Exhibit 10(gg)

 

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AMENDED AND RESTATED
COLLATERAL AGENCY AGREEMENT
 

 
Dated as of February 12, 2013
 

 
among
 

 
PPL IRONWOOD, LLC,
 
THE BANK OF NEW YORK MELLON,
as Trustee,
 
THE BANK OF NEW YORK MELLON,
as Collateral Agent,
 
and
 
THE BANK OF NEW YORK MELLON,
as Depositary Bank
 
 
 

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705 MW (Net) Gas-Fired Combined Cycle Electric Generating Facility
South Lebanon Township, Lebanon County, Pennsylvania
 
 

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TABLE OF CONTENTS
 
Page
 
ARTICLE I DEFINITIONS
2
         
SECTION 1.1.
Definitions
2
   
ARTICLE II SECURITY INTERESTS AND EXERCISE OF RIGHTS
6
         
SECTION 2.1.
Sharing; Priority of Security Interests
6
 
SECTION 2.2.
Subordinated Debt
7
 
SECTION 2.3.
Exercise of Rights Under Security Documents
7
 
SECTION 2.4.
Rights of Senior Parties
9
   
ARTICLE III ACCOUNTS
10
         
SECTION 3.1.
Establishment of Project Accounts
10
 
SECTION 3.2.
Investment of Funds in the Project Accounts
10
 
SECTION 3.3.
Valuation and Sale of Investments
11
 
SECTION 3.4.
Possession of Accounts; Liquidation
11
 
SECTION 3.5.
The Depositary Bank; Limited Company Rights
12
 
SECTION 3.6.
Advances
13
 
SECTION 3.7.
Collection of Project Revenues
14
 
SECTION 3.8.
Revenue Account
14
 
SECTION 3.9.
Operating and Maintenance Account
15
 
SECTION 3.10.
Debt Service Reserve Account
15
 
SECTION 3.11.
Major Maintenance Reserve Account
15
 
SECTION 3.12.
Distribution Account
15
 
SECTION 3.13.
Restoration Account
16
 
SECTION 3.14.
Fuel Conversion Volume Rebate Account
18
 
SECTION 3.15.
Subordinated Debt Account
18
   
ARTICLE IV APPLICATION OF CERTAIN PROCEEDS
18
         
SECTION 4.1.
Division of Foreclosure Proceeds
18
 
SECTION 4.2.
Application of Casualty Proceeds and Eminent Domain Proceeds
19
   
ARTICLE V COLLATERAL AGENT; DEPOSITARY BANK
20
         
SECTION 5.1.
Appointment and Duties of Collateral Agent and Depositary Bank
20
 
SECTION 5.2.
Rights of Collateral Agent
21
 
SECTION 5.3.
Lack of Reliance on the Collateral Agent
23
 
SECTION 5.4.
Indemnification
24
 
SECTION 5.5.
Resignation of the Collateral Agent or Depositary Bank
24
 
SECTION 5.6.
Removal of the Collateral Agent or Depositary Bank
26
 
SECTION 5.7.
Merger, Conversion, Consolidation or Succession to Business
26
 
SECTION 5.8.
Power of Attorney
26
   
ARTICLE VI REPRESENTATIONS AND WARRANTIES
27
         
SECTION 6.1.
Representations and Warranties
27
   
ARTICLE VII MISCELLANEOUS
29
         
SECTION 7.1.
Agreement for Benefit of Parties Hereto
29
 
SECTION 7.2.
No Warranties
29
 
SECTION 7.3.
Severability
29
 
SECTION 7.4.
Notices
29
 
SECTION 7.5.
Successors and Assigns
30
 
SECTION 7.6.
Counterparts
30
 
SECTION 7.7.
Governing Law
30
 
SECTION 7.8.
Impairments of Other Rights
30
 
SECTION 7.9.
Amendment: Waiver
31
 
SECTION 7.10.
Headings
31
 
SECTION 7.11.
Termination
31
 
SECTION 7.12.
Entire Agreement
31
 
SECTION 7.13.
Limitation of Liability
31
 
SECTION 7.14.
Replacement and/or Removal of Independent Engineer; Payment of Independent
Engineer
32
 
SECTION 7.15.
Third-Party Engineer Dispute Resolution
32

EXHIBITS
     
Exhibit 2.1
Form of Designation Letter
Exhibit 2.2
Terms of Subordination
Exhibit 2.3
Form of Senior Party Certificate
Exhibit 7.14
Third-Party Engineers

 
 

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AMENDED AND RESTATED
COLLATERAL AGENCY AGREEMENT
 
THIS AMENDED AND RESTATED COLLATERAL AGENCY AGREEMENT (this “Agreement”) is
dated as of February 12, 2013 by and among PPL IRONWOOD, LLC, a Delaware limited
liability company (formerly AES Ironwood, L.L.C.) (the “Company”), THE BANK OF
NEW YORK MELLON (as successor trustee to IBJ Whitehall Bank & Trust Company), as
Trustee (the “Trustee”), THE BANK OF NEW YORK MELLON (as successor collateral
agent to IBJ Whitehall Bank & Trust Company), as Collateral Agent (the
“Collateral Agent”), and THE BANK OF NEW YORK MELLON (as successor depositary
bank to IBJ Whitehall Bank & Trust Company), as Depositary Bank (the “Depositary
Bank”).
 
