COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT

EXHIBIT 10.11

EXECUTION VERSION

COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT

Dated as of March 29, 2007

among

PLUM POINT ENERGY ASSOCIATES, LLC,

as the Borrower,

PPEA HOLDING COMPANY, LLC,

as Pledgor,

THE ROYAL BANK OF SCOTLAND PLC,

as Administrative Agent,

THE BANK OF NEW YORK,

as Collateral Agent,

AMBAC ASSURANCE CORPORATION,

as Loan Insurer

and

EACH OF THE OTHER PARTIES HERETO FROM TIME TO TIME

TABLE OF CONTENTS

 

 

 

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This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT is dated as of March 29, 2007, and is entered into by and among PLUM POINT ENERGY ASSOCIATES, LLC, a Delaware limited liability company (the “ Borrower ”), PPEA HOLDING COMPANY, LLC, a Delaware limited liability company (the “ Pledgor ”), THE BANK OF NEW YORK, in its capacity as collateral agent for the Secured Parties (as defined below) (the “ Collateral Agent ”), THE ROYAL BANK OF SCOTLAND PLC, in its capacity as Administrative Agent (as defined below), AMBAC ASSURANCE CORPORATION, in its capacity as Loan Insurer (as defined below), and EACH OF THE OTHER PERSONS (AS DEFINED BELOW) PARTY HERETO FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS HEREOF. Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

RECITALS

(1) The Borrower has an undivided interest in an approximately 665 MW coal- fired power generation plant to be located near Osceola, Arkansas (the “ Project ”).

(2) The Borrower, the lenders party thereto from time to time (collectively, the “ Construction Lenders ”), The Royal Bank of Scotland plc, in its capacity as administrative agent for the Construction Lenders (the “ Administrative Agent ”), The Royal Bank of Scotland plc, in its capacity as issuer of letters of credit, RBS Securities Corporation, in its capacity as sole lead arranger and sole bookrunner (in such capacities, the “ Lead Arranger ”), the Collateral Agent and the other parties thereto from time to time have entered into that certain Credit Agreement, dated as of the date hereof (the “ Credit Agreement ”).

(3) The Borrower may incur Additional Senior Debt after the date of this Agreement.

(4) The Borrower will enter into certain interest rate protection agreements after the date of this Agreement, and the Borrower may secure its obligations under certain of such agreements with a first priority lien on the Collateral.

(5) Certain of the Borrower’s obligations under the Credit Agreement, the Secured Interest Rate Protection Agreements and the Secured Funded Debt Documents will be insured and guaranteed by the Loan Insurer, and the Borrower’s reimbursement and other obligations to the Loan Insurer will be secured on a first priority basis by Liens on the Collateral pursuant to the terms of the Collateral Documents.

(6) The obligations of the Borrower under the Credit Agreement, the Secured Interest Rate Protection Agreements and the Secured Funded Debt Documents will be secured on a first priority basis by Liens on the Collateral pursuant to the terms of the Collateral Documents.

(7) The Transaction Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral and certain other matters.

(8) In order to induce the Secured Parties to enter into the transactions contemplated by the Transaction Documents, each of the parties hereto has agreed to the agency, intercreditor and other provisions set forth in this Agreement.

AGREEMENT

In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

SECTION 1. Definitions .

1.1 Defined Terms . Any terms used herein without definition shall have the meaning ascribed thereto in the Collateral Documents. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the term defined):

“ Accession Agreement ” means an Accession Agreement substantially in the form attached hereto as Exhibit A.

“ Additional Senior Debt ” means Debt incurred by the Borrower after the date hereof which is permitted by all of the Transaction Documents and, pursuant to the terms thereof, the Borrower’s obligations to the lenders, tax-exempt bondholders, agents, trustee, issuing bank and other creditors of the Borrower thereunder are permitted to be secured by a first-priority Lien on the Collateral.

“ Advance ” means (without duplication) (a) a loan (including any Construction Loans, Backstop LC Loans, Revolving Credit Loans and Term Loans under and as defined in the Credit Agreement) or other funded debt obligation made by the Construction Lenders under the Credit Agreement and/or the New Lenders under any other Secured Funded Debt Document and/or (b) an obligation of the Lenders under the Credit Agreement or the New Lenders under any other Secured Funded Debt Document to reimburse a LC Issuer for a drawing under a Letter of Credit, as the context may require.

“ Affiliate ” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Agent ” means each of the Administrative Agent, the Collateral Agent, the Depositary Agent, each LC Issuer, the Lead Arranger, the Loan Insurer, and/or each agent, trustee and/or issuing bank under any Secured Funded Debt Document, as the context may require.

