Borrower may seek to
challenge such requirement, so long as the Borrower pays all costs of
such challenge and the disclosing party determines that such challenge
would not adversely affect it; (ii) to counsel for any of the Lenders or
either Agent; (iii) to banking, securities exchange or other regulatory
or supervisory authorities, auditors or accountants; (iv) to either Agent
or any other Lender; (v) in connection with the exercise of any remedies
hereunder or under any of the Financing Documents or any suit, action or
proceeding relating to this Agreement or any other Financing Document or
the enforcement of rights hereunder or thereunder; (vi) to the
Independent Engineer, the Insurance Advisor or to other experts engaged
by either Agent or any Lender in connection with this Agreement and the
transactions contemplated hereby; (vii) to the extent that such
information is required to be disclosed to a Government Authority in
connection with a tax audit or dispute; (viii) in connection with any
Default and any enforcement or collection proceedings resulting therefrom
or in connection with the negotiation of any restructuring or "work-out"
(whether or not consummated) of the obligations of the Borrower under
this Agreement or the obligations of the Borrower, the Sponsor, the
Operator or other Project Party under any other Transaction Document; or
(ix) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective
assignee or participant) first executes and delivers to the respective
Lender and the Borrower a confidentiality agreement pursuant to which it
agrees to comply with the requirements of this Section 11.08.
Notwithstanding the foregoing provisions of this Section 11.08(b), the
foregoing obligation of confidentiality shall not apply to any such
information that: (A) was known to any Lender or either Agent prior to
the time it received such confidential information from the Borrower or
its Affiliates pursuant to the Transaction Documents; or (B) becomes part
of the public domain independently of any act of any Lender or either
Agent not permitted hereunder (through publication or otherwise); or (C)
is received by any Lender or either Agent, as applicable, without
restriction as to its disclosure or use, from a Person other than the
Borrower or its Affiliates; provided that such Lender or such Agent, as
applicable has no actual knowledge that such source is disclosing such
information to such Lender or such Agent, as applicable, in violation of
a confidentiality agreement with respect to such information.
11.09 NON-RECOURSE. No recourse shall be had for the payment of any obligations
under any Loan or upon any other obligation, covenant or agreement under
this Agreement or any other Financing Document, against the Sponsor or
any Affiliate thereof, any incorporator, direct or indirect stockholder,
member, partner, officer, director, as such, whether past, present or
future of the Sponsor or the Borrower or any Affiliate thereof or of any
successor corporation thereto (either directly or through the Sponsor or
the Borrower or a
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successor corporation) (each hereinafter, a "NON-RECOURSE PERSON"),
whether by virtue of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise. It
is expressly agreed and understood that:
(a) this Agreement and each other Financing Document are solely
limited liability company obligations of the Borrower, and that no
personal liability whatsoever shall attach to, or be incurred by,
any Non-Recourse Person, either directly or indirectly through the
Borrower or any successor Person, because of the indebtedness
thereby authorized or under or by reason of any of the
obligations, covenants or agreements contained in this Agreement
or any of the Financing Documents or to be implied herefrom or
therefrom; and
(b) any claim of or relating to such personal liability is hereby
expressly waived and released as a condition of, and as part of
the consideration for, the execution of this Agreement and each
other Financing Document.
Notwithstanding the foregoing, nothing in this Section 11.09 shall impair
or in any way limit any liabilities or obligations of: (i) the Sponsor
under or pursuant to its obligations as set forth in the Borrower Equity
Interest Pledge; or (ii) any Non-Recourse Party for fraud or willful
misconduct.
11.10 SURVIVAL. The obligations of the Borrower under Sections 5.01, 5.05, 5.06
and 11.03, the obligations of the Lenders under Section 10.05 and the
obligations of the Borrower and the Lenders under the penultimate
sentence of Section 10.08 and under Section 11.08 shall survive after the
Termination Date. In addition, each representation and warranty made, or
deemed to be made by a notice of any Disbursement, herein or pursuant
hereto shall survive the making of such representation and warranty, and
no Lender shall be deemed to have waived, by reason of making any
Disbursement hereunder, any Default that may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or either Agent may have had notice or
knowledge or reason to believe that such representation or warranty was
false or misleading at the time such Disbursement was made.
11.11 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any party hereto may execute
this Agreement by signing any such counterpart. This Agreement and the
other Financing Documents constitute the entire agreement and
understanding among the parties hereto with respect to matters covered by
this Agreement and the other Financing Documents and supersede any and
all prior agreements and understandings, written or oral, relating to the
subject matter hereof. This Agreement shall become effective at such time
as the Administrative Agent shall have received counterparts hereof
signed by all of the intended parties hereto.
11.12 NO THIRD PARTY BENEFICIARIES IN RELATION TO DISBURSEMENTS. THE AGREEMENT
OF THE LENDERS TO MAKE THE LOANS TO THE
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BORROWER, ON THE TERMS AND CONDITIONS SET OUT IN THIS AGREEMENT, ARE
SOLELY FOR THE BENEFIT OF THE BORROWER, AND NO OTHER PERSON (INCLUDING
ANY AFFILIATE OF THE BORROWER, OR ANY PROJECT PARTY, CONTRACTOR,
SUBCONTRACTOR, SUPPLIER, WORKMAN, CARRIER, WAREHOUSEMAN OR MATERIALMAN
FURNISHING LABOR, SUPPLIES, GOODS OR SERVICES TO OR FOR THE BENEFIT OF
ANY PROJECT) SHALL HAVE ANY RIGHTS HEREUNDER OR UNDER ANY OTHER FINANCING
DOCUMENT AS AGAINST EITHER AGENT OR ANY LENDER OR WITH RESPECT TO ANY
EXTENSION OF CREDIT CONTEMPLATED HEREBY.
11.13 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN
NEW YORK COUNTY (INCLUDING ANY APPELLATE DIVISION THEREOF), AND OF ANY
OTHER APPELLATE COURT IN THE STATE OF NEW YORK, FOR THE PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (OTHER THAN ENFORCEMENT OF THE DEED OF
TRUST). EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
11.14 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, EACH AGENT AND EACH OF THE
LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.15 SPECIAL EXCULPATION. NO CLAIM MAY BE MADE BY THE BORROWER, ANY OF ITS
AFFILIATES, ANY PARTY TO THIS AGREEMENT OR THE AFFILIATES, SHAREHOLDERS,
DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THEM
AGAINST EITHER AGENT OR ANY LENDER OR THE AFFILIATES, SHAREHOLDERS,
DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THEM FOR
ANY SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE LOSS OR
DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, OR ANY ACT,
-89-
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER
HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO
EXIST IN ITS FAVOR.
11.16 SERVICE OF PROCESS. Each party hereto hereby irrevocably consents to the
service of process in any suit, action or proceeding in such courts by
the mailing thereof by any of the other parties hereto by registered or
certified mail, postage prepaid, to the "Address for Notices" specified
below its name on the signature pages hereof.
11.17 SERVICE OF PROCESS. Nothing herein shall in any way be deemed to limit
the ability of any party hereto to serve any writs, process or summonses
in any other manner permitted by applicable law or to obtain jurisdiction
over any other party hereto in such jurisdiction, and in such manner, as
may be permitted by applicable law.
11.18 SEVERABILITY. Any provision of this Agreement or the other Financing
Documents that is prohibited or unenforceable in any particular
jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of that prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or the other Financing Documents,
and any such prohibition or unenforceability in any particular
jurisdiction shall not invalidate or render unenforceable that provision
in any other jurisdiction.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BORROWER
--------
ORMESA LLC
By: ORMAT FUNDING CORP.,
its Sole Member and Controlling Manager
By: /s/ Connie Stechman
------------------------------------------
Name: Connie Stechman
Title: Director, Chief Financial Officer
and Assistant Secretary
Address for Notices:
Ormesa LLC
980 Greg Street
Sparks, Nevada89431
Telephone No.: (775) 356-9029
Facsimile No.: (775) 356-9039
Attention: President
Schedule I to the Credit Agreement
I-3
ADMINISTRATIVE AGENT
--------------------
UNITED CAPITAL,
a division of Hudson United Bank,
not in its individual capacity but solely
as Administrative Agent
By: /s/ Jerome P. Peters, Jr.
-----------------------------------------
Name: Jerome P. Peters, Jr.
Title: Senior Vice President
Address for Notices:
United Capital, a division
of Hudson United Bank
87 Post Road East
Westport, Connecticut06880
Telephone No.: (203) 291-6600
Facsimile No.: (203) 291-6632
Attention: Mr. Jerome P. Peters, Jr.
Schedule I to the Credit Agreement
I-4
COLLATERAL AGENT
----------------
UNITED CAPITAL,
a division of Hudson United Bank,
not in its individual capacity but solely
as Collateral Agent
By: /s/ Jerome P. Peters, Jr.
-----------------------------------------
Name: Jerome P. Peters, Jr.
Title: Senior Vice President
Address for Notices:
United Capital, a division
of Hudson United Bank
87 Post Road East
Westport, Connecticut06880
Telephone No.: (203) 291-6600
Facsimile No.: (203) 291-6632
Attention: Mr. Jerome P. Peters, Jr.
Schedule I to the Credit Agreement
SCHEDULE I
DEFINITIONS
"ACCEPTABLE INSURANCE BROKER" shall mean a nationally or internationally
recognized, independent insurance broker satisfactory to the Administrative
Agent.
"ACCOUNTING PRINCIPLES" shall mean, with respect to any Person at any date, the
generally accepted accounting principles and standards then in effect in such
Person's jurisdiction of incorporation or formation, in all cases, consistently
applied.
"ACCOUNTS" shall have the meaning assigned to such term in the Depositary
Agreement.
"ACQUISITION DOCUMENTS" shall mean those documents delivered to the Collateral
Agent by the Borrower on four cd-roms labeled (i) "Acquisition of Ormesa I and
GEM Geothermal Power Facilities by Ormat", (ii) "Acquisition of Ormesa
Geothermal II Power Facilities by Ormat", (iii) "Acquisition of Ormesa II
Geothermal Project by Ormat" and (iv) "Acquisition of Ormesa Geothermal Trust by
Ormat", including the Sale and Purchase Agreements and all other documents
contained therein.
"ADDITIONAL COSTS" shall have the meaning assigned to such term in Section
5.01(a).
"ADDITIONAL PROJECT DOCUMENT" shall mean any contract or agreement relating to
any Project (other than Non-Material Project Contracts) entered into by the
Borrower subsequent to the Closing Date.
"ADDITIONAL RESTORATION FUNDS" shall have the meaning assigned to such term in
Section 8.05(d)(ii)(C).
"ADDITIONAL TERM LOAN AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date through (and including) December 31, 2003.
"ADDITIONAL TERM LOAN COMMITMENT" shall mean for each Lender, the obligation of
such Lender to make an Additional Term Loan in an aggregate principal amount at
any one time outstanding equal to the amount set out opposite such Lender's name
in Schedule III under the heading "Additional Term Loan Commitment" (as the same
may be adjusted from time to time pursuant to Section 2.03 or as a consequence
of an assignment in accordance with Section 11.06(b)). The initial aggregate
amount of the Additional Term Loan Commitments available to the Borrower at any
time shall not exceed $7,500,000.
"ADDITIONAL TERM LOAN FACILITY" shall mean the credit facility to be provided
pursuant to Section 2.0l(b).
"ADDITIONAL TERM LOAN NOTE" shall have the meaning assigned to such term in
Section 2.07(b).
"ADDITIONAL TERM LOANS" shall have the meaning assigned to such term in Section
2.0l(b).
Schedule I to the Credit Agreement
I-2
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in the
opening paragraph of this Agreement.
"ADVANCE DATE" shall have the meaning assigned to such term in Section 4.06.
"AFFECTED LOANS" shall have the meaning assigned to such term in Section 5.04.
"AFFECTED PROPERTY" shall mean, with respect to any Event of Loss, any Project
Property lost, destroyed, damaged, condemned (including through a Condemnation)
or otherwise taken as a result of such Event of Loss.
"AFFILIATE" shall mean, as to any Person, any other Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
first Person. As used in this definition, "CONTROL" (including, with its
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person that owns directly or indirectly 10% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation or 10% or more of the partnership, limited
liability company or other ownership interests of any other Person will be
deemed to control such corporation or other Person. The term "AFFILIATED" shall
have a correlative meaning.
"AGENT" shall mean either of the Administrative Agent or the Collateral Agent.
"AGREEMENT" shall have the meaning assigned to such term in the opening
paragraph of this Agreement.
"ANCILLARY DOCUMENTS" shall mean, with respect to each Additional Project
Document entered into by the Borrower subsequent to the Closing Date: (a) each
security agreement or instrument (which may consist of an amendment to a
Security Document), together with all recorded financing statements and other
filings, necessary or desirable to grant to the Collateral Agent for the benefit
of the Secured Parties a first priority perfected Lien in such Additional
Project Document and all property interests received by the Borrower in
connection therewith; (b) a Consent and Agreement from each party (other than
the Borrower) to such Additional Project Document; (c) evidence of the
authorization of the Borrower and the other parties to such Additional Project
Document to execute, deliver and perform such Additional Project Document; (d)
evidence that all Government Approvals necessary for the execution, delivery and
performance of such Additional Project Document have been duly obtained, were
validly issued, are in full force and effect and are not subject to appeal; and
(e) such other certificates, documents and information with respect to such
Additional Project Document as either Agent or any Lender may reasonably
request, all in form and substance reasonably satisfactory to the Administrative
Agent.
"ANNUAL OPERATING PLAN AND BUDGET" shall have the meaning assigned to such term
in Section 8.23(a).
Schedule I to the Credit Agreement
I-3
"APPLICABLE LENDING OFFICE" shall mean, for each Lender party hereto on the
Closing Date and for each Type of Loan, the "Lending Office" of such Lender (or
of an Affiliate of such Lender) designated for such Type of Loan in Schedule II
and for each Lender which may become a party hereto after the Closing Date, the
"Lending Office" of such Lender (or of an affiliate of such Lender) designated
for such Type of Loan in the instrument referred to in Section 11.06(b);
provided that any Lender may from time to time change its "Applicable LendingOffice" for any Type of Loan by delivering notice of such change to the Agents
and the Borrower; and provided, further, that the Borrower shall not be
responsible for any costs or expenses in connection with any change of an
Applicable Lending Office that was not consented to in writing by the Borrower
in its discretion.
"APPLICABLE MARGIN" shall mean, with respect to any Loan that is a Eurodollar
Loan, a rate per annum equal to 5.00%; and with respect to any Loan that is a
Prime Rate Loan, a rate per annum equal to 2.15%.
"APPLICABLE TAXES" shall have the meaning assigned to such term in Section
5.06(a).
"APPROVED FUND" shall mean, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"AUTHORIZED OFFICER" shall mean, (a) with respect to any Person that is a
corporation, the President, Vice President, Treasurer, Controller, Assistant
Treasurer, Secretary or Assistant Secretary of such Person; (b) with respect to
any Person that is a partnership, the President, Vice President, Treasurer,
Controller, Assistant Treasurer, Secretary or Assistant Secretary of the
managing general partner of such Person; and (c) with respect to any Person that
is a limited liability company, the President, Vice President, Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary of such Person or of the
managing member of such Person.
"BANKRUPTCY CODE" shall mean Title II of the United States Code entitled
"Bankruptcy" or any successor statute, and all rules promulgated thereunder.
"BASLE ACCORD" shall mean the proposals for a risk-based capital framework
described by the Basle Committee on Banking Regulation and Supervisory Practices
in its paper entitled "International Convergence of Capital Measurement and
Capital Standards" dated July 1988.
"BLM" shall mean the United States Department of the Interior, Bureau of Land
Management.
"BLM LEASES" shall mean the following leases between BLM and the Borrower: CACA
964, CACA 966, CACA 1903, CACA 6217, CACA 6218, CACA 17568, CACA 25081, and CACA
6219.
"BORROWER" shall have the meaning assigned to such term in the opening paragraph
of this Agreement.
Schedule I to the Credit Agreement
I-4
"BORROWER EQUITY INTEREST PLEDGE" shall mean the Pledge Agreement executed by
the Sponsor in favor of the Collateral Agent for the benefit of the Secured
Parties, substantially in the form of Exhibit B-2.
"BORROWER SECURITY AGREEMENT" shall mean the Borrower Security Agreement
executed by the Borrower in favor of the Collateral Agent for the benefit of the
Secured Parties, substantially in the form of Exhibit B-l.
"BUSINESS DAY" shall mean any day on which commercial banks are not authorized
or required to close in New York City and, if such day relates to a borrowing
of, a payment or prepayment of principal of or interest on, a Conversion of or
into, a Continuation of, or an Interest Period for, a Eurodollar Loan or a
notice by the Borrower with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property of such Person to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under the relevant Accounting Principles with
respect to such Person (including Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board) and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with the relevant Accounting Principles with
respect to such Person (including such Statement No. 13).
"CHARTER DOCUMENTS" shall mean, with respect to any Person, the articles of
incorporation, bylaws, limited liability company agreements, partnership
agreements or such other documents or instruments that are required to be
registered or lodged in the place of incorporation, formation or organization of
such Person and which establish the legal existence of such Person.
"CLASS" shall have the meaning assigned to such term in Section 1.02.
"CLOSING DATE" shall mean the date on which: (a) all of the conditions set out
in Section 6.01 shall have been satisfied or waived by the Lenders; and (b) the
initial extension of credit hereunder shall occur.
"CLOSING PRO FORMA" shall mean pro forma cash flow projections for the Borrower
certified by an Authorized Officer of the Borrower, together with a detailed
statement of the assumptions underlying such projections, in form, scope and
substance satisfactory to the Independent Engineer and demonstrating, without
consideration of the Upgrade Project or any borrowing of the Additional Term
Loan Facility, that the Borrower's Debt Service Coverage Ratio for each year
during such period is not less than 1.50:1.
"CODE" shall mean the Internal Revenue Code of 1986, any successor statute, and
all rules and regulations promulgated thereunder.
Schedule I to the Credit Agreement
I-5
"COLLATERAL" shall mean, collectively, the "Collateral" as defined in each
Security Document and all other collateral of whatsoever nature purported to be
subject to the Lien of any Security Document.
"COLLATERAL AGENT" shall have the meaning assigned to such term in the opening
paragraph of this Agreement.
"COMMITMENT FEES" shall mean, collectively, the fees payable to the
Administrative Agent pursuant to Section 2.04(a), (b) and (d).
"COMMITMENTS" shall mean, at any time for any Lender, such Lender's Initial Term
Loan Commitment and Additional Term Loan Commitment.
"CONDEMNATION" shall mean any taking, seizure, condemnation, confiscation or
requisition, including severance damage, by eminent domain or by inverse
condemnation or for any public or quasi-public use under any Government Rule or
any conveyance in anticipation thereof.
"CONDEMNATION PROCEEDS" shall mean all compensation, awards, damages and other
payments or relief arising out of any Condemnation or any part thereof.
"CONSENT AND AGREEMENT" shall mean each agreement among a Project Party and the
Collateral Agent, providing for the consent by such Project Party to the
collateral assignment by the Borrower to the Collateral Agent of the Borrower's
rights under each Project Document between the Borrower and such Project Party.
"CONTEST" shall mean with respect to any Person, with respect to any Taxes or
any Lien imposed on Property of such Person (or the related underlying claim for
labor, material, supplies or services) by any Government Authority for Taxes or
any Mechanics' Lien (each, a "SUBJECT CLAIM"), a contest of the amount, validity
or application, in whole or in part, of such Subject Claim pursued in good faith
and by appropriate legal, administrative or other proceedings diligently
conducted so long as: (a) prior to commencing such contest, such Person shall
have advised the Administrative Agent of the Subject Claim and the nature of the
contest; (b) reserves have been established with respect to Subject Claim in the
amount required by and otherwise in accordance with any relevant Accounting
Principles; (c) during the period of such contest, the enforcement of such
Subject Claim is effectively stayed and any Lien arising thereby shall be
effectively removed of record by the posting of a surety bond or similar
instrument permitted hereunder by a reputable surety company or, with the
consent of the Majority Lenders (not to be unreasonably withheld, conditioned or
delayed), the posting of security satisfactory to the Majority Lenders, in
either case in an amount sufficient to assure the discharge of the Subject Claim
and any actual or proposed deficiency, additional charge, penalty or expense
arising from or incurred as a result of such contest; (d) neither such Person,
its officers, nor any Financing Party could be exposed to any risk of criminal
liability or civil liability as a result of such contest; and (e) such contest
and any resultant failure to pay such Subject Claim under the circumstances
described above could not otherwise reasonably be expected to have a Material
Adverse Effect or result in the loss or forfeiture of any Property of such
Person. The term "CONTEST" used as a verb shall have a correlative meaning.
Schedule I to the Credit Agreement
1-6
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the continuation
pursuant to Section 2.0l(c) of a Eurodollar Loan as a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERSION/CONTINUATION NOTICE" shall mean a conversion or continuation notice
substantially in the form of Exhibit E hereto and duly completed and executed by
the Borrower.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion of Loans of
one Type into Loans of another Type.
"DEBT SERVICE" shall mean, for any period, the sum, computed without
duplication, of the following: (a) all amounts payable by the Borrower to the
Lenders in respect of principal of Indebtedness during such period; plus (b) all
amounts payable by the Borrower to the Lenders in respect of Interest Expense
for such period; plus (c) all fees payable in accordance with Section 2.04; plus
(d) all other amounts payable by the Borrower during such period to the Secured
Parties (in each case, upon the payment date thereof, by acceleration or
otherwise).
"DEBT SERVICE COVERAGE RATIO" shall mean, for any period, the quotient of: (a)
Project Cash Flow for such period; divided by (b) Debt Service (other than
prepayments of Loans pursuant to Sections 3.03 and 3.04) payable during such
period.
"DEBT SERVICE RESERVE ACCOUNT" shall have the meaning assigned to such term in
the Depositary Agreement.
"DEBT SERVICE RESERVE REQUIRED AMOUNT" shall mean, as of any date of
determination, the amount that is equal to one-third (1/3) of the aggregate
scheduled Debt Service for the next twelve-month period (or such shorter period
as shall end on the Final Maturity Date).
"DEED OF TRUST" shall mean that certain leasehold deed of trust executed by the
Borrower in favor of the Collateral Agent as of the Closing Date and encumbering
the Projects to secure the payment of the Secured Obligations.
"DEFAULT" shall mean an event that, after giving of notice, lapse of time or the
fulfillment of any contingency (or any combination of the foregoing), would
become an Event of Default.
"DEPOSITARY AGREEMENT" shall mean the Depositary Agreement among the
Administrative Agent, the Collateral Agent, Wealth Management, a division of
Hudson United Bank, as Depositary Bank, and the Borrower, substantially in the
form of Exhibit C.
"DEPOSITARY BANK" shall have the meaning assigned to such term in the Depositary
Agreement.
"DEVELOP" and "DEVELOPMENT" shall mean, with respect to any Project, the
acquisition, ownership, leasing, occupation, construction, testing, repair,
operation, maintenance and use of such Project and the financing of such
Project.
"DISBURSEMENT" shall mean the making of any Loan pursuant to the Initial Term
Loan Facility or the Additional Term Loan Facility.
Schedule I to the Credit Agreement
I-7
"DISTRIBUTION CERTIFICATE" shall mean a Distribution Certificate and related
attachments and certifications, substantially in the form of Exhibit G, executed
by an Authorized Officer of the Borrower, and otherwise duly completed.
"DISTRIBUTION DATE" shall mean any Quarterly Date or Extended Restricted Payment
Date on which the Borrower is permitted, in accordance with the Financing
Documents, to make equity distributions.
"DOLLARS" and "$" shall mean lawful money of the United States.
"ELIGIBLE ASSIGNEE" means:
(a) any Lender or any Affiliate or Approved Fund of a Lender; and
(b) any bank, institutional investor or other financial institution having
combined capital and surplus in excess of $100,000,000; provided that
neither such entity nor any of its Subsidiaries is an Affiliate of the
Borrower.
"EMERGENCY OPERATING COSTS" shall mean those amounts required to be expended in
order to prevent or mitigate the consequences of an event or circumstance that
was unforeseeable at the time of the Borrower's delivery of the then-current
Annual Operating Plan and Budget and that, in the good-faith judgment of the
Operator and/or the Borrower, requires the taking of immediate measures to
prevent or mitigate an emergency situation.
"ENERGY SERVICES AGREEMENT" shall mean the Energy Services Agreement,
substantially in the form of the draft thereof dated as of December 20, 2002, to
be entered into between the Borrower and Imperial Irrigation District pursuant
to the Memorandum of Understanding dated as of November 21, 2002 by and between
the Borrower and Imperial Irrigation District that will replace the Interim
Distribution Service Agreement dated March 8, 1999 between the Borrower and
Imperial Irrigation District.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any notice, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
communication by any other Person alleging or asserting such first Person's
liability for investigatory costs, clean-up costs, governmental response costs,
damages to natural resources or other Property of such second Person, personal
injuries, fines or penalties or seeking injunctive relief, in each case arising
out of, based on or resulting from: (a) the presence, Use or Release into the
environment of any Hazardous Material at any location, whether or not owned by
such first Person that is not otherwise in compliance with applicable
Environmental Laws; or (b) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law. The term "Environmental Claim" shall include any claim by any Government
Authority for enforcement, clean-up, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and any claim
by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
Schedule I to the Credit Agreement
I-8
"ENVIRONMENTAL LAWS" shall mean any and all Government Rules to the extent
relating to the environment or human health, or the Release or threatened
Release of Hazardous Materials into the environment including ambient air, soil,
surface water, groundwater, wetlands, land or subsurface strata or otherwise
relating to the Use of Hazardous Materials, whether now or hereafter in effect.
"ENVIRONMENTAL PARTY" shall mean the Borrower, the Operator, or any other Person
involved in the development, construction, operation or maintenance of any
Project (other than any Financing Party) and any officer, director, employee or
agent of any of the foregoing in his or her capacity as such.
"ERISA" means the Employee Retirement Income Security Act of 1974, any successor
statute, and all rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA EVENT" means: (a) any "reportable event", as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURODOLLAR BASE RATE" shall mean, with respect to any Eurodollar Loan for any
Interest Period therefor, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for the
offering of Dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the Eurodollar Base Rate for such Interest Period shall be the arithmetic mean
(rounded upwards, if necessary, to the
Schedule I to the Credit Agreement
I-9
nearest 1/100 of 1%) of the respective rates per annum quoted by each Reference
Bank at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) on the date two Business Days prior to the first day of such
Interest Period for the offering by such Reference Bank to leading banks in the
London interbank market of Dollar deposits having a term comparable to such
Interest Period and in an amount comparable to the principal amount of such
Eurodollar Loan for such Interest Period.
"EURODOLLAR LOANS" shall mean Loans that bear interest at rates determined on
the basis of the Eurodollar Rate.
"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Administrative Agent to be equal to (a) the Eurodollar
Base Rate for such Loan for such Interest Period divided by (b) 1 minus the
Reserve Requirement for such Loan for such Interest Period.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Section 9.01.
"EVENT OF LOSS" shall mean, with respect to any Property of the Borrower, any
loss of, destruction of or damage to, or any condemnation (including a
Condemnation) or other taking of, such Property.
"EXECUTION DATE" shall mean the date on which this Agreement shall have been
signed by all of the parties intended to be a party hereto.
"EXPERT CONSULTATION" shall mean, with respect to any matter, such consultation
(which may be oral or in writing) with the Independent Engineer, the Insurance
Advisor, legal counsel or such other expert advisors as may be engaged in
connection with such matter as either Agent (or the Majority Lenders through
such Agent) shall deem appropriate under the particular circumstances.
"EXTENDED RESTRICTED PAYMENT DATE" shall have the meaning assigned to such term
in Section 8.13(a).
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that: (a) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day; and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate charged to United
on such day on such transactions as determined by the Administrative Agent.
"FERC" shall mean the Federal Energy Regulatory Commission.
"FINAL MATURITY DATE" shall mean the fifth anniversary of the Closing Date.
Schedule 1 to the Credit Agreement
I-10
"FINANCING DOCUMENTS" shall mean this Agreement, the Notes, the Security
Documents, each Consent and Agreement and each Interest Rate Cap Agreement.
"FINANCING PARTY" shall mean any Lender, the Depositary Bank, the Collateral
Agent or the Administrative Agent.
"FOREIGN LENDER" shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FPA" shall mean the Federal Power Act and the rules and regulations promulgated
thereunder.
"FUNDING AND CONSTRUCTION AGREEMENT" shall mean the Funding and Construction
Agreement (Heber-Mirage Transmission Line), dated as of June 29, 1987, between
the Borrower, Imperial Irrigation District, and the other Participants named
therein.
"GEM 2 PROJECT" shall mean the nominal 20.5 MW geothermal power plant, employing
double flash design, located at East Mesa, Imperial County, California. The GEM
2 Project has been mothballed and is not currently operating.
"GEM 3 PROJECT" shall mean the nominal 20.5 MW geothermal power, employing
double flash design, plant located at East Mesa, Imperial County, California.
"GOVERNMENT APPROVAL" shall mean: (a) any authorization, consent, approval,
license, lease, ruling, permit, tariff, rate, certification, exemption, filing,
variance, claim, order, judgment, decree, sanction or publication of, by or
with; (b) any notice to; (c) any declaration of or with; or (d) any registration
by or with, or any other action or deemed action by or on behalf of, any
Government Authority or (e) to the extent any such Government Approval
materially references such application, any application therefor for in each
case relating to: (i) the due execution and delivery of, and the performance by
each intended party (other than the Financing Parties) of its obligations and
the exercise of its rights under, each Transaction Document to which it is (or
is intended to be) a party; or (ii) the Development of any Project as
contemplated by the Transaction Documents.