W I T N E S S E T H:
 
WHEREAS, the Company constructed and owns a gas-fired combined cycle electric
generating facility in South Lebanon Township, Lebanon County, Pennsylvania,
with a net design capacity of approximately 705 megawatts and related property
and facilities;
 
WHEREAS, the Company financed the construction and equipping of the Facility
primarily through the issuance of the Bonds, the net proceeds of which, were
received by the Company;
 
WHEREAS, the Company duly authorized the creation and issuance of the Bonds
pursuant to the Indenture;
 
WHEREAS, in connection with the authentication and delivery of the first Bonds
authenticated and delivered by the Trustee under the Indenture, the Company
delivered the DSR Letter of Credit and the CP Letter of Credit;
 
WHEREAS, all obligations of the Company under the Indenture are secured as set
forth in the Security Documents pursuant to which the Collateral Agent has been
granted a Security Interest in the Collateral;
 
WHEREAS, a Collateral Agency and Intercreditor Agreement (the “Original
Agreement”) among the Company, Dresdner Bank AG, New York Branch, in its
capacity as Agent for the banks under the DSR LOC Reimbursement Agreement,
Dresdner Bank AG, New York Branch, in its capacity as Agent for the banks under
the CP LOC Reimbursement Agreement, the Trustee, the Collateral Agent and the
Depositary Bank was executed as of June 1, 1999;
 
WHEREAS, (i) the DSR Letter of Credit was fully drawn on and is no longer
outstanding, and (ii) the CP Letter of Credit expired and is no longer
outstanding;
 
WHEREAS, the Construction Account established pursuant to Section 3.1 of the
Original Agreement has been closed because the Commercial Operation Date has
been achieved;
 
WHEREAS, Sections 2.4, 2.5, 5.1(e) and 7.9 of the Original Agreement provide
that the Original Agreement may be amended, modified or supplemented with the
consent and at the direction of the Required Senior Parties (as defined below);
 
WHEREAS, the consent of the Required Senior Parties was solicited and obtained
upon the terms and subject to the conditions set forth in the Prospectus of PPL
Energy Supply, LLC, dated February 6, 2013 (the “Prospectus”) and the related
letter of transmittal and consent;
 
WHEREAS, the Required Senior Parties have directed the Collateral Agent and the
Depositary Bank to exercise their respective rights under the Original Agreement
to amend and restate the Original Agreement by executing and delivering an
amended and restated Collateral Agency Agreement in the form attached to, and on
the terms and conditions set forth in, the Prospectus and pursuant to Sections
2.4, 2.5, 5.1(e) and 7.9 of the Original Agreement;
 
WHEREAS the Company desires to execute this Agreement embodying the
modifications of the Original Agreement made and approved as aforesaid;
 
WHEREAS the Board of Directors of the Company has authorized the Company to
enter into this Agreement for the purpose of embodying the modification of the
Original Agreement made and approved as aforesaid; and
 
WHEREAS the Company represents that all acts and things necessary have happened,
been done, and been performed, to make this Agreement valid and binding in
accordance with its terms.
 
NOW, THEREFORE, for and in consideration of the premises and of the covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, covenant and agree as follows:
 
 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.1.   Definitions.
 
The following terms shall have the meanings specified herein unless the context
otherwise requires. Capitalized terms not otherwise defined herein shall have
the meanings specified in the Indenture in the form of such terms as they exist
on the date hereof; provided, however, that defined terms from the Indenture
that have been added or amended subsequent to the date hereof shall have such
added or amended meanings herein upon compliance with the provisions of Section
5.1(e). For the purposes of this Agreement, the rules of construction set forth
in the Indenture shall apply as if such rules were set forth herein.
 
“Advances” has the meaning specified in Section 3.6.
 
“Authorized Representative” of any Person means the individual or individuals
authorized to act on behalf of such Person by the board of directors, management
committee, board of control or any other governing body of such Person as
designated from time to time in a certificate of such Person with specimen
signatures and delivered to the Collateral Agent and upon which the Collateral
Agent may conclusively rely.
 
“Available Accounts” means the Project Accounts other than the Debt Service
Reserve Account.
 
“Bond Payment Date” means February 28, May 31, August 31 and November 30 of each
year, which commenced on August 31, 1999, on which interest on and/or principal
of the Bonds shall be payable in accordance with the Indenture.
 
“Certificate as to Redemption” means the certificate filed by an Authorized
Representative of the Company in the case of an Event of Loss or an Event of
Eminent Domain in order to determine (i) whether the Facility can be rebuilt,
repaired or restored and (ii) the availability of Casualty Proceeds or Eminent
Domain Proceeds for such rebuilding, repairing or restoring.
 
“Claims” means with respect to any Person, any and all suits, sanctions, legal
proceedings, claims, assessments, judgments, damages, penalties, fines,
liabilities, demands, out-of-pocket costs, reasonable out-of-pocket expenses of
whatever kind (including reasonable attorneys’ fees and expenses) and losses
incurred or sustained by or against such Person.
 