“ Asset Sale ” means a sale, lease (as lessor), sale and leaseback, assignment, conveyance, exclusive license (as licensor), transfer or other disposition to, or any exchange of Property with, any Person, in one transaction or a series of transactions, of part of the Borrower’s Properties, whether now owned or hereafter acquired, leased or licensed, to the extent such sale, lease, sale and leaseback, assignment, conveyance, license, transfer or other disposition is permitted under the terms of all of the Transaction Documents.

 

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“ Available Amount ” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

“ Bankruptcy Code ” means Title 11 of the United States Code entitled “ Bankruptcy ”, as now and hereafter in effect, or any successor statute.

“ Bankruptcy Event ” shall be deemed to occur, with respect to any Person, if that person shall institute a voluntary case seeking liquidation or reorganization under the Bankruptcy Law, or shall consent to the institution of an involuntary case thereunder against it; or such Person shall file a petition or shall otherwise institute any similar proceeding under any other applicable Federal or state law, or shall consent thereto; or such Person shall apply for the appointment, or by consent or acquiescence there shall be an appointment, of a receiver, liquidator, sequestrator, trustee or other officer or custodian with similar powers for itself or any substantial part of its property or assets; or such Person shall make an assignment for the benefit of its creditors; or such Person shall become insolvent, or admit in writing its inability or unwillingness to pay its debts generally as they become due; or if an involuntary case shall be commenced seeking liquidation or reorganization of such Person under the Bankruptcy Law or any similar proceedings shall be commenced against such Person under any other applicable Federal or state law and (i) the petition commencing the involuntary case is not timely controverted, (ii) the petition commencing the involuntary case is not dismissed within sixty (60) days of its filing, (iii) an interim trustee is appointed to take possession of all or a portion of the property, and/or to operate all or any part of the business, of such Person and such appointment is not vacated within sixty (60) days, or (iv) an order for relief shall have been issued or entered therein; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee or other officer having similar powers, of such Person or all or a part of its property shall have been entered; or any other similar relief shall be granted against such Person under any applicable federal or state law.

“ Bankruptcy Law ” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.

“ Borrower ” has the meaning specified in the preamble hereto.

“ Breakage Costs ” means, with respect to any Advance, the loss, cost and expense attributable to (a) the prepayment of the principal amount of such Advance other than on the last day of the applicable interest period for such Advance or (b) the revocation by the Borrower of any notice of borrowing or notice of issuance submitted pursuant to the Credit Agreement or any other Secured Funded Debt Document, as applicable, after the applicable minimum period for the submission of such notice of borrowing or notice of issuance, as applicable, specified therein or the failure of the conditions precedent to be met after delivery of any such notice of borrowing or notice of issuance and, shall in any event include any amount payable pursuant to Section 2.16 of the Credit Agreement.

 

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“ Business Day ” means any day other than a Saturday or Sunday or other day on which banks in New York, New York or in the State of Arkansas are authorized or required by law or executive order to remain closed.

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“ Cash ” means money, currency or a credit balance in any demand account or deposit account.

“ Claims ” means any and all actions, suits, penalties, claims and demands and reasonable out-of-pocket liabilities, losses, costs and expenses (including reasonable and documented attorney’s fees and expenses) of any nature whatsoever.

“ Closing Date ” means March 29, 2007.

“ Co-Participants ” means ETEC, MJMEUC, MEAM and Empire.

“ Collateral ” means the Equity Interests in and all Property of the Borrower (other than any Property which is specifically excluded from the Collateral pursuant to the Collateral Documents, including, from and after the disposition thereof, any Excluded Collateral), now owned or hereinafter acquired.

“ Collateral Documents ” means the Mortgage, the Pledge Agreement, the Security Agreement, this Agreement, the Depositary Agreement, each Consent, any fixture filings, financing statements, or other similar documents filed, recorded or delivered in connection with the foregoing, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Secured Obligations or under which rights or remedies with respect to such Liens are governed.

“ Commitments ” means the commitments of the Construction Lenders and the New Lenders to make Advances, to fund, issue and take participation interests in Letters of Credit, and/or to make other extensions of credit to the Borrower, as more particularly provided for in the Credit Agreement or the applicable Secured Funded Debt Document.

“ Consent ” means each Consent and Agreement entered into on or prior to the Closing Date (including any “acknowledgment letter” delivered by the applicable counterparties on or before the Closing Date with respect to any Consent and Agreements entered into prior to the Closing Date) or from time to time thereafter among the applicable counterparty, the Borrower and the Collateral Agent (for the benefit of the Secured Parties).

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “ Controlling ” and “ Controlled ” and “ under common control with ” shall have meanings correlative thereto.