"GOVERNMENT AUTHORITY" shall mean any federal, state, municipal, local,
territorial, or other governmental department, commission, board, bureau,
agency, regulatory authority, instrumentality, judicial or administrative body,
domestic or foreign.
"GOVERNMENT RULE" shall mean any statute, law, regulation, ordinance, rule,
judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive or rule of common law, requirement of, or other
governmental restriction or any similar form of decision of or determination by,
or any interpretation or administration of any of the foregoing by, any
Government Authority, whether now or hereafter in effect.
"GUARANTEE" shall mean a guarantee, an indemnity obligation in respect of
guarantees or performance bonds, an endorsement, a contingent agreement to
purchase or to furnish funds for
Schedule I to the Credit Agreement
I-11
the payment or maintenance of, or otherwise to be or become contingently liable
under or with respect to, or an agreement to assure a creditor against loss with
respect to, any Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an agreement
to purchase, sell or lease (as lessee or lessor) Property of any Person,
products, materials, supplies or services primarily for the purpose of enabling
a debtor to make payment of his, her or its obligations or an agreement to
assure a creditor against loss, and including causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for collection or deposit
in the ordinary course of business. The terms "GUARANTEE" and "GUARANTEED" used
as verbs shall have correlative meanings.
"HAZARDOUS MATERIAL" shall mean: (a) any petroleum or petroleum products,
flammable materials, explosives, radioactive materials, asbestos that is
friable, urea formaldehyde foam insulation and equipment that contains
dielectric fluid containing polychlorinated biphenyls; (b) any materials or
substances which are defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any Environmental
Law; and (c) any other material or substance, exposure to which is prohibited,
limited or regulated as such under any Environmental Law including the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., or any similar state statute.
"HISTORICAL COMPUTATION PERIOD" shall mean, on any Distribution Date, the period
of four consecutive complete fiscal quarters of the Borrower ending on or
immediately prior to such Distribution Date.
"IMPAIRMENT" shall mean, with respect to any Transaction Document or Government
Approval, the rescission, termination, cancellation, repeal, invalidity,
suspension (other than by reason of events of force majeure to the extent
suspension by reason of events of force majeure is expressly permitted by such
Transaction Document or Government Approval), injunction, inability to satisfy
stated conditions or amendment, modification or supplementation (other than, in
the case of a Project Document, any such amendment, modification or
supplementation effected in accordance with Section 8.22 and, in the case of a
Government Approval, any such amendment, modification or supplementation
effected in accordance with Section 8.03(b)) of such Transaction Document or
Government Approval in whole or in part. The verb "IMPAIR" shall have a
correlative meaning.
"IMPERIAL IRRIGATION DISTRICT" shall mean the Imperial Irrigation District, an
irrigation district organized under the Water Code of the State of California.
"INDEBTEDNESS" shall mean, for any Person without duplication: (a) indebtedness
created, issued or incurred by such Person for borrowed money (whether by loan
or the issuance and sale of debt securities or the sale of Property of such
Person to another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property of such Person from such
Schedule I to the Credit Agreement
I-12
Person); (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property of such Person or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 120 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for the account of such Person; (e)
obligations of such Person in respect of surety bonds or similar instruments;
(f) Capital Lease Obligations of such Person; (g) any Guarantee issued or
provided by such Person; and (h) Indebtedness of others Guaranteed by such
Person.
"INDEMNITEE" shall have the meaning assigned to such term in Section 11.03(b).
"INDEPENDENT ENGINEER" shall mean Harris Group Inc., and/or such other Person as
the Administrative Agent may engage on behalf of the Lenders to act as
Independent Engineer for the purposes of this Agreement.
"INITIAL SURVEY" shall have the meaning assigned to such term in Section
6.01(f)(ii).
"INITIAL TERM LOAN AVAILABILITY PERIOD" shall mean the period from (and
including) the Closing Date through (and including) February 28, 2003.
"INITIAL TERM LOAN COMMITMENT" shall mean, for each Lender, the obligation of
such Lender to make Initial Term Loans up to an aggregate principal amount at
any one time outstanding equal to the amount set out opposite such Lender's name
in Schedule III under the heading "Initial Term Loan Commitment" (as the same
may be adjusted from time to time pursuant to Section 2.03 or as a consequence
of an assignment in accordance with Section 11.06(b)). The maximum aggregate
amount of the Initial Term Loan Commitments of the Lenders available to the
Borrower at any time shall not exceed $20,000,000.
"INITIAL TERM LOAN FACILITY" shall mean the credit facility to be provided
pursuant to Section 2.01 (a).
"INITIAL TERM LOAN NOTE" shall have the meaning assigned to such term in Section
2.07(a).
"INITIAL TERM LOANS" shall have the meaning assigned to such term in Section
2.01 (a).
"INSURANCE ADVISOR" shall mean Hudson Insurance Services, Inc. and/or such other
Person as the Administrative Agent may engage on behalf of the Lenders to act as
Insurance Advisor for the purposes of this Agreement.
"INTEREST EXPENSE" shall mean, for any period, the sum of the following: (a) all
interest in respect of Indebtedness accrued or capitalized during such period
(whether or not actually paid during such period); plus (b) the net amounts
payable (or minus the net amounts receivable) under Interest Rate Cap Agreements
accrued during such period (whether or not actually paid or received during such
period).
Schedule I to the Credit Agreement
I-13
"INTEREST PERIOD" shall mean, in respect of any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Loan of
another Type or (in the event of a Continuation) the last day of the next
preceding Interest Period for such Loan, and ending on the numerically
corresponding day in the third calendar month thereafter, except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (a) no
Interest Period may end after the Final Maturity Date; (b) each Interest Period
that would otherwise end on a day that is not a Business Day shall end on the
next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the immediately preceding Business Day);
and (c) notwithstanding clause (a) above, no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loan would otherwise be a shorter period, such Loan shall not be available
hereunder.
"INTEREST RATE CAP AGREEMENT" shall mean any interest rate cap agreement or
similar arrangement providing for the transfer or mitigation of interest risks
either generally or under specific contingencies in a manner satisfactory to the
Majority Lenders, which is entered into by the Borrower pursuant to Section
8.16.
"INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for cash,
Property of such Person, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including any "short sale" or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another Person subject
to an understanding or agreement, contingent or otherwise, to resell such
Property to such Person, but excluding any such advance, loan or extension of
credit having a term not exceeding 90 days representing the purchase price of
inventory or supplies sold in the ordinary course of business); (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person; and (d)
the entering into of any Interest Rate Cap Agreement.
"LEASEHOLD PROPERTIES" shall mean the land and premises described as "Property"
on Exhibit A to the Deed of Trust.
"LENDERS" shall have the meaning assigned to such term in the opening paragraph
of this Agreement.
"LIEN" shall mean, with respect to any Property of any Person, any mortgage,
lien, pledge, charge, lease, easement, servitude, right of others or security
interest or encumbrance of any kind in respect of such Property. For purposes of
this Agreement and the other Financing Documents, any Person shall be deemed to
own subject to a Lien any Property that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement (other than an operating lease)
relating to such Property.
Schedule I to the Credit Agreement
I-14
"LLC AGREEMENT" shall mean the Second Amended and Restated Limited Liability
Company Agreement of the Borrower, dated as of December 27, 2002, executed by
the Sponsor and the Borrower.
"LOANS" shall mean the loans made by the Lenders to the Borrower pursuant to
Section 2.01.
"LOSS PROCEEDS" shall mean, with respect to any Event of Loss, insurance
proceeds, condemnation awards (including Condemnation Proceeds) or other
compensation, awards, damages and other payments or relief (exclusive, in each
case, of the proceeds of liability insurance and business interruption insurance
and other payments for interruption of operations) with respect to any Event of
Loss, less any expenses reasonably incurred by Borrower in collecting such
amounts.
"MAJOR PROJECT PARTY" shall mean the Borrower, the Operator, the Imperial
Irrigation District, SCE and any counterparty to any other Project Document.
"MAJORITY LENDERS" shall mean, subject to the penultimate paragraph of Section
11.04, as of any date of determination prior to the Closing Date, the Lenders
holding at least 50.1% of the aggregate Commitments, and as of any date of
determination thereafter, the Lenders holding at least 50.1% of the aggregate
principal amount of Loans then outstanding.
"MARGIN STOCK" shall mean margin stock within the meaning of Regulation U and
Regulation X.
"MATERIAL ADVERSE EFFECT" shall mean, a material adverse effect on:
(a) the business, operations, Property, assets or condition (financial or
otherwise), liabilities, or capitalization of the Borrower;
(b) the ability of the Borrower, the Operator, SCE or the Imperial Irrigation
District to perform its respective material obligations under any
Transaction Document to which it is a party;
(c) the validity or enforceability of any Transaction Document in its entirety
or with respect to any material provision thereof (including, in the case
of any Security Document, any Lien in favor of the Collateral Agent for the
benefit of the Secured Parties thereunder);
(d) the timely payment of the principal of or interest on the Loans; or
(e) the ability of the Projects to maintain their QF status under PURPA.
"MECHANICS' LIENS" shall mean carriers', warehousemen's, mechanics', workmen's,
materialmen's, construction or other like statutory Liens (other than Liens
described in paragraphs (a) and (b) of the definition of "Permitted Liens").
"MERGER DOCUMENTS" shall mean (i) the Agreement and Plan of Merger by and among
the Borrower, GEM Resources LLC, a Delaware limited liability company, Ormesa
Geothermal, Ormesa Geothermal II, and OrResource, a California general
partnership, dated as of
Schedule I to the Credit Agreement
I-15
December 16,2002 and (iii) the Statement of Merger filed with the Secretary of
State of the State of California on December 16,2002.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
"NON-MATERIAL PROJECT CONTRACTS" shall mean any contracts or agreements entered
into by the Borrower in the ordinary course of business in connection with any
Project under which the Borrower shall have obligations not in excess of
$2,000,000 under any such agreement, excluding, however: (a) any contract or
agreement providing for non-monetary obligations of the Borrower the performance
or non-performance of which could reasonably be expected to have a Material
Adverse Effect; and (b) any contract or agreement providing for: (i) the
conveyance to the Borrower of Real Property or rights therein (including
leasehold interests, easements or licenses) that are integral to such Project;
or (ii) the acquisition by the Borrower of other Property, or the delivery to
the Borrower of services, that are integral to such Project; with respect to
contracts or agreements to which the Borrower is a party, any contracts or
agreements relating to Permitted Indebtedness of the type described in clause
(h) of the definition thereof at any time the aggregate amount of all such
Permitted Indebtedness (measured as equivalent to the total contingent liability
of the Borrower assumed under all such contracts and agreements) would exceed
$2,000,000. For purposes of this definition, indemnity or similar obligations of
the Borrower subject to a maximum dollar amount shall be computed at such
amount, and all other indemnity or similar obligations of the Borrower shall be
computed at the amount thereof which could, at the time such agreement is
entered into, reasonably be expected to become due and payable. Notwithstanding
the foregoing, contracts or agreements customarily used in connection with the
acquisition of Permitted Investments described in paragraphs (a), (b), (c) and
(d) of the definition of "Permitted Investments" shall be deemed to be
Non-Material Project Contracts.
"NON-RECOURSE PERSON" shall have the meaning assigned to such term in Section
11.09.
"NOTES" shall mean, collectively, the Initial Term Loan Notes and the Additional
Term Loan Notes.
"NOTICE OF BORROWING" shall mean a notice of borrowing of Loans hereunder
substantially in the form of Exhibit D hereto and duly completed and executed by
the Borrower.
"O&M CONTRACT" shall mean the Operations and Maintenance Agreement dated as of
April 15, 2002, between the Operator and the Borrower and any other contract or
agreement between the Borrower and any other Person whereby such other Person
agrees to operate and/or maintain a Project on behalf of the Borrower.
"OECS" shall mean modular Ormat Energy Converters, organic Rankine cycle modular
power plants utilizing geothermal fluid and sweetwater to vaporize organic
motive fluid to generate electricity.
Schedule I to the Credit Agreement
I-16
"OGII PROJECT" shall mean the nominal 18.5 MW geothermal power plant utilizing
20 OECs and employing binary technology located at East Mesa, Imperial County,
California.
"OGI PPA" shall mean the Power Purchase Contract dated July 18, 1984 between the
Borrower and SCE, as amended by (i) Amendment No. 1 thereto dated December
23, 1988, (ii) Agreement Addressing Renewable Energy Pricing and Payment Issues
between the Borrower and SCE dated as of June 19, 2001, and identified by SCE as
QFID No. 3010, and (iii) Amendment No. 1 to Agreement Addressing Renewable
Energy Pricing and Payment Issues, dated November 29, 2001.
"OGII PPA" shall mean the Power Purchase Contract dated June 13, 1984 between
the Borrower and SCE, as amended by (i) an Agreement Addressing Renewable Energy
Pricing and Payment Issues between the Borrower and SCE dated as of June19, 2001, and identified by SCE as QFID No. 3012, and (ii) Amendment No. 1 to
Agreement Addressing Renewable Energy Pricing and Payment Issues, dated November29, 2001.
"OPERATING YEAR" shall mean the period commencing on the Closing Date and ending
on December 31, 2003 and each successive 12-month period thereafter.
"OPERATION AND MAINTENANCE EXPENSES" shall mean, for any period, the sum of the
following for each Project, computed without duplication: (a) expenses of
administering and operating such Project and of maintaining it in good repair
and operating condition payable during such period, including, without
duplication, amounts payable during such period under the O&M Agreement; plus
(b) direct operating and maintenance costs of such Project payable during such
period; plus (c) insurance costs payable during such period; plus (d) sales and
excise taxes payable by or on behalf of the Borrower with respect to the sale of
electrical energy during such period; plus (e) property taxes payable by or on
behalf of the Borrower during such period; plus (f) franchise taxes payable by
or on behalf of the Borrower during such period; plus (g) costs and fees
attendant to obtaining and maintaining in effect the Government Approvals
payable during such period; plus (h) reasonable legal, accounting and other
professional fees attendant to any of the foregoing items payable during such
period; plus (i) federal and state income taxes payable by or on behalf of the
Borrower during such period; plus (j) electrical start-up costs and
interconnection fees. Operation and Maintenance Expenses shall exclude, to the
extent otherwise included, any depreciation or other non-cash expense during or
for such period.
"OPERATOR" shall mean Ormat Nevada Inc., a Delaware corporation, and/or any
successor operator of any Project.
"ORMESA I PROJECT" shall mean the nominal 24 MW geothermal power plant employing
binary technology located at East Mesa, Imperial County, California.
"ORMESA IE PROJECT" shall mean the nominal 10 MW geothermal power plant
employing binary technology located at East Mesa, Imperial County, California.
"ORMESA IH PROJECT" shall mean the nominal 10 MW geothermal power plant
employing binary technology located at East Mesa, Imperial County, California.
Schedule I to the Credit Agreement
I-17
"OTHER MATERIAL PROJECT CONTRACT" shall mean any contract or agreement relating
to the Development of any Project to which, on and as of the Closing Date, the
Borrower is party, other than: (a) any Non-Material Project Contracts; and (b)
any Financing Documents.
"PARTICIPANT" shall have the meaning assigned to such term in Section 11.06(c).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INDEBTEDNESS" shall mean:
(a) Indebtedness under this Agreement;
(b) Indebtedness of the type described in paragraph (b) of the definition of
"Indebtedness" in respect of current accounts and other amounts payable
under Project Documents or Non-Material Project Contracts in the ordinary
course of business, but only to the extent such amounts are incurred in
connection with any Project, including any Upgrade Project (and only to the
extent such Indebtedness is contemplated in the then-current Annual
Operating Plan and Budget in relation to such Project);
(c) any Interest Rate Cap Agreement; and
(d) Indebtedness owed by the Borrower to the Sponsor in an aggregate principal
amount not exceeding $35,000,000 under the Subordinated Promissory Note
dated December 31, 2002 made by the Borrower in favor of the Sponsor.
"PERMITTED INVESTMENTS" of any Person shall mean:
(a) direct obligations of the United States, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States or
any agency thereof, maturing in not more than 90 days from the date of
acquisition thereof by such Person;
(b) time deposits or certificates of deposit issued by any Lender or any other
bank or trust company that is organized under the laws of the United States
or any state thereof and has capital, surplus and undivided profits of at
least $500,000,000 and outstanding senior unsecured long-term debt which is
rated "AA" or better by S&P and "Aa2" or better by Moody's (or an
equivalent rating by another nationally recognized statistical rating
organization of similar standing if neither such corporation is in the
business of rating unsecured bank indebtedness), maturing in not more than
90 days from the date of acquisition thereof by such Person;
(c) commercial paper rated (on the date of acquisition thereof by such Person)
"A-l" or "P-l" by S&P and Moody's, respectively (or an equivalent rating
by another nationally recognized statistical rating organization of similar
standing if neither of such corporations is then in the business of rating
commercial paper), maturing in not more than 90 days from the date of
acquisition thereof by such Person;
Schedule I to the Credit Agreement
I-18
(d) repurchase agreements with any Lender or any other bank or trust company
that is organized under the laws of the United States or any state thereof
and has capital, surplus and undivided profits of at least $500,000,000 and
outstanding senior unsecured long-term debt which is rated "AA" or better
by S&P and "Aa2" or better by Moody's (or an equivalent rating by another
nationally recognized statistical rating organization of similar standing
if neither such corporation is in the business of rating unsecured bank
indebtedness), with maturities not in excess of 30 days relating to
securities referred to in paragraph (a) above;
(e) investments in mutual and money market funds organized under the laws of
the United States of America or any state thereof, in each case sponsored
by a securities broker dealer of recognized national standing, with a
consistent dollar value and whose investments are limited to investments
described in any one or more of the foregoing clauses having a rating of
"AA" or "A-l" or better by S&P or "Aa2" or "P-l" or better by Moody's;
(f) for purposes of Sections 7.21, 8.12 and 8.15, the Project Documents and the
Non-Material Project Contracts to the extent the same constitute
Investments; and
(g) for purposes of Sections 7.21, 8.12 and 8.15, the Interest Rate Cap
Agreements entered into by the Borrower in accordance with Section 8.16.
"PERMITTED LIENS" shall mean:
(a) Liens under worker's compensation, unemployment insurance or other social
security legislation (other than ERISA) and Liens to secure other statutory
obligations, in each case for which appropriate reserves have been made;
(b) Liens imposed by any Government Authority for Taxes that are not yet due or
that are being Contested;
(c) Mechanics' Liens arising in the ordinary course of business or incident to
the construction, improvement or Restoration of a Project in respect of
obligations which are not yet due or which are being Contested and which do
not in the aggregate exceed $250,000;
(d) minor defects, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, licenses, restrictions on the use of
property or minor imperfections in title that do not materially impair the
property affected thereby for the purpose for which title was acquired or
interfere with the Development of any Project and that individually or in
the aggregate could not reasonably be expected to result in a Material
Adverse Effect;
(e) Liens created pursuant to this Agreement and the Security Documents or
otherwise in favor of a Financing Party;
Schedule I to the Credit Agreement
I-19
(f) Liens to secure obligations incurred in the ordinary course of business
(excluding any obligation to repay borrowed money) under the Project
Documents to which it is a party and for which appropriate reserves have
been made;
(g) Liens resulting from any money judgment, writ or warrant of attachment in
an aggregate amount not exceeding $50,000;
(h) leases entered into by the Borrower with any Person (other than an
Affiliate of the Borrower) in the ordinary course of business; provided
that: (i) annual payments under such leases do not exceed $50,000 in the
aggregate at any time; (ii) such leases do not individually or in the
aggregate interfere with the Development of such Project; and (iii) such
leases individually or in the aggregate could not reasonably be expected to
result in a Material Adverse Effect;
(i) those matters listed as exceptions to title (except California mechanics'
liens but including Mechanics' Liens referred to clause (c) above) as set
out in the Title Policy as of the Closing Date;
(j) any interests or estates now or hereafter permitted by the BLM in
accordance with its rules and regulations; and
(k) Liens of any judgment rendered or claim filed in connection with any
Project, which the Borrower or others on its behalf are contesting
diligently and in good faith by appropriate proceedings, for which adequate
reserves have been established in accordance with applicable Accounting
Principles and which do not in the aggregate exceed $100,000.
"PERMITTED TRANSFEREE" shall mean (A) any Affiliate of the transferor or (B) any
third-party transferee that, in each case, (i) is a financial institution or
another entity experienced in the ownership or operation of renewable power
generation facilities, (ii) shall have agreed that the transferred Collateral
shall remain subject to the Lien of the Borrower Equity Interest Pledge and
(iii) shall have executed and delivered such instruments and documents that are,
in the reasonable opinion of the Collateral Agent, necessary to carry out the
purposes of the Borrower Equity Interest Pledge.
"PERSON" shall mean any individual, firm, corporation, company, limited
liability company, voluntary association, partnership, joint venture, trust,
unincorporated organization, Government Authority, committee, department
authority or any other body, whether incorporated or unincorporated.
"PLAN" means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
Schedule I to the Credit Agreement
I-20
"PLANS AND SPECIFICATIONS" shall mean, for any Project, the drawings, plans,
specifications, operating and maintenance manuals, and other similar data and
documentation describing the technical parameters of such Project.
"PLANT" shall mean, for any Project, the electrical generating plant consisting
of electrical generating components, the electrical interconnection, associated
materials and environmental control equipment and ancillary structures,
equipment and systems.
"PLANT CONNECTION AGREEMENTS" means, collectively, (a) the Plant Connection
Agreement dated as of October 1, 1985, between the Borrower and Imperial
Irrigation District for the Ormesa I Project, providing, among other things, for
the connection of such Project to Imperial Irrigation District's electric system
for the delivery by the Borrower of the electrical output of such Project to
Imperial Irrigation District for the account of SCE, (b) the Plant Connection
Agreement dated as of October 21, 1988, between the Borrower and Imperial
Irrigation District for the Ormesa IH Project, providing, among other things,
for the connection of such Project to Imperial Irrigation District's electric
system for the delivery by the Borrower of the electrical output of such Project
to Imperial Irrigation District for the account of SCE, (c) the Plant Connection
Agreement dated as of October 3, 1989, between the Borrower and Imperial
Irrigation District for the Ormesa IH Project, providing, among other things,
for the connection of such Project to Imperial Irrigation District's electric
system for the delivery by the Borrower of the electrical output of such Project
to Imperial Irrigation District for the account of SCE, (d) the Plant Connection
Agreement dated as of May 26, 1987, between the Borrower and Imperial Irrigation
District for the OGII Project, providing, among other things, for the connection
of such Project to Imperial Irrigation District's electric system for the
delivery by the Borrower of the electrical output of such Project to Imperial
Irrigation District for the account of SCE, (e) the Plant Connection Agreement
dated as of March 21, 1989, between the Borrower and Imperial Irrigation
District for the GEM 2 Project, providing, among other things, for the
connection of such Project to Imperial Irrigation District's electric system for
the delivery by the Borrower of the electrical output of such Project to
Imperial Irrigation District for the account of SCE, and (f) the Plant
Connection Agreement dated as of March 21, 1989, between the Borrower and
Imperial Irrigation District for the GEM 3 Project, providing, among other
things, for the connection of such Project to Imperial Irrigation District's
electric system for the delivery by the Borrower of the electrical output of
such Project to Imperial Irrigation District for the account of SCE.
"POST-DEFAULT RATE" shall mean, in respect of any principal of any Loan or any
other amount under this Agreement, any Note, or any other Financing Document
that is not paid when due (whether at stated maturity, by acceleration, by
optional or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to: (a) in the case of overdue principal of any
Loan, 2% plus the interest rate otherwise applicable to such Loan; or (b) in the
case of any other amount, the Prime Rate plus the Applicable Margin plus 2%.
"PPAS" shall mean the OGI PPA and the OGII PPA.
"PRIME RATE" shall mean, for any day, the prime commercial lending rate most
recently published in The Wall Street Journal.
Schedule I to the Credit Agreement
I-21
"PRIME RATE LOANS" shall mean Loans which bear interest at rates determined upon
the basis of the Prime Rate.
"PRINCIPAL OFFICE" shall mean the principal office of the Administrative Agent
presently located at Mahwah, New Jersey.
"PROJECT" shall mean each of the Ormesa I Project, the Ormesa IE Project, the
Ormesa IH Project, the OGII Project, the GEM 2 Project, the GEM 3 Project and
the Resource, which, in each case, shall include the Plant and Site of such
Project.
"PROJECT CASH FLOW" shall mean, without duplication, for any period, the excess
(if any) of: (a) Project Revenues for such period (exclusive of extraordinary or
non-recurring items; over (b) the aggregate Operation and Maintenance Expenses
for such period.
"PROJECT DOCUMENTS" shall mean, without duplication, the PPAs, the Plant
Connection Agreements (as each may be modified by, and to the extent not
terminated by, the Energy Services Agreement), the O&M Contract, the Unit
Agreement, the Transmission Services Agreements (as each may be modified by, and
to the extent not terminated by, the Energy Services Agreement), the Real
Property Documents, the Water Supply Agreement, the Funding and Construction
Agreement, when entered into by the parties thereto and in full force and
effect, the Energy Services Agreement, the SIGC Lease, the Acquisition
Documents, the Restructuring Documents, the Merger Documents, the LLC Agreement,
the Charter Documents of the Borrower and, to the extent not included above, any
Other Material Project Contract and, to the extent not included above and not
constituting a Non-Material Project Contract, each Additional Project Document.
"PROJECTED DEBT SERVICE COVERAGE RATIO" shall mean, on any Distribution Date,
the quotient of (a) Project Cash Flow divided by (b) Debt Service scheduled to
be payable, in each case as reflected in the Closing Pro Forma and, in each
case, for the period of four consecutive complete fiscal quarters of the
Borrower ending on the fourth Quarterly Date next succeeding such Distribution
Date.
"PROJECT PARTY" shall mean each Person (other than any Agent or any Lender) from
time to time party to or otherwise bound by a Project Document.
"PROJECT REVENUES" shall mean, for any period (without duplication), all cash
revenues received by or on behalf of the Borrower during such period from: (a)
the sale of electrical energy, capacity or other ancillary services from any
Project; (b) all interest earned with respect to such period on Permitted
Investments held in the Accounts; (c) excess amounts transferred to the Revenue
Account from the Debt Service Reserve Account in accordance with the Depositary
Agreement during such period; (d) amounts received by the Borrower from Project
Parties constituting the refund of deposits during such period; and (e) all
other income, howsoever earned, or revenue howsoever generated or proceeds of
any nature whatsoever received by or on behalf of the Borrower during such
period. Project Revenues shall exclude, to the extent included: (i) proceeds of
Permitted Indebtedness, and (ii) contributions to the Borrower's capital.
Schedule I to the Credit Agreement
I-22
"PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible
and the Real Property.
"PUHCA" shall mean the Public Utility Holding Company Act of 1935, any successor
statute and the rules and regulations promulgated thereunder.
"PURCHASE ORDER" shall mean one or more purchase orders or other arrangements
executed or made by the Borrower to provide for the goods and services necessary
to effect the Tower Repairs.
"PURPA" shall mean the Public Utility Regulatory Policies Act of 1978, any
successor statute and the rules and regulations promulgated thereunder.
"QF" shall mean qualified small power production facilities under PURPA.
"QUARTERLY DATES" shall mean the last day of March, June, September and December
in each year, the first of which shall be the first such day after the Closing
Date.
"QUARTERLY PERIOD" shall mean any period commencing on a Quarterly Date and
ending on the day immediately preceding the next succeeding Quarterly Date.
"REAL PROPERTY" shall mean the land described in the BLM Leases, the Site
Licenses and the ROWS.
"REAL PROPERTY DOCUMENTS" shall mean the BLM Leases, the Site Licenses, the
ROWs, and all documents and agreements in the possession of the Borrower related
thereto.
"RECONSTRUCTION PERIOD" shall have the meaning assigned to such term in Section
8.05(d)(ii)(D).
"REFERENCE BANKS" shall mean JP Morgan Chase and Citibank, N.A. (or their
Applicable Lending Offices, as the case may be), as any of the same may be
replaced by the Administrative Agent (in consultation with the Borrower).
"REGULATION D, REGULATION U AND REGULATION X" shall mean, respectively,
Regulation D, Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any change after the
Execution Date in United States Federal, state or foreign law or regulations
(including Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks including such
Lender of or under any United States Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"RELEASE" shall mean, with respect to any Hazardous Material, any release,
spill, emission, emanation, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or
Schedule I to the Credit Agreement
I-23
migration of such Hazardous Material into the environment, including the
movement of such Hazardous Material through ambient air, soil, surface water,
groundwater, wetlands, land or subsurface strata.
"REQUIRED PAYMENT" shall have the meaning assigned to such term in Section 4.06.
"RESERVE REQUIREMENT" shall mean, for any Interest Period for any Eurodollar
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required under Regulation D to be
maintained during such Interest Period by member banks of the Federal Reserve
System in New York City with deposits exceeding one billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D) in an amount
of $100,000 or more. Without limiting the effect of the foregoing, the Reserve
Requirement shall include any other reserves required to be maintained by such
member banks by reason of any Regulatory Change with respect to: (a) any
category of liabilities which includes deposits by reference to which the
Eurodollar Base Rate is to be determined as provided in the definition of
"Eurodollar Base Rate"; or (b) any category of extensions of credit or other
assets which includes Eurodollar Loans.