“Collateral Agent” has the meaning specified in the preamble of this Agreement.
 
“Collateral Agent Claims” means all obligations of the Company, now or hereafter
existing, to pay fees, costs, expenses, liabilities or indemnities to the
Collateral Agent under the Collateral Agency Agreement.
 
“Combined Exposure” means, as of any date of calculation, the sum (calculated
without duplication) of the following, to the extent the same is held by or
represented by a Senior Party: (i) the aggregate principal amount of all
Outstanding Bonds; (ii) the aggregate principal amount of all outstanding
Permitted Indebtedness (other than the Bonds, Subordinated Debt and Affiliate
Subordinated Debt); and (iii) the aggregate amount of all available undrawn
financing commitments under the documents governing the Permitted Indebtedness
(other than the Bonds, Subordinated Debt and Affiliate Subordinated Debt) which
the creditors party to such documents have no right to terminate.
 
“Company” has the meaning specified in the preamble of this Agreement.
 
“Contract” means any agreement, lease, license, evidence of Debt, indenture or
other contract (including any design, construction, equipment, or other warranty
or guarantee under any of the foregoing).
 
“Debt Service Reserve Account” means the Debt Service Reserve Account
established pursuant to Section 3.1.
 
“Depositary Bank” has the meaning specified in the preamble to this Agreement.
 
“Designation Letter” means a “Designation Letter” in the form of Exhibit 2.1,
pursuant to which a Person agrees to be bound by the terms of this Agreement.
 
“Distribution Account” means the Distribution Account established pursuant to
Section 3.1.
 
“Equity Contribution” means the equity contribution required to be made by PPL
Ironwood under the Equity Subscription Agreement.
 
“Event of Default” means, so long as there are any Financing Commitments or any
Financing Liabilities outstanding under such documents, an “Event of Default” as
such term is defined in the Indenture, or an “Event of Default” or equivalent
term under any working capital facility.
 
“EWG” means “exempt wholesale generator,” as defined in Section 32(a) of PUHCA.
 
“Fair Market Value” has the meaning specified in the Power Purchase Agreement.
 
“Financing Commitment” means any commitment pursuant to the Financing Documents
to provide credit to the Company.
 
“Financing Liabilities” means all indebtedness, liabilities and obligations of
the Company (of whatsoever nature and howsoever evidenced including, but not
limited to, principal, interest, fees, reimbursement obligations,
collateralization or deposit obligations, penalties, indemnities and legal
expenses, whether due after acceleration or otherwise) under or pursuant to the
Indenture, the Bonds and any evidence of indebtedness thereunder entered into,
the Collateral Agency Agreement and any evidence of indebtedness thereunder
entered into, any working capital facility and any evidence of indebtedness
thereunder entered into, and the Security Documents, to the extent arising on or
prior to the Final Maturity Date, in each case, direct or indirect, primary or
secondary, fixed or contingent, now or hereafter arising out of or relating to
any such agreements.
 
“First Supplemental Indenture” means the First Supplemental Indenture to the
Trust Indenture, dated as of June 1, 1999, by and among the Company, IBJ
Whitehall Bank & Trust Company as Trustee and IBJ Whitehall Bank & Trust Company
as Depositary Bank.
 
 “Fuel Conversion Payment Volume Rebate Account” means the Fuel Conversion
Payment Volume Rebate Account established pursuant to Section 3.1.
 
 “Indenture” means the Trust Indenture, dated as of June 1, 1999, by and among
the Company, IBJ Whitehall Bank & Trust Company as Trustee and IBJ Whitehall
Bank & Trust Company as Depository Bank, together with the First Supplemental
Indenture, Second Supplemental Indenture and Third Supplemental Indenture.
 
 “Liabilities” means, as to any Person, all Debt, obligations and any other
liabilities of such Person (whether absolute, accrued, contingent, fixed or
otherwise, and whether due or to become due).
 
“Major Maintenance Reserve Account” means the Major Maintenance Reserve Account
established pursuant to Section 3.1.
 
“Operating and Maintenance Account” means the Operating and Maintenance Account
established pursuant to Section 3.1.
 
“Project Accounts” has the meaning specified in Section 3.1.
 
“PUHCA” means the Public Utility Holding Company Act of 1935.
 
“Required Senior Parties” means, at any time, Persons that at such time hold at
least a majority of the Combined Exposure.
 
“Responsible Officer” when used with respect to the Collateral Agent, means any
officer in the corporate trust and agency group (or any successor group) of the
Collateral Agent including without limitation, any vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Collateral Agent customarily performing functions similar to those performed
by any of the above designated officers, and with respect to a particular
corporate trust matter, also means any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
 
“Restoration Account” means the Restoration Account established pursuant to
Section 3.1.
 
“Restoration Certificate” means a certificate of the Company substantially in
the Ruin of Exhibit 3.15.
 
“Revenue Account” means the Revenue Account established pursuant to Section 3.1.
 
“Second Supplemental Indenture” means the Second Supplemental Indenture to the
Trust Indenture, dated as of May 12, 2000, by and among the Company, IBJ
Whitehall Bank & Trust Company as Trustee and IBJ Whitehall Bank & Trust Company
as Depository Bank.
 