 

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“ Controlling Parties ” means (a) in the case of the Credit Agreement, (i) until the Credit Agreement has been Refinanced in full, the “Controlling Party” under and as defined in the Credit Agreement and (ii) if the Credit Agreement has been Refinanced in full and the Loan Insurer is not guaranteeing or insuring any other Insured Debt, the administrative agent under any successor credit facility (subject to the requirements thereunder regarding majority or supermajority lender voting) and (b) in the case of any other Insured Debt, the “Controlling Party”, “Directing Party” or analogous entity in respect of such other Insured Debt.

“ Debt ” of any Person at any date means, 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 Person);

(b) notes payable and drafts accepted by such Person representing extensions of credit whether or not representing obligations for borrowed money;

(c) any obligation owed by such Person for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is due more than six months from the date of incurrence of the obligation in respect thereof;

(d) the face amount of any letter of credit or similar instrument issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings;

(e) the direct or indirect Guarantee, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another (provided that such obligation of such person shall be “Debt” hereunder only if and to the extent that the assurance such Person is providing to such obligee is in respect of an obligation that otherwise constitutes “Debt” hereunder);

(f) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged or the holders thereof will be protected (in whole or in part) against loss in respect thereof ( provided that such obligation of such Person shall be “Debt” hereunder only if and to the extent that the assurance such Person is providing to such obligee is in respect of an obligation that otherwise constitutes “Debt” hereunder);

(g) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital

 

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contributions or otherwise) or (ii) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (i)  or (ii)  of this clause (g) , the primary purpose or intent thereof is as described in clause (f)  above ( provided that such liability of such Person shall be “Debt” hereunder only if and to the extent that the related obligation otherwise constitutes “Debt” hereunder);

(h) all ordinary course trade payables which are more than 90 days overdue;

(i) all obligations of such person in respect of any exchange traded or over the counter derivative transaction or any interest rate protection or commodity hedging transaction, including any transaction under any Hedging Agreement (including any Interest Rate Protection Agreement), whether entered into for hedging or speculative purposes; and

(j) Capital Lease Obligations.

“ Debt Service Reserve ” means any Permitted Investments deposited into a Debt Service Reserve Account as contemplated by the Depositary Agreement.

“ Debt Service Reserve Account ” has the meaning assigned to such term in the Depositary Agreement.

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would constitute an Event of Default.

“ Depositary Agent ” means The Bank of New York, a New York banking corporation, not in its individual capacity but solely as depositary agent, bank and securities intermediary under the Depositary Agreement.

“ Depositary Agreement ” means the Depositary Agreement, dated as of the date hereof, among the Borrower, the Depositary Agent, the Administrative Agent and the Collateral Agent.

“ DIP Financing ” has the meaning specified in Section 6.1 .

“ direction of the Required First Lien Secured Parties ” means any instruction or direction given to the Collateral Agent in accordance with the terms of this Agreement (including Section 9.4 hereof and as contemplated by the definition of Required First Lien Secured Parties) to take or refrain from taking any action hereunder or under any other Collateral Document. Each such instruction or direction shall be accompanied by a certificate from each Secured Debt Representative certifying the dollar amount that such Secured Debt Representative (on behalf of its applicable Secured Parties) is entitled to vote pursuant to the applicable terms and conditions hereof. The Collateral Agent shall be entitled to conclusively rely on the accuracy of each such certificate of each Secured Debt Representative and the Collateral Agent shall provide a copy of each such certificate to the other Secured Debt Representatives.

“ Discharge Date ” means the date on which:

(a) payment in full in cash of (i) the outstanding principal amount of the Advances, (ii) unreimbursed amounts with respect to any Letter of Credit issued under the Credit Agreement or the other Secured Funded Debt Documents and (iii) Interest Expense (including interest accruing (or which would, absent the commencement of an Insolvency or Liquidation Proceeding, accrue) on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding) has been made under the Transaction Documents;

 

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(b) the termination or expiration of all (i) Commitments, (ii) Secured Interest Rate Protection Agreements and (iii) Secured Fuel Supply Agreements has occurred;

(c) cancellation, termination or cash collateralization at 102.5% of the Available Amount thereof (in a manner reasonably satisfactory to the applicable LC Bank and the applicable Secured Debt Representative or, if such Letters of Credit are Insured Debt, the Controlling Party) of all Letters of Credit issued and outstanding under the Credit Agreement or the other Secured Funded Debt Documents has occurred; and

(d) payment in full in cash of all other Secured Obligations that are then due and payable or otherwise accrued has been made (or provision has been made for the payment and discharge in full of such other Secured Obligations in accordance with the terms and conditions of the applicable Secured Funded Debt Documents).

“ Early Termination Event ” means, with respect to any Secured Fuel Supply Agreement or any Secured Interest Rate Protection Agreement, the occurrence of any “ Early Termination Event ” or the designation of an “ Early Termination Date ” (however defined) or any event of default (howsoever defined) under such Secured Fuel Supply Agreement or such Secured Interest Rate Protection Agreement (as the case may be) which results in the termination of such Secured Fuel Supply Agreement or such Secured Interest Rate Protection Agreement (as the case may be).