"RESOURCE" shall mean the geothermal resource for the Project known as the East
Mesa Field geothermal resource reservoir and well field located adjacent to the
southeast corner of the Imperial Valley, California, approximately 20 miles east
of El Centro, California.
"RESTORATION PLANS" shall have the meaning given to that term in Section
8.05(d)(i).
"RESTORATION SUB-ACCOUNT" shall have the meaning given to that term in the
Depositary Agreement.
"RESTORATION WORK" shall have the meaning assigned to such term in Section
8.05(d).
"RESTORE" shall mean, for any Affected Property, to rebuild, repair, restore or
replace such Affected Property. The term "RESTORATION" shall have a correlative
meaning.
"RESTRICTED PAYMENT" shall mean:
(a) (i) any dividend or distribution (in cash, Property or obligations) on, or
any other payment or distribution on account of, or any payment for, or any
purchase, redemption, retirement or other acquisition, directly or
indirectly of, any limited liability company interests of the Borrower;
(ii) any option or warrant for the purchase or acquisition of any such
limited liability company interests; or (iii) the setting apart of any
money for a sinking or other analogous fund for any of the foregoing; and
(b) (i) any payment (in cash, Property or obligations) with respect to
principal or interest on, or any other payment or distribution on account
of, or any payment for, the purchase, redemption, retirement or other
acquisition of, subordinated Indebtedness of the Borrower; or (ii) the
setting apart of any money for a sinking or other analogous fund for any of
the foregoing.
Schedule I to the Credit Agreement
I-24
"RESTRUCTURING DOCUMENTS" shall mean those documents delivered to the Collateral
Agent by the Borrower on a cd-rom labeled "Restructuring Subsequent to
Acquisition of Ormesa and GEM Interests by Ormat", including the Certificates of
Transfer, Bills of Sale, Assignments, and all other documents contained therein.
"REVENUE ACCOUNT" shall have the meaning assigned to such term in the Depositary
Agreement.
"ROWS" shall mean the following rights-of-way held by the Borrower and granted
by BLM: CACA 25634, CACA 26346, CACA 17188, CACA 22562, CACA 22563, CACA 22567,
CACA 25544, CACA 25633, CACA 26355, CACA 26356, and CACA 20267.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc.
"SCE" shall mean Southern California Edison Company, a California corporation.
"SECOND CLOSING DATE" shall mean the date on which (a) all of the conditions set
out in Section 6.02 shall have been satisfied or waived by the Lenders; and (b)
the Borrower shall have borrowed the Additional Term Loan.
"SECURED OBLIGATIONS" shall mean, as at any date, the sum, computed without
duplication, of the following: (a) the aggregate outstanding principal amount of
the Loans plus accrued interest thereon; plus (b) all other amounts from time to
time payable to the Secured Parties under the Financing Documents plus accrued
interest thereon. For purposes hereof, it is understood that any Secured
Obligations to any Person arising under an agreement entered into at a time such
Person (or an affiliate thereof) is party to this Agreement as a "Lender" shall
continue to constitute Secured Obligations, notwithstanding that such Person (or
its Affiliate) has ceased to be a "Lender" party thereto (by assigning all of
its Commitments, Loans, and other interests therein) at the time a claim is to
be made in respect of such Secured Obligations.
"SECURED PARTIES" shall mean the Administrative Agent, the Collateral Agent, the
Depositary Bank and the Lenders.
"SECURITY DOCUMENTS" shall mean the Borrower Security Agreement, the Borrower
Equity Interest Pledge, the Deed of Trust, the Depositary Agreement, any
security agreement or instrument referred to in paragraph (a) of the definition
of "Ancillary Documents" and all Uniform Commercial Code financing statements
required by this Agreement and/or any of the foregoing documents, and any such
Ancillary Document, to be filed with respect to the Liens created pursuant
thereto on personal property or any fixtures of the Borrower.
"SIGC" shall mean Second Imperial Geothermal Company.
"SIGC LEASE" shall mean the Lease Agreement, effective October 30, 2002, by and
between the Borrower and SIGC.
"SITE" shall mean, for any Project, the ROWs, the Site Licenses and any
Leasehold Properties relating to such Project.
Schedule I to the Credit Agreement
I-25
"SITE LICENSES" shall mean the following site licenses granted by BLM: CACA
17129, CACA 22405, CACA 24678, CACA 20172, and CACA 22079.
"SPONSOR" shall mean Ormat Funding Corp., a Delaware corporation.
"SUBSIDIARY" shall mean, for any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.
"TAX" shall mean any present or future tax, assessment, fee, excise, impost,
duty, governmental charge or levy of any kind imposed directly or indirectly by
or on behalf of any Government Authority.
"TERMINATION DATE" shall mean the date on which: (a) the Secured Parties shall
have received final and indefeasible payment in full of all of the Secured
Obligations and all other amounts owing to the Secured Parties under the
Financing Documents (and provision for payment reasonably satisfactory to each
Agent of all amounts reasonably expected to become due and owing to the Secured
Parties pursuant to Sections 2.04, 5.01, 5.05, 5.06, and 11.03, and similar
provisions in the other Financing Documents, shall have been made); and (b) the
Commitments shall have terminated, expired or been reduced to zero.
"TITLE COMPANY" shall mean First American Title Insurance Company, a California
corporation.
"TITLE POLICY" shall mean the policy of title insurance issued on the Closing
Date by the Title Company to the Collateral Agent for the benefit of the Secured
Parties pursuant to Section 6.01(f)(i).
"TOTAL LOSS" shall mean, in relation to any insured property, any of the
following: (a) the complete destruction of such insured property; (b) the
destruction of such insured property such that there remains no substantial
remnant thereof which a prudent owner, uninsured, desiring to restore such
insured property to its original condition would utilize as the basis of such
restoration; (c) the destruction of such insured property irretrievably beyond
repair; or (d) the destruction of such insured property such that the insured
may claim the whole amount of the relevant insurance policy covering such
insured property upon abandoning such insured property to the insurance
underwriters therefor.
"TOWER REPAIRS" shall mean the structural repairs of, and replacement of the
cooling towers of the Ormesa I Project, the OGII Project and the Ormesa IE
Project to restore performance of such cooling towers to good working order in
accordance with generally prudent utility practice.
"TRANSACTION DOCUMENTS" shall mean the Financing Documents and the Project
Documents.
Schedule I to the Credit Agreement
I-26
"TRANSMISSION SERVICES AGREEMENTS" shall mean, collectively, (a) the
Transmission Services Agreement dated as of October 3, 1989 between the Borrower
and Imperial Irrigation District for the Ormesa I Project, the Ormesa IE Project
and the Ormesa IH Project; (b) the Transmission Services Agreement for
Alternative Resources dated as of September 26, 1985 between SCE and Imperial
Irrigation District for the OGII Project, as amended by Plant Amendment No. 1
dated as of August 25, 1987; (c) the Transmission Services Agreement dated as of
March 21, 1989 between the Borrower and Imperial Irrigation District for the GEM
2 Project; (d) the Transmission Services Agreement dated as of March 21, 1989
between the Borrower and Imperial Irrigation District for the GEM 3 Project; (e)
the Interim Distribution Service Agreement dated March 8, 1999 between Imperial
Irrigation District and the Borrower; (f) the Memorandum of Understanding dated
November 21, 2002 between Imperial Irrigation District and the Borrower; and (g)
the Funding and Construction Agreement dated June 29, 1987 among Imperial
Irrigation District, the Borrower and various other parties
"TYPE" shall have the meaning assigned to such term in Section 1.02.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as in effect
from time to time in the State of New York and in any other jurisdiction the
laws of which control the creation or perfection of security interests under the
Security Documents.
"UNIT AGREEMENT" shall mean that certain Unit Agreement for Exploration,
Development and Operation of the East Mesa Unit Area County of Imperial, State
of California, No. 14-08-0001-20927, dated as of July 30, 1984 by and between
Republic-1975 Geothermal Energy Program and Republic 1977B Geothermal Energy
Drilling Program and Republic Geothermal, Inc., as Unit Operator.
"UNITED" shall have the meaning assigned to such term in the opening paragraph
of this Agreement.
"UNITED STATES" and "U.S." shall mean the United States of America.
"UPGRADE ACCEPTANCE TEST" shall mean the test, the parameters of which are set
forth as Schedule IX.
"UPGRADE PRO FORMA" shall mean pro forma cash flow projections for the Borrower
updating the Closing Pro Forma, entitled "Updated Ormesa United Capital
Proposal" and dated December 18, 2002.
"UPGRADE PROJECT" shall mean the Borrower's planned capital expenditure program
to upgrade the Project.
"USE" shall mean, with respect to any Hazardous Material and with respect to any
Person, the generation, manufacture, processing, distribution, handling, use,
treatment, recycling or storage of such Hazardous Material or transportation to
or from the Property of such Person of such Hazardous Material.
Schedule I to the Credit Agreement
I-27
"WATER SUPPLY AGREEMENT" shall mean the Amended and Restated Water Supply
Agreement dated as of March 6, 1990 between the Borrower and the Imperial
Irrigation District.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
Schedule I to the Credit Agreement
Schedule II
to Credit Agreement
Applicable Lending Offices
Lender Applicable Lending Office
------ -------------------------
United Capital,
a division of Hudson United Bank 87 Post Road East
Westport, Connecticut06880
Schedule III
to Credit Agreement
Commitments
Initial Term Additional Term
Loan Commitment Loan Commitment
--------------- ---------------
United Capital,
a division of Hudson United Bank $20,000,000 $7,500,000
Schedule IV
to Credit Agreement
INSURANCE
At all times commencing on the Closing Date, the Borrower will be required to
maintain, or cause to be maintained, insurance for the Projects for coverages
and in amounts similar to that insurance maintained by other owners of similar
projects as determined by the Insurance Consultant. The insurance coverage shall
include:
1. Liability insurance for all risks in an amount not less than $5,000,000.
2. Property insurance to cover all risks in an amount not less than the full
replacement cost of the Project with customarily related business interruption
protection.
3. General Liability, Automobile Liability and Excess/Umbrella Liability,
General Liability limits of US $1,000,000/US $2,000,000, the Automobile
Liability limit designated as US $1,000,000 and the Excess/Umbrella Liability
coverage limit is US $5,000,000.
4. Material property damage limit of US $50,000,000 covering all real and
personal property, subject to certain terms, conditions and exclusions on an
"All Risk" of direct physical loss or damage including earthquake (subject to a
US $5,000,000 limit).
The Collateral Agent shall be named as loss payee for the property
insurance (in respect of insurance proceeds in excess of $1,000,000) and shall
be named as additional insured for the liability insurance.
Notification of the renewal terms and conditions will be provided 30 days
in advance of the renewal dates.
-2-
IMPERIAL COUNTY AIR POLLUTION CONTROL DISTRICT (ICAPCD) PERMITS TO OPERATE
(PTO):
OGI, Plant and 21 Geothermal Wells PTO 1716E
OGIE, plant and 7 Geothermal wells PTO 1942F
OGII, plant and 14 Geothermal wells PTO 1883D
OGIH, plant and 8 Geothermal wells PTO 2047C
GEM, plant and 39 Geothermal wells PTO 2002F
GEM Title V Operating Permit Number V-2002
CALIFORNIA REGIONAL WATER BOARD WASTE DISCHARGE ORDERS (WDO)
OGI 00-103 7A132035403
OGIE 00-102 7A132035404
OGII 00-090 7A132035301
OGIH 00-085 7A132035401
GEM 00-101 7A132040013
BUREAU OF LAND MANAGEMENT SITE LICENSES
OGI CACA 17129
OGII CACA 20172
OGIE CACA 22405
OGIH CACA 24678
GEM CACA 22079
FEDERAL COMMUNICATIONS COMMISSION
OGII Radio Station License Number 9904D125452 Call Sign: WPNY538
-3-
IMPERIAL COUNTY PUBLIC HEALTH SERVICE (DIVISION OF ENVIRONMENTAL HEALTH)
Surface Water Treatment Permit (Potable Water System)
OGII Permit # 4S-8660-02
U.S. ENVIRONMENTAL PROTECTION AGENCY (USEPA) REGION 9:
OGI RCRA EPA ID Number CA0000138271
OGII RCRA EPA ID Number CAD983613449
GEM RCRA EPA ID Number CAR000045096
CALIFORNIA BOARD OF EQUALIZATION (BOE) HAZARDOUS WASTE GENERATOR ACCOUNT:
OGI HA EF 36-057873
OGII HA EF 38-057602
GEM HA EF 36-051259
IMPERIAL COUNTY DEPARTMENT OF PLANNING COMMISSION CONDITIONAL USE PERMITS (CUP):
OGI & OGIE Aug 14, 1988 (No Number) Conditional Use Permit (CUP)
approved and issued for five
Groundwater Wells to be utilized
for cooling tower makeup.
OGII April 8, 1985 No. 711-85 Conditional Use Permit (CUP)
Approved and issued for three
Groundwater Wells to be utilized
for cooling tower makeup.
Schedule VII
to Credit Agreement
Deferred Government Approvals
Authority to Construct (ATC) Permit - Issued by the Imperial County Air
Pollution Control District (ICAPCD). An application for issuance of an ATC has
been submitted.
Building Permits for all phases of construction - Issued by the Imperial County
Planning Department. Approvals are awarded on a continuous basis.
Environmental Assessment (EA). The Imperial County Planning Department is the
local lead agency for the California Environmental Quality Act (CEQA). The EA
concentrates on the Biological and Archeological parameters and is expected to
be done by Jan. 2003.
Schedule VIII
to Credit Agreement
ENVIRONMENTAL CLAIMS
PART A - ENVIRONMENTAL CLAIMS:
On November 12, 2002, the California Regional Water Quality Control Board issued
a "Notice to Comply" as a result of an inspection of the Projects conducted on
October 23, 2002. Three (3) non-Compliance issues with the Ormesa Waste
Discharge Requirements were noted, as listed below (the status of each is
included as a parenthetical statement at the end):
1. Ormesa Geothermal I (West Cooling Tower) - West Wall of the concrete basin
has substantial cracking and appears to be falling apart. Repairs to the
concrete basin are required to be completed by February 15, 2003. (The contract
to repair the wall is about to be let for completion of the repairs before the
required date.)
2. Cooling Tower Basin solids - Piles of solids from cleanout of cooling tower
basins were noted at well pads 16-30, 15-32, 18-5, and the containment basin
west of OGIH. Proper disposal of these solids is required before December 31,2002. (Samples have been collected and tested, and authorization to dispose has
been received from the California Regional Water Quality Control Board. However,
written authorization from the Imperial County Health Department has not yet
been received. The California Regional Water Quality Control Board has agreed to
extend the required disposal date because of the delay in receiving the written
authorization from the Imperial County Health Department to dispose of the
wastes.)
3. North Wall of pond at GEM 2&3 - Staff noted an area in need of repair to
liner and concrete in the upper wall on the north side. Repairs to the liner and
concrete are required before November 30, 2002. (Repairs were completed on
November 25, 2002.)
PART B - THREATENED ENVIRONMENTAL CLAIMS:
FPL Energy Operating Services, Inc. (FPLE) received a letter, dated August1, 2000, from the Imperial County District Attorney's office indicating that a
request to initiate legal action regarding the handling of the Ormesa IE Project
cooling tower fill and wood debris waste in June and July of 1999 had been filed
by the U.S. Department of the Interior, Bureau of Land Management (BLM), and
suggested that FPLE schedule an appointment to discuss any additional
information FPLE may want to submit. Two meetings were held between the District
Attorney's office and FPLE, and FPLE believes that the BLM and the Imperial
County District Attorney's office no longer intends to pursue the matter,
although no specific resolution to the matter was documented.
PART C - HAZARDOUS MATERIALS:
Cotton-wound steel-core filters were historically used by the Ormesa I, Ormesa
II, Ormesa IE and Ormesa IH projects since the commencement of operation (in
December of 1986, 1987, 1988 and 1989, respectively) to remove fine sand,
produced from the geothermal fluid production wells, from the geothermal fluid
prior to injection into the geothermal fluid injection wells. Waste injection
filters were routinely disposed of off-site as common, non-hazardous industrial
waste in a local municipal waste landfill. In late 1992, a sample of the
injection filters was tested and determined to be a California (non-RCRA)
hazardous waste because of the concentrations of some heavy metals, which
normally occur only in low concentrations in the East Mesa geothermal fluids
used by these Ormesa Geothermal projects. All litigation concerning this issue
was settled prior to the acquisition of the East Mesa projects by FPLE (in 1994
the projects settled with the Imperial County District Attorney; the California
Environmental Protection Agency, Department of Toxic Substance Control; and the
California Regional Water Quality Board, Colorado River Basin Region, and in
1996 the projects settled with the local municipal waste landfill into which the
filters were disposed). These Ormesa Geothermal have not used filters to remove
sand from the geothermal injection fluid prior to injection since late 1992.
None of the waste geothermal fluid injection filters were disposed of on-site.
2
Schedule IX
to Credit Agreement
UPGRADE ACCEPTANCE TEST PARAMETERS
These parameters are to outline the methods to be used to update the report of
the Independent Engineer that was delivered on the Closing Date, which update
shall be delivered pursuant to Schedule 6.2(g) of the Credit Agreement.
The Upgrade Acceptance Test is to demonstrate that the Projects are collectively
capable of generating net energy sales of 445,000 MWh per year. The Upgrade
Acceptance Test is to be conducted over a continuous period of 168 hours (7
days) with all Project systems in normal operating configurations for
continuous, long-term operation with a normal complement of operating personnel.
Criterion for successful completion of the Upgrade Acceptance Test shall be that
during the 168-hour period the Project generate 8,535 MWh for sale to SCE,
corrected for ambient conditions and net of all Project auxiliary loads and line
losses. A detailed Upgrade Acceptance Test protocol, including appropriate
ambient correction factors, measurement points, etc., is to be developed by
the Borrower and approved by the Independent Engineer within 30 days prior to
commencement of the test.
Exhibit A-1
to Credit Agreement
FORM OF INITIAL TERM LOAN NOTE
$ , 2002
--------------- --------- ----
New York, New York
FOR VALUE RECEIVED, the undersigned, ORMESA LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of UNITED CAPITAL, a division of Hudson United Bank, a New Jersey
banking corporation (the "Lender"), in lawful money of the United States of
America and in immediately available funds, the principal amount of
____________________________________ ($_______________) or, if less, the unpaid
principal amount of the Initial Term Loan made by the Lender pursuant to Section
2.01(a) of the Credit Agreement hereinafter defined. The principal amount shall
be paid in the amounts and on the dates specified in Section 3.01 of the Credit
Agreement. The Borrower further agrees to pay interest in like money on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in Section 3.02 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Loan,
the date and amount of each payment or prepayment of principal with respect
thereto, each conversion of all or a portion thereof to another Type, and each
continuation of all or a portion thereof as the same Type. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.
This Note (a) is an Initial Term Loan Note referred to in the Credit
Agreement dated as of December 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto as lenders, and United Capital, a division of Hudson United Bank, a New
Jersey banking corporation, not in its individual capacity, but solely as
administrative agent and collateral agent; (b) is subject to the provisions of
the Credit Agreement; and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of assets in which a security interest has been
granted, the nature and extent of the security, the terms and conditions upon
which the security interests were granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind, except as specifically
provided for in the Credit Agreement.
Initial Term Loan Note
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.
Initial Term Loan Note
ORMESA LLC
----------------------------------------
By ORMAT FUNDING CORP.,
Its Sole Member and Control Manager
By:
------------------------------------
Name:
Title:
Initial Term Loan Note
Exhibit A-2
to Credit Agreement
FORM OF ADDITIONAL TERM LOAN NOTE
[$7,500,000.00] ____________, 200_
New York, New York
FOR VALUE RECEIVED, the undersigned, ORMESA LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of [__________________________________] (the "Lender"), in lawful
money of the United States of America and in immediately available funds, the
principal amount of [SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00)], or, if less, the unpaid principal amount of the Additional
Term Loan made by the Lender pursuant to Section 2.01(b) of the Credit Agreement
hereinafter defined. The principal amount shall be paid in the amounts and on
the dates specified in Section 3.01 of the Credit Agreement. The Borrower
further agrees to pay interest in like money on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
Section 3.02 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Loan,
the date and amount of each payment or prepayment of principal with respect
thereto, each conversion of all or a portion thereof to another Type, and each
continuation of all or a portion thereof as the same Type. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.
This Note (a) is an Additional Term Loan Note referred to in the Credit
Agreement dated as of December 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto as lenders, and United Capital, a division of Hudson United Bank, a New
Jersey banking corporation, not in its individual capacity, but solely as
administrative agent and collateral agent; (b) is subject to the provisions of
the Credit Agreement; and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of assets in which a security interest has been
granted, the nature and extent of the security, the terms and conditions upon
which the security interests were granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind, except as specifically
provided for in the Credit Agreement.
Promissory Note
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.
Exhibit A-2
to Credit Agreement
PROMISSORY NOTE
[$7,500,000.00]
___________, 200_
New York, New York
FOR VALUE RECEIVED, the undersigned, ORMESA LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of [_______________________________________] (the "Lender"), in lawful
money of the United States of America and in immediately available funds, the
principal amount of [SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000.00)], or, if less, the unpaid principal amount of the Additional
Term Loan made by the Lender pursuant to Section 2.0l(b) of the Credit
Agreement hereinafter defined. The principal amount shall be paid in the amounts
and on the dates specified in Section 3.01 of the Credit Agreement. The Borrower
further agrees to pay interest in like money on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
Section 3.02 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Loan,
the date and amount of each payment or prepayment of principal with respect
thereto, each conversion of all or a portion thereof to another Type, and each
continuation of all or a portion thereof as the same Type. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.
This Note (a) is an Additional Term Loan Note referred to in the Credit
Agreement dated as of December 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto as lenders, and United Capital, a division of Hudson United Bank, a New
Jersey banking corporation, not in its individual capacity, but solely as
administrative agent and collateral agent; (b) is subject to the provisions of
the Credit Agreement; and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured as
provided in the Security Documents. Reference is hereby made to the Security
Documents for a description of assets in which a security interest has been
granted, the nature and extent of the security, the terms and conditions upon
which the security interests were granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind, except as specifically
provided for in the Credit Agreement.
Promissory Note
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK.
Exhibit B-l
to Credit Agreement
FORM OF BORROWER SECURITY AGREEMENT
This BORROWER SECURITY AGREEMENT (this "AGREEMENT"), dated as of ______ __,
2002, between ORMESA LLC, a Delaware limited liability company (the "BORROWER"),
and UNITED CAPITAL, a division of Hudson United Bank, a New Jersey banking
corporation ("UNITED"), not in its individual capacity, but solely as collateral
agent for the Lenders and other Secured Parties under and as defined in the
Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the "COLLATERAL AGENT").
WHEREAS, pursuant to that certain Credit Agreement, dated as of December31, 2002 (as amended, modified, supplemented and in effect from time to time,
the "CREDIT AGREEMENT"), among the Borrower, the Lenders party thereto from time
to time, United, not in its individual capacity, but solely as administrative
agent for such Lenders, and the Collateral Agent, the Lenders have agreed to
make loans to the Borrower for the purpose of financing certain costs of
acquiring, improving and operating various geothermal power plant facilities and
related expenses;
WHEREAS, it is a condition to the obligations of the Lenders and the other
Secured Parties under the Credit Agreement that the Borrower shall have executed
and delivered this Agreement and granted the Liens provided for herein; and
WHEREAS, to induce the Lenders and the other Secured Parties to enter into
the Credit Agreement and to induce certain of the Secured Parties to make loans
to the Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower has agreed to pledge
and grant a security interest in the Collateral (as defined below) as security
for the Secured Obligations (as defined in the Credit Agreement).
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to them in Schedule I to the
Credit Agreement. All terms used herein which are not defined herein or in the
Credit Agreement and are defined in the Uniform Commercial Code (as such term is
defined below) shall have the meanings therein stated. In addition, capitalized
terms used in the preamble hereto shall have the respective meanings given
thereto, and the following terms shall have the following meanings under this
Agreement:
"ACCOUNTS RECEIVABLE" shall have the meaning assigned to such term in
Article III(5).
"ARTICLE 9" shall mean Article 9 of the Uniform Commercial Code, as revised
and in effect on and after July 1, 2001.
"ASSIGNED AGREEMENT(S)" shall have the meaning assigned to such term in
Article III(2).
"COLLATERAL" shall have the meaning assigned to such term in Article III.
"COPYRIGHT COLLATERAL" shall mean all Copyrights, whether now owned or
hereafter acquired by the Borrower, including each Copyright identified in Annex
2.
Borrower Security Agreement
-2-
"COPYRIGHTS" shall mean all copyrights, copyright registrations and
applications for copyright registrations, including, without limitation, all
renewals and extensions thereof, the right to recover for all past, present and
future infringements thereof, and all other rights of any kind whatsoever
accruing thereunder or pertaining thereto.
"EQUIPMENT" shall have the meaning assigned to such term in Article III(9).
"INSTRUMENTS" shall have the meaning assigned to such term in Article
III(6).
"INTELLECTUAL PROPERTY" shall mean, collectively, all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with: (a) all
inventions, processes, production methods, proprietary information, know-how and
trade secrets; (b) all licenses or user or other agreements granted to the
Borrower with respect to any of the foregoing, in each case whether now or
hereafter owned or used including, without limitation, the contracts, licenses
or other agreements with respect to the Copyright Collateral, the Patent
Collateral or the Trademark Collateral, listed in Annex 5; (c) all information,
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys, engineering
reports, test reports, manuals, materials standards, processing standards,
performance standards, catalogs, computer and automatic machinery software and
programs; (d) all field repair data, sales data and other information relating
to sales or service of products now or hereafter manufactured; (e) all
accounting information and all media in which or on which any information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or
data; and (f) all causes of action, claims and warranties now or hereafter owned
or acquired by the Borrower in respect of any of the items listed above.
"INVENTORY" shall have the meaning assigned to such term in Article III(7).
"MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership.
"PATENT COLLATERAL" shall mean all Patents, whether now owned or hereafter
acquired by the Borrower, including each Patent identified in Annex 3.
"PATENTS" shall mean all patents and patent applications, including,
without limitation, the inventions and improvements described and claimed
therein together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, all income, royalties, damages and
payments now or hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, the right to sue for past, present and future
infringements, thereof, and all rights corresponding thereto throughout the
world.
"RECORDS" shall have the meaning assigned to such term in Section 2.07.
"TRADEMARK COLLATERAL" shall mean all Trademarks, whether now owned or
hereafter acquired by the Borrower, including each Trademark identified in Annex
4. Notwithstanding the foregoing, the Trademark Collateral does not and shall
not include any Trademark that would be rendered invalid, abandoned, void or
unenforceable by reason of its being included as part of the Trademark
Collateral.
"TRADEMARKS" shall mean all trade names, trademarks and service marks,
logos, trademark and service mark registrations, and applications for trademark
and service mark registrations, including, without limitation, all renewals of
trademark and service mark registrations, all rights corresponding thereto
throughout the world, the right to recover for all past, present and future
infringements thereof, all other rights
Borrower Security Agreement
-3-
of any kind whatsoever accruing thereunder or pertaining thereto, together, in
each case, with the product lines and goodwill of the business connected with
the use of, and symbolized by, each such trade name, trademark and service mark.
1.02 INTERPRETATION. The principles of interpretation set out in Article I
of the Credit Agreement shall apply equally to this Agreement mutatis mutandis.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and Secured Parties that:
2.01 CREDIT AGREEMENT REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Borrower contained in Article VII of the
Credit Agreement is incorporated herein by reference and made a part hereof as
if fully set out in this Agreement for the benefit of the Collateral Agent and
the Borrower shall be deemed to have made each such representation and warranty
as of each date provided for in the Credit Agreement.
2.02 COPYRIGHTS, PATENTS AND TRADEMARKS. Annexes 2, 3 and 4, respectively,
set out a complete and correct list of all Copyrights, Patents and Trademarks
owned by the Borrower on the date hereof. Except pursuant to licenses and other
user agreements entered into by the Borrower in the ordinary course of business
that are listed in Annex 5, the Borrower owns and possesses the right to use,
and has done nothing to authorize or enable any other Person to use, any
Copyright, Patent or Trademark listed in Annexes 2, 3 and 4. All registrations
listed in Annexes 2, 3 and 4 are valid and in full force and effect. Except as
may be set out in Annex 5, the Borrower owns and possesses the right to use all
Copyrights, Patents and Trademarks.
2.03 LICENSES. Annex 5 sets out a complete and correct list of all licenses
and other user agreements existing with respect to the Intellectual Property on
the date hereof.
2.04 NO VIOLATIONS IN RESPECT OF COPYRIGHTS, PATENTS AND TRADEMARKS. To the
Borrower's knowledge: (i) except as set out in Annex 5, there is no violation by
others of any right of the Borrower with respect to any Copyright, Patent or
Trademark listed in Annexes 2, 3 and 4, respectively; and (ii) the Borrower is
not infringing in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted or are pending against the
Borrower or, to the Borrower's knowledge, threatened, and no claim against the
Borrower has been received by the Borrower, alleging any such violation, except
as may be set out in Annex 5.
2.05 TRADEMARK COLLATERAL. The Borrower does not own any Trademarks
registered in the United States of America to which the last sentence of the
definition of Trademark Collateral applies.
2.06 INVENTORY AND EQUIPMENT. All existing Inventory and Equipment: (a) is
located at the Borrower's Address for Notices set out beneath its name on the
signature pages hereto or at one of the locations identified in Annex 6 or in
transit from one of such locations to another; and (b) is in the Borrower's
exclusive control on the date hereof.