“Secured Obligations” means, collectively, the Financing Liabilities, the
Trustee Claims and the Collateral Agent Claims.
 
“Security Interest” means any perfected and enforceable Lien on Collateral
granted to a Senior Party pursuant to any applicable Security Document.
 
“Senior Debt Termination Date” means the date on which all Financing
Liabilities, other than contingent liabilities and obligations which are
unasserted at such date, have been paid and satisfied in full and all Financing
Commitments have been terminated.
 
“Senior Documents” has the meaning specified in Section 6.1.
 
“Senior Parties” means, collectively, the Trustee, the Collateral Agent, the
Depositary Bank and any working capital provider and each successor to any of
such Persons.
 
“Senior Party Certificate” means a certificate of a Senior Party substantially
in the form of Exhibit 2.3, signed by an Authorized Representative of such
Senior Party, (i) setting forth the principal amount of the Financing
Liabilities owed to such Senior Party as of the date of such certificate and the
outstanding unutilized commitments to extend credit to the Company or the
Company by such Senior Party as of the date of such certificate, (ii) setting
forth a contact person for such Senior Party and including phone and facsimile
numbers for such person, (iii) directing the Collateral Agent to take a
specified action and (iv) stating specifically the action the Collateral Agent
is directed to take and the Security Document and the provision thereof pursuant
to which the Collateral Agent is being directed to act.
 
“Subordinated Debt Account” means the Subordinated Debt Account established
pursuant to Section 3.1.
 
“Terms of Subordination” means the Terms of Subordination attached hereto as
Exhibit 2.2.
 
“Third Supplemental Indenture” means the Third Supplemental Indenture to the
Trust Indenture, dated as of February 12, 2013, by and among the Company, The
Bank of New York Mellon as Trustee and The Bank of New York Mellon as Depository
Bank.
 
 “Trigger Event” means (i) an “Event of Default” under the Indenture and an
acceleration of the indebtedness issued thereunder, (ii) an “Event of Default”
or the equivalent under any working capital facility and an acceleration of the
indebtedness entered into thereunder, or (iii) a Bankruptcy Event in respect of
the Company and the expiration of the shortest applicable grace period.
 
“Trustee” has the meaning specified in the preamble of this Agreement.
 
“UCC” means the Uniform Commercial Code as is in effect from time to time in the
State of New York and any other jurisdiction the laws of which control the
creation or perfection of security interests under the Security Documents.
 
 
ARTICLE II
 
SECURITY INTERESTS AND EXERCISE OF RIGHTS
 
SECTION 2.1.   Sharing; Priority of Security Interests.
 
(a)           Each Senior Party agrees that, (i) as among the Senior Parties,
the Security Interest of each Senior Party in any Collateral ranks and will rank
equally in priority with the Security Interest of the other Senior Parties in
the same Collateral and (ii) in respect of matters voted on by the Senior
Parties collectively, the Trustee shall vote all Bonds according to the votes of
a majority of Bondholders voting.
 
(b)           The priorities specified herein are applicable irrespective of any
statement in any Security Document or in any other agreement to the contrary,
the time or order or method of attachment or perfection of Liens, the time or
order of filing of financing statements or the giving or failure to give notice
of the acquisition or expected acquisition of purchase money or other security
interests.
 
(c)           The Company hereby covenants and agrees to cause each person
holding Senior Debt to become a party to this Agreement by executing a
Designation Letter and becoming a Senior Party hereunder.
 
SECTION 2.2.   Subordinated Debt.
 
Notwithstanding any provision in any Transaction Document to the contrary, the
Senior Parties hereby agree that (i) the Subordinated Debt Providers shall be
entitled to share in the Collateral or any other payment, security or guarantee
from the Company or any of its Affiliates only to the extent provided in, and
only in accordance with, Articles III and IV and the Terms of Subordination and
(ii) the Subordinated Debt Providers shall not be entitled to vote or take any
actions pursuant to this Agreement or any other Security Document, or take any
other actions with respect to the Collateral until such time as all of the
Secured Obligations owing to all of the Senior Parties have been satisfied in
full. Each Subordinated Debt Provider agrees to be bound by the Terms of
Subordination and agrees that such Terms of Subordination shall be explicitly
incorporated into the Subordinated Loan Agreement to which it is a party. Each
party becoming a Subordinated Debt Provider pursuant to a Designation Letter
shall agree, in such Designation Letter, to be bound by such Terms of
Subordination.
 
SECTION 2.3.   Exercise of Rights Under Security Documents.
 