“ Eligible Fuel Supply Agreement Amount ” means, as of any date of determination, the amounts which the Borrower owes to the applicable Secured Fuel Supply Agreement Counterparty under such Secured Fuel Supply Agreement in respect of coal actually delivered to the Project under such Secured Fuel Supply Agreement (and not, for the avoidance of doubt, any termination payments, mark-to-market payments or consequential, special, punitive, liquidated or indirect damage payments) as of such date of determination.

“ Eligible Swap Amount ” means, as of any date of determination, the amount of the Termination Payments (if any) due and owing to the applicable Interest Rate Hedge Provider as of such of date of determination.

“ Empire ” means The Empire District Electric Company, a Kansas corporation.

“ Empire PPA ” means the Power Purchase Agreement, dated as of March 3, 2006, between the Borrower and Empire.

 

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“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any person, or any obligations convertible into or exchangeable for, or giving any person a right, option or warrant to acquire, such equity interests or such convertible or exchangeable obligations.

“ ETEC ” means East Texas Electric Cooperative, Inc., a generation and transmission electric cooperative existing under the laws of the State of Texas.

“ Event of Default ” means the occurrence of (a) any “Event of Default” under and as defined in the Credit Agreement or any other Collateral Document, (b) any “Event of Default”, “Early Termination Event” or “Additional Termination Event”, under and as defined in the Secured Interest Rate Protection Agreement, (c) any similar term describing an event of default or early termination event under and however defined in any Secured Interest Rate Protection Agreement or (d) any similar term describing an event of default under any other Transaction Document.

“ Excluded Collateral ” means any of the Borrower’s Properties set forth on Schedule 1.01(a) hereto.

“ FERC ” means the Federal Energy Regulatory Commission and its successors.

“ GAAP ” means generally accepted accounting principles in the United States.

“ Governmental Authority ” means the government of the United States of America or any other nation, any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Governmental Rule ” means, with respect to any Person, any law, rule, regulation, ordinance, order, code, treaty, judgment, decree, directive, guideline, policy or similar form of decision of any Governmental Authority binding on such Person.

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of (a) the guarantor or (b) another Person (including any bank under a letter of credit) to induce the creation of which the guarantor has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation, contingent or otherwise, of the guarantor, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or other obligation of the payment of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, (iv) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt

 

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or obligation or (v) to otherwise assure or hold harmless the owner of such Debt or other obligation against loss in respect thereof; provided , however , that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.

“ Hedging Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, fuel or other commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided , however , that no phantom stock or similar plan providing for payments and on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any Affiliate of the Borrower shall be a Hedging Agreement.

“ Indemnified Person ” has the meaning assigned to such term in Section 7.11(a).

“ Independent Engineer ” means Stone & Webster Management Consultants, Inc., or its successor appointed pursuant to the Credit Agreement.

“ Insolvency or Liquidation Proceeding ” means:

(a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Loan Party;

(b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Loan Party or with respect to a material portion of their respective assets;

(c) any liquidation, dissolution, reorganization or winding up of any Loan Party whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

(d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Loan Party.

“ Insurance Policies ” has the meaning assigned to such term in the Depositary Agreement.

“ Insured Debt ” has the meaning assigned to such term in Section 9.4(d).

“ Interest Expense ” means, for any period, cash interest expense (including default interest) of the Borrower for such period (including all commissions, discounts and other fees and charges owed by the Borrower with respect to letters of credit and bankers’ acceptance financing) under any of the Secured Funded Debt Documents.

“ Interest Rate Hedge Provider ” means any Person providing an Interest Rate Protection Agreement; provided , that such Person’s long-term unsecured debt is rated at least

 

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“AA-” by S&P and “Aa3” by Moody’s at the time such Person enters into an Interest Rate Protection Agreement (including the applicable confirmation thereunder) with the Borrower.

“ LC Issuer ” means (a) The Royal Bank of Scotland plc, in its capacity as issuer of Letters of Credit under the Credit Agreement and (b) any other issuer of Letters of Credit under any of the Secured Funded Debt Documents.

“ Lenders Exposure Amount ” means, with respect to the Credit Agreement and the other Secured Funded Debt Documents, at any time, an amount equal to (without duplication) (a) the sum of the aggregate principal amount of the Advances outstanding under the Credit Agreement or such other Secured Funded Debt Document at such time, plus (b) the sum of the aggregate Available Amount under all Letters of Credit at such time plus (c) the sum of the aggregate amount of undrawn (and then uncancelled) Commitments under the Credit Agreement or such other Secured Funded Debt Document at such time ( provided that for purposes of this clause (c) , if the applicable Secured Funded Debt Document contemplates Advances made under one class of Commitments to convert to Advances made under another class Commitments (e.g., Construction Loans under the Credit Agreement being converted into Term Loans under the Credit Agreement), then the Commitments under such other class shall be disregarded for purposes of calculating Lenders Exposure Amount (e.g., the Term Loan Commitments under the Credit Agreement shall be disregarded prior to Term-Conversion).

“ Letters of Credit ” means each of the letters of credit issued by the LC Issuer under any of the Secured Funded Debt Documents (including the Letters of Credit under and as defined in the Credit Agreement).

“ Lien ” means, with respect to any Property, (a) any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance, collateral assignment, charge or security interest in, on or of such Property, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such Property and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Loan Insurance Agreement ” means the Loan Insurance Agreement, dated as of the date hereof, between the Borrower and the Loan Insurer.

“ Loan Insurance Policy ” means the Financial Guaranty Insurance Policy No. SF0881BE, dated as of the date hereof, made by the Loan Insurer to the Administrative Agent, for the benefit of the Construction Lenders, as beneficiary.

“ Loan Insurer ” means Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company, in its capacity as the issuer of the Insurance Policies.

“ Loan Insurer Payments ” shall have the meaning assigned to such term in the Loan Insurance Agreement.

“ Loan Party ” means each of the Borrower, the Pledgor and any other Person which provides collateral security for the benefit of the Secured Parties.

 

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“ Major Maintenance ” means all expenditures by the Borrower for major maintenance of the Project in accordance with Prudent Utility Practices, the Project Contracts and vendor and supplier requirements and recommendations (including overhauls and replacements of major components of the Project). For the avoidance of doubt, “Major Maintenance” excludes any ordinary course expenditures by the Borrower related to the operation and maintenance of the Project.

“ Management Fee ” means an operating period management fee payable to the Project Manager in accordance with Section 6.2.2 of the Project Management Agreement in an aggregate amount not to exceed the Borrower’s portion of such operating period management fee in accordance with Section 6.2.2 of the Project Management Agreement (as in effect on the date hereof), which Management Fee shall at all times be subordinate to the Secured Obligations. For the avoidance of doubt, the Management Fee shall not include (a) any costs or expenses reimbursable to the Project Manager under Section 6.1 of the Project Management Agreement (as in effect on the date hereof) or (b) any construction period management fee payable to the Project Manager in accordance with Section 6.2.1 of the Project Management Agreement (as in effect on the date hereof).

“ Management Services Agreement ” means the Management Services Agreement, dated as of March 29, 2007, between Plum Point Management Company, LLC and the Borrower.

“ MEAM ” means Municipal Energy Agency of Mississippi, a public body corporate and politic and a joint agency organized under the laws of Mississippi.

“ MJMEUC ” means Missouri Joint Municipal Electric Utility Commission, a body public and corporate of the State of Missouri.

“ MJMEUC PPA ” means the Power Purchase Agreement, dated as of December 4, 2006, between the Borrower and MJMEUC.

“ Mortgage ” means each deed of trust, real property debenture, mortgage, leasehold mortgage, assignment of rents, and similar document made by the Borrower in favor of or for the benefit of the Collateral Agent (on behalf of the Secured Parties) on the Closing Date or from time to time thereafter pursuant to any of the Transaction Documents.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Net Cash Proceeds ” means (a) with respect to any Asset Sale or Recovery Event, the proceeds thereof in the form of cash and cash equivalents (including any such proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (a) selling expenses (including reasonable and customary broker’s fees or commissions, legal fees, transfer and similar Taxes incurred by the Borrower in connection therewith and the Borrower’s good faith estimate of income Taxes paid or payable in connection with such sale, after taking into account any available tax credits or deductions and any tax sharing arrangements), (b) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Asset Sale ( provided that, to the extent and at the time any such amounts are released from

 

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such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Debt for borrowed money (other than the Secured Obligations) which is secured by the asset sold in such Asset Sale and which is required to be repaid with such proceeds (other than any such Debt assumed by the purchaser of such asset).

“ New Lenders ” means the lenders, noteholders, tax-exempt bondholders and/or other creditors who make Advances to the Borrower or otherwise extend Commitments to the Borrower under any Secured Funded Debt Document (other than the Credit Agreement) and their respective Secured Debt Representatives.

“ O&M Costs ” means all actual cash maintenance and operation costs incurred and paid for the Project on account of the Borrower’s interest in the Project (or any other Co-Participant’s interest that the Borrower has chosen to fund in accordance with the Participation Agreement) in any particular calendar or fiscal year or period to which said term is applicable, including payments made by the Borrower:

(1) for fuel and/or guaranteed heat rate payments made by the Borrower under the Power Purchase Agreements;

(2) under the PILOT Agreements;

(3) under Permitted Rail Car Leases;

(4) for coal, additives or chemicals and transportation costs related thereto;

(5) for its Taxes (other than those based upon the Borrower’s income);

(6) for insurance, consumables, spare parts, equipment, material, repair and maintenance services;

(7) lease payments;

(8) under the Permitted O&M Agreement;

(9) under Additional Project Contracts (as defined in the Credit Agreement);

(10) under the Management Services Agreement;

(11) under any parts or combustion turbine services agreement;

(12) for legal fees and consulting fees and expenses paid by the Borrower in connection with the financing, management, maintenance or operation of the Project;

 

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(13) Loan Insurer Payments and interest payments contemplated by Section 2.01 of the Loan Insurance Agreement;

(14) fees paid in connection with obtaining, transferring, maintaining or amending any permits;

(15) investments by the Borrower in any Permitted Project Company, provided that (i) such investments are made in accordance with the terms of the Transaction Documents and (ii) the proceeds of such investments are applied to pay for items which would be “O&M Costs” if the Borrower purchased such items; and

(16) reasonable general and administrative expenses, including all expenditures incurred to prevent the occurrence of any default under any Transaction Document or Project Document or any Default or Event of Default, and/or to keep the Collateral free and clear of all Liens (other than Permitted Liens).

Notwithstanding anything to the contrary herein, O&M Costs shall not include (i) Major Maintenance expenditures, (ii) Restricted Payments of any kind to the Borrower or its Affiliates, (iii) non-cash charges, including depreciation or obsolescence charges or reserves therefore, amortization of intangibles or other bookkeeping entries of a similar nature, (iv) Capital Expenditures, (v) payments for restoration or repair of the Project from the Loss Proceeds Account in accordance with the terms of this Agreement and the Depositary Agreement, (vi) payments in respect of Debt of the Borrower (other than Debt of the type referred to in clauses (h) and (j) of the definition thereof), (vii) the Management Fee and (viii) the Borrower’s income taxes.

“ Other Credit Support ” means any (a) letter of credit, (b) guaranty (other than any such guaranty issued by the Borrower) or (c) cash collateral issued or pledged, as applicable, in favor of any Secured Party to support the obligations of the Borrower under the applicable Transaction Document.

“ Other Credit Support Exception ” means (a) with respect to any Other Credit Support constituting a guaranty, the guarantor thereunder fails to make payment after receipt of a demand for payment thereunder made in accordance with the terms of such guaranty, within three Business Days of its receipt of such demand and (b) with respect to any Other Credit Support constituting a letter of credit, the occurrence and continuance of any of the following: (i) a restraint or injunction shall be threatened or pending against the issuer of such letter of credit or Secured Party that is the beneficiary thereof that restrains or limits or seek to restrain or limit a draw upon, or the application of proceeds from, such letter of credit prior to, concurrent with, or following such draw or application, (ii) the issuing bank of such letter of credit shall be subject to a bankruptcy, or (iii) the issuing bank shall have disavowed, repudiated or dishonored its obligations under such letter of credit after, if applicable, delivery to such issuing bank of a conforming draw request thereunder.

“ Participation Agreement ” shall mean that certain Participation Agreement, dated as of March 3, 2006 by and between the Borrower, ETEC, MJMEUC, Empire and MEAM (pursuant to the Joinder to Participation Agreement, dated as of June 8, 2006).

 

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“ Permitted Investments ” has the meaning assigned to such term in the Depositary Agreement.

“ Permitted Liens ” means any Lien (a) on the Collateral or (b) which the Borrower may incur or suffer to exist on any of its Properties, in each case to the extent permitted by all of the Transaction Documents.

“ Permitted O&M Agreement ” means any operation and maintenance agreement with a third party contractor or an Affiliate of Dynegy Inc. to provide day-to-day operation and maintenance services to the Project which contains terms and conditions reasonably acceptable to the Controlling Party, in consultation with the Independent Engineer.

“ Permitted Project Company ” means any subsidiary of the Borrower formed in accordance with the Participation Agreement and in accordance with the terms of all the Transaction Documents.

“ Permitted Rail Car Leases ” means any lease agreement for the supply of railcars for fuel supply which contains terms and conditions reasonably acceptable to the Controlling Party, in consultation with the Independent Engineer.

“ Permitted Tax-Exempt Bond Refinancing ” means the Refinancing of the Tax-Exempt Bonds, as contemplated by the definition of “Permitted Tax-Exempt Bond Refinancing” in the Credit Agreement.

“ Person ” means any natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity.

“ PILOT Agreements ” means (i) the PILOT Lease, (ii) that certain PILOT Bond Trust Indenture, dated as of March 1, 2006, by and between the City and the PILOT Bond Trustee, (iii) the HOPA Agreements, (iv) the PILOT, (v) the Guaranty Agreement, dated as of March 1, 2006, made by the Borrower in favor of the PILOT Bond Trustee, (vi) the Empire Participating Co-Tenant Agreement, (vii) the Empire Asset Purchase Agreement, (viii) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of Empire, (ix) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of ETEC, (x) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of MJMEUC, (xi) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of MEAM, and (xii) any other agreement related thereto.

“ Pledge Agreement ” means the Pledge and Security Agreement, dated as of the date hereof, between the Pledgor and the Collateral Agent (for the benefit of the Secured Parties) in respect of the pledge by the Pledgor of the membership interests in the Borrower.

“ Power Purchase Agreements ” means the Empire PPA, the MJMEUC PPA, the SMEPA PPA and the SWECI PPA.

“ Project Contracts ” has the meaning assigned to such term in the Credit Agreement.

 

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“ Project Management Agreement ” means that certain Project Management Agreement, dated as of March 3, 2006, among the Borrower, the Co-Participants and the Project Manager.

“ Project Manager ” means LSP Services Plum Point, LLC, in its role as project manager pursuant to the Project Management Agreement.

“ Property ” means any right or interest in or to assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Prudent Utility Practices ” means, as to the Project, those practices, methods, equipment, specifications and standards of safety and performance, as the same may change from time to time, as are commonly used by electric generation stations in the United States of a type and size similar to the Project, including as to fuel type and configuration of the Project, as good, safe and prudent engineering practices in connection with operation, maintenance, repair, improvement and use of electrical and other equipment, facilities and improvements of such electrical station, with commensurate standards of safety, performance, dependability, efficiency and economy. The term “Prudent Utility Practices” does not necessarily mean one particular practice, method, equipment specification or standard in all cases, but is instead intended to encompass a broad range of acceptable practices, methods, equipment specifications and standards.

“ Recovery Event ” means any settlement of or payment in respect of any property or casualty insurance claim or any taking under power of eminent domain or by condemnation or similar proceeding of or relating to any property or asset of the Borrower, in each case, if not used to repair or rebuild the Project in accordance with the Participation Agreement.

“ Refinanced ” means, in respect of any Debt, or the agreement or contract pursuant to which such Debt is incurred, (a) such Debt (or more than 20% of the principal amount thereof) or related agreement or contract is extended, renewed, defeased, refinanced, replaced, refunded or repaid, and (b) any other Debt issued in exchange or replacement for or to refinance such Debt (or more than 20% of the principal amount thereof), in whole or in part, whether with the same or different lenders, arrangers and/or agents and whether with a larger or smaller aggregate principal amount and/or a longer or shorter maturity, in each case to the extent permitted under the terms of the Transaction Documents.

“ Required First Lien Secured Parties ” means, at any time and calculated in accordance with the terms of this Agreement (including Section 9.4 hereof), Secured Parties owed or holding more than 50% of the sum of (without duplication):

(a) the Lenders Exposure Amount under the Credit Agreement and the other Secured Funded Debt Documents at such time;

(b) from and after the date on which an Early Termination Event under any Secured Interest Rate Protection Agreement has occurred, the Eligible Swap Amount thereunder at such time;

 

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(c) from and after the date on which an Early Termination Event under any Secured Fuel Supply Agreement has occurred, the Eligible Fuel Supply Agreement Amount at such time; and

(d) the amounts owed to the Loan Insurer under the Loan Insurance Agreement at such time.

“ Responsible Officer ” of any Person, means, any executive officer, chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement and the other Transaction Documents; provided that, with respect to the Collateral Agent, such term shall mean the Person in the corporate trust offices of the Collateral Agent responsible for the administration of this Agreement.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, defeasance, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower, in any case, excluding (a) the Developer Conversion Fee referred to in the Depositary Agreement and (b) to the extent contemplated by Section 3.8(c) of the Depositary Agreement any payments in respect of the Empire Buy-In (as defined in the Depositary Agreement) after application of the net proceeds thereof pursuant to Section 3.11 of the Depositary Agreement.

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“ Secured Funded Debt Documents ” means (a) the Credit Agreement and (b) any other agreement, document, indenture or instrument providing for or evidencing the obligations of the Borrower to any of the New Lenders in respect of Advances made by such New Lenders to the Borrower, Commitments made by such New Lenders to the Borrower or other extensions of credit extended by such New Lenders to the Borrower, to the extent such are effective at the relevant time. For the avoidance of doubt, the definition of “ Secured Funded Debt Documents ” does not include the Collateral Documents, the Loan Insurance Agreement, the Secured Fuel Supply Agreement or the Secured Interest Rate Protection Agreements.

“ Secured Debt Representative ” means (a) with respect to the Credit Agreement, the Administrative Agent (subject to Section 9.4(d)), (b) with respect to any other Secured Funded Debt Document, the agent or trustee for the New Lenders thereunder (as designated in the applicable Accession Agreement) (subject to Section 9.4(d)), (c) with respect to any Secured Interest Rate Protection Agreement, the Interest Rate Hedge Provider party thereto, (d) with respect to any Secured Fuel Supply Agreement, the Secured Fuel Supply Agreement Counterparty party thereto and (e) with respect to the Loan Insurance Agreement, the Loan Insurer.

 

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“ Secured Fuel Supply Agreement Counterparties ” means each counterparty to a Secured Fuel Supply Agreement which is bound by this Agreement.

“ Secured Fuel Supply Agreements ” means any coal and other fuel supply agreements entered into by the Borrower and relating to the Project and entered into in accordance with the terms of the Transaction Documents, provided that the Secured Fuel Supply Agreement Counterparty has become bound by this Agreement pursuant to Section 5.4 .

“ Secured Interest Rate Protection Agreement ” means any Interest Rate Protection Agreement which has been entered into by the Borrower and an Interest Rate Hedge Provider.

“ Secured Obligations ” means, collectively, without duplication: (a) all of the Borrower’s financial liabilities and obligations, of whatsoever nature and however evidenced (including, but not limited to, principal, interest, premium, fees, reimbursement obligations, penalties, termination payments, settlement amounts, amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Law, indemnities and legal and other expenses, whether due after acceleration, termination or otherwise) to the Secured Parties in their capacity as such under the Transaction Documents or any other agreement, document or instrument evidencing, securing or relating to such financial liabilities or obligations, in each case, direct or indirect, primary or secondary, fixed or contingent, now or hereafter arising out of or relating to any such agreements; (b) any and all sums advanced by any of the Secured Parties in order to preserve the Collateral or preserve its security interest in the Collateral; and (c) in the event of any proceeding for the collection or enforcement of the obligations described in clauses (a)  and (b)  above, after an Event of Default has occurred and is continuing and unwaived, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by any of the Secured Parties of its rights under the Collateral Documents, together with reasonable attorneys’ fees and court costs. For the avoidance of doubt, (i) with respect to each Secured Fuel Supply Agreement, the Secured Obligations shall only include the Eligible Fuel Supply Agreement Amount for such Secured Fuel Supply Agreement and (ii) with respect to the Tax-Exempt Bonds, prior to the occurrence of a Permitted Tax-Exempt Bond Refinancing, the obligations of the Borrower under the Tax-Exempt Bonds and related documents and agreement shall not be Secured Obligations.

“ Secured Parties ” means the Construction Lenders, the New Lenders, the Agents, the Interest Rate Hedge Providers, the Secured Fuel Supply Agreement Counterparties and the Loan Insurer and their respective Secured Debt Representatives.

“ Security Agreement ” means the Security Agreement, dated as of the date hereof, between the Borrower and the Collateral Agent.

“ SMEPA PPA ” means the Power Purchase Agreement, dated as of July 31, 2006, between the Borrower and SMEPA

“ SWECI PPA ” means the Amended and Restated Power Purchase Agreement, dated as of March 28, 2007, between the Borrower and SWECI.

 

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“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges, liabilities or withholdings imposed by any Governmental Authority and any and all interest and penalties related thereto.

“ Tax-Exempt Bonds ” means the tax-exempt bonds in an aggregate principal amount of $100,000,000 issued by the City of Osceola, Arkansas pursuant to the terms and conditions of that certain Trust Indenture, dated as of April 1, 2006, the proceeds of which were lent to the Borrower by the City pursuant to the terms and conditions of a loan agreement, dated as of April 1, 2006.

“ Term-Conversion ” has the meaning assigned to such term in the Credit Agreement.

“ Termination Payment ” means any amounts payable to or by the Borrower in connection with a termination (whether as a result of the occurrence of an event of default or other termination event) of any Secured Interest Rate Protection Agreement, together with any Interest Expense due and payable by the Borrower in connection with such amounts.

“ Transaction Documents ” means the Secured Interest Rate Protection Agreements, the Secured Fuel Supply Agreements, the Collateral Documents (including this Agreement), the Loan Insurance Agreement, the Secured Funded Debt Documents and any other related agreement.

“ UCC ” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided , however , in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of the security interest in any Collateral (as hereinafter defined) is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions related to such provisions.

 

1.2

Rules of Interpretation .

For all purposes of this Agreement and the other Collateral Documents, except as otherwise expressly provided or unless the context otherwise requires:

(a) all definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined;

(b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

(c) the expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein with respect to the Secured Obli