2.07 RECORDS. The place of business or, if there is more than one place of
business, the chief executive office of the Borrower is located at the
Borrower's Address for Notices set out on the signature
Borrower Security Agreement
-4-
page hereto, and the Borrower has no books and records concerning the Collateral
(hereinafter, collectively called the "RECORDS") at any location other than at
such address or at one of the locations identified in Annex 6 or in transit from
one of such locations to another.
2.08 INSTRUMENTS. The Borrower has delivered to the Collateral Agent,
without exception, all Collateral that consists of Instruments, which Collateral
is listed on Annex 7 hereto. Annex 7 correctly and completely sets forth all
obligors of such Instruments and their respective aggregate principal amounts.
2.09 CHANGES IN CIRCUMSTANCES. The Borrower has not, within the period of
four months prior to the date hereof: (a) changed its location (as determined
pursuant to Section 9-307 of Article 9); (b) changed its name; or (c) become a
"new debtor" (as defined in Section 9-102(a)(56) of Article 9) with respect to a
security agreement previously entered into by any other Person.
2.10 OTHER ASSETS. All assets of each Project not described in Sections
2.02 through 2.08 are located at the Borrower's Address for Notices set out
beneath its name on the signature pages hereto or at one of the locations
identified in Annex 6 or in transit from one of such locations to another. All
such assets are under the exclusive control of the Borrower. The Borrower will
not change the location of any such assets without 30 days' prior written notice
to the Collateral Agent.
2.11 ASSIGNED AGREEMENTS. All copies of the Assigned Agreements delivered
by the Borrower to the Collateral Agent are true, correct and complete copies
thereof, and such Assigned Agreements have not been amended, modified or
otherwise changed in any respect, except for such amendments, modifications and
changes which are attached to the Assigned Agreements so delivered. Borrower has
obtained all consents and approvals necessary for the assignment of the Assigned
Agreements, except from the BLM and SCE.
2.12 GENERAL.
(a) None of the Collateral constitutes, or is the proceeds of, "FARM
PRODUCTS" as defined in Section 9-102(a)(34) of the UCC.
(b) Other than BLM, none of the account debtors or other persons
obligated on any of the Collateral is a governmental authority covered by
the Federal Assignment of Claims Act or like federal, state or local
statute or rule in respect of such Collateral.
(c) The Borrower holds no commercial tort claims.
(d) The Borrower has at all times operated its business in compliance
in all material respects with all applicable provisions of the federal Fair
Labor Standards Act, as amended, and with all applicable provisions of
federal, state and local statutes and ordinances dealing with the control,
shipment, storage or disposal of hazardous materials or substances.
ARTICLE III
COLLATERAL
As collateral security for the prompt payment in full when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations now
existing or hereafter arising, the Borrower hereby pledges and grants to the
Collateral Agent, for the benefit of the Secured Parties as hereinafter
provided, and subject to the rules and regulations of the BLM, a lien on and
security interest in, all of the
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Borrower's right, title and interest in, to and under the following, whether now
owned by the Borrower or hereafter acquired and whether now existing or
hereafter coming into existence and wherever located (all being collectively
referred to herein as "COLLATERAL"):
1. the assets of the Projects, including all rights of access to and
inspection and use of all books and records of the Projects (including
computer software and computer software programs), all payments (including
fees) or distributions, whether in cash, property or otherwise, at any time
owing or payable to the Borrower in its capacity as owner of the Projects
and all other rights, interests, property or claims to which the Borrower
may be entitled in its capacity as owner of the Projects;
2. except to the extent expressly prohibited by the terms thereof, the
agreements, contracts and documents listed in Annex 1 (including all
exhibits and schedules thereto), as each such agreement, contract and
document may be amended, supplemented or modified and in effect from time
to time (such agreements, contracts and documents, being, individually, an
"ASSIGNED AGREEMENTS" and collectively, the "ASSIGNED AGREEMENTS"),
including: (i) all rights of the Borrower to receive moneys due and to
become due under or pursuant to the Assigned Agreements; (ii) all rights of
the Borrower to receive proceeds of any insurance, bond, indemnity,
warranty or guaranty with respect to the Assigned Agreements; (iii) all
claims of the Borrower for damages arising out of or for breach of or
default under the Assigned Agreements; and (iv) all rights of the Borrower
to terminate, amend, supplement, modify or waive performance under the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise to exercise all remedies thereunder;
3. all Government Approvals now or hereafter held in the name, or for
the benefit of the Borrower (provided, that any Government Approval which
by its terms or by operation of law would become void, voidable, terminable
or revocable if mortgaged, pledged or assigned hereunder or if a security
interest therein were granted hereunder is expressly excepted and excluded
from the Lien and terms of this Agreement to the extent necessary so as to
avoid such voidness, avoidability, terminability or revocability);
4. all Accounts and all balances therein and all instruments,
certificates and notes in respect of Permitted Investments held or
maintained from time to time therein, and all interest and other property
from time to time receivable in respect thereof;
5. all general intangibles (including payment intangibles and
software) and accounts (each as defined in the Uniform Commercial Code) of
the Borrower constituting any right to the payment of money, including all
moneys due and to become due to the Borrower in respect of any loans or
advances or for Inventory or Equipment or other goods sold or leased or for
services rendered, all deposit accounts (including all Accounts established
pursuant to the Depositary Agreement), all moneys due and to become due to
the Borrower under any Guarantee (including a letter of credit) and all Tax
refunds (such accounts, general intangibles and moneys due and to become
due, and Tax refunds, being herein called collectively "ACCOUNTS
RECEIVABLE");
6. all instruments, chattel paper (whether tangible or electronic)
(each as defined in the Uniform Commercial Code) or letters of credit of
the Borrower evidencing, representing, arising from or existing in respect
of, relating to, securing or otherwise supporting the payment of, any of
the Accounts Receivable, including promissory notes, drafts, bills of
exchange and trade acceptances (herein collectively called "INSTRUMENTS")
and all interest, cash, instruments and other Property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any of the Instruments;
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7. all inventory (as defined in the Uniform Commercial Code) of the
Borrower, including Motor Vehicles held by the Borrower for lease, fuel,
tires and other spare parts, all goods obtained by the Borrower in exchange
for such inventory, and any products made or processed from such inventory,
including all substances, if any, commingled therewith or added thereto
(herein collectively called "INVENTORY");
8. all Intellectual Property and all other accounts or general
intangibles of the Borrower not constituting Intellectual Property or
Accounts Receivable;
9. all equipment (as defined in the Uniform Commercial Code) of the
Borrower, including all Motor Vehicles owned by the Borrower (herein
collectively called "EQUIPMENT");
10. each contract and other agreement of the Borrower relating to the
sale or other disposition of Inventory or Equipment;
11. all documents (as defined in the Uniform Commercial Code) or other
receipts of the Borrower covering, evidencing or representing Inventory or
Equipment;
12. all rights, claims (including insurance claims) and benefits of
the Borrower against any Person arising out of, relating to or in
connection with Inventory or Equipment, including any such rights, claims
or benefits against any Person storing or transporting such Inventory or
Equipment; and
13. all other tangible and intangible personal property and fixtures
of the Borrower, including all cash, products, offspring, rents, revenues,
issues, profits, royalties, income, benefits, accessions, letter-of-credit
rights, supporting obligations, additions, substitutions and replacements
of and to any and all of the foregoing, including all proceeds and products
of and to any of the property of the Borrower described in the preceding
paragraphs of this Article III (including, without limitation, any proceeds
of insurance thereon (whether or not the Collateral Agent is loss payee
thereof), and any indemnity, warranty or guarantee, payable by any reason
of loss or damage to or otherwise with respect to any of the foregoing, and
all causes of action, claims and warranties now or hereafter held by the
Borrower in respect of any of the items listed above) and, to the extent
related to any property described in such paragraphs or such proceeds,
products and accessions, all books, correspondence, credit files, records,
invoices and other papers, including all tapes, cards, computer runs and
other papers and documents in the possession or under the control of the
Borrower or any computer bureau or service company from time to time acting
for the Borrower;
provided, however, (a) any distributions, payments or releases (whether in
the form of cash, instruments or otherwise) properly made by or to the
Borrower pursuant to Section 8.13 of the Credit Agreement shall
automatically be released from the Lien granted hereunder and shall no
longer be part of the Collateral upon the making of such distribution,
payment or release and (b) any sale, transfer or other disposition of the
Collateral permitted by Section 8.12(a) of the Credit Agreement shall
automatically be released from the Lien granted hereunder and shall no
longer be part of the Collateral upon consummation of such sale, transfer
or other disposition.
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ARTICLE IV
CERTAIN ASSURANCES; REMEDIES
In furtherance of the grant of the pledge and security interest pursuant to
Article III, the Borrower agrees with each Secured Party as follows:
4.01 DELIVERY AND OTHER PERFECTION. The Borrower shall:
(a) if any of the Collateral required to be pledged and delivered by
the Borrower under Article III is received by the Borrower, forthwith: (i)
transfer and deliver to the Collateral Agent for the benefit of the Secured
Parties such Collateral so received by the Borrower, all of which
thereafter shall be held by the Collateral Agent, pursuant to the terms of
this Agreement, as part of the Collateral; and/or (ii) take such other
action as the Collateral Agent shall deem necessary or appropriate to duly
record the Lien created hereunder in such Collateral;
(b) deliver and pledge to the Collateral Agent any and all
Instruments, endorsed and/or accompanied by instruments of assignment and
transfer in such form and substance as the Collateral Agent may request;
provided, that so long as no Event of Default shall have occurred and be
continuing, the Borrower may retain for collection in the ordinary course
any Instruments received by the Borrower in the ordinary course of business
and the Collateral Agent shall, promptly upon request of the Borrower, make
appropriate arrangements for making any Instrument pledged by the Borrower
and held by the Collateral Agent available to the Borrower for purposes of
presentation, collection or renewal (any such arrangement to be effected,
to the extent requested by the Collateral Agent, against trust receipt or
like document);
(c) give, execute, deliver, file and/or record any financing
statement, continuation statement, notice, instrument, document, agreement
or other papers that may be necessary or desirable (in the reasonable
judgment of the Collateral Agent): (i) to create, preserve, perfect or
validate the pledge and security interest granted pursuant hereto; or (ii)
to enable the Collateral Agent to exercise and enforce its rights hereunder
with respect to such pledge and security interest, including, without
limitation, upon the occurrence and during the continuance of any Event of
Default, causing any or all of the Collateral to be transferred of record
into the name of the Collateral Agent or its nominee (and the Collateral
Agent agrees that if any Collateral is transferred into its name or the
name of its nominee, the Collateral Agent will thereafter promptly give to
the Borrower copies of any notices and communications received by it with
respect to the Collateral pledged by the Borrower hereunder); provided,
that notices to account debtors in respect of any Accounts Receivable or
Instruments shall be subject to the provisions of paragraph (g) below;
(d) without limiting the obligations of the Borrower under Section
4.04(d), promptly notify the Collateral Agent upon the acquisition after
the date hereof by the Borrower of any Equipment covered by a certificate
of title or ownership having a value in excess of $500,000 in the
aggregate, and upon the request of the Collateral Agent, cause the
Collateral Agent to be listed as the lienholder on such certificate of
title or ownership and within 60 days of the acquisition thereof deliver
evidence of the same to the Collateral Agent;
(e) keep full and accurate Records, and stamp or otherwise mark such
Records in such manner as the Collateral Agent may reasonably require in
order to reflect the pledge and security interest granted by this
Agreement;
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(f) (i) upon reasonable prior notice, at any time during normal
business hours, permit representatives of the Collateral Agent to inspect
and make abstracts from the Records; and (ii) upon the occurrence and
during the continuance of any Event of Default, permit representatives of
the Collateral Agent to be present at the Borrower's place of business to
receive copies of all communications and remittances relating to the
Collateral;
(g) upon the occurrence and during the continuance of any Event of
Default, upon request of the Collateral Agent, promptly notify (and the
Borrower hereby authorizes the Collateral Agent so to notify) each account
debtor in respect of any Accounts Receivable or Instruments that such
Collateral has been assigned to the Collateral Agent hereunder, and that
any payments due or to become due in respect of such Collateral are to be
made directly to the Collateral Agent, with a copy of such notice to the
Collateral Agent;
(h) furnish to the Collateral Agent from time to time (but, unless any
Event of Default shall have occurred and be continuing, no more frequently
than annually) statements and schedules further identifying and describing
the Copyright Collateral, the Patent Collateral and the Trademark
Collateral, respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral and the Trademark Collateral as
the Collateral Agent may reasonably request, all in reasonable detail;
(i) promptly upon request of the Collateral Agent, following receipt
by the Collateral Agent of any statements, schedules or reports pursuant to
clause (h) above, modify this Agreement by amending Annexes 2, 3 and/or 4,
as the case may be, to include any Copyright, Patent or Trademark that
becomes part of the Collateral under this Agreement, and deliver any such
amended Annexes to the Collateral Agent;
(j) for each deposit account (including, without limitation, the
Accounts) that the Borrower, now or at any time hereafter, opens or
maintains, at the Collateral Agent's request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral
Agent, either (a) cause the bank to agree to comply, without further
consent of the Borrower, at any time with instructions from the Collateral
Agent to such bank directing the disposition of funds from time to time
credited to such deposit account, or (b) arrange for the Collateral Agent
to become the customer of the bank with respect to the deposit account,
with the Borrower being permitted, only with the consent of the Collateral
Agent, to exercise rights to withdraw funds from such deposit account;
provided, the provisions of this paragraph shall not apply to (i) a deposit
account for which the Collateral Agent is the bank and is in automatic
control, and (ii) any deposit accounts specially and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or
for the benefit of the Borrower's salaried employees. To the extent that
the Borrower shall have any cash, funds or sums of money in its possession
constituting Project Revenues, all such cash, funds or sums of money shall
be paid directly to the Collateral Agent or the Depositary Bank for deposit
into the appropriate Account in accordance with the terms of the Credit
Agreement and the Depositary Agreement;
(k) if any Collateral is, now or at any time hereafter, in the
possession of a bailee, promptly notify the Collateral Agent thereof and,
at the Collateral Agent's request and option, promptly obtain an
acknowledgement from the bailee, in form and substance satisfactory to the
Collateral Agent, that the bailee holds such Collateral for the benefit of
the Collateral Agent and such bailee's agreement to comply, without further
consent of the Borrower, at any time with instructions of the Collateral
Agent as to such Collateral;
(l) if the Borrower, now or at any time hereafter, holds or acquires
an interest in any electronic chattel paper or any "transferable record,"
as that term is defined in Section 201 of the federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform
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Electronic Transactions Act as in effect in any relevant jurisdiction,
promptly notify the Collateral Agent thereof and, at the request and option
of the Collateral Agent, take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control, under Section
9-105 of the Uniform Commercial Code, of such electronic chattel paper or
control under Section 201 of the federal Electronic Signatures in Global
and National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record; provided that the Collateral Agent and the Secured
Parties agree that the Collateral Agent will arrange, pursuant to
procedures satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of control, for
the Borrower to make alterations to the electronic chattel paper or
transferable record permitted under the Uniform Commercial Code or, as the
case may be, Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act, for a party in control to make without loss of control, unless an
Event of Default has occurred and is continuing or would occur after taking
into account any action by the Borrower with respect to such electronic
chattel paper or transferable record;
(m) if the Borrower is, now or at any time hereafter, a beneficiary
under a letter of credit with a face value in excess of $250,000, promptly
notify the Collateral Agent thereof and, at the request and option of the
Collateral Agent, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (a) arrange for the issuer and
any confirmer of such letter of credit to consent to an assignment to the
Collateral Agent of the proceeds of the letter of credit, or (b) arrange
for the Collateral Agent to become the transferee beneficiary of the letter
of credit, with the Collateral Agent agreeing, in each case, that the
proceeds of the letter of credit are to be applied as provided in the
Credit Agreement; and
(n) take any and all other actions as the Collateral Agent may
reasonably determine to be necessary or useful for the attachment,
perfection and first priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in any and all of the
Collateral, including, without limitation, (i) complying with any provision
of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of the Collateral Agent to enforce,
the Collateral Agent's security interest in such Collateral, (ii) obtaining
governmental and other third party waivers, consents and approvals, in form
and substance reasonably satisfactory to the Collateral Agent, including,
without limitation, any consent of any licensor, lessor or other person
obligated on Collateral, (iii) obtaining waivers from mortgagees and
landlords in form and substance reasonably satisfactory to the Collateral
Agent, and (iv) taking all actions under any earlier versions of the
Uniform Commercial Code or under any other law, as reasonably determined by
the Collateral Agent to be applicable under the Uniform Commercial Code or
in any other jurisdiction, including any foreign jurisdiction.
4.02 OTHER FINANCING STATEMENTS AND LIENS. Except for Permitted Liens,
without the prior written consent of the Collateral Agent, the Borrower shall
not file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Collateral Agent is not named as the sole
secured party for the benefit of the Secured Parties.
4.03 PRESERVATION OF RIGHTS. The Collateral Agent shall not be required to
take any steps to preserve any rights against prior parties to any of the
Collateral.
4.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.
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(a) Adverse Claims. The Borrower shall defend, all at its own cost and
expense, the Borrower's title and the existence, perfection and first
priority (subject to any Permitted Liens) of the Collateral Agent's
security interest in the Collateral against all adverse claims.
(b) Distributions to Collateral Agent. If any Event of Default shall
have occurred and be continuing, and whether or not the Collateral Agent or
any other Secured Party exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any other relief or
remedy available to it under applicable law or under this Agreement or any
other Transaction Document or any other agreement relating to such Secured
Obligation, all distributions on and other payments in respect of the
Collateral shall be paid directly to the Collateral Agent and retained by
it as part of the Collateral, subject to the terms of this Agreement, and,
if the Collateral Agent shall so request, the Borrower agrees to execute
and deliver to the Collateral Agent appropriate additional distribution and
other orders and documents to that end; provided, that if such Event of
Default is waived or cured, any such distribution or other payment
theretofore paid to the Collateral Agent shall, upon request of the
Borrower (except to the extent theretofore applied to the Secured
Obligations in accordance with the Credit Agreement), be returned by the
Collateral Agent to the Borrower.
(c) Assigned Agreements.
(i) Anything herein to the contrary notwithstanding, the
Borrower shall remain liable to perform all of its duties
and obligations under each of the Assigned Agreements and in
respect of the Collateral to the same extent as if this
Agreement had not been executed. The exercise by the
Collateral Agent or any other Secured Party of any of the
rights and remedies hereunder shall not release the Borrower
from any of its duties or obligations under any of the
Assigned Agreements or in respect of the Collateral. Neither
the Collateral Agent nor any other Secured Parry shall have
any obligation or liability under any of the Assigned
Agreements or otherwise in respect of the Collateral by
reason of this Agreement or be obligated to perform any of
the obligations or duties of the Borrower under any of the
Assigned Agreements or otherwise in respect of the
Collateral or to take any action to collect or enforce any
claim for payment or any other right assigned hereunder.
(ii) If the Borrower fails to perform any agreement contained
herein or in any of the Assigned Agreements, the Collateral
Agent may (but shall not be obligated to) cause the
performance of such agreement, subject to the rules and
regulations of the BLM, and the reasonable fees, costs and
expenses (including reasonable attorneys' fees and expenses)
of the Collateral Agent incurred in connection therewith
shall, in accordance with Section 4.15, be payable by or on
behalf of the Borrower and shall be Secured Obligations to
the Collateral Agent secured under Article III.
(d) Motor Vehicles. At any time after the occurrence and during the
continuance of an Event of Default, the Borrower shall, upon the request of
the Collateral Agent, deliver to the Collateral Agent originals of the
certificates of title or ownership for the Motor Vehicles owned by it with
the Collateral Agent listed as lienholder and take such other action as the
Collateral Agent shall reasonably deem necessary or desirable to perfect
the security interest created hereunder in all such Motor Vehicles.
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(e) Intellectual Property.
(i) For the purpose of enabling the Collateral Agent to exercise
rights and remedies under Section 4.07 at such time as the
Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose, the Borrower
hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty or other
compensation to the Borrower) to use, assign, license or
sublicense any of the Intellectual Property now owned or
hereafter acquired by the Borrower, wherever the same may be
located, including in such license reasonable access to all
media in which any of the licensed items may be recorded or
stored and to all computer programs used for the compilation
or printout thereof.
(ii) Notwithstanding anything contained herein to the contrary,
but subject to the provisions of Section 8.12 of the Credit
Agreement that limit the rights of the Borrower to dispose
of its property, so long as no Event of Default shall have
occurred and be continuing, the Borrower will be permitted
to exploit, use, enjoy, protect, license, sublicense,
assign, sell, dispose of or take other actions with respect
to the Intellectual Property in the ordinary course of the
business of the Borrower. In furtherance of the foregoing,
unless an Event of Default shall have occurred and be
continuing the Collateral Agent shall from time to time,
upon the request and at the sole cost and expense of the
Borrower, execute and deliver any instruments, certificates
or other documents, in the form so requested, that the
Borrower shall have certified are appropriate (in its
judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant
to clause (i) immediately above as to any specific
Intellectual Property). Further, upon the Termination Date,
the Collateral Agent shall transfer to the Borrower the
license granted pursuant to clause (i) immediately above.
The exercise of rights and remedies under Section 4.07 by
the Collateral Agent shall not terminate the rights of the
holders of any licenses or sublicenses theretofore granted
by the Borrower in accordance with the first sentence of
this clause (ii).
4.05 CUSTODY AND PRESERVATION. The Collateral Agent's obligation to use
reasonable care in the custody and preservation of Collateral shall be satisfied
if it uses the same care as it uses in the custody and preservation of its own
Property.
4.06 RIGHTS OF SECURED PARTIES. The Collateral Agent or any other Secured
Party may (but shall not be obligated to) pay or secure payment of any Tax or
other claim that may be secured by or result in a Lien on any Collateral. The
Collateral Agent or any other Secured Party may (but shall not be obligated to)
do or cause to be done any other thing that is necessary or desirable to
preserve, protect or maintain the Collateral or, after an Event of Default has
occurred and for so long as it shall be continuing, to enhance its value. The
Collateral Agent shall have no obligation to any Person to act or refrain from
acting or exercising any of its rights under this Agreement; provided, however,
that anything to the contrary contained herein notwithstanding, the Collateral
Agent shall be liable for its own gross negligence or willful misconduct. The
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Borrower, in accordance with Section 4.15, shall immediately reimburse the
Collateral Agent or any other Secured Party for any reasonable payment or
expense (including reasonable attorneys' fees and expenses) that the Collateral
Agent or such other Secured Party may incur pursuant to this Section 4.06.
4.07 EVENTS OF DEFAULT ETC. During the period during which an Event of
Default shall have occurred and be continuing:
(a) the Collateral Agent shall have the rights and remedies with
respect to this Agreement as more particularly provided herein or in the
Credit Agreement;
(b) the Borrower shall, at the request of the Collateral Agent,
assemble Collateral owned by it that is movable (and not otherwise in the
possession of the Collateral Agent), if any, at such place or places,
reasonably convenient to both the Collateral Agent and the Borrower, as
designated in such request;
(c) subject to applicable law and to the extent permitted by the BLM,
the Collateral Agent may (but shall not be obligated to), without notice to
the Borrower and at such times as the Collateral Agent in its sole judgment
may determine, exercise any or all of the Borrower's rights in, to and
under, or in any way connected to the Collateral and the Collateral Agent
shall otherwise have and may (but shall not be obligated to) exercise all
of the rights, powers, privileges and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or
not said Code is in effect in the jurisdiction where the rights, powers,
privileges and remedies are asserted) and such additional rights, powers,
privileges and remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights, powers, privileges and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by applicable law, to exercise all
voting, consensual and other powers of ownership pertaining to the
Collateral as if the Collateral Agent were the sole and absolute owner
thereof (and the Borrower agrees to take all such action as may be
appropriate to give effect to such right);
(d) the Collateral Agent may (but shall not be obligated to) make any
reasonable compromise or settlement it reasonably deems desirable with
respect to any of the Collateral and may (but shall not be obligated to)
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms, of all or any part of the Collateral;
(e) the Collateral Agent may (but shall not be obligated to), in its
name or in the name of the Borrower or otherwise, demand, sue for, collect
or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral; and
(f) subject to applicable law and to the extent permitted by the BLM,
the Collateral Agent may (but shall not be obligated to), upon 10 Business
Days' prior written notice to the Borrower of the time and place, with
respect to the Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of the Collateral
Agent, any other Secured Party or any of their respective agents, sell,
lease, assign or otherwise dispose of all or any part of such Collateral,
at such place or places as the Collateral Agent deems reasonable, and for
cash or for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance or
notice of intention to effect any such disposition or of the time or place
thereof (except such notice as is required above or by applicable statute
and cannot be waived). The Collateral Agent or any other Secured Party or
anyone else may be the purchaser, lessee, assignee or recipient of any or
all of the Collateral so disposed of at any public sale (or, to the maximum
extent permitted by applicable law, at any private sale) and thereafter
hold the same absolutely, free from any claim or right of whatsoever
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kind, including any right or equity of redemption (statutory or otherwise),
of the Borrower, any such demand, notice and right or equity being hereby
expressly waived and released to the maximum extent permitted by applicable
law. Subject to applicable law and to the extent permitted by the BLM, the
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
4.07 shall be applied in accordance with Section 4.11.
The Borrower recognizes that, by reason of certain prohibitions contained
in the Securities Act of 1933, as amended, and applicable state securities laws,
the Collateral Agent may be compelled, subject to the notice provision as
provided in paragraph (f) of this Section 4.07, with respect to any sale of all
or any part of the Collateral constituting a security (as such term is defined
in the Securities Act of 1933), to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Borrower acknowledges that any such private sale may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the Borrower or the issuer thereof to
register it for public sale.
4.08 DEFICIENCY. If the proceeds of sale, collection or other realization
of or upon the Collateral by virtue of the exercise of remedies under Section
4.07 are insufficient to cover the costs and expenses of such realization and
the payment in full of the Secured Obligations, the Collateral Agent shall
retain all rights and remedies under the Transaction Documents, and the Borrower
shall remain liable, with respect to any deficiency to the extent the Borrower
is obligated under this Agreement.
4.09 REMOVALS, ETC. Without at least 30 days' prior written notice to the
Collateral Agent, the Borrower shall not: (a) maintain any of its Records at any
office, or permit any Inventory, Equipment or assets of the Projects to be
located anywhere, other than at the Borrower's Address for Notices set out
beneath its name on the signature pages hereto or at one of the locations
identified in Annex 6 or in transit from one of such locations to another; (b)
maintain its chief executive office at any place other than at the Borrower's
Address for Notices set out beneath its name on the signature pages hereto; (c)
change its corporate name, or the name under which it does business, from the
name shown on the signature pages hereto; or (d) change the jurisdiction in
which it is organized from that in which it is organized on the date hereof. The
signature page hereto correctly specifies the place of business of the Borrower
or, if the Borrower had more than one place of business, the location of the
chief executive office of the Borrower, in each case during the period of four
months ending on December 31, 2002.
4.10 PRIVATE SALE. The Collateral Agent and the other Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 4.07 conducted in a
commercially reasonable manner. Subject to and without limitation of the
preceding sentence, the Borrower hereby waives any claims against the Collateral
Agent or any other Secured Party arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale to an unrelated
third party was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
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4.11 APPLICATION OF PROCEEDS.
(a) Application of Proceeds. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all
or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Collateral Agent under this Agreement, shall be applied by
the Depositary Bank at the direction of the Collateral Agent to the Secured
Obligations in accordance with Article IV of the Depositary Agreement.
(b) Borrower Remains Obligated. No sale or other disposition of all or
any part of the Collateral pursuant to Section 4.07 shall be deemed to
relieve the Borrower of its obligations under any Transaction Document to
which it is a party except to the extent the proceeds thereof are applied
to the payment of such obligations.
(c) Proceeds. As used in this Article IV, "PROCEEDS" of Collateral
means cash, securities and other property realized in respect of, and
distributions in kind of, Collateral, including any thereof received under
any reorganization, liquidation or adjustment of debt of the Borrower or
any issuer of or obligor on any of the Collateral.
4.12 ATTORNEY-IN-FACT. Without limiting any rights or powers granted by
this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent is hereby appointed the attorney-in-fact of the
Borrower for the purpose of carrying out the provisions of this Article IV and
taking any action and executing any instruments which the Collateral Agent may
deem necessary or desirable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Collateral Agent shall
be entitled under this Article IV to make collections in respect of the
Collateral, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks made payable to the order of the Borrower
representing any payment or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same.
4.13 PERFECTION. Prior to or on the Closing Date, the Borrower shall: (a)
file such financing statements and other documents in the offices set out on
Annex 8 in order to perfect the security interests granted by Article III to the
extent such security interests may be perfected by such filings; (b) cause the
Collateral Agent (to the extent requested by the Collateral Agent) to be listed
as the lienholder on all certificates of title or ownership relating to Motor
Vehicles owned by the Borrower; and (c) stamp or mark the books of the Borrower
to record the Liens granted hereunder. Copies of any such financing statement or
amendment thereto shall promptly be delivered to the Collateral Agent. The
Borrower hereby authorizes the Collateral Agent to cause the filing of one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Borrower where
permitted by applicable law. Copies of any such statement or amendment thereto
shall promptly be delivered to the Borrower.