So long as any Secured Obligations remain outstanding, the following provisions
shall apply:
 
(a)           Subject to Section 5.2(e), if a Trigger Event shall have occurred
and be continuing, and only in such event, upon the written direction of the
Required Senior Parties contained in Senior Party Certificates, the Collateral
Agent, on behalf of the Trustee and any other Senior Party that is a party to
this Agreement, as applicable, shall be permitted and is hereby authorized to
take any and all actions and to exercise any and all rights, remedies and
options which it may have under the Security Documents or this Agreement;
provided, however, that if the underlying event which caused the Trigger Event
is a Bankruptcy Event in respect of the Company of which the Collateral Agent
shall have received written notice, no written request of the Required Senior
Parties shall be required in order for the Collateral Agent following such
Trigger Event to take any and all actions and to exercise any and all rights and
remedies specified in the Security Documents or this Agreement to be taken in
such circumstances. Nothing contained herein shall be construed as restricting
the right of any Senior Party to cause the acceleration, in accordance with the
Indenture of the Senior Debt held by such Party.
 
(b)           The Senior Parties hereby agree to give each other and the
Collateral Agent written notice of the occurrence of an Event of Default and of
a Trigger Event as soon as practicable after the occurrence thereof; provided,
however, that the failure to provide such notice shall not limit or impair the
rights of the Senior Parties hereunder or under the Financing Documents.
 
(c)           Each Senior Party hereby acknowledges and agrees that all funds
held by the Trustee in accordance with Article 5 of the Indenture are held for
the benefit of the Bondholders and that the Trustee shall hold such funds solely
for the benefit of such Bondholders.
 
(d)           Each Senior Party hereby acknowledges and agrees that all funds
held in the Debt Service Reserve Account by the Collateral Agent in accordance
with this Agreement are held for the benefit of the Trustee (on behalf of the
Bondholders) and that the Collateral Agent shall hold such funds solely for the
benefit of such Persons.
 
(e)           Each Senior Party hereby acknowledges and agrees that the
Collateral Agent, subject to Section 5.2(c) and (e), shall administer the
Collateral in the manner contemplated by the Security Documents and this
Agreement and the Collateral Agent shall exercise, as directed by the Required
Senior Parties in Senior Party Certificates in accordance with Section 2.3(a)
such rights and remedies with respect to the Collateral (including the curing of
defaults under the Transaction Documents) as are granted to it under the
Security Documents, this Agreement and Applicable Law. No Senior Party and no
class or classes of Senior Parties shall have any right (i) to direct the
Collateral Agent to take any action in respect of the Collateral other than in
accordance with Section 2.3(a) or (ii) to take any action with respect to the
Collateral (A) independently of the Collateral Agent or (B) other than to direct
the Collateral Agent in writing to take action in accordance with Section
2.3(a); provided, however, that nothing in this Section 2.3(e) shall be deemed
to limit the ability of any Senior Party to take any action in accordance with
Section 2.3(g).
 
(f)           Each of the Company and each Senior Party covenants and agrees
that, upon the occurrence and during the continuation of a Trigger Event, the
Collateral Agent shall be entitled, as instructed by the Required Senior Parties
in Senior Party Certificates in accordance with Section 2.3(a), to give notices
or instructions that the Company would otherwise be entitled to give under this
Agreement.
 
(g)           From time to time during the continuation of a Trigger Event, the
Collateral Agent shall, as instructed by the Required Senior Parties in Senior
Party Certificates in accordance with Section 2.3(a), direct the Depositary Bank
to render an accounting of the current balance of each Project Account or other
amounts or funds administered by the Depositary Bank under this Agreement, and
the Depositary Bank agrees to render the same, subject to the terms, conditions
and protections contained in this Agreement.
 
(h)           The Company covenants and agrees that it shall not take any action
that would prohibit or impair the ability of the Collateral Agent from
participating in any objection to any foreclosure or similar proceeding
instituted by a junior lienor against the Company; provided, however, that
nothing in this Section 2.3(h) shall, or shall be deemed to, affect the
relationship among the Senior Parties or the relationship between the Senior
Parties and the Collateral Agent, nor shall anything in this Section 2.3(h)
affect any representation, warranty, covenant or agreement of any Senior Party
in this Agreement.
 
(i)           The Company covenants and agrees that it shall send to the
Collateral Agent on or before five (5) days prior to each Bond Payment Date an
Officer’s Certificate signed by an Authorized Representative of the Company
setting forth (i) the names of each Senior Party as of the date of the
certificate, (ii) the principal amount of the Financing Liabilities owed to each
such Senior Party as of the date of the certificate and (iii) the unutilized
outstanding commitments of each Senior Party to extend credit to the Company as
of the date of the certificate. The Collateral Agent shall be entitled to rely
on the information contained in such certificate.
 
(j)           Notwithstanding the foregoing provisions of this Article II, each
Senior Party individually shall be authorized to cure any default of the Company
under any Project Contract in accordance with the consent to assignment executed
in connection with such Project Contract; provided, however, that funds advanced
in connection with such cure shall not constitute Senior Debt unless such funds
would otherwise satisfy the requirements for the issuance of Senior Debt.
 
(k)           Each Senior Party hereby acknowledges and agrees that if (i) there
is an Event of Default under the Indenture and such Event of Default is not
caused directly or indirectly by a default or event of default under the Power
Purchase Agreement, (ii) the Collateral Agent receives the written request of
the Required Senior Parties specified in Section 2.3(a), and (iii) the Trustee
has been directed by the required Bondholders to declare the aggregate principal
amount of the Outstanding Bonds, all interest accrued and unpaid thereon and all
premium payable thereon in accordance with the terms of the Indenture
immediately due and payable, the Collateral Agent at the direction of the
Required Senior Parties shall notify the Power Purchaser in writing at the
address provided in the Power Purchase Agreement of the opportunity to purchase
the Facility for an amount equal to the greater of (x) the Fair Market Value of
the Facility and (y) all Financing Liabilities due and owing to the Senior
Parties and any Subordinated Debt Provider. If the Power Purchaser has not
within 90 days of the date of such notice provided the Collateral Agent with a
binding written notice of its intent to purchase the Facility for such amount,
the Collateral Agent shall no longer have any obligation under this paragraph.
If the Power Purchaser offers within such period to purchase the Facility for
such amount within 120 days after the expiration of such 90 day period, the
Collateral Agent shall take such actions as required to consummate such sale
promptly as directed by the Required Senior Parties in Senior Party
Certificates.
 
SECTION 2.4.   Rights of Senior Parties.
 
The Senior Parties and the Collateral Agent (upon receipt of Senior Party
Certificates from the Required Senior Parties) may, at any time and from time to
time, without any consent of or notice to any Subordinated Debt Providers, (i)
amend in any manner any Security Document or any agreement under which any of
the Financing Liabilities is outstanding in accordance with the terms thereof,
(ii) sell, exchange, release, not perfect and otherwise deal with any property
at any time pledged, assigned or mortgaged to secure the Financing Liabilities
in accordance with the Security Documents, (iii) release anyone liable in any
manner under or in respect of the Financing Liabilities, (iv) exercise or
refrain from exercising any rights against the Company and others and (v) apply
any sums from time to time received to payment or satisfaction of the Financing
Liabilities.
 
ARTICLE III
 
ACCOUNTS
 
SECTION 3.1.   Establishment of Project Accounts.
 
The Collateral Agent hereby confirms that it has established with the Depositary
Bank at its office at the address listed in Section 7.4, New York, New York, the
following special, segregated accounts (the “Project Accounts”):
 

 
(i)
Revenue Account;
       
(ii)
Operating and Maintenance Account;
       
(iii)
Debt Service Reserve Account;
       
(iv)
Restoration Account;
       
(v)
Major Maintenance Reserve Account;
       
(vi)
Fuel Conversion Payment Volume Rebate Account;
       
(vii)
Subordinated Debt Account; and
       
(viii)
Distribution Account.

 
All amounts from time to time held in each Project Account shall be held (a) in
the name of the Collateral Agent subject to the lien and security interest of
the Collateral Agent for the benefit of the Senior Parties or certain of them as
set forth herein and (b) in the custody of the Depositary Bank for and on behalf
of the Collateral Agent for the purposes and on the terms set forth in this
Agreement. All such amounts shall constitute a part of the Collateral and shall
not constitute payment of any Indebtedness or any other obligation of the
Company until applied as hereinafter provided.
 
SECTION 3.2.   Investment of Funds in the Project Accounts.
 
(a)           Amounts deposited in the Project Accounts (and each subaccount
thereof) and each other account or fund created hereunder (unless expressly
stated otherwise), at the written request and direction of the Company, shall be
invested by the Collateral Agent in Permitted Investments. Such investments
shall mature in such amounts and not later than such times as may be necessary
to provide funds when needed to make payments from such funds as provided in
this Agreement. Net interest or gain received from such investments shall be
applied as provided in this Agreement.
 
(b)           So long as an outstanding balance shall remain in the Project
Accounts or any other account or fund created hereunder, the Collateral Agent
shall provide the Company with statements by the tenth (10th) Business Day of
each month showing the amount of all receipts, the net investment income or gain
received and collected, all disbursements and the amount then available as of
the last Business Day of the prior calendar month in the Project Accounts (and
each subaccount thereof) and each other account or fund created hereunder. The
Depositary Bank agrees to provide the Collateral Agent with such information as
it may reasonably have available to it in order to permit the Collateral Agent
to provide such statements in accordance with the requirements hereof.
 
SECTION 3.3.   Valuation and Sale of Investments.
 
(a)           Obligations purchased as an investment of funds in any Project
Account or any other separate account or fund created under the provisions
hereof shall be deemed at all times to be a part of such account or fund and,
unless otherwise specified herein, any profit realized from the liquidation of
such investment shall be credited to such Project Account or such other separate
account or fund created hereunder, and any loss resulting from the liquidation
of such investment shall be charged to the respective Project Account or such
other separate account or fund.
 
(b)           The Collateral Agent shall determine the value of all investments
in any of the Project Accounts or the Bond Payment Account as of the last
Business Day of each month, with any deficit in any account balance to be funded
from Project Revenues and any investments valued in excess of the amounts
required to be on deposit in an account shall be liquidated and the amount of
such excess shall be deposited in the Revenue Account for application in
accordance with Section 3.8.
 
(c)           The Collateral Agent shall determine the value of all investments
in the Debt Service Reserve Account in accordance with this Section 3.3.
 
(d)           In computing the amount of any funds in any Project Account, or
other separate account or fund created under the provisions hereof for any
purpose provided in this Agreement, obligations purchased as an investment of
funds therein shall be valued at the market value of such obligations, exclusive
of accrued interest; provided, however, that if there is no readily determinable
market value for such obligations, the value of such obligations shall be
determined with reference to the acquisition price of such obligations, plus
accrued but unpaid interest.
 
(e)           The Depositary Bank agrees to provide the Collateral Agent with
such information as it may reasonably have available to it in order to permit
the Collateral Agent to make such determinations and transfers as may be
required by this Section 3.3.
 
SECTION 3.4.   Possession of Accounts; Liquidation.
 
(a)           Each of the Project Accounts shall at all times be in the
exclusive possession of the Depositary Bank acting for and on behalf of the
Collateral Agent acting for and on behalf of the Senior Parties.
 
(b)           Notwithstanding any provision hereof to the contrary, if a Trigger
Event shall have occurred and be continuing, the Collateral Agent shall promptly
liquidate all amounts in the Project Accounts and all related investments and
distribute all such monies so received in accordance with Section 4.1.
 
SECTION 3.5.   The Depositary Bank; Limited Company Rights.
 
(a)           The Depositary Bank.
 
(i)           Establishment of Securities Accounts. The Depositary Bank hereby
agrees and confirms that (A) the Depositary Bank has established the Project
Accounts as set forth in Section 3.1, (B) each Project Account is and will be
maintained as a “securities account” (within the meaning of Section 8-501 of the
UCC), (C) the Company is the “entitlement holder” (within the meaning of Section
8-102(a)(7) of the UCC) in respect of the “financial assets” (within the meaning
of Section 8-102(a)(9) of the UCC) credited to the Project Accounts, (D) all
property delivered to the Depositary Bank pursuant to the Transaction Documents
or this Agreement will be held by the Depositary Bank and promptly credited to a
Project Account by an appropriate entry in its records in accordance with this
Agreement, (E) all “financial assets” (within the meaning of Section 8-102(a)(9)
of the UCC) in registered form or payable to or to the order of and credited to
any Project Account shall be registered in the name of, payable to or to the
order of, or endorsed to, the Depositary Bank or in blank, or credited to
another securities account maintained in the name of the Depositary Bank, and in
no case will any financial asset credited to any Project Account be registered
in the name of, payable to or to the order of, or endorsed to, the Company
except to the extent the foregoing have been subsequently endorsed by the
Company to the Depositary Bank or in blank and (F) the Depositary Bank shall not
change the name or account number of any Project Account without the prior
written consent of the Collateral Agent.
 
(ii)           Financial Assets Election. The Depositary Bank agrees that each
item of property (excluding cash, but including any security, instrument or
obligation, share, participation, interest or other property whatsoever)
credited to any Project Account shall be treated as a “financial asset” within
the meaning of Section 8-102(a)(9) of the UCC.
 
(iii)           Entitlement Orders. If at any time the Depositary Bank shall
receive any “entitlement order” (within the meaning of Section 8-102(a)(8) of
the UCC) or any other order from the Collateral Agent acting in accordance with
this Agreement directing the transfer or redemption of any financial asset
relating to the Project Accounts, the Depositary Bank shall comply with such
entitlement order or other order without further consent by the Company or any
other Person. The parties hereto hereby agree that the Collateral Agent shall
have “control” (within the meaning of Section 8-106(d) of the UCC) of the
Company’s “security entitlement” (within the meaning of Section 8-102(a)(17) of
the UCC) with respect to the financial assets credited to the Project Accounts
and the Company hereby disclaims any entitlement to claim “control” of such
“security entitlement”.
 
(iv)           Subordination of Lien; Waiver of Set-off. If the Depositary Bank
has or subsequently obtains by agreement, operation of law or otherwise a lien
or security interest in any Project Account or any security entitlement credited
thereto, the Depositary Bank agrees that such lien or security interest shall be
subordinate to the lien and security interest of the Collateral Agent. The
financial assets standing to the credit of the Project Accounts will not be
subject to deduction, set-off, banker’s lien, or any other right in favor of any
Person other than the Collateral Agent in its capacity as such (except that the
face amount of any checks which have been credited to any Project Account but
are subsequently returned unpaid because of uncollected or insufficient funds).
 
(v)           No Other Agreements. The Depositary Bank and the Company have not
entered into any agreement with respect to the Project Accounts or any financial
assets credited to any Project Account other than this Agreement and the other
Security Documents. The Depositary Bank has not entered into any agreement with
the Company or any other Person purporting to limit or condition the obligation
of the Depositary Bank to comply with entitlement orders originated by the
Collateral Agent in accordance with this Section 3.5. In the event of any
conflict between this Section 3.5 or any other Security Document or any other
agreement now existing or hereafter entered into, the terms of this Section 3.5
shall prevail.
 
(vi)           Notice of Adverse Claims. Except for the claims and interest of
the Collateral Agent and the Company in each of the Project Accounts, the
Depositary Bank does not know of any claim to, or interest in, any Project
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against any Project Account
or in any financial asset credited thereto, the Depositary Bank will promptly
notify the Collateral Agent and the Company thereof.
 
(vii)           Rights and Powers of the Collateral Agent. The rights and powers
granted by the Collateral Agent to the Depositary Bank have been granted in
order to perfect its lien and security interests in the Project Accounts, are
powers coupled with an interest and will neither be affected by the bankruptcy
of the Company nor the lapse of time.
 
(viii)           Choice of Law. Both this Agreement and each Project Account
(including all security entitlements relating thereto) shall be governed by the
law of the State of New York. Regardless of any provision in any other
agreement, for purposes of the UCC, the “securities intermediary’s jurisdiction”
of the Depositary Bank with respect to the Project Accounts is the State of New
York.
 
(b)           Limited Company Rights. The Company shall not have any rights
against or to monies held in the Project Accounts, as third-party beneficiary or
otherwise or any right to direct the Depositary Bank or the Collateral Agent to
apply or transfer monies in any Project Account, except the right to receive or
make requisitions of monies held in the Project Accounts, as permitted by this
Agreement and to direct the investment of monies held in the Project Accounts as
permitted by Section 3.2. Except as expressly provided in this Agreement, in no
event shall any amounts or Permitted Investments deposited in or credited to any
Project Account be registered in the name of the Company, payable to the order
of the Company or specially endorsed to the Company except to the extent that
the foregoing have been specially endorsed to the Collateral Agent or in blank.
 
SECTION 3.6.   Advances.
 
(a)           Notwithstanding any other provision hereof to the contrary, the
Company may, by delivering an Officer’s Certificate to the Collateral Agent,
withdraw funds on deposit in or credited to any of the Available Accounts
(“Advances”); provided, however, that, at the time of the making of such
Advance, no Default or Event of Default shall have occurred and be continuing
and the Officer’s Certificate of the Company shall so certify. The Collateral
Agent may conclusively rely on such Officer’s Certificate certifying that all
conditions for withdrawals from the Available Accounts have been met.
 
(b)           The Company shall repay immediately or cause to be repaid any
Advances to the extent that the funds on deposit in such Available Accounts are,
on the Business Day next preceding the day on which such funds are to be
withdrawn or transferred from such Available Accounts pursuant to this Article
III, insufficient to make the necessary withdrawals and transfers. In addition,
the Company shall cause to be repaid immediately the aggregate amount of all
Advances upon the occurrence of (i) a default in the payment of principal of,
premium, if any, or interest on the Bonds or (ii) any Event of Default. Any
amounts so repaid shall be allocated to and deposited in the Available Accounts
to which such repayment is required to be made as directed by the Company in an
Officer’s Certificate.
 
SECTION 3.7.   Collection of Project Revenues.
 
The Company shall arrange for the direct payment to the Collateral Agent of all
Project Revenues.
 
SECTION 3.8.   Revenue Account.
 
(a)           The Revenue Account shall be funded with all Project Revenues
received pursuant to Section 3.7.
 
(b)           Upon receipt by the Collateral Agent, not less than three (3)
Business Days prior to the date of the proposed transfer, of an Officer’s
Certificate of the Company detailing the amounts to be paid, the Collateral
Agent shall transfer funds in the Revenue Account by wire transfer in accordance
with such Officer’s Certificate and the following order of priority:
 
first, on a monthly basis, to the Trustee and the Collateral Agent, any amounts
certified by the Company as the amounts then due and payable in respect of
Trustee Claims and Collateral Agent Claims, respectively; provided, however,
that if funds in the Revenue Account are insufficient on any date to make the
payments specified in this paragraph first, distribution of funds shall be made
ratably to the specified recipients;
 
second, on a monthly basis, to the Trustee, for deposit in the Interest Payment
Subaccount, an amount equal to one-third of the interest becoming due on the
Bonds on the next succeeding Bond Payment Date;
 
third, on a monthly basis, to the Trustee, for deposit in the Principal Payment
Subaccount, an amount equal to one-third of the principal becoming due on the
Bonds on the next succeeding Bond Payment Date;
 
fourth, on a monthly basis, to the Collateral Agent for deposit in the Debt
Service Reserve Account, an amount necessary to fund the Debt Service Reserve
Account up to the DSRA Required Balance;
 
fifth, on a monthly basis, to any Project Account in the sole discretion of the
Company.
 
(c)           When making the transfers specified in Section 3.8(b), each
transfer shall be adjusted as necessary, taking into account investment gains or
losses in such Project Account or Indenture Account and further adjusting such
transfers by the amount any prior over-fundings or any prior shortfalls in such
Project Account or Indenture Account, to ensure that the aggregate amounts so
transferred to such Project Accounts or Indenture Accounts are sufficient to pay
the amount due and payable from such Project Accounts and Indenture Accounts on
the applicable payment date.
 
SECTION 3.9.   Operating and Maintenance Account.
 
(a)           The Operating and Maintenance Account may be funded from funds
transferred by the Collateral Agent from the Revenue Account.
 
(b)           Upon receipt by the Collateral Agent of an Officer’s Certificate
of the Company detailing the amounts to be paid, the Collateral Agent shall
transfer funds in the Operating and Maintenance Account to the Company or to
whomsoever the Company directs.
 
SECTION 3.10.     Debt Service Reserