Exhibit 4.1.7
WAIVER AGREEMENT
Dated as of June 9, 2006
among
CALPINE CONSTRUCTION FINANCE COMPANY, L.P.
CCFC FINANCE CORP.
THE GUARANTORS NAMED HEREIN
and
WILMINGTON TRUST FSB,
as Trustee
Relating to the Indenture
Dated as of August 14, 2003
and
Amended as of September 18, 2003, January 14, 2004, March 5,
2004
and March 15, 2006
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WAIVER AGREEMENT
UNDER INDENTURE, dated as of June 9, 2006 (the
"Waiver Agreement"),
among Calpine Construction Finance Company, L.P., a
Delaware limited
partnership (the
"Company"),
CCFC Finance Corp., a
Delaware
corporation ("Finance
Corp."), the Guarantors and Wilmington Trust FSB, as
trustee (the "Trustee").
WHEREAS, the Company, Finance Corp., the Guarantors and the
Trustee
have executed
that certain Indenture, dated as of August 14, 2003, as
supplemented by that certain Supplemental Indenture, dated as of September 18,
2003, as further
supplemented by that
certain Second
Supplemental
Indenture,
dated as of January 14, 2004, as further supplemented by that certain Third
Supplemental
Indenture, dated as of
March 5, 2004, and as further supplemented
by that certain Fourth
Supplemental
Indenture, dated as of
March 15, 2006 (as
supplemented, the
"Indenture"),
in connection with the co-issuance by the
Company and Finance Corp. of certain Second Priority Senior Secured Floating
Rate Notes due 2011 (the "Notes");
WHEREAS, on December 20, 2005, Calpine Corporation ("Calpine") and
certain of
its controlled subsidiaries, including, among others, Calpine
Operating Services
Company, Inc. and Calpine Energy Services,
L.P. ("CES"),
filed a voluntary
proceeding for relief
under Chapter 11 of
the United States
Bankruptcy Code
with the United States Bankruptcy Court for the Southern
District of New York (the "Proceeding");
WHEREAS, CES, the Company and certain of the Company's
subsidiaries
are parties to the Index Based Gas Sale and Power Purchase
Agreement dated as of
August 14, 2003, as amended (the "PPA"), pursuant to which the
Company purchases
natural gas from CES
for its power
generating facilities,
and CES purchases
power generated by the facilities from the Company;
WHEREAS, on November 1, 2005, as permitted under the Indenture,
the
Company used net proceeds of approximately $212.0 million from the sale of
one
of its facilities
to make a prepayment
to CES for gas under
the PPA (the "Gas
Prepay Transaction");
WHEREAS, ordinarily
under the PPA, the cost of gas consumed by the
Company's facilities
is offset against the cost of power generated by the
facilities, with CES
paying the Company only the net amount due, such payments
generally being made on the 25th of each month for services
provided during
the
prior month; however, due to the Gas Prepay Transaction, CES was
obligated for a
period of time to pay the full cost for the power under the PPA,
without offset,
which resulted in larger than usual payments owing to the Company
under the PPA;
WHEREAS, CES failed to
timely make a number of payments owing to
the Company
under the PPA,
including in respect of gas deliveries during
February 2006, approximately $18.5 million due on March 27, 2006
(the "March PPA
Payment" );
WHEREAS, the
failure by CES to
timely make the March
PPA Payment
constitutes an Event
of Default under the
Indenture (the "March PPA Payment
Default");
WHEREAS, the Company
has failed to timely provide to the Holders a
financial report for the periods ended December 31, 2005 and March
31, 2006 (the
"Financial Reports")
as required
to be provided to them pursuant to Section
4.03(1) of the Indenture;
WHEREAS, the failure by the Company to timely provide the
Financial
Reports constitutes a
Default (the
"Reporting Default,"
and together with the
March PPA Payment Default, the "Specified Defaults");
WHEREAS, pursuant to a
consent solicitation,
commenced as of June
6, 2006 and
completed as of June 9, 2006 (the
"Consent Solicitation"), the
Company and Finance Corp. have requested that the Holders consent
to a waiver of
the Specified Defaults (the "Waiver");
WHEREAS, pursuant to
Sections 6.04 and 9.02 of the Indenture, the
Holders of at least a majority in aggregate principal amount of the Notes have
consented to the Waiver; and
WHEREAS, the Company and Finance Corp. have directed the Trustee
to
execute and deliver this Waiver Agreement in accordance with the terms of the
Indenture.
NOW THEREFORE, for and
in consideration of the premises and mutual
covenants herein contained, the Company, Finance Corp., the Guarantors and
the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms.
Unless the
context otherwise requires, capitalized terms used
herein that are not otherwise defined herein shall have the
meaning assigned to
such terms in the Indenture.
ARTICLE II
WAIVER OF SPECIFIED DEFAULTS
Section 2.1 Waiver.
(a) Upon the
satisfaction of the
conditions set forth
in Section
2.2 of this Waiver
Agreement, the
Holders, pursuant to Section 6.04 of the
Indenture, hereby
waive application of Sections 6.01(4) and 6.01(11) of the
Indenture solely to the extent applicable to any Specified Default,
such Waiver
being effective
on the first date that all of the conditions set forth in
Section 2.2 of this Waiver Agreement shall have been satisfied (the "Waiver
Effective Date").
(b) Except for the Waiver expressly set forth above in subsection
(a), the Holders reserve each and every right and remedy they may
have under the
Indenture and under
applicable
law with respect to any Default or Event of
Default.
Section 2.2 Conditions. The effectiveness of Section 2.1(a) of
this
Waiver Agreement is
subject to the
satisfaction of the
following conditions
precedent:
(a) Holders of at least a majority in aggregate principal amount
of
the Notes shall have consented to this Waiver, and the Company, Finance Corp.,
and the Guarantors
named as signatories hereto and