4.14 TERMINATION.
(a) Upon any distribution or transfer of any Collateral in accordance
with Section 8.12 or 8.13 of the Credit Agreement, the Collateral Agent
shall, upon the written request of (and at the sole cost and expense of)
the Borrower, promptly execute and deliver to the Borrower such Uniform
Commercial Code termination statements and such other documentation as
shall be reasonably requested by the Borrower to evidence the termination
and release of the Liens on such Collateral.
Borrower Security Agreement
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(b) Upon the Termination Date, the security interest created by this
Agreement shall terminate and all rights to the Collateral shall revert to
the Borrower, and the Collateral Agent shall (at the written request and
sole cost and expense of the Borrower) promptly cause to be transferred and
delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of the Borrower and to be released and
cancelled all licenses and rights referred to in Section 4.04. The
Collateral Agent shall also (at the written request and sole cost and
expense of the Borrower) promptly execute and deliver to the Borrower upon
such termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and such other
documentation as shall be reasonably requested by the Borrower to effect
the termination and release of the Liens on the Collateral. Without
limiting the generality of the foregoing, the Collateral Agent shall,
within 30 days of its receipt of a request from the Borrower at any time
following the Termination Date, and at the expense of the Borrower, (i) pay
to the Borrower or deposit into a deposit account in the Borrower's name
the balance on deposit in any Account that is a deposit account, (ii) send
to the Depositary Bank an authenticated statement that releases the
Depositary Bank from any further obligation to comply with entitlement
orders originated by the Collateral Agent with respect to any Account that
is a securities account, (iii) communicate the authoritative copy of any
electronic chattel paper constituting part of the Collateral to the
Borrower or its designated custodian, (iv) send to each Person having an
unfulfilled obligation to pay or deliver to the Collateral Agent proceeds
arising from any letter of credit right constituting Collateral an
authenticated release from any further obligation to pay or deliver to the
Collateral Agent proceeds arising from any such letter of credit right, and
(v) execute and deliver to the Borrower statements terminating any Consent
and Agreement then in effect.
4.15 EXPENSES.
(a) Subject to, and without duplication of amounts described in,
Section 11.03 of the Credit Agreement, the Borrower agrees promptly to pay
to the Collateral Agent all reasonable fees and out-of-pocket expenses
(including reasonable fees and expenses for legal services) of, or incident
to, the enforcement of any of the provisions of this Article IV, or the
exercise by experts, agents or attorneys selected by the Collateral Agent
in good faith of any rights or privileges of the Borrower in respect of the
Collateral, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral,
and for the care of the Collateral and defending or asserting rights and
claims of the Collateral Agent and the other Secured Parties in respect
thereof, by litigation or otherwise, in each case in accordance with the
terms of this Agreement, and all such reasonable fees and expenses,
together with interest thereon at the applicable Post-Default Rate, shall
be Secured Obligations of the Collateral Agent secured under Article III.
(b) The terms, conditions, covenants and agreements to be observed or
performed by the Borrower under this Agreement shall be observed or
performed by it at its sole cost and expense.
4.16 FURTHER ASSURANCES. The Borrower agrees that, at any time and from
time to time, at its sole cost and expense, it shall promptly execute and
deliver all further agreements, instruments, documents and certificates and take
all further action that, in the reasonable judgment of the Collateral Agent, may
be necessary or desirable in order to fully effect the purposes of this
Agreement (including the delivery of possession of any Collateral that hereafter
comes into existence or is acquired in the future by the Collateral Agent as
pledgee for the benefit of the Secured Parties) and to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
the Collateral or any part thereof.
Borrower Security Agreement
-16-
4.17 RELEASE OF MOTOR VEHICLES. So long as no Event of Default shall have
occurred and be continuing, at the written request and, in accordance with
Section 4.15, sole cost and expense of the Borrower, the Collateral Agent shall
execute and deliver to the Borrower such instruments as the Borrower shall
reasonably request to remove the notation of the Collateral Agent as lienholder
on any certificate of title for any Motor Vehicle; provided, that any such
instruments shall be delivered, and the release shall be effective, only upon
receipt by the Collateral Agent of a certificate from the Borrower stating that
the Motor Vehicle the lien on which is to be released is to be sold or has
suffered a casualty loss (with title thereto passing to the casualty insurance
company therefor in settlement of the claim for such loss) and that the sale or
casualty proceeds thereon shall first have been delivered to the Collateral
Agent.
ARTICLE V
MISCELLANEOUS
5.01 COLLATERAL AGENT'S RIGHT TO PERFORM ON BORROWER'S BEHALF. If the
Borrower shall fail to observe or perform any of the terms, conditions,
covenants and agreements to be observed or performed by it under this Agreement,
the Collateral Agent may (but shall not be obligated to), upon reasonable notice
to the Borrower, do the same or cause it to be done or performed or observed by
experts, agents or attorneys selected by the Collateral Agent in good faith at
the sole cost and expense of the Borrower, either in its name or in the name and
on behalf of the Borrower, and the Borrower hereby authorizes the Collateral
Agent so to do.
5.02 WAIVERS OF RIGHTS INHIBITING ENFORCEMENT. The Borrower waives, to the
maximum extent permitted by applicable law:
(a) any claim that, as to any part of the Collateral, a public sale,
should the Collateral Agent elect so to proceed, is, in and of itself, not
a commercially reasonable method of sale for the Collateral;
(b) the right to assert in any action or proceeding between it and the
Collateral Agent any offsets that it may have;
(c) except as otherwise provided in this Agreement, NOTICE OR JUDICIAL
HEARING IN CONNECTION WITH THE COLLATERAL AGENTS TAKING POSSESSION OR
DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND
HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
BORROWER WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO THE TIME,
PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE
ENFORCEMENT OF THE COLLATERAL AGENT'S RIGHTS HEREUNDER;
(d) all rights of redemption, appraisement, valuation, stay and
extension or moratorium; and
(e) all other rights the exercise of which would, directly or
indirectly, prevent, delay or inhibit the enforcement of any of the rights
or remedies of the Collateral Agent and the other Secured Parties under
this Agreement or the absolute sale of the Collateral, now or hereafter in
force under any applicable law, and the Borrower, for itself and all who
may claim under it,
Borrower Security Agreement
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insofar as it or they now or hereafter lawfully may, hereby waive the
benefit of all such laws and rights.
5.03 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of the
Collateral Agent, any other Secured Party or any of such Person's agents to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy hereunder shall operate as a waiver thereof. No
single or partial exercise by the Collateral Agent, any other Secured Party or
any of such Person's agents of any right, power or remedy hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights, powers and remedies herein or in any other
Transaction Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which either Collateral Agent or any other Secured
Party would otherwise have. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of either Collateral
Agent or any other Secured Party to any other or further action in any
circumstances without notice or demand, except to the extent notice is expressly
required by this Agreement or any other Financing Document.
5.04 NOTICES. All notices, requests and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing in the manner
set out in Section 11.02 of the Credit Agreement Unless otherwise so changed in
accordance with the Credit Agreement by a party hereto, all notices, requests
and other communications to such party shall be sent to the address of such
party set out on the signature pages hereto.
5.05 AMENDMENTS, ETC. This Agreement may be amended, supplemented, modified
or waived only by an instrument in writing duly executed by the Borrower and the
Collateral Agent. Any such amendment, supplement, modification or waiver shall
be binding upon the Collateral Agent and each Lender, each holder of any of the
Secured Obligations and the Borrower. Any waiver shall be effective only in the
specific instance and for the specified purpose for which it was given.
5.06 EXPENSES. The parties hereto agree that all costs and expenses covered
by Section 11.03 of the Credit Agreement shall be Secured Obligations entitled
to the benefits of the collateral security provided pursuant to Article III.
5.07 SUCCESSORS AND ASSIGNS. This Agreement shall: (a) remain in full force
and effect until the termination hereof pursuant to Section 4.14; and (b) be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Borrower and the Collateral Agent, the Lenders and each holder of
any of the Secured Obligations; provided, however, that the Borrower shall not
assign or transfer its rights hereunder without the prior written consent of the
Collateral Agent.
5.08 SURVIVAL, ETC. The obligations of the Borrower under Section 4.15
shall survive after termination of this Agreement or the resignation or the
removal of the Collateral Agent. In addition, the representations and warranties
of the Borrower set out in this Agreement or contained in any documents
delivered to the Collateral Agent or any other Secured Party pursuant to this
Agreement shall be considered to have been relied upon by the Secured Parties in
entering into the Credit Agreement and the relevant Financing Documents and
making each Loan, notwithstanding any investigation on their respective parts.
5.09 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument and either of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto with respect to matters covered by this Agreement and the other
Financing Documents and supersede any and all
Borrower Security Agreement
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prior agreements and understandings, written or oral, relating to the subject
matter hereof. This Agreement shall become effective at such time as the
Collateral Agent shall have received counterparts hereof signed by all of the
intended parties hereto.
5.10 AGENTS, ETC. The Collateral Agent may employ agents, experts and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents, experts or attorneys-in-fact
selected by it in good faith.
5.11 SEVERABILITY. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by applicable law: (a)
the other provisions hereof shall remain in full force and effect in such
jurisdiction in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
5.12 HEADINGS. Headings appearing herein are used solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.
5.13 LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, NEITHER THE COLLATERAL AGENT NOR ANY OTHER SECURED PARTY SHALL HAVE
LIABILITY WITH RESPECT TO, AND THE BORROWER HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE FOR:
(a) ANY LOSS OR DAMAGE SUSTAINED BY THE BORROWER, OR ANY LOSS, DAMAGE,
DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT MAY
OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO,
ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THIS AGREEMENT EXCEPT FOR ANY
SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE SAME
IS THE RESULT OF ACTS OR OMISSIONS ON THE PART OF SUCH SECURED PARTY
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE; OR
(b) ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH ANY CLAIM RELATED TO
THIS AGREEMENT.
5.14 SECURITY INTEREST ABSOLUTE. To the maximum extent permitted by
applicable law and subject to the rules and regulations of the BLM, the rights
and remedies of the Collateral Agent hereunder, the Liens created hereby, and
the obligations of the Borrower under this Agreement are absolute, irrevocable
and unconditional and will remain in full force and effect without regard to,
and will not be released, suspended, discharged, terminated or otherwise
affected by, any circumstance or occurrence whatsoever (other than termination
pursuant to Section 4.14), including:
(a) any renewal, extension, amendment, or modification of, or addition
or supplement to or deletion from, any of the Transaction Documents or any
other instrument or agreement referred to therein, or any assignment or
transfer of any thereof;
(b) any waiver of, consent to or departure from, extension, indulgence
or other action or inaction under or in respect of any of the Secured
Obligations, this Agreement, any other Transaction Document or other
instrument or agreement relating thereto, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of the Secured
Obligations,
Borrower Security Agreement
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this Agreement, any other Transaction Document or any such other instrument
or agreement relating thereto;
(c) any furnishing of any additional security for the Secured
Obligations or any part thereof to the Collateral Agent or any other person
or any acceptance thereof by the Collateral Agent or any other person or
any substitution, sale, exchange, release, surrender or realization of or
upon any such security by the Collateral Agent or any other person or the
failure to create, preserve, validate, perfect or protect any other Lien
granted to, or purported to be granted to, or in favor of, the Collateral
Agent or any other Secured Party;
(d) any invalidity, irregularity or unenforceability of all or any
part of the Secured Obligations, any other Transaction Document or any
other agreement or instrument relating thereto or any security therefor;
(e) the acceleration of the maturity of any of the Secured Obligations
or any other modification of the time of payment thereof; or
(f) any other event or circumstance whatsoever which might otherwise
constitute a legal or equitable discharge of a surety or a guarantor, it
being the intent of this Section 5.14 that the obligations of the Borrower
hereunder shall be absolute, irrevocable and unconditional under any and
all circumstances.
5.15 REINSTATEMENT. This Agreement and the Lien created hereunder shall
automatically be reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Secured Obligations is
rescinded or must otherwise be restored by any holder of the Secured
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Borrower shall indemnify the Collateral
Agent, each other Secured Party and its respective employees, officers and
agents on demand for all reasonable fees, costs and expenses (including, without
limitation, reasonable fees, costs and expenses of counsel) incurred by the
Collateral Agent, such other Secured Party or its respective employees, officers
or agents in connection with such reinstatement, rescission or restoration.
5.16 NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES HERETO ARE
SOLELY FOR THE BENEFIT OF THE BORROWER, THE COLLATERAL AGENT AND THE OTHER
SECURED PARTIES, AND NO PERSON (OTHER THAN THE PARTIES HERETO, THE OTHER SECURED
PARTIES AND THEIR SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER) SHALL HAVE ANY
RIGHTS HEREUNDER.
5.17 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. EACH OF THE BORROWER AND THE COLLATERAL AGENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY
(INCLUDING ITS APPELLATE DIVISION), AND OF ANY OTHER APPELLATE COURT IN THE
STATE OF NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
COLLATERAL AGENT AND THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
Borrower Security Agreement
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5.18 WAIVER OF JURY TRIAL. THE BORROWER AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.19 SERVICE OF PROCESS. Nothing herein shall in any way be deemed to limit
the ability of the Financing Parties or the Borrower to serve any writs, process
or summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Borrower or the Collateral Agent, as applicable, in such
jurisdiction, and in such manner, as may be permitted by applicable law.
5.20 AUTHORITY OF THE COLLATERAL AGENT. The Borrower acknowledges and
agrees that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken, or determination or request made, by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of
any power, right or remedy provided for or resulting or arising out of this
Agreement shall, as between the Collateral Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Borrower, the Collateral Agent shall be conclusively
presumed to be acting as the Collateral Agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Borrower shall be
under no obligation or entitlement to make any inquiry respecting such
authority.
5.21 LIMITATION OF RECOURSE. The obligations of the Borrower under this
Agreement shall be obligations of the Borrower only and neither the Collateral
Agent nor any Secured Party shall have any claim against or recourse to (whether
by operation of law or otherwise) any Non-Recourse Person (other than claims
against and recourse to the Sponsor with respect to its obligations under the
Borrower Equity Interest Pledge) in respect of such obligations of the Borrower.
Notwithstanding the foregoing, nothing in this Section 5.21 shall impair or in
any way limit any liabilities or obligations of (a) the Sponsor under or
pursuant to its obligations as set forth in the Borrower Equity Pledge, or (b)
any Non-Recourse Party for fraud or willful misconduct.
Borrower Security Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
ORMESA LLC
BY: ORMAT FUNDING CORP.,
ITS SOLE MEMBER AND CONTROL MANAGER
By:
------------------------------------------
Name:
Title:
Address for Notices: 980 Greg Street
Sparks, NV89431
Attn: President
Telephone: (775) 356-9029
Telecopy: (775) 356-9039
UNITED CAPITAL,
a division of Hudson United Bank,
not in its individual capacity, but solely
as Collateral Agent
By:
------------------------------------------
Name:
Title:
Address for Notices: 87 Post Road East
Westport, CT06880
Telecopier No.: (203) 291-6652
Telephone No.: (203) 291-6639
Attention: Jerry Peters, Senior Vice President
Borrower Security Agreement
ANNEX 1
Assigned Agreements
1. each PPA
2. the O&M Contract
3. each Plant Connection Agreement
4. the Energy Services Agreement, upon execution and delivery thereof
5. the Water Supply Agreement
6. each BLM Lease
7. each Site License
8. each ROW
9. the LLC Agreement
10. the Unit Agreement
11. each Transmission Service Agreement
12. the Funding and Construction Agreement
13. the Purchase Order
Borrower Security Agreement
ANNEX 4
List of Trade Names, Trademarks, Service Marks,
Trademark and Service Mark Registrations and
Applications for Trademark and Service Mark Registrations
NONE
Borrower Security Agreement
Exhibit B-2
to Credit Agreement
FORM OF BORROWER PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "AGREEMENT"), dated as of __________ ___, 2002,
between ORMAT FUNDING CORP., a Delaware corporation (the "PLEDGOR"), and UNITED
CAPITAL, a division of Hudson United Bank, a New Jersey banking corporation
("UNITED"), not in its individual capacity, but solely as Collateral Agent for
the Lenders and other Secured Parties under and as defined in the Credit
Agreement referred to below (in such capacity, together with its successors in
such capacity, the "COLLATERAL AGENT").
WHEREAS, pursuant to the Credit Agreement, dated as of December 31, 2002
(as amended, modified and supplemented and in effect from time to time, the
"CREDIT AGREEMENT"), among Ormesa LLC, a Delaware limited liability company (the
"BORROWER"), the lenders party thereto from time to time (the "LENDERS"),
United, not in its individual capacity, but solely as administrative agent for
such Lenders, and the Collateral Agent, the Lenders have agreed to make loans
and extend other credit to the Borrower for the purpose of financing certain
costs of acquiring, improving and operating various geothermal power plant
facilities and related expenses;
WHEREAS, the Borrower is a direct, wholly-owned subsidiary of the Pledgor;
WHEREAS, it is a condition to the obligations of the Lenders and the other
Secured Parties under the Credit Agreement that the Pledgor shall have executed
and delivered this Agreement and granted the Liens provided for herein; and
WHEREAS, to induce the Lenders and the other Secured Parties to enter into
the Credit Agreement and to induce the Lenders to make loans to the Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Pledgor has agreed to pledge and grant a
security interest in the Collateral (as defined below) as security for the
Secured Obligations (as defined in the Credit Agreement).
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.01 DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned to them in Schedule I to the
Credit Agreement. All terms used herein which are not defined herein or in the
Credit Agreement and are defined in the Uniform Commercial Code (as such term is
defined below) shall have the meanings therein stated. In addition, capitalized
terms used in the preamble hereto shall have the respective meanings given
thereto and the following terms shall have the following meanings under this
Agreement.
"ARTICLE 9" shall mean Article 9 of the Uniform Commercial Code of the
State of New York, as revised and in effect on and after July 1, 2001.
"BORROWER INSOLVENCY EVENT" shall mean the insolvency, bankruptcy or
reorganization of the Borrower or any other event described in Section 9.01 (g)
or (h) of the Credit Agreement with respect to the Borrower.
"BORROWER INSOLVENCY PROCEEDINGS" shall have the meaning assigned to such
term in Section 4.05.
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"COLLATERAL" shall have the meaning assigned to such term in Article III.
"OWNERSHIP COLLATERAL" shall have the meaning assigned to such term in
Article III(c).
"PLEDGED INTERESTS" shall have the meaning assigned to such term in Article
III(a).
"RECORDS" shall have the meaning assigned to such term in Section 2.01.
1.02 INTERPRETATION. The principles of interpretation set out in Article I
of the Credit Agreement shall apply equally to this Agreement mutatis mutandis.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants to the Secured Parties that:
2.01 RECORDS. The place of business or, if there is more than one place of
business, the chief executive office of the Pledgor is located at the Pledgor's
Address for Notices set out on the signature page hereto, and the Pledgor has no
books and records concerning the Collateral (hereinafter, collectively called
the "Records") at any location other man at such address.
2.02 LEGAL TITLE. The Pledgor is the sole legal and beneficial owner of the
Collateral free and clear of all Liens (other than Permitted Liens and the
pledge and security interest granted to the Collateral Agent hereunder for the
benefit of the Secured Parties, which pledge and security interest shall,
following a filing described in Section 5.13 hereof, constitute a first priority
perfected pledge and security interest in and to all of the Collateral) and no
right or option to acquire all or any part of the Collateral exists in favor of
any other Person. The Pledgor has not agreed to secure any Indebtedness by any
Lien upon and does not have outstanding any obligation to create Liens on, or
with respect to, any Collateral (other than Permitted Liens and the Liens
granted to the Collateral Agent hereunder for the benefit of the Secured
Parties). All filings and other actions necessary to create, preserve, validate,
perfect and protect such pledge and security interest and the priority thereof
have been duly made or taken (other than any such filings or other actions
permitted to be made or taken after the Closing Date in accordance with this
Agreement and the other Financing Documents).
2.03 PLEDGED INTERESTS. The Pledged Interests identified in Annex 1 are,
and all other Pledged Interests in which the Pledgor shall hereafter grant a
security interest pursuant to Article III will be, duly authorized, validly
existing, fully paid and non-assessable and none of such Pledged Interests is or
will be subject to any contractual restriction, or any restriction under the
Charter Documents of the Borrower, upon the transfer of such Pledged Interests
(except for any such restriction contained herein or in the other, Financing
Documents).
2.04 ANNEX 1. The Pledged Interests identified in Annex 1 constitute all of
the membership interests or other ownership interests of any class or character
of the Borrower beneficially owned by the Pledgor on the date hereof (whether or
not registered in the name of the Pledgor), and constitute one hundred percent
(100%) of the membership or other ownership interests of the Borrower. Annex 1
correctly identifies, as at the date hereof, the registered owner of such
Pledged Interests and the respective percentage of membership interests
comprising such Pledged Interests.
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2.05 CORPORATE STATUS. The Pledgor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2.06 DUE AUTHORIZATION, LEGALITY AND ENFORCEABILITY. The Pledgor has full
corporate power, authority and legal right to execute and deliver the
Transaction Documents to which it is a party and to perform its obligations
thereunder. The execution, delivery and performance by the Pledgor of each of
the Transaction Documents to which it is or is intended to be a party and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action on its part. Each of the Transaction Documents
to which the Pledgor is a party has been duly executed and delivered by or on
behalf of the Pledgor and constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by, (i) applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally; and (ii) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity).
2.07 NO CONSENT, BREACH, ETC. The execution, delivery and performance by
the Pledgor of each Transaction Document to which it is or is intended to be a
party do not and will not: (a) require any consent or approval of any Person
that has not been obtained and each such consent and approval that has been
obtained is in full force and effect; (b) violate any Government Rule or
Government Approval applicable to it; (c) conflict with, result in a breach of
or constitute a default under (A) its Charter Documents or any corporate action,
or any resolution of the board of directors, or (B) any Project Document or any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which it is a party or by which it or its Property may be bound or
affected in any material respect; or (d) result in, or create any Lien (other
than a Permitted Lien) upon or with respect to any of the Collateral now owned
or hereafter acquired by the Pledgor. The Pledgor is not in violation of any
Government Rule or Government Approval applicable to it or any of its
Properties, except where such violation could not reasonably be expected to
result in a Material Adverse Effect. The Pledgor is not in breach of or default
under any indenture, loan or credit agreement or any other agreement, lease or
instrument referred to in clause (c) of this Section 2.08, except such breaches
or defaults that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
2.08 GOVERNMENT APPROVALS. The Pledgor possesses all Government Approvals
necessary under Government Rules for it to own its Properties and conduct its
business, and no Government Approval by, and no filing (other than the filing
described in Section 5.13) with, any Government Authority is required for the
execution, delivery and performance of its obligations under this Agreement and
each other Transaction Document to which it is a party or the validity and
enforceability of such obligations.
2.09 NO PROCEEDINGS. There is no action, suit or proceeding at law or in
equity or by or before any Government Authority, arbitral tribunal or other body
now pending or, to the best knowledge of the Pledgor, threatened against or
affecting the Pledgor or its Property, that could reasonably be expected to
result in a Material Adverse Effect.
2.10 INVESTMENT COMPANY ACT. The Pledgor is not an "investment company" or
a company "controlled" by an "investment company" or an "investment advisor",
within the meaning of the Investment Company Act of 1940.
2.11 REGULATION OF PLEDGOR. The Pledgor is not, and is not subject to
regulation as, a "public-utility company", an "electric utility company", a
"holding company" or as an "affiliate" or a "subsidiary company" of any of the
foregoing under PUHCA, and is not subject to regulation as a "public utility"
under the Federal Power Act, as amended, or under state law with respect to
rates, financial or organizational regulation.
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2.12 TAXES. The Pledgor has filed or caused to be filed all tax returns
that are required by applicable law to be filed, and has paid all Taxes shown to
be due and payable on said returns or on any assessments made against it or any
of its Property and all other Taxes, imposed on it by any Government Authority
(other than Taxes the payment of which is not yet due or that are being
Contested) except, in each case, where such failure could not reasonably be
expected to have a Material Adverse Effect. No Liens for Taxes (other than
Permitted Liens) against the Pledgor or any of its Property exist and no claims
are being asserted against the Pledgor or any of its Property with respect to
any Taxes.
2.13 CERTIFICATED SECURITIES. No portion of the Collateral is represented
by certificates or instruments.
2.14 CHANGES IN CIRCUMSTANCES. The Pledgor has not, within the period of
four months prior to the date hereof: (a) changed its location (as determined
pursuant to Section 9-307 of Article 9); (b) changed its name; or (c) become a
"new debtor" (as defined in Section 9-102(a)(56) of Article 9) with respect to a
security agreement previously entered into by any other Person.
ARTICLE III
THE PLEDGE
As collateral security for the prompt payment and performance in full when
due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations now existing or hereafter arising, the Pledgor hereby pledges and
grants to the Collateral Agent for the benefit of the Secured Parties as
hereinafter provided, a lien on and security interest in, all of the Pledger's
right, title and interest in, to and under the following, whether now owned by
the Pledgor or hereafter acquired and whether now existing or hereafter coming
into existence and wherever located (all being collectively referred to herein
as "COLLATERAL"):
(a) the membership interests of the Borrower identified in Annex 1 and all
other ownership interests of whatever class or character of the Borrower,
now owned or hereafter acquired by the Pledgor, in each case together with
all certificates, if any, evidencing the same (collectively, the "PLEDGEDINTERESTS");
(b) all certificates, shares, securities, moneys, membership interests, stock
or other Property representing a dividend or distribution on any of the
Pledged Interests or other Ownership Collateral, or representing a
distribution or return of capital upon or in respect of any of the Pledged
Interests or other Ownership Collateral, or resulting from a split-up,
revision, reclassification or other like change of any of the Pledged
Interests or other Ownership Collateral or otherwise received in exchange
therefor, and any subscription warrants, rights or options issued to the
holders of, or otherwise in respect of, any of the Pledged Interests or
other Ownership Collateral;
(c) without prejudice to Section 8.02, 8.12 or 8.25 of the Credit Agreement and
without affecting the obligations of the Pledgor or the Borrower under any
provision prohibiting such action under any Financing Document or any other
Transaction Document, in the event of any consolidation or merger in which
the Borrower is not the surviving entity: (i) all ownership interests of
any class or character of the successor entity (unless such successor
entity is the Borrower itself) formed by or resulting from such
consolidation or merger received in consideration of, or in exchange for,
the Collateral described in paragraphs (a) and (b) above; and (ii) all
other consideration (including, without limitation, all personal property,
tangible or intangible) received in exchange
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for such Collateral (the Pledged Interests, together with all other
certificates, shares, securities, moneys, membership interests, stock or
other Property as may from time to time be pledged hereunder pursuant to
paragraph (a) or (b) above and this paragraph (c) and the proceeds of and
to any such property and, to the extent related to any such property or
such proceeds, all books, correspondence, credit files, records, invoices
and other papers, being herein collectively called the "OWNERSHIP
COLLATERAL");
(d) (i) all of Pledgor's right, title and interest (x) under the LLC Agreement,
including all voting and management rights and all rights to grant and
withhold consents and approvals, and (y) regarding access to and inspection
and use of all books and records, including computer software and computer
software programs, of the Borrower, and (ii) all other rights, interests,
property or claims to which the Pledgor may be entitled in its capacity as
member of the Borrower; and
(e) all proceeds of any of the foregoing;
provided, however, any distributions, payments or releases (whether in the form
of cash, instruments or otherwise) properly made by the Borrower to the Pledgor
pursuant to Section 8.13 of the Credit Agreement shall automatically be released
from the Lien granted hereunder and shall no longer be part of the Collateral
upon the making of such distribution, payment or release.
ARTICLE IV
COVENANTS
In furtherance of the grant of the pledge and security interest pursuant to
Article III, the Pledgor hereby agrees with each Secured Party and the
Collateral Agent as follows:
4.01 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Pledgor shall (a)
preserve and maintain its legal existence, (b) preserve and maintain its good
standing and all of its material licenses, rights, privileges and franchises
necessary for the maintenance of its existence and qualification to do business,
and (c) conduct of its business in an orderly, efficient and regular manner,
unless the failure to so comply could not reasonably be expected to result in a
Material Adverse Effect.
4.02 NO DISSOLUTION. The Pledgor shall not cause or consent to any
dissolution or termination of the Borrower, nor shall the Pledgor join in or
consent to any election to dissolve or terminate the Borrower.
4.03 LIENS. Except for any Liens arising under this Agreement, the Pledgor
will not secure or agree to secure any Indebtedness by any Lien upon, or have
outstanding at any time any Lien or obligation to create Liens on or with
respect to, any Collateral.
4.04 NOTICES. The Pledgor shall promptly upon: (a) obtaining knowledge of
any action, suit or proceeding at law or in equity by or before any Government
Authority, arbitral tribunal or other body pending or threatened against or
otherwise affecting the Pledgor that could reasonably be expected to result in a
Material Adverse Effect; (b) becoming aware of any other circumstance, act or
condition (including the adoption, amendment or repeal of any Government Rule or
the Impairment of any Government Approval or notice affecting the Pledgor
(whether formal or informal, written or oral) of the failure to comply with the
terms and conditions of any Government Approval) that could reasonably be
expected to result in a Material Adverse Effect; or (c) knowing or having reason
to believe that any Default or Event of Default relating to the Pledgor has
occurred, in each case, furnish to the Collateral Agent a notice of such event
describing the
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same in reasonable detail and, together with such notice or as soon thereafter
as practicable, a written description of the action that the Pledgor has taken
or proposes to take with respect thereto.
4.05 BANKRUPTCY PROCEEDINGS. To the maximum extent permitted by applicable
law, the Pledgor hereby agrees that it shall not: (a) institute, take, cause to
be taken, or consent to, any action (whether as member or otherwise) intended to
result in the institution against the Borrower of any proceedings (whether of a
legal or equitable nature or otherwise) which may lead to a Borrower Insolvency
Event (such proceedings, "BORROWER INSOLVENCY PROCEEDINGS"); (b) consent to the
taking by the Borrower of any action which would result in the commencement of
any Borrower Insolvency Proceedings; or (c) to the extent it is entitled or
lawfully able to do so, fail to timely controvert, or to cause the Borrower to
timely controvert, any Borrower Insolvency Proceedings.
4.06 TRANSFERS. The Pledgor shall not create or consent to the creation of
any other membership or ownership interest in the Borrower without the prior
written consent of the Collateral Agent. Except pursuant to the exercise by the
Collateral Agent of any of its rights hereunder or as otherwise expressly
permitted herein, the Pledgor shall not sell, assign, transfer or otherwise
dispose of all or any portion of its ownership interest (whether voting or
economic) in the Borrower (whether any such ownership interest is owned by the
Pledgor on the date of this Agreement or is acquired by the Pledgor at any time
after the date hereof) or sell, assign, transfer, exchange or otherwise dispose
of all or any part of the other Collateral (or any interest therein), in each
case, unless each of the following conditions is satisfied at all times
immediately prior to and after giving effect to such proposed sale or transfer:
(i) no Default or Event of Default shall have occurred and is then
continuing;
(ii) the proposed purchaser or transferee is a Permitted Transferee;
(iii) the Pledgor will at all times continue to directly own at least
fifty-one percent (51%) of the membership or other ownership interests
of the Borrower;
(iv) there shall not at any time be more than three Permitted Transferees
holding the membership or other ownership interests of the Borrower;
(v) the Pledgor will at all times be the managing member of the Borrower
or the owner of at least fifty-one percent (51%) of the membership or
other ownership interests in the managing member of the Borrower;
(vi) all such Collateral so sold or transferred will at all times remain
subject to the Lien granted hereunder notwithstanding such sale or
transfer, and such proposed purchaser or transferee shall have
executed and delivered to the Collateral Agent documentation to that
effect satisfactory to the Collateral Agent, including without
limitation (A) a pledge agreement substantially in the form of this
Agreement, (B) written acknowledgement of such continuing Lien and (C)
appropriate Uniform Commercial Code financing statements;
(vii) all Uniform Commercial Code financing statements determined by the
Collateral Agent to be necessary or desirable to maintain and preserve
such continuing Lien against such proposed purchaser or transferee
shall have been filed in all locations determined by the Collateral
Agent to be necessary or desirable for such purpose, and such proposed
purchaser or transferee shall have taken all other action requested by
the Collateral Agent in connection therewith; and
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(viii) all reasonable fees and expenses of the Collateral Agent and its
counsel in connection with any such proposed sale or transfer shall be
reimbursed by the Pledgor on demand.
4.07 CERTAIN DISTRIBUTIONS. Section 8.13 of the Credit Agreement contains a
covenant of the Borrower with respect to the making by the Borrower of
Restricted Payments. The Pledgor hereby agrees that if it or any of its
Affiliates receives a Restricted Payment in contravention of Section 8.13, then
the Pledgor shall hold, or cause to be held, such Restricted Payment (or an
amount equal thereto) in trust for the Secured Parties, and promptly pay the
same, or cause the same to be paid over, to the Collateral Agent.
4.08 COMPLIANCE WITH GOVERNMENT RULES, ETC. The Pledgor shall comply with
all applicable Government Rules and shall from time to time obtain, maintain,
comply with and renew, all Government Approvals necessary for it to perform its
obligations under the Transaction Documents to which it is a party (except any
thereof the non-compliance with or non-renewal of which could not reasonably be
expected to result in a Material Adverse Effect. The Pledgor shall promptly upon
receipt or publication furnish a copy of each such Government Approval to the
Collateral Agent.
4.09 TAXES. The Pledgor shall pay and discharge all Taxes imposed on it or
on its income or profits or on any of its Property prior to the date on which
penalties attach thereto and prepare and file Tax returns on or before their due
date; provided, that the Pledgor shall have the right to Contest the validity or
amount of any such Tax.
4.10 REGULATORY STATUS. The Pledger: (a) shall take, or cause to be taken,
all action required to cause the representations and warranties set out in
Sections 2.11 and 2.12 to be and remain, at all times, true and correct; and (b)
shall not take, or permit to be taken, any action which could cause the
representations and warranties set out in Sections 2.11 or 2.12 to cease to be
true and correct.
4.11 SUBORDINATED PROMISSORY NOTE. The Pledgor will not amend, modify or
otherwise change, or consent to any amendment, modification or other change to,
that certain Subordinated Promissory Note dated as of December 31, 2002 by
Borrower in favor of Pledgor, without the prior written consent of the
Collateral Agent (not to be unreasonably withheld).
ARTICLE V
CERTAIN ASSURANCES; REMEDIES
In furtherance of the grant of the pledge and security interest pursuant to
Article III, the Pledgor agrees with each Secured Party as follows:
5.01 DELIVERY AND OTHER PERFECTION. The Pledgor shall:
(a) if any of the Pledged Interests, other Collateral, securities,
participations, interests, moneys or other Property required to be
pledged by the Pledgor under Article III is received by the Pledgor,
forthwith: (i) transfer and deliver to the Collateral Agent for the
benefit of the Secured Parties, such Collateral so received by the
Pledgor, all of which thereafter shall be held by the Collateral
Agent, pursuant to the terms of this Agreement, as part of the
Collateral; and/or (ii) take such other action as the Collateral Agent
shall deem necessary or appropriate to duly record the Lien created
hereunder in such Collateral;
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(b) give, execute, deliver, file and/or record any Uniform Commercial Code
financing statement, continuation statement, notice, instrument,
document, agreement or other papers mat may be necessary or desirable
(in the reasonable judgment of the Collateral Agent): (i) to create,
preserve, perfect or validate the pledge and security interest granted
pursuant hereto; or (ii) to enable the Collateral Agent to exercise
and enforce its rights hereunder with respect to such pledge and
security interest, including, without limitation, upon the occurrence
or during the continuation of an Event of Default, causing any or all
of the Collateral to be transferred of record into the name of the
Collateral Agent or its nominee (and the Collateral Agent agrees that
if any Collateral is transferred into its name or the name of its
nominee, the Collateral Agent will thereafter promptly give to the
Pledgor copies of any notices and communications received by it with
respect to the Collateral pledged by the Pledgor hereunder). Without
limiting the generality of the foregoing, the Pledgor shall, if any
Collateral shall be evidenced by a promissory note or other
instrument, deliver and pledge to the Collateral Agent such note or
instrument duly endorsed or accompanied by duly executed instruments
of transfer or assignment, all in such form and substance as will
allow the Collateral Agent to realize upon the Collateral pursuant to
Section 5.07;
(c) keep full and accurate Records, and stamp or otherwise mark such
Records in such manner as the Collateral Agent may reasonably require
in order to reflect the pledge and security interest granted by this
Agreement; and
(d) (i) upon reasonable prior notice, at any time during normal business
hours, permit representatives of the Collateral Agent to inspect and
make abstracts from the Records, and promptly forward to the
Collateral Agent copies of any notices or communications received by
the Pledgor with respect to the Collateral that could reasonably be
expected to impair the Lien granted to the Collateral Agent hereunder;
and (ii) upon the occurrence and during the continuance of any Event
of Default, permit representatives of the Collateral Agent to be
present at the Pledgor's place of business to receive copies of all
communications and remittances relating to the Collateral.
5.02 OTHER FINANCING STATEMENTS AND LIENS. Except for Permitted Liens,
without the prior written consent of the Collateral Agent, the Pledgor shall not
file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any jurisdiction, any Uniform Commercial Code financing statement or
like instrument with respect to the Collateral in which the Collateral Agent is
not named as the sole secured party for the benefit of the Secured Parties.
5.03 PRESERVATION OF RIGHTS. The Collateral Agent shall not be required to
take any steps to preserve any rights against prior parties to any of the
Collateral.
5.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.
(a) Ownership Collateral. Except as otherwise permitted hereunder or
pursuant to the Credit Agreement, the Pledgor shall cause the
Ownership Collateral to constitute at all times 100% of the membership
or other ownership interests of any class or character of the Borrower
then outstanding. Until the termination of the pledge and the security
interest created hereby pursuant to Section 5.14, the Pledgor shall
not enter into any voting trust, grant any proxies or enter into any
other commitment, understanding or arrangement with respect to the
Ownership Collateral (including without limitation the ability to
vote, transfer or receive dividends in respect of, the Ownership
Collateral), except for the pledge and security interest in favor of
the Collateral Agent provided for herein.
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(b) Powers of Ownership. So long as no Event of Default shall have
occurred and be continuing, the Pledgor shall have the right to
exercise all voting, consensual and other powers of ownership
pertaining to the Ownership Collateral for all purposes not
inconsistent with the terms of this Agreement, the Credit Agreement,
any other Transaction Document or any other instrument or agreement
referred to herein or therein; provided, that the Pledgor agrees that
it will not vote the Ownership Collateral in any manner that is
inconsistent with the terms of this Agreement, the Credit Agreement,
any other Transaction Document or any such other instrument or
agreement; and the Collateral Agent shall execute and deliver to the
Pledgor, or cause to be executed and delivered to the Pledgor, all
such proxies (if the Ownership Collateral shall be registered in the
name of the Collateral Agent), powers of attorney, dividend and other
orders, and all such instruments, without recourse, as the Pledgor may
reasonably request for the purpose of enabling the Pledgor to exercise
the rights and powers that it is entitled to exercise pursuant to this
Section 5.04(b).
(c) Restricted Payments. Without limiting Section 4.07, the Pledgor shall
not receive or retain any dividends or distributions on the Ownership
Collateral except to the extent permitted under Section 8.13 of the
Credit Agreement.
(d) Adverse Claims. The Pledgor shall defend, all at its own cost and
expense, the Pledgor's title and the existence, perfection and first
priority (subject to any Permitted Liens) of the Collateral Agent's
security interest in the Collateral against all adverse claims.
(e) Distributions to Collateral Agent. If any Event of Default shall have
occurred and be continuing, and whether or not the Collateral Agent or
any other Secured Party exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any other
relief or remedy available to it under applicable law or under this
Agreement or any other Transaction Document or any other agreement
relating to such Secured Obligation, the Pledgor shall direct that all
distributions on and other payments in respect of the Collateral shall
be paid directly to the Collateral Agent and retained by it as part of
the Collateral, subject to the terms of this Agreement, and, if the
Collateral Agent shall so request, the Pledgor agrees to execute and
deliver to the Collateral Agent appropriate additional distribution
and other orders and documents to that end; provided, that if such
Event of Default is waived or cured, any such distribution or other
payment theretofore paid to the Collateral Agent shall, upon request
of the Pledgor (except to the extent theretofore applied to the
discharge of the Secured Obligations in accordance with the Credit
Agreement), be returned promptly by the Collateral Agent to the
Pledgor.
5.05 CUSTODY AND PRESERVATION. The Collateral Agent's obligation to use
reasonable care in the custody and preservation of Collateral shall be satisfied
if it uses the same care as it uses in the custody and preservation of its own
Property.
5.06 RIGHTS OF SECURED PARTIES. The Collateral Agent or any other Secured
Party may (but shall not be obligated to) pay or secure payment of any Tax or
other claim that may be secured by or result in a Lien on any Collateral. The
Collateral Agent or any other Secured Party may (but shall not be obligated to)
do or cause to be done any other thing that is necessary or desirable to
preserve, protect or maintain the Collateral or, after an Event of Default has
occurred and for so long as it shall be continuing, to enhance its value. The
Collateral Agent shall have no obligation to any Person to act or refrain from
acting or exercising any of its rights under this Agreement; provided, however,
that anything to the contrary contained herein notwithstanding, the Collateral
Agent shall be liable for its own gross negligence or willful misconduct. The
Pledgor, in accordance with Section 5.15, shall immediately reimburse the
Collateral Agent or any other
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Secured Party for any reasonable payment or expense (including reasonable
attorneys' fees and expenses) that the Collateral Agent or such other Secured
Party may incur pursuant to this Section 5.06.
5.07 EVENTS OF DEFAULT, ETC. During the period during which an Event of
Default shall have occurred and be continuing:
(a) the Collateral Agent shall have the rights and remedies with respect
to this Agreement as more particularly provided herein or in the
Credit Agreement;
(b) the Pledgor shall, at the request of the Collateral Agent, assemble
Collateral owned by it that is movable (and not otherwise in the
possession of the Collateral Agent), if any, at such place or places,
reasonably convenient to both the Collateral Agent and the Pledgor, as
designated in such request;
(c) subject to applicable law, the Collateral Agent may (but shall not be
obligated to), without notice to the Pledgor and at such times as the
Collateral Agent in its sole judgment may determine, exercise any or
all of the Pledger's rights in, to and under, or in any way connected
to the Collateral and the Collateral Agent shall otherwise have and
may (but shall not be obligated to) exercise all of the rights,
powers, privileges and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code (whether or not said
Code is in effect in the jurisdiction where the rights, powers,
privileges and remedies are asserted) and such additional rights,
powers, privileges and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights, powers,
privileges and remedies hereunder may be asserted, including, without
limitation, the right, to the maximum extent permitted by applicable
law, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Collateral Agent were the sole
and absolute owner thereof (and the Pledgor agrees to take all such
action as may be appropriate to give effect to such right);
(d) the Collateral Agent may (but shall not be obligated to) make any
reasonable compromise or settlement it reasonably deems desirable with
respect to any of the Collateral and may (but shall not be obligated
to) extend the time of payment, arrange for payment in installments,
or otherwise modify the terms, of all or any part of the Collateral;
(e) the Collateral Agent may (but shall not be obligated to), in its name
or in the name of the Pledgor or otherwise, demand, sue for, collect
or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral; and
(f) subject to applicable law, the Collateral Agent may (but shall not be
obligated to), upon 10 Business Days' prior written notice to the
Pledgor of the time and place, with respect to the Collateral or any
part thereof which shall then be or shall thereafter come into the
possession, custody or control of the Collateral Agent, any other
Secured Party or any of their respective agents, sell, lease, assign
or otherwise dispose of all or any part of such Collateral, at such
place or places as the Collateral Agent deems reasonable, and for cash
or for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or
of the time or place thereof (except such notice as is required above
or by applicable statute and cannot be waived). The Collateral Agent,
any other Secured Party, the Pledgor or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the maximum
extent permitted by applicable law, at any private sale) and
thereafter hold the same absolutely,
Pledge Agreement
free from any claim or right of whatsoever kind, including any right
or equity of redemption (statutory or otherwise), of the Pledgor, any
such demand, notice and right or equity being hereby expressly waived
and released to the maximum extent permitted by applicable law.
Subject to applicable law, the Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to
which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.07 shall be applied in accordance with Section 5.11.
The Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as amended, and applicable state securities laws,
the Collateral Agent may be compelled, subject to the notice provision as
provided in paragraph (f) of this Section 5.07, with respect to any sale of all
or any part of the Collateral constituting a security (as such term is defined
in the Securities Act of 1933), to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the Pledgor or the issuer thereof to
register it for public sale.
5.08 DEFICIENCY. If the proceeds of sale, collection or other realization
of or upon the Collateral by virtue of the exercise of remedies under Section
5.07 are insufficient to cover the costs and expenses of such realization and
the payment in full of the Secured Obligations, the Collateral Agent shall
retain all rights and remedies under the Transaction Documents, and the Pledgor
shall remain liable, with respect to any deficiency to the extent the Pledgor is
obligated under this Agreement.
5.09 REMOVALS, ETC. Without at least 30 days' prior written notice to the
Collateral Agent, the Pledgor shall not: (a) maintain any of its Records at any
office other than at the Pledger's Address for Notices set out beneath its name
on the signature pages hereto; (b) maintain its chief executive office at any
place other than at the Pledger's Address for Notices set out beneath its name
on the signature pages hereto; (c) change its corporate name, or the name under
which it does business, from the name shown on the signature pages hereto; or
(d) change the jurisdiction in which it is organized from that in which it is
organized on the date hereof. The signature page hereto correctly specifies the
place of business of the Pledgor or, if the Pledgor had more than one place of
business, the location of the chief executive office of the Pledgor, in each
case during the period of four months ending on December 31, 2002.
5.10 PRIVATE SALE. The Collateral Agent and the other Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 5.07 conducted in a
commercially reasonable manner. Subject to and without limitation of the
preceding sentence, the Pledgor hereby waives any claims against the Collateral
Agent or any other Secured Party arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale to an unrelated
third party was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
5.11 APPLICATION OF PROCEEDS.
Pledge Agreement
(a) Application of Proceeds. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash
at the time held by the Collateral Agent under this Agreement, shall
be applied by the Collateral Agent to the Secured Obligations in
accordance with Article IV of the Depositary Agreement.
(b) Pledgor Remains Obligated. No sale or other disposition of all or any
part of the Collateral pursuant to Section 5.07 shall be deemed to
relieve the Pledgor of its obligations under any Transaction Document
to which it is a party except to the extent the proceeds thereof are
applied to the payment of such obligations.
(c) Proceeds. As used in this Article V, "PROCEEDS" of Collateral means
cash, securities and other property realized in respect of, and
distributions in kind of, Collateral, including any thereof received
under any reorganization, liquidation or adjustment of debt of the
Pledgor or any issuer of or obligor on any of the Collateral.
5.12 ATTORNEY-IN-FACT. Without limiting any rights or powers granted by
this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent is hereby appointed the attorney-in-fact of the
Pledgor for the purpose of carrying out the provisions of this Article V and
taking any action and executing any instruments which the Collateral Agent may
deem necessary or desirable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Collateral Agent shall
be entitled under this Article V to make collections in respect of the
Collateral, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks made payable to the order of the Pledgor
representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
5.13 PERFECTION. Prior to or on the Closing Date, the Pledgor shall: (a)
file such Uniform Commercial Code financing statements and other documents in
the offices set out on Annex 2 in order to perfect the security interests
granted by Article III, to the extent such security interests can be perfected
by such filing; (b) register the pledge of any applicable Collateral for
purposes of Article 8 of the Uniform Commercial Code; and (c) cause the Borrower
to stamp or mark the books of the Borrower to record the Liens granted
hereunder. Copies of any such Uniform Commercial Code financing statement or
amendment thereto shall promptly be delivered to the Collateral Agent. The
Pledgor hereby authorizes the Collateral Agent to cause the filing of one or
more Uniform Commercial Code financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral without the
signature of the Pledgor where permitted by applicable law. Copies of any such
statement or amendment thereto shall promptly be delivered to the Pledgor.
5.14 TERMINATION.
(a) Upon any transfer of any Collateral in accordance with Section 8.12 or
8.13 of the Credit Agreement or Section 4.06 or 4.07, the Collateral
Agent shall, upon the written request of (and at the sole cost and
expense of) the Pledgor, promptly execute and deliver to the Pledgor
such Uniform Commercial Code termination statements and such other
documentation as shall be reasonably requested by the Pledgor to
evidence the termination and release of the Liens on such Collateral.
(b) Upon the Termination Date, the security interest created by this
Agreement shall terminate and all rights to the Collateral shall
revert to the Pledgor, and the Collateral Agent shall (at the written
request and sole cost and expense of the Pledgor) promptly
Pledge Agreement
cause to be transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order
of the Pledgor. The Collateral Agent shall also (at the written
request and sole cost and expense of the Pledgor) promptly execute and
deliver to the Pledgor upon such termination such Uniform Commercial
Code termination statements and such other documentation as shall be
reasonably requested by the Pledgor to effect the termination and
release of the Liens on the Collateral.
5.15 EXPENSES.
(a) Subject to, and without duplication of amounts described in, Section
11.03 of the Credit Agreement, the Pledgor agrees promptly to pay to
the Collateral Agent to the extent not paid by or recovered from the
Borrower all reasonable fees and out-of-pocket expenses (including
reasonable fees and expenses for legal services) of, or incident to,
the enforcement of any of the provisions of this Article V, or the
exercise by experts, agents or attorneys selected by the Collateral
Agent in good faith of any rights or privileges of the Pledgor in
respect of the Collateral, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect
of any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Collateral Agent and
the other Secured Parties in respect thereof, by litigation or
otherwise, in each case in accordance with the terms of this
Agreement, and all such reasonable fees and expenses, together with
interest thereon at the applicable Post-Default Rate, shall be Secured
Obligations of the Collateral Agent secured under Article III.
(b) The terms, conditions, covenants and agreements to be observed or
performed by the Pledgor under this Agreement shall be observed or
performed by it at its sole cost and expense.
5.16 FURTHER ASSURANCES. The Pledgor agrees that, at any time and from time
to time, at its sole cost and expense, it shall promptly execute and deliver all
further agreements, instruments, documents and certificates and take all further
action that, in the reasonable judgment of the Collateral Agent, may be
necessary or desirable in order to fully effect the purposes of this Agreement
(including the delivery of possession of any Collateral that hereafter comes
into existence or is acquired in the future by the Collateral Agent as pledgee
for the benefit of the Secured Parties) and to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to the
Collateral or any part thereof.
ARTICLE VI
MISCELLANEOUS
6.01 COLLATERAL AGENT'S RIGHT TO PERFORM ON PLEDGOR'S BEHALF. If the
Pledgor shall fail to observe or perform any of the terms, conditions, covenants
and agreements to be observed or performed by it under this Agreement, the
Collateral Agent may (but shall not be obligated to), upon reasonable notice to
the Pledgor, do the same or cause it to be done or performed or observed by
experts, agents or attorneys selected by the Collateral Agent in good faith at
the sole cost and expense of the Pledgor, either in its name or in the name and
on behalf of the Pledgor, and the Pledgor hereby authorizes the Collateral Agent
so to do.
6.02 WAIVERS OF RIGHTS INHIBITING ENFORCEMENT. The Pledgor waives, to the
maximum extent permitted by applicable law:
Pledge Agreement
(a) any claim that, as to any part of the Collateral, a public sale,
should the Collateral Agent elect so to proceed, is, in and of itself,
not a commercially reasonable method of sale for the Collateral;
(b) the right to assert in any action or proceeding between it and the
Collateral Agent any offsets that it may have;
(c) except as otherwise provided in this Agreement, NOTICE OR JUDICIAL
HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION OR
DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER
REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF THE COLLATERAL AGENT'S
RTGHTS HEREUNDER;
(d) all rights of redemption, appraisement, valuation, stay and extension
or moratorium; and
(e) all other rights the exercise of which would, directly or indirectly,
prevent, delay or inhibit the enforcement of any of the rights or
remedies of the Collateral Agent and the other Secured Parties under
this Agreement or the absolute sale of the Collateral, now or
hereafter in force under any applicable law, and the Pledgor, for
itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waive the benefit of all such laws and
rights.
6.03 NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of the
Collateral Agent, any other Secured Party or any of such Person's agents to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy hereunder shall operate as a waiver thereof. No
single or partial exercise by the Collateral Agent, any other Secured Party or
any of such Person's agents of any right, power or remedy hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights, powers and remedies herein or in any other
Transaction Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which either Collateral Agent or any other Secured
Party would otherwise have. No notice to or demand on the Pledgor in any case
shall entitle the Pledgor to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of either the
Collateral Agent or any other Secured Party to any other or further action in
any circumstances without notice or demand, except to the extent notice is
expressly required by this Agreement or any other Financing Document.
6.04 NOTICES. All notices, requests and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing in the manner
set out in Section 11.02 of the Credit Agreement. Unless otherwise so changed in
accordance with the Credit Agreement by a party hereto, all notices, requests
and other communications to such party shall be sent to the address of such
party set out on the signature pages hereto.
6.05 AMENDMENTS, ETC. This Agreement may be amended, supplemented, modified
or waived only by an instrument in writing duly executed by the Pledgor and the
Collateral Agent. Any such amendment, supplement, modification or waiver shall
be binding upon the Collateral Agent and each Lender, each holder of any of the
Secured Obligations and the Pledgor. Any waiver shall be effective only in the
specific instance and for the specified purpose for which it was given.
Pledge Agreement
6.06 EXPENSES. The parties hereto agree that all costs and expenses covered
by Section 11.03 of the Credit Agreement shall be Secured Obligations entitled
to the benefits of the collateral security provided pursuant to Article III.
6.07 SUCCESSORS AND ASSIGNS. This Agreement shall: (a) remain in full force
and effect until the termination hereof pursuant to Section 5.14; and (b) be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Pledgor and the Collateral Agent, the Lenders and each holder of
any of the Secured Obligations; provided, however, that the Pledgor shall not
assign or transfer its rights hereunder without the prior written consent of the
Collateral Agent.
6.08 SURVIVAL, ETC. The obligations of the Pledgor under Section 5.15 shall
survive after termination of this Agreement or the resignation or the removal of
the Collateral Agent. In addition, the representations and warranties of the
Pledgor set out in this Agreement or contained in any documents delivered to the
Collateral Agent or any other Secured Party pursuant to this Agreement shall be
considered to have been relied upon by the Secured Parties in entering into the
Credit Agreement and the relevant Financing Documents and making each Loan,
notwithstanding any investigation on their respective parts.
6.09 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument and either of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto with respect to matters covered by this Agreement and the other
Financing Documents and supersede any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof. This
Agreement shall become effective at such time as the Collateral Agent shall have
received counterparts hereof signed by all of the intended parties hereto.
6.10 AGENTS, ETC. The Collateral Agent may employ agents, experts and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents, experts or attorneys-in-fact
selected by it in good faith.
6.11 SEVERABILITY. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by applicable law: (a)
the other provisions hereof shall remain in full force and effect in such
jurisdiction in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
6.12 HEADINGS. Headings appearing herein are used solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.
6.13 LIMITATION OF LIABILITY.
(a) The liability of the Pledgor for the payment and performance of the
Secured Obligations shall be limited as and to the extent provided
under Section 11.09 of the Credit Agreement.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER THE
COLLATERAL AGENT NOR ANY OTHER SECURED PARTY SHALL HAVE LIABILITY WITH
RESPECT TO, AND THE PLEDGOR HEREBY WAIVES, RELEASES AND AGREES NOT TO
SUE FOR:
Pledge Agreement
(i) ANY LOSS OR DAMAGE SUSTAINED BY THE PLEDGOR, OR ANY LOSS, DAMAGE,
DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL,
THAT MAY OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN
ANY WAY RELATED TO, ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER
THIS AGREEMENT EXCEPT FOR ANY SUCH LOSS, DAMAGE, DEPRECIATION OR
DIMINUTION TO THE EXTENT THAT THE SAME IS THE RESULT OF ACTS OR
OMISSIONS ON THE PART OF SUCH SECURED PARTY CONSTITUTING WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE; OR
(ii) ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES SUFFERED BY THE PLEDGOR IN CONNECTION WITH ANY CLAIM
RELATED TO THIS AGREEMENT.
6.14 SECURITY INTEREST ABSOLUTE. To the maximum extent permitted by
applicable law, the rights and remedies of the Collateral Agent hereunder, the
Liens created hereby, and the obligations of the Pledgor under this Agreement
are absolute, irrevocable and unconditional and will remain in full force and
effect without regard to, and will not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever
(other than termination pursuant to Section 5.14), including:
(a) any renewal, extension, amendment, or modification of, or addition or
supplement to or deletion from, any of the Transaction Documents or
any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof;
(b) any waiver of, consent to or departure from, extension, indulgence or
other action or inaction under or in respect of any of the Secured
Obligations, this Agreement, any other Transaction Document or other
instrument or agreement relating thereto, or any exercise or
non-exercise of any right, remedy, power or privilege under or in
respect of the Secured Obligations, this Agreement, any other
Transaction Document or any such other instrument or agreement
relating thereto;
(c) any furnishing of any additional security for the Secured Obligations
or any part thereof to the Collateral Agent or any other person or any
acceptance thereof by the Collateral Agent or any other person or any
substitution, sale, exchange, release, surrender or realization of or
upon any such security by the Collateral Agent or any other person or
the failure to create, preserve, validate, perfect or protect any
other Lien granted to, or purported to be granted to, or in favor of,
the Collateral Agent or any other Secured Party;
(d) any invalidity, irregularity or unenforceability of all or any part of
the Secured Obligations, any other Transaction Document or any other
agreement or instrument relating thereto or any security therefor;
(e) the acceleration of the maturity of any of the Secured Obligations or
any other modification of the time of payment thereof; or
(f) any other event or circumstance whatsoever which might otherwise
constitute a legal or equitable discharge of a surety or a guarantor,
it being the intent of this Section 6.14 that the obligations of the
Pledgor hereunder shall be absolute, irrevocable and unconditional
under any and all circumstances.
Pledge Agreement
6.15 SUBROGATION. The Pledgor shall not exercise, and hereby irrevocably
defers the exercise of, any claim, right or remedy that it may now have or may
hereafter acquire against the Borrower arising under or in connection with this
Agreement, including, without limitation, any claim, right or remedy of
subrogation, contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by applicable law or otherwise in any
claim, right or remedy of the Collateral Agent or the other Secured Parties
against the Borrower or any other Person or any Collateral which the Collateral
Agent or any other Secured Party may now have or may hereafter acquire, until
the indefeasible payment and satisfaction in full of all Secured Obligations and
the expiration and termination of the Commitments. If, notwithstanding the
preceding sentence, any amount shall be paid to the Pledgor on account of such
subrogation rights at any time when any of the Secured Obligations shall not
have been paid in full, such amount shall be held by the Pledgor in trust for
the Collateral Agent and the other Secured Parties, segregated from other funds
of the Pledgor and be turned over to the Collateral Agent in the exact form
received by the Pledgor (duly endorsed by the Pledgor to the Collateral Agent,
if required), to be applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Financing Documents.
6.16 REINSTATEMENT. This Agreement and the Lien created hereunder shall
automatically be reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Secured Obligations is
rescinded or must otherwise be restored by any holder of the Secured
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Pledgor shall indemnify the Collateral
Agent, each other Secured Party and its respective employees, officers and
agents on demand for all reasonable fees, costs and expenses (including, without
limitation, reasonable fees, costs and expenses of counsel) incurred by the
Collateral Agent, such other Secured Party or its respective employees, officers
or agents in connection with such reinstatement, rescission or restoration.
6.17 NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES HERETO ARE
SOLELY FOR THE BENEFIT OF THE PLEDGOR, THE COLLATERAL AGENT AND THE OTHER
SECURED PARTIES, AND NO PERSON (OTHER THAN THE PARTIES HERETO, THE OTHER SECURED
PARTIES AND THEIR SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER) SHALL HAVE ANY
RIGHTS HEREUNDER.
6.18 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. EACH OF THE PLEDGOR AND THE COLLATERAL AGENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK COUNTY
(INCLUDING ITS APPELLATE DIVISION), AND OF ANY OTHER APPELLATE COURT IN THE
STATE OF NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE
PLEDGOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
6.19 WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Pledge Agreement
6.20 SERVICE OF PROCESS. The Pledgor hereby irrevocably consents to the
service of process in any suit, action or proceeding in such courts by the
mailing thereof by any of the other parties hereto by registered or certified
mail, postage prepaid, to the Address for Notices specified below its name on
the signature pages hereof. Nothing herein shall in any way be deemed to limit
the ability of the Financing Parties or the Pledgor to serve any writs, process
or summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Pledgor or the Collateral Agent, as applicable, in such
jurisdiction, and in such manner, as may be permitted by applicable law.
6.21 AUTHORITY OF THE COLLATERAL AGENT. The Pledgor acknowledges and agrees
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken, or determination or request made, by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of
any power, right or remedy provided for or resulting or arising out of this
Agreement shall, as between the Collateral Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Pledgor, the Collateral Agent shall be conclusively
presumed to be acting as the Collateral Agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Pledgor shall be
under no obligation or entitlement to make any inquiry respecting such
authority.
Pledge Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
ORMAT FUNDING CORP.
By:
------------------------------------
Name:
Title:
Address for Notices:
980 Greg Street
Sparks, NV89431
Attn: President
Telephone: (775) 356-9029
Telecopy: (775) 356-9039
Pledge Agreement
S-23
UNITED CAPITAL,
a division of Hudson United Bank,
not in its individual capacity,
but solely as Collateral Agent
By:
------------------------------------
Name:
Title:
Address for Notices: 87 Post Road East
Westport, CT06880
Telecopier No.: (203) 291-6652
Telephone No.: (203) 291-6639
Attention: Jerry Peters, Senior
Vice President
Borrower Equity Interest Pledge Agreement
ANNEX 1
PLEDGED INTERESTS
One Hundred Percent (100%) of the membership or other ownership interests of
Ormesa LLC, all of which are currently owned by Ormat Funding Corp.
Pledge Agreement
Exhibit C
to Credit Agreement
FORM OF DEPOSITARY AGREEMENT
This DEPOSITARY AGREEMENT dated as of December 31, 2002 (this "AGREEMENT"),
among ORMESA LLC, a Delaware limited liability company (the "BORROWER"), UNITED
CAPITAL, a division of Hudson United Bank ("UNITED"), not in its individual
capacity, but solely as administrative agent for the Lenders under and as
defined in the Credit Agreement referred to below (in such capacity, the
"ADMINISTRATIVE AGENT"), UNITED, not in its individual capacity, but solely as
collateral agent for the benefit of the Secured Parties under and as defined in
the Credit Agreement referred to below (in such capacity, the "COLLATERALAGENT"), and WEALTH MANAGEMENT, a division of Hudson United Bank, a New Jersey
banking corporation, not in its individual capacity, but solely as the
"securities intermediary" in accordance with Article 8 of the Uniform Commercial
Code (as defined below) and as a "bank" with respect to any "deposit accounts"
(each as defined in the Uniform Commercial Code) in which a security interest
may be granted under the Uniform Commercial Code and herein for the benefit of
the Collateral Agent and the Secured Parties under and as defined in the Credit
Agreement referred to below (the "DEPOSITARY BANK").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement, dated as of December31, 2002 (as amended, modified, supplemented and in effect from time to time,
the "CREDIT AGREEMENT"), among the Borrower, the Lenders party thereto from time
to time, the Administrative Agent, and the Collateral Agent, the Lenders have
agreed to make certain loans to the Borrower;
WHEREAS, the Depositary Bank is willing to serve as the depositary bank for
the benefit of the Collateral Agent and the Secured Parties on the terms and
subject to the conditions of this Agreement;
WHEREAS, it is a condition to the obligations of the Lenders and the other
Secured Parties under the Credit Agreement that the Borrower shall have executed
and delivered this Agreement;
WHEREAS, to induce the Lenders and the other Secured Parties to enter into
the Credit Agreement and to induce certain of the Secured Parties to make loans
to the Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower has agreed to execute
and deliver this Agreement.
-2-
Accordingly, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings assigned to them in Schedule I
to the Credit Agreement. All terms used herein which are not defined herein or
in the Credit Agreement and are defined in the Uniform Commercial Code (as such
term is defined below) shall have the meanings therein stated. In addition,
capitalized terms used in the preamble and recitals hereto shall have the
respective meanings given thereto, and the following terms shall have the
following meanings under this Agreement:
"ACCOUNTS" shall mean the Revenue Account, and the Debt Service Reserve
Account.
"DEBT SERVICE RESERVE ACCOUNT" shall have the meaning assigned to such term
in Section 2.2(c).
"DISTRIBUTABLE CASH" shall have the meaning assigned to such term in
Section 4.1(b).
"MONTHLY DATE" shall mean the last Business Day of each calendar month
following the Closing Date.
"RESTORATION SUB-ACCOUNT" shall have the meaning assigned to such term in
Section 2.2(e).
"REVENUE ACCOUNT" shall have the meaning assigned to such term in Section
2.2(a), and shall include the Restoration Sub-Account.
"WITHDRAWAL APPROVAL NOTICE" shall have the meaning assigned to such term
in Section 4.1(d)(ii).
SECTION 1.2. INTERPRETATION. The rules of interpretation set out in Section
1.03 of the Credit Agreement shall apply equally to this Agreement mutatis
mutandis.
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ARTICLE II.
APPOINTMENT OF DEPOSITARY BANK;
CREATION OF THE ACCOUNTS
SECTION 2.1. APPOINTMENT OF DEPOSITARY BANK. The Depositary Bank is
appointed to act as depositary bank and disbursement agent hereunder and agrees
to act as such, to accept all cash, payments and other amounts delivered to or
held by it pursuant to the terms of this Agreement or any other Financing
Document and to distribute all such funds and perform all of its other
obligations in accordance with this Agreement. The Depositary Bank shall hold
and safeguard the Accounts and shall treat the cash, instruments and securities
in the Accounts as funds, instruments and securities pledged by the Borrower to
the Collateral Agent to be held in the custody of the Depositary Bank, as agent
solely for the benefit of the Collateral Agent and Secured Parties, in trust and
in accordance with the provisions of this Agreement.
SECTION 2.2. CREATION OF ACCOUNTS. On or prior to the Closing Date, the
Borrower shall establish with the Depositary Bank at its corporate trust office
in Westport, Connecticut the following special and segregated interest bearing
accounts, which shall be in the name of the Collateral Agent for the benefit of
the Secured Parties maintained at all times until the termination of this
Agreement:
(a) an account entitled "Ormesa Revenue Account" with account number
2080000692834, ABA no. 061 000 227, account name Reliance Trust,
Attn. Gwen Fore, FBO Ormesa PRA 2897400272 (the "REVENUE
ACCOUNT");
(b) an account entitled "Ormesa Debt Service Reserve Account" with
account number 2080000692834, ABA no. 061 000 227, account name
Reliance Trust, Attn. Gwen Fore, FBO Ormesa DSRA 2897400281 (the
"DEBT SERVICE RESERVE ACCOUNT"); and
(c) a sub-account of the Revenue Account entitled "Ormesa Restoration
Sub-Account" with account number 2080000692834, ABA no. 061 000
227, account name Reliance Trust, Attn. Gwen Fore, FBO Ormesa
Restoration Sub-Account 2897400316 (the "RESTORATION
SUB-ACCOUNT").
Each Account shall be subject to debit or withdrawal solely by the Depositary
Bank as provided in this Agreement and no Person shall have any control over or
right of withdrawal from the Accounts except as provided in this Agreement. Each
Account shall
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constitute a part of the Collateral and shall not constitute payment of the
Secured Obligations until applied as provided in this Agreement.
SECTION 2.3. SECURITY INTEREST. As collateral security for the prompt and
complete payment and performance when due of all of the Secured Obligations, the
Borrower has granted to the Collateral Agent, pursuant to the Borrower Security
Agreement, a first priority Lien in and to (a) the Accounts and (b) all cash,
investments and securities at any time on deposit in the Accounts, including all
income or gain earned thereon and all proceeds thereof.
ARTICLE III.
DEPOSITS INTO THE REVENUE ACCOUNT
SECTION 3.1. DEPOSITS.
(a) The Borrower agrees, and confirms to the Collateral Agent that it has
instructed all of its Affiliates, SCE, SIGC and Imperial Irrigation District
that all Project Revenues (and any other cash or other revenues received by it
other than distributions previously made in accordance with this Agreement)
shall be paid directly to the Depositary Bank for deposit in the Revenue
Account. In the event that, notwithstanding the foregoing, any such payment is
remitted directly to the Borrower, the Borrower shall promptly (but in any event
within five 5) Business Days of receipt thereof) deliver such payment to the
Depositary Bank for deposit in the Revenue Account.
(b) The Borrower has directed and confirms to the Collateral Agent that it
has so instructed all of its Affiliates to direct, all insurers with whom the
Borrower or any of its Affiliates maintains the insurance required by Section
8.05 of the Credit Agreement that all insurance proceeds other than Loss
Proceeds in respect of any Event of Loss, which shall be applied in accordance
with Section 4.3) payable to Borrower or any of its Affiliates in connection
with all insurance required by said Section 8.05 shall be paid directly to the
Collateral Agent, as loss payee, for transfer to the Depositary Bank and deposit
in the Revenue Account. In the event that, notwithstanding the foregoing, any
such proceeds are remitted directly to the Borrower, the Sponsor or any of their
respective Affiliates and such party is not entitled to retain such insurance
proceeds pursuant to Section 8.05 of the Credit Agreement, then such party shall
promptly (but in any event within five 5) Business Days of receipt thereof)
deliver such proceeds to the Depositary Bank for deposit in the Revenue Account.
(c) The Depositary Bank shall only be required to accept such monies as are
delivered to it for deposit into the Accounts and shall not be required to
monitor the amount of such deposits or pursue the collection of such sums from
any Person.
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ARTICLE IV.
DEPOSITS INTO AND
DISTRIBUTIONS FROM ACCOUNTS
SECTION 4.1. WITHDRAWALS FROM THE REVENUE ACCOUNT.
(a) Distributions from Revenue Account on Monthly Dates. On each Monthly
Date prior to the Termination Date (other than any Monthly Date that also is a
Quarterly Date and such Quarterly Date's corresponding Business Day, on which
distributions shall be made solely in accordance with Section 4.1(b) instead of
this Section 4.1 (a)), the Depositary Bank shall distribute funds from the
Revenue Account (including all income earned and gains from investments in
Permitted Investments pursuant to Section 5.5) and apply the same at the times,
in the amounts and in the following priorities:
FIRST: subject to the provisions of Section 4.1(g), withdraw and
transfer to the Operator an amount, as set forth in a Withdrawal
Approval Notice, equal to the cumulative amount of Operation and
Maintenance Expenses scheduled to be payable by or on behalf of the
Borrower in the then-current calendar year through and including the
next succeeding calendar month (i) in accordance with the then-current
Annual Operating Plan and Budget (as such amount may be adjusted by
the Borrower in accordance with Section 8.23(b) of the Credit
Agreement), less all amounts previously withdrawn as Operation and
Maintenance Expenses in the then-current calendar year, and (ii)
solely on the initial two Monthly Dates following the Closing Date, in
respect of the "Compromise Payment" under and as defined in the Energy
Services Agreement, provided that the amount of such "Compromise
Payment", together with all amounts previously withdrawn and
transferred in respect of such "Compromise Payment", shall not exceed
$724,000 in the aggregate; and
SECOND: after making the withdrawal and transfer, if any, specified in
priority FIRST above, and subject to the provisions of Section 4.1(g),
withdraw and transfer to the Operator an amount, as set forth in a
Withdrawal Approval Notice, equal to the cumulative amount of capital
expenditures scheduled to be payable by or on behalf of the Borrower
in the then-current calendar year through and including the next
succeeding calendar month in accordance with the then-current Annual
Operating Plan and Budget (as such amount may be adjusted by the
Borrower in accordance with Section 8.23(b) of the Credit Agreement),
less all amounts previously withdrawn for capital expenditures in the
then-current calendar year.
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(b) Distributions from Revenue Account on Quarterly Dates. On each
Quarterly Date falling after the Closing Date and on or prior to the Termination
Date (or, if any such Quarterly Date is not a Business Day, the Business Day
next succeeding such Quarterly Date, unless such next succeeding Business Day
falls in the subsequent calendar month, in which case the effective Business Day
corresponding to such Quarterly Date shall be the Business Day immediately
preceding such Quarterly Date), the Depositary Bank shall distribute funds from
the Revenue Account (including all income earned and gains from investments in
Permitted Investments pursuant to Section 5.5) and apply the same at the times,
in the amounts and in the following priorities:
FIRST: subject to the provisions of Section 4.1 (g), withdraw and
transfer to the Operator an amount, as set forth in a Withdrawal
Approval Notice, equal to the cumulative amount of Operation and
Maintenance Expenses scheduled to be payable by or on behalf of the
Borrower in the then-current calendar year through and including the
next succeeding calendar month (i) in accordance with the then-current
Annual Operating Plan and Budget (as such amount may be adjusted by
the Borrower in accordance with Section 8.23(b) of the Credit
Agreement), less all amounts previously withdrawn as Operation and
Maintenance Expenses in the then-current calendar year;
SECOND: after making the withdrawal, if any, specified in priority
FIRST above, withdraw and transfer to the Administrative Agent, the
Collateral Agent and the Depositary Bank an amount equal to any fee or
expense then due and owing to such Person (including in respect of the
making of any Permitted Investment) by Borrower hereunder or under any
other Financing Document, as set forth in a Withdrawal Approval
Notice;
THIRD: after making the withdrawal, if any, specified in priority
SECOND above, withdraw and transfer to the Administrative Agent for
the account of each Lender an amount equal to the amount of interest
then due on the Loans held by such Lender and the amount of all fees
owed to such Lender, each as set forth in a Withdrawal Approval
Notice;
FOURTH: after making the withdrawal specified in priority THIRD above,
(i) withdraw and transfer to the Administrative Agent for the account
of each Lender an amount equal to the principal amount then due on the
Loans held by such Lender; and (ii) with respect to any additional
principal due on such Loans as required by any mandatory prepayment
then due under Section 3.04(d) of the Credit Agreement, withdraw and
transfer to the Administrative Agent for the account of each Lender an
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amount equal to such additional principal due on such Loans, in each
case as set forth in a Withdrawal Approval Notice;
FIFTH: after making the withdrawal specified in priority FOURTH above,
deposit into the Debt Service Reserve Account an amount equal to the
difference between the Debt Service Reserve Required Amount on such
date and the then-current balance of the Debt Service Reserve Account,
as set forth in a Withdrawal Approval Notice;
SIXTH: after making the withdrawal, if any, specified in priority
FIFTH above, and subject to the provisions of Section 4.1(g), withdraw
and transfer to the Operator an amount, as set forth in a Withdrawal
Approval Notice, equal to the cumulative amount of capital
expenditures scheduled to be payable by or on behalf of the Borrower
in the then-current calendar year through and including the next
succeeding calendar month in accordance with the then-current Annual
Operating Plan and Budget (as such amount may be adjusted by the
Borrower in accordance with Section 8.23(b) of the Credit Agreement),
less all amounts previously withdrawn for capital expenditures in the
then-current calendar year; and
SEVENTH: after making the withdrawal, if any, specified in priority
SIXTH above, and subject to the restrictions and provisions of
Sections 4.1(d), 4.1(e) and 4.1(g), withdraw and transfer to the
Borrower, the Sponsor or such other Person as directed by the Borrower
all or any portion of any funds remaining in the Revenue Account
("DISTRIBUTABLE CASH").
(c) Revenue Account Has Insufficient Funds for Principal. Interest and Fees
Payment. In the event funds available in the Revenue Account are insufficient to
make the payments set forth in priorities THIRD and FOURTH of Section 4.1(b),
the Collateral Agent will direct the Depositary Bank in writing (with a copy to
the Borrower) to withdraw funds from the Debt Service Reserve Account and apply
the same towards the payment of such priorities THIRD and FOURTH and thereafter
the Debt Service Reserve Account shall be replenished pursuant to the operation
of priority FIFTH of Section 4.1(b).
(d) Distributions from Revenue Account. No payment pursuant to priority
SEVENTH of Section 4.1(b) will be permitted unless:
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(i) The Borrower has delivered a duly executed Distribution
Certificate to the Administrative Agent no fewer than three (3) Business
Days prior to the date such withdrawal is scheduled to be made; and
(ii) The Collateral Agent has confirmed to the Depositary Bank and the
Borrower (A) the accuracy of the information set forth in such Distribution
Certificate, (B) that all conditions to such payment set forth in Section
8.13 of the Credit Agreement have been satisfied, and (C) that no Default
(other than any Default that (i) provides a cure period therefor of not
more than 30 days, (ii) is reasonably capable of being remedied during such
30-day period, (iii) as to which the Borrower is diligently prosecuting or
pursuing such remedy, and (iv) following the occurrence of which not more
than 30 days have elapsed) or Event of Default has occurred and is
continuing or will occur as a result of the Depositary Bank's allowing such
withdrawal, by the Collateral Agent's delivery to the Depositary Bank of
such Distribution Certificate and a written notice from the Collateral
Agent authorizing the Depositary Bank to permit such withdrawal (which may
take the form of the Collateral Agent's countersignature on a Distribution
Certificate) (A "WITHDRAWAL APPROVAL NOTICE") at least one (1) Business Day
prior to the date such withdrawal is scheduled to be made.
(e) Failure to Meet Minimum Debt Service Coverage Ratio. If, as of any
Quarterly Date, the Borrower shall fail to comply with Section 8.13(iii) of the
Credit Agreement, then on such Quarterly Date (or corresponding Business Day,
if such Quarterly Date is not A Business Day), the Borrower shall, in its
related Distribution Certificate, instruct the Collateral Agent who in turn will
instruct the Depositary Bank either (i) to fund the Debt Service Reserve Account
via priority SEVENTH of Section 4.1(b) (and in lieu of priority SEVENTH as set
forth in Section 4.1(b)) in an amount equal to the credit balance of the Revenue
Account on such date, or (ii) to apply the credit balance of the Revenue Account
on such date to prepay the Loans pursuant to Section 3.04(d) of the Credit
Agreement via priority SEVENTH of Section 4.1(b) (and in lieu of priority
SEVENTH as set forth in Section 4.1(b)). Such funding of the Debt Service
Reserve Account or, alternatively, prepayment of the Loans, shall be required on
each succeeding Quarterly Date (or corresponding Business Day) until such time
as Borrower has demonstrated its compliance with Section 8.13(iii) of the Credit
Agreement.
(f) No failure of the Borrower to deliver a Distribution Certificate to the
Administrative Agent will restrict or otherwise affect the Collateral Agent's
right to cause the Depositary Bank to withdraw and transfer funds pursuant to
(i) priorities FIRST through SIXTH of Section 4.1 (b), or (ii) Section 4.1(e)(i)
or 4.1(e)(ii), as the Collateral Agent shall select.
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(g) Notwithstanding anything to the contrary in Section 4.1(a) or (b), the
Borrower shall be permitted to specify in any Distribution Certificate a
Business Day, which shall be not more than 10 days after the Monthly Date or
Quarterly Date to which such Distribution Certificate pertains, on which
payments (i) to the Operator pursuant to priorities FIRST or SECOND of Section
4.1(a) or priorities FIRST or SIXTH of Section 4.1(b) shall be made to the
Operator and (ii) to the Borrower, the Sponsor or such other Person as directed
by the Borrower pursuant to priority SEVENTH of Section 4.1(b) shall be made to
the Borrower, the Sponsor or such other Person, and the Depositary Bank shall
make any such payments to the Operator or to the Borrower, the Sponsor or such
other Person as directed by the Borrower on any such later Business Day so
specified in such Distribution Certificate.
SECTION 4.2. DEBT SERVICE RESERVE ACCOUNT.
(a) Initial Funding of Debt Service Reserve Account. On the Closing Date,
proceeds of the Initial Term Loans shall be used to fund the Debt Service
Reserve Account in an amount equal to the Debt Service Reserve Required Amount
on such date.
(b) Funding of Debt Service Reserve Account on Each Quarterly Date. On the
Quarterly Date next succeeding the Closing Date (or, pursuant to Section 4.1,
the corresponding Business Day) and on each subsequent Quarterly Date (or
corresponding Business Day) thereafter, the Debt Service Reserve Account shall
be funded via priority FIFTH of Section 4.1(b) in an amount equal to the
difference between the Debt Service Reserve Required Amount on such date and the
then-current balance of the Debt Service Reserve Account; provided, however,
that additional deposits to the Debt Service Reserve Account may from time to
time be made pursuant to Section 4.1(e).
(c) Excess Required Balance in Debt Service Reserve Account. If on any
Quarterly Date (or corresponding Business Day), the funds on deposit in the Debt
Service Reserve Account (including any gain realized from investments in
Permitted Investments pursuant to Section 5.5) exceed the Debt Service Reserve
Required Amount, subject to the prior written approval of the Collateral Agent
(which shall be given so long as no Default or Event of Default has occurred and
is continuing), the Borrower may direct the Depositary Bank in writing to
withdraw and transfer to the Revenue Account or, so long as the Borrower is in
compliance with its obligations under Section 8.13 of the Credit Agreement, to
the Borrower or as directed by the Borrower, all or a portion of such excess
funds.
SECTION 4.3. Restoration Sub-Account. The Borrower agrees that in the event
that it receives any amount of Loss Proceeds in respect of any Event of Loss,
within five (5) Business Days it shall deposit the amount of such Loss Proceeds
in the Restoration Sub-
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Account. Distributions from the Restoration Sub-Account shall be requested by
the Borrower, and made by the Depositary Bank to the Borrower, solely in
accordance with Sections 8.05(c) and 8.05(d) of the Credit Agreement, except
that Loss Proceeds remaining in the Restoration Sub-Account upon completion of
Restoration Work relating thereto shall be transferred promptly to to the
Revenue Account
ARTICLE V.
ACCOUNTS GENERALLY
SECTION 5.1. BENEFIT OF ACCOUNTS. All right, title and interest in and to
the Accounts and the funds in the Accounts and any interest accrued on such
funds shall be collaterally assigned to the Collateral Agent in accordance with
the terms of the Borrower Security Agreement until the Termination Date. Funds
shall be distributed from the Accounts only in accordance with this Agreement
and funds deposited in the Accounts shall be applied as provided in this
Agreement and the other Financing Documents, as applicable. Notwithstanding the
foregoing, no Agent nor any Lender shall be liable for any tax, assessment, fee
or other governmental or other charge or claim on or arising out of the Accounts
or any interest or earnings thereon, all of which shall be for the account
of Borrower.
SECTION 5.2. BOOKS OF ACCOUNT; STATEMENTS.
(a) The Depositary Bank 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 Depositary Bank, all in accordance with
its normal recordkeeping practices. The Depositary Bank shall make such books of
account available during normal business hours for inspection and audit by the
Administrative Agent, the Collateral Agent, the Borrower and their respective
representatives.
(b) Not later than the tenth Business Day of each month during the term of
this Agreement, the Depositary Bank shall deliver to each of the other parties
hereto a rollforward statement setting forth the beginning balance of each
Account and the transactions comprising the additions into and withdrawals out
of each Account during the preceding month which shall total to the amounts held
in each Account at the close of business on the last day of such preceding
month.
SECTION 5.3. ACCOUNTS GENERALLY.
(a) Except as expressly set forth in this Agreement, the Borrower shall not
have any right of withdrawal in respect of any of the Accounts, and the Borrower
shall
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not make, attempt to make or consent to the making of any withdrawal or transfer
from any Account except in strict adherence to this Agreement.
(b) The Collateral Agent shall have sole signatory authority with respect
to directing the Depositary Bank to make withdrawals from the Accounts. Those
persons who are authorized to sign with respect to the Accounts shall be
designated by the Collateral Agent from time to time by written notice to the
Depositary Bank.
(c) It shall be sufficient, for purposes of this Agreement, that the
Depositary Bank has received a Withdrawal Approval Notice signed by an
individual designated by the Collateral Agent as provided in Section 5.3(b), and
the Depositary Bank shall not require any further evidence of authorization
prior to making any disbursement hereunder.
(d) Subject to (i) the timely receipt of a Withdrawal Approval Notice
(which, for purposes of this Agreement, shall mean not later than 3:00 p.m. (New
York City time) on the Business Day preceding the requested date of payment or
action), (ii) the availability of cash in the applicable Account, (iii) the
Federal wire transfer system functioning in a normal fashion and (iv) other
circumstances beyond the control of the Depositary Bank, the Depositary Bank
shall make any payment required hereunder pursuant to any Withdrawal Approval
Notice (except transfers between Accounts and between Accounts and other
accounts) by means of wire transfer of immediately available funds to the
address of the payee set forth in such Withdrawal Approval Notice prior to 11:00
a.m. (New York City time) on the date specified herein for such payment, or by
such other means of payment, to such other address or at such later time as may
be specified by such payee.
SECTION 5.4. LIMITATION ON DEPOSITARY BANK'S OBLIGATIONS. The Depositary
Bank has no obligation to the Borrower, the Sponsor or any third party to make
any payment (or authorize any withdrawal with respect thereto) for which the
appropriate Account does not contain adequate funds.
SECTION 5.5. PERMITTED INVESTMENTS. All funds paid to or retained by the
Depositary Bank in Accounts shall, until paid or applied as provided herein, be
invested by the Depositary Bank at the written authorization and direction of
the Borrower from time to time and at the risk and expense of the Borrower in
Permitted Investments (and in the absence of a written authorization and
direction from the Borrower, in U.S. Government money market mutual funds);
provided, that upon the occurrence and during the continuance of an Event of
Default, such funds shall be so invested in Permitted Investments at the
Collateral Agent's direction and at the risk and expense of the Borrower. All
gains (including interest received) realized as the result of any such
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investment (net of all fees, commissions and other expenses, if any, incurred in
connection with such investment) shall be deposited into the applicable Account.
The Depositary Bank will have no liability for any loss resulting from any
Permitted Investment other than by reason of its willful misconduct, gross
negligence or bad faith. The Depositary Bank may sell any Permitted Investment
(without regard to its maturity date, but in accordance with Section 8.2)
whenever the Depositary Bank in its sole discretion deems it necessary to make
any distribution required by this Agreement and the Depositary Bank will not be
liable to any Person for any loss suffered because of any such sale, other than
by reason of its willful misconduct, gross negligence or bad faith.
SECTION 5.6. DEPOSITS IRREVOCABLE. All deposits made into any Account,
absent manifest error, shall be irrevocable and such deposits and all
instruments or security held in such Account and all interest thereon shall be
held in trust by the Depositary Bank and applied solely as provided herein.
SECTION 5.7. EVENTS OF DEFAULTS; MANDATORY PREPAYMENTS. Notwithstanding any
other provision contained in this Agreement, upon receipt by the Depositary Bank
of a written notice from the Collateral Agent stating that a Default or an Event
of Default has occurred and is continuing or that a mandatory prepayment is
required (upon which notice the Depositary Bank shall be entitled to rely
without independent investigation), the Depositary Bank shall (x) in the case of
a Default or an Event of Default, thereafter transfer and distribute cash from
the Accounts only upon the express written instructions of, and in accordance
with the priorities established by, the Collateral Agent in its sole discretion,
until notified in writing by the Collateral Agent that such Default or Event of
Default has been waived or cured or (y) in the case of a mandatory prepayment,
pay an amount equal to the amount of such mandatory prepayment to the
Administrative Agent for payment to the Lenders in accordance with the Credit
Agreement. Any notice provided under this Section 5.7 shall be provided to the
Borrower.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 6.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEPOSITARY BANK.
The Depositary Bank represents and warrants to the Administrative Agent, the
Collateral Agent and the Borrower as follows:
(a) Existence. The Depositary Bank is a New Jersey banking corporation
duly organized, validly existing and in good standing under the laws of New
Jersey.
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(b) Power and Authorization; Enforceable Obligations.
(i) The Depositary Bank has full power and authority and the
legal right to conduct its business as now conducted and as proposed
to be conducted by it, to execute, deliver and perform this Agreement
and to take all actions necessary to complete the transactions
contemplated by this Agreement. The Depositary Bank has taken all
necessary action to authorize the transactions contemplated hereby on
the terms and conditions of this Agreement and to authorize the
execution, delivery and performance of this Agreement.
(ii) This Agreement has been duly executed and delivered by the
Depositary Bank and constitutes the legal, valid and binding
obligation of the Depositary Bank, enforceable against the Depositary
Bank in accordance with its terms, except as enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
or by limitation upon the availability of equitable remedies.
(c) No Legal Bar. The execution, delivery and performance of this
Agreement by the Depositary Bank will not, to the best of the Depositary
Bank's knowledge, (i) violate any applicable law of the State of New York,
the State of New Jersey or the United States of America governing the
banking and trust powers of the Depositary Bank or (ii) result in a breach
of any provision of any security issued by the Depositary Bank or of any
indenture, mortgage, deed of trust, lease, contract, undertaking, agreement
or instrument to which the Depositary Bank is a party or by which it or any
of its property is bound or to which it or any of its property is subject.
The execution, delivery and performance of this Agreement will not result
in, or require the creation or imposition of any lien on any of the
properties or revenues of the Depositary Bank pursuant to any applicable
law or any indenture, mortgage, deed of trust, lease, contract,
undertaking, agreement or instrument to which the Depositary Bank is a
party or by which it or any of its property is bound or to which it or any
of its property is subject. No approval or consent of any Person is
required in connection with the execution, delivery and performance by the
Depositary Bank of this Agreement, except such approvals or consents as
have been duly obtained and are in full force and effect.
(d) Government Approvals. To the best of the Depositary Bank's
knowledge, no Government Approval of any Government Authority of the State
of New York, the State of New Jersey or the United States of America
governing
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the banking and trust powers of the Depositary Bank, except for such
Government Approvals as have been obtained and are in full force and effect
and are not subject to appeal or judicial or other governmental review, are
required to be obtained by the Depositary Bank in connection with the
execution, delivery and performance of this Agreement or the taking of any
action by any party contemplated hereby.
(e) The Accounts are and will be maintained by the Depositary Bank as
"securities accounts" (as defined in the Uniform Commercial Code) to the
extent "financial assets" (as defined in the Uniform Commercial Code) are
deposited in or credited to the Accounts. The Depositary Bank will treat
each item of property (including cash and investment property) held by it
in or credited to the Accounts as a "financial asset" to the extent such
property can be treated as a "financial asset" under the Uniform Commercial
Code. The Depositary Bank will treat and identify the Collateral Agent as
the "entitlement holder" (as defined in the Uniform Commercial Code) with
respect to the Accounts and all financial assets credited thereto. No
financial asset deposited in or credited to the Accounts shall be
registered in the name of, payable to the order of, or specially endorsed
to any Person other than the Collateral Agent, unless endorsed to the
Depositary Bank or in blank. The Collateral Agent, acting for the benefit
of the Secured Parties, will have control of all security entitlements with
respect to financial assets credited to the Accounts. The Depositary Bank
will comply strictly with all "entitlement orders" (as defined in the
Uniform Commercial Code) originated by the Collateral Agent in accordance
with the terms of the Financing Documents without further consent by the
Borrower or any other Person. The Depositary Bank will not comply or agree
to comply with any entitlement order with respect to the Accounts or any
financial assets credited thereto given by any Person other than the
Collateral Agent. The Depositary Bank is a "securities intermediary" (as
defined in the Uniform Commercial Code) and will act in such capacity. The
Depositary Bank is not a "clearing corporation" (as defined in the Uniform
Commercial Code).
(f) In the event that the Accounts are not considered "securities
accounts" (as defined in the Uniform Commercial Code) under applicable law,
the Accounts shall be deemed to be "deposit accounts" (as defined in the
Uniform Commercial Code) to the extent a security interest can be granted
and perfected under the Uniform Commercial Code in the Accounts as deposit
accounts, which the Collateral Agent shall maintain with the Depositary
Bank acting not as a securities intermediary but as a "bank" (as defined
in the Uniform Commercial Code). The Collateral Agent, acting on behalf of
the Secured Parties, shall be
-15-
deemed the customer of the Depositary Bank for purposes of the Accounts and
as such shall be entitled to all the rights that customers of banks have
under applicable law with respect to deposit accounts, including the right
to withdraw funds from, or close, the Accounts (which rights shall be
exercised in accordance with the terms of the Financing Documents). The
Depositary Bank shall not have title to the funds on deposit in the
Accounts and shall credit the Accounts with all receipts of interest,
dividends, and other income received on the property held in the Accounts.
The Depositary Bank shall administer and manage the Accounts in strict
compliance with all the terms applicable to the Accounts pursuant to the
terms of this Agreement, and shall be subject to and comply with all the
obligations that the Depositary Bank owes to the Collateral Agent and the
Secured Parties with respect to the Accounts, including all subordination
obligations, pursuant to the terms of this Agreement.
(g) In the event that the Accounts are not considered "securities
accounts" or "deposit accounts" (each as defined in the Uniform Commercial
Code) under applicable law or a security interest cannot be granted and
perfected in the Accounts under the Uniform Commercial Code, then the
Accounts and all property deposited therein shall be deemed to be under the
exclusive dominion and control of the Secured Parties, which the Secured
Parties maintain through the Collateral Agent and the Depositary Bank, as
their agents for such purpose, and the Collateral Agent and the Depositary
Bank will act and will be deemed to be acting as the Secured Parties'
agents in respect of the Accounts for the purpose of maintaining such
exclusive dominion and control for the purpose of the creation and
perfection of security interests in favor of the Secured Parties.
(h) Except for the claims and interest of the Collateral Agent, the
Secured Parties and the Borrower in the Accounts, no officer of the
Depositary Bank with direct responsibility for administering this Agreement
has actual knowledge of any claim to, or interest in, the Accounts or any
monies or any other property deposited therein or credited thereto. If an
officer of the Depositary Bank with direct responsibility for administering
this Agreement obtains actual knowledge that any Person has asserted any
lien, encumbrance or adverse claim against the Accounts or in any monies or
any other property deposited therein or credited thereto, the Depositary
Bank will promptly notify the Collateral Agent and the Borrower thereof.
-16-
ARTICLE VII.
DEPOSITARY BANK GENERALLY
SECTION 7.1. ACCEPTANCE. The acceptance by the Depositary Bank of its
duties hereunder is subject to the following terms and conditions, which the
parties to this Agreement agree shall govern and control with respect to the
rights, duties, liabilities and immunities of the Depositary Bank:
(a) the Depositary Bank will not be responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity
of the amounts deposited with or held by it;
(b) the Depositary Bank will 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;
(c) the Depositary Bank may consult with and obtain advice from
counsel and other skilled Persons (at the reasonable expense of the
Borrower) in the event of any dispute or question as to the construction of
any provision hereof and shall be fully protected in taking or not taking
any action in good faith in reliance on such advice;
(d) the Depositary Bank will not be charged with knowledge of any
agreement other than this Agreement and Schedule I to the Credit Agreement,
and shall have no duties as Depositary Bank except those expressly set
forth herein and in any modification or amendment hereof; provided, that no
such modification or amendment will affect its duties unless it has given
its written consent thereto;
(e) the Depositary Bank may engage or be interested in any financial
or other transaction with any party hereto and may act on, or as
depository, trustee or agent for, any committee or body of holders of
obligations of such persons as freely as if it were not Depositary Bank;
(f) the Depositary Bank is not obligated to take any action that in
its reasonable judgment would involve it in expense or liability unless it
has been furnished with reasonable indemnity (it being understood and
agreed that the general indemnity of the Collateral Agent will constitute a
reasonable indemnity);
(g) the Depositary Bank will not take instructions from any Person
except those given in accordance with this Agreement; and
-17-
(h) the Depositary Bank will be protected in acting upon any written
notice, certificate, instruction, request or other paper or document as to
the due execution thereof and the validity and effectiveness of the
provisions thereof and as to the truth of any information therein
contained, which Depositary Bank, in good faith, reasonably believes to be
genuine.
SECTION 7.2. FEES OF DEPOSITARY BANK. The Borrower shall pay the Depositary
Bank the following fees (and no others):
(a) An annual fee of $4,500 payable on the Closing Date and on each
anniversary of the Closing Date occurring on or prior to the Termination
Date. In the event the Termination Date should occur prior to an
anniversary of the Closing Date, the annual fee for the final year shall be
refunded to the Borrower on a per-quarter basis, with any portion of a
quarter counted as a full quarter.
(b) A termination fee in the amount of $1,500 payable upon notice of
the Depositary Bank's termination as Depositary Bank prior to the
Termination Date.
(c) The services to be provided by the Depositary Bank including the
sweeping of interest and dividends daily, and the provision of mutual funds
for trust accounts; the mutual fund provider may reimburse the Depositary
Bank or United up to one-quarter of one percent (0.25%) of the funds
invested in consideration of it performing administrative services,
provided that the Borrower shall not incur any expense or fee as a result
of the foregoing.
SECTION 7.3. REPLACEMENT OR RESIGNATION OF DEPOSITARY BANK.
(a) The Depositary Bank 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 Depositary Bank as hereinafter provided. If
a successor Depositary Bank is not appointed within thirty (30) days after
the giving of written notice of such resignation, the Depositary Bank may
apply to any court of competent jurisdiction to appoint a successor
Depositary Bank to act until such time, if any, as a successor is appointed
as herein provided.
(b) The Collateral Agent may remove the Depositary Bank at any time by
giving notice to each other party to this Agreement, such removal to be
effective upon the appointment of a successor Depositary Bank as
hereinafter provided.
-18-
(c) In the event of any resignation or removal of the Depositary Bank,
a successor Depositary Bank, which shall be a bank or trust company
organized under the laws of the United States of America or of any state
thereof, shall be appointed by the Collateral Agent and be reasonably
acceptable to the Borrower and the Depositary Bank shall return all
unearned prepaid compensation. Any such successor Depositary Bank shall
deliver to each party to this Agreement a written instrument accepting such
appointment hereunder and thereupon such successor Depositary Bank shall
succeed to all the rights and duties of the Depositary Bank hereunder and
shall be entitled to receive the Accounts from the predecessor Depositary
Bank.
(d) Any Person into which the Depositary Bank may be merged or
converted or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which the Depositary Bank
shall be a party, or any Person to which substantially all of the corporate
trust business of the Depositary Bank may be transferred, shall be the
Depositary Bank under this Agreement without further act.
SECTION 7.4. INDEMNITY. Whether or not the transactions contemplated hereby
are consummated, the Borrower shall, subject to the provisions of this Section
7.4, indemnify, pay and hold the Depositary Bank and the officers, directors,
employees, agents, affiliates, and attorneys of the Depositary Bank
(collectively, the "INDEMNITEES") harmless from and against any and all
out-of-pocket liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including without limitation reasonable attorneys' fees and
costs of the Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not the Indemnitees are
designated a party thereto) that are imposed on, incurred by or asserted against
any Indemnitee, in any manner relating to or arising out of this Agreement or
the other Financing Documents or the exercise of any right or remedy hereunder
or under any other Financing Document (collectively, the "INDEMNIFIED
LIABILITIES"); provided, that the Borrower shall not have any obligation to any
Indemnitee if a court of competent jurisdiction renders a judgment, final and
not subject to appeal or review, that such Indemnified Liabilities arise from
the gross negligence or willful misconduct of such Indemnitee. The Borrower
shall pay or reimburse each Indemnitee for all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees and
expenses) incurred by such Indemnitee in the defense of any claim arising out of
any Indemnified Liability at the time such costs and expenses are incurred and
such Indemnitee has given the Borrower written notice thereof. The foregoing
indemnity will remain operative and in full force and effect regardless of the
termination of this
-19-
Agreement, the consummation of the transactions contemplated by the Financing
Documents, the repayment of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Financing Document, or the content or accuracy of any representation or warranty
made by the Borrower in any Financing Document. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in this Section 7.4
may be unenforceable because it violates any law or public policy, the Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.
ARTICLE VIII.
DISPUTES; DETERMINATIONS
SECTION 8.1. DISPUTES. In the event of any dispute as to any amount to be
transferred or paid pursuant to this Agreement, the Depositary Bank is
authorized and directed to retain in its possession, without liability to any
Person, the disputed amount until such dispute has been settled by agreement of
the other parties hereto or by legal proceedings, but the Depositary Bank is
under no duty whatsoever to institute or defend any such proceeding; provided,
that the Depositary Bank has no right to retain any amount necessary to pay when
due principal, fees or interest payable to the Collateral Agent or any Secured
Party in accordance with this Agreement (under the circumstances contemplated by
Section 4.1(b) or otherwise). The Depositary Bank has the right to interplead
the parties to a dispute in any court of competent jurisdiction and to ask such
court to determine the respective rights of such parties with respect to this
Agreement.
SECTION 8.2. CASH AVAILABLE. In determining the amount of funds on deposit
in an Account at any time, the Depositary Bank will treat as cash available the
net amount that the Depositary Bank would receive on such day if it liquidated
all the securities then on deposit in such Account (at then-prevailing market
prices and assuming normal sales expenses). The Depositary Bank will use its
best efforts to sell securities without a loss in order that actual cash is
available on each date on which a transfer or payment is to be made pursuant to
this Agreement.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. NO WAIVER; REMEDIES CUMULATIVE. No failure on the part of any
party hereto or any of such Person's agents to exercise, and no delay in
exercising, and no course of dealing with respect to, any right, power or remedy
hereunder shall operate as a waiver thereof. No single or partial exercise by
any party hereto or any of such Person's agents of any right, power or remedy
hereunder shall preclude any other or further
-20-
exercise thereof or the exercise of any other right, power or remedy. The
rights, powers and remedies herein expressly provided are cumulative and not
exclusive of any rights, powers or remedies which any party hereto would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any other party hereto to
any other or further action in any circumstances without notice or demand,
except to the extent notice is expressly required by this Agreement or any other
Financing Document.
SECTION 9.2. NOTICES. All notices, requests and other communications
provided for herein (including any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including by telecopy)
delivered to the intended recipient at the address set forth below or, as to any
party, at such other address as shall be designated by such party in a notice to
each other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier with confirmation of receipt received or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid; provided, however, that if such transmission or delivery does not
occur by 4:00 p.m. recipient's time, then such transmission or delivery shall be
deemed to occur on the next Business Day.
For Borrower:
Ormesa LLC
980 Greg Street
Sparks, Nevada89431
Attention: President
Telephone: (775) 356-9029
Facsimile: (775) 356-9039
For Administrative Agent and Collateral Agent:
United Capital,
a division of Hudson United Bank
87 Post Road East
Westport, Connecticut06880
Attention: Mr. Jerome P. Peters, Jr.
Telephone: (203) 291-6600
Facsimile: (203) 291-6632
-21-
For Depositary Bank:
Wealth Management, a division of
Hudson United Bank
90 Post Road East
Westport, CT06880
Attention: James N. Donaldson, Senior Vice
President
Telephone: (203) 291-6705
Facsimile: (203) 291-6709
SECTION 9.3. AMENDMENTS, ETC. This Agreement may be amended, supplemented,
modified or waived only by an instrument in writing duly executed by each of the
parties hereto. Any such amendment, supplement, modification or waiver shall be
binding upon the Depositary Bank, the Collateral Agent, each Secured Party, each
holder of any of the Secured Obligations and the Borrower. Any waiver shall be
effective only in the specific instance and for the specified purpose for which
it was given.
SECTION 9.4. SUCCESSORS AND ASSIGNS. This Agreement shall: (a) remain in
full force and effect until the termination hereof pursuant to Section 9.14; and
(b) be binding upon and inure to the benefit of the respective successors and
permitted assigns of the parties hereto; provided, however, that the Borrower
shall not assign or transfer its rights hereunder without the prior written
consent of the Collateral Agent.
SECTION 9.5. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts, all of which when taken together shall constitute
one and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto with respect to matters covered by this Agreement and the other
Financing Documents and supersede any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof. This
Agreement shall become effective at such time as the Collateral Agent shall have
received counterparts hereof signed by all of the intended parties hereto.
SECTION 9.6. SEVERABILITY. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
applicable law: (a) the other provisions hereof shall remain in full force and
effect in such jurisdiction in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (b) the invalidity
-22-
or unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 9.7. HEADINGS. Headings appearing herein are used solely for
convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.
SECTION 9.8. NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES
HERETO ARE SOLELY FOR THE BENEFIT OF THE BORROWER, THE DEPOSITARY BANK, THE
COLLATERAL AGENT AND THE OTHER SECURED PARTIES, AND NO PERSON (OTHER THAN THE
PARTIES HERETO, THE OTHER SECURED PARTIES AND THEIR SUCCESSORS AND ASSIGNS
PERMITTED HEREUNDER) SHALL HAVE ANY RIGHTS HEREUNDER.
SECTION 9.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Notwithstanding anything to the contrary herein, the State of New York is
and shall continue to be for so long as this Agreement shall be in effect the
Depositary Bank's jurisdiction (within the meaning of Section 8-110(e) of the
Uniform Commercial Code) in its capacity as the "securities intermediary" with
respect to all securities accounts and (within the meaning of Section 9-304 of
the Uniform Commercial Code) in its capacity as the "bank" with respect to all
deposit accounts established and maintained by the Depositary Bank in the name
of the Collateral Agent.
SECTION 9.10. SUBMISSION TO JURISDICTION, ETC. EACH PARTY HERETO HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK COUNTY (INCLUDING ITS APPELLATE DIVISION), AND OF ANY OTHER APPELLATE COURT
IN THE STATE OF NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-23-
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.12. SERVICE OF PROCESS. Nothing herein shall in any way be deemed
to limit the ability of any party hereto to serve any writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over any other party hereto in such jurisdiction, and in such
manner, as may be permitted by applicable law.
SECTION 9.13. LIMITATION OF RECOURSE. The obligations of the Borrower under
this Agreement shall be obligations of the Borrower only and none of the
Depositary Bank, the Collateral Agent or any Secured Party shall have any claim
against or recourse to (whether by operation of law or otherwise) any
Non-Recourse Person (other than claims against and recourse to the Sponsor with
respect to its obligations under the Borrower Equity Interest Pledge) in respect
of such obligations of the Borrower. Notwithstanding the foregoing, nothing in
this Section 9.13 shall impair or in any way limit any liabilities or
obligations of (a) the Sponsor under or pursuant to its obligations as set forth
in the Borrower Equity Pledge, or (b) any Non-Recourse Party for fraud or
willful misconduct.
SECTION 9.14. TERMINATION. This Agreement and the lien granted pursuant to
Section 7.2 will automatically terminate upon the Termination Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been duly executed on the date and
year first above written.
UNITED CAPITAL,
a division of Hudson United Bank,
as Administrative Agent and Collateral
Agent
By
-------------------------------------
Name: Jerome P. Peters, Jr.
Title: Senior Vice President
ORMESA LLC, as Borrower
BY ORMAT FUNDING CORP.,
its Sole Member and Control Manager
BY
-------------------------------------
Name:
Title:
WEALTH MANAGEMENT,
a division of Hudson United Bank,
as Depositary Bank
By
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit D
to Credit Agreement
FORM OF NOTICE OF BORROWING
United Capital,
a division of Hudson United Bank
87 Post Road East
Westport, CT06880
Re: Notice of Borrowing
Ladies and Gentlemen:
Reference is hereby made to Section [6.01(v)/6.02(i)] of the Credit
Agreement, dated as of December 31, 2002 (the "CREDIT AGREEMENT"), among Ormesa
LLC (the "BORROWER"), the several banks and other financial institutions party
thereto from time to time and United Capital, a division of Hudson United Bank,
not in its individual capacity, but solely as administrative agent and
collateral agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings given to them in the Credit Agreement.
The Borrower hereby requests that an [Initial Term/Additional Term] Loan be
made in an aggregate principal amount equal to [$20,000,000.00][$7,500,000.00]
on ___________, 200__ (the "BORROWING DATE").+ Such Loan will be a [Prime Rate
Loan/Eurodollar Loan].
The undersigned hereby certifies that all conditions contained in Section
[6.01/6.02] of the Credit Agreement have been or will be satisfied or waived on
the Borrowing Date.
The undersigned hereby further certifies as follows:
(a) Immediately before and after giving effect to the borrowing
requested hereby, the representations of the Borrower and the Sponsor
contained in the Financing Documents shall be true and correct on and as of
the Borrowing Date in all material respects as if made on and as of such
date except for any such representations and warranties that were initially
stated to have been made solely as of an earlier date, in which case such
representations shall have been true and correct in all material respects
as of such earlier date.
(b) Immediately before and after giving effect to the borrowing
requested hereby, no Default or Event of Default shall have occurred and be
continuing and no Default will result therefrom.
(c) Immediately before and after giving effect to the borrowing
requested hereby, no Material Adverse Effect shall have occurred and be
continuing or will result therefrom.
----------
+ In connection with the Additional Term Loan only, this Notice must be
delivered to the Administrative Agent by 11:00 a.m., New York time, at
least 3 (with respect to Eurodollar Loans) or 1 (with respect to Prime Rate
Loans) Business Day(s) prior to the proposed Borrowing Date.
-2-
(d) All Government Approvals that are necessary for each Project as of
the Borrowing Date shall have been obtained and shall be in full force and
effect and not subject to appeal.
The Borrower agrees that if prior to the time of the borrowing requested
hereby any matter certified to herein by the Borrower is not true and correct at
such time as if then made, the Borrower will immediately so notify the
Administrative Agent. Except to the extent, if any, that prior to the time of
the borrowing requested hereby the Administrative Agent shall receive written
notice to the contrary from the Borrower, each matter certified to herein shall
be deemed once again to be certified as true and correct at the Borrowing Date
as if then made.
Please wire transfer the proceeds of the Loan requested hereby in
accordance with the payment instructions attached as Schedule A hereto.
Borrowing Certificate
-3-
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized signatory this ___ day of ____________, 200_.
ORMESA LLC
By: ORMAT FUNDING CORP.,
its Sole Member and Control Manager
By:
------------------------------------
Name:
Title:
Borrowing Certificate
Exhibit E
to Credit Agreement
FORM OF DISTRIBUTION CERTIFICATE
United Capital
a division of Hudson United Bank
87 Post Road East
Westport, Connecticut 06680
Wealth Management
a division of Hudson United Bank
87 Post Road East
Westport, Connecticut 06680
Re: Distribution Certificate
Ladies and Gentlemen:
Reference is hereby made to Section 8.13(vi) of the Credit Agreement dated
as of December 31, 2002 (the "CREDIT AGREEMENT"), among Ormesa LLC (the
"BORROWER"), the several banks and other financial institutions party thereto
from time to time and United Capital, a division of Hudson United Bank, not in
its individual capacity, but solely as administrative agent (the "ADMINISTRATIVEAGENT") and collateral agent (the "COLLATERAL AGENT"), and to Section 4.1 of the
Depositary Agreement dated as of December 31, 2002 (the "DEPOSITARY AGREEMENT")
among the Borrower, the Administrative Agent, the Collateral Agent and Wealth
Management, a division of Hudson United Bank, as depositary bank (the
"DEPOSITARY BANK"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to them in the Credit Agreement.
The Borrower hereby requests that the transfers from the Accounts described
in the attached Distribution Request be made by the Depositary Bank on
______________, 20___ (the "PAYMENT DATE")*, other than the transfers described
on lines 4.00, .5.00, 6.00, 11.00 and 12.00, which are requested to be made on
_____________, 20__.+
The undersigned hereby certifies that immediately before and after giving
effect to the payments requested hereby, no Default (other than any Default that
(i) provides a cure period therefor of not less than 30 days, (ii) is reasonably
capable of being remedied during such 30-day period and (iii) as to which the
Borrower is diligently prosecuting or pursuing such remedy, and
----------
* This Certificate must be delivered to the Administrative Agent and the
Depositary Bank at least 10 days prior to the proposed Payment Date for any
request that contemplates a Restricted Payment or at least 3 Business Days prior
to the proposed Payment Date for any request that does not contemplate a
Restricted Payment.
+ Such date shall not be more than 10 days after the Monthly Date or
Quarterly Date to which this Distribution Certificate relates.
-2-
(iv) following the occurrence of which not more than 30 days have elapsed) or an
Event of Default shall have occurred and be continuing or would result
therefrom.
[In connection with a Restricted Payment (including, without
limitation, a payment pursuant to 4.1(b) SEVENTH of the Depositary Agreement),
the undersigned hereby further certifies as follows: +
(a) [The Payment Date is within 30 days after a Quarterly Date/The
Borrower was unable to make a Restricted Payment within 30 days after a
Quarterly Date because Section 8.13(ii) of the Credit Agreement was
unsatisfied; the provisions of Section 8.13(ii), as well as the other
provisions of Section 8.13 of the Credit Agreement, are satisfied and the
Payment Date is within 10 days after such conditions of Section 8.13 of the
Credit Agreement were first satisfied];
(b) Immediately before and after giving effect to such Restricted
Payment, for any corresponding Quarterly Date on or prior to March 31,2004, the Projected Debt Service Coverage Ratio shall be at least 1.20:1,
and for any corresponding Quarterly Date thereafter, the Debt Service
Coverage Ratio for the relevant Historical Computation Period is at least
1.20:1;
(c) Immediately before and after giving effect to such Restricted
Payment, the balance on deposit in the Debt Service Reserve Account is at
least equal to the Debt Service Reserve Required Amount; and
(d) the Restricted Payment is only made from and to the extent of
Distributable Cash (as defined in the Depositary Agreement).]
[the remainder of this page intentionally left blank]
----------
+ These certifications are only necessary with respect to Restricted
Payments (including, without limitation, payments pursuant to Section 4.1(b)
SEVENTH of the Depositary Agreement).
-3-
The Borrower has caused this Distribution Certificate to be executed and
delivered by its duly authorized signatory this _____ day of ________, 20 __.
ORMESA LLC
By ORMAT FUNDING CORP.,
its Sole Member and Control Manager
By:
------------------------------------
Name:
Title:
-4-
ORMESA LLC
FORM OF DISTRIBUTION REQUEST
[DATE]
REVENUE DEBT SERVICE RESERVE
ACCOUNT ACCOUNT
-------------------- ----------------------
BALANCE PRIOR TO THIS REQUEST ____________________ ______________________
1.00 Power sales ____________________ ______________________
2.00 Interest income ____________________ ______________________
3.00 Other income ____________________ ______________________
MONTHLY DISTRIBUTIONS:
Section 4.1(a) FIRST
4.00 Operation and Maintenance Expenses ____________________ ______________________
Section 4.1(a) SECOND
5.00 Capital Expenditures ____________________ ______________________
QUARTERLY DISTRIBUTIONS:
Section 4.1(b) FIRST
6.00 Operation and Maintenance Expenses ____________________ ______________________
Section 4.1(b) SECOND ____________________ ______________________
7.00 Fees and Expenses for Administrative Agent, ____________________ ______________________
Collateral Agent and Depositary Bank ____________________ ______________________
Section 4.1(b) THIRD
8.00 Lender Interest and Fees ____________________ ______________________
Section 4.1(b) FOURTH
9.00 Lender Principal and Additional Principal ____________________ ______________________
Section 4.1(b) FIFTH
10.00 Debt Service Reserve Account ____________________ ______________________
Section 4.1(b) SIXTH
11.00 Capital Expenditures
Section 4.1(b) SEVENTH
12.00 Distributable Cash ____________________ ______________________
TOTAL TRANSFERS IN/(OUT) ____________________ ______________________
BALANCE SUBSEQUENT TO THIS REQUEST
==================== ======================
WIRE TO UNITED [7,8,9]
WIRE TO OPERATOR [4,5,6,11]
WIRE TO DEBT SERVICE RESERVE ACCOUNT [10]
WIRE TO BORROWER, SPONSOR, OR OTHER SUCH
PERSON [12]
SUBMITTED BY: ________________________ APPROVED BY: ____________________
DATE OF SUBMISSION ___________________ DATE OF APPROVAL ________________
Exhibit F
to Credit Agreement
FORM OF CONVERSION/CONTINUATION NOTICE
, 200
-------- ---- -
United Capital,
a division of Hudson United Bank
87 Post Road East
Westport, CT06880
Re: Notice of Conversion/Continuation
Gentlemen and Ladies:
This [Conversion/Continuation] Notice (this "NOTICE") is delivered to you
pursuant to Section 4.05 of the Credit Agreement dated as of December 31, 2002
(the "CREDIT AGREEMENT"), among Ormesa LLC (the "BORROWER"), the several banks
and other financial institutions party thereto from time to time and United
Capital, a division of Hudson United Bank, not in its individual capacity, but
solely as administrative agent and collateral agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings given to them in
the Credit Agreement.
The Borrower hereby requests that on____________________, 20___, the
outstanding principal amount identified below of the Loans issued under the
Credit Agreement;
(1) which are [Initial Term Loans/Additional Term Loans] and
(2) which are presently [Eurodollar Loans/Prime Rate Loans] with an
Interest Period ending on____________________, 200_,
(3) be [converted/continued] as,
(4) [Eurodollar Loans/Prime Rate Loans] having an Interest Period of
[__________].
The principal amount to be so [converted/continued] is $_______________
[The undersigned hereby certifies that the requirements of Section 2.01(c)
have been satisfied with respect to this conversion.]
-2-
The Borrower has caused this Notice to be executed and delivered by
its duly authorized signatory this___day of______________, 20__.
ORMESA LLC
By: ORMAT FUNDING CORP.,
its Sole Member and Control Manager
By:
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Name:
Title:
Dates Referenced Herein and Documents Incorporated by Reference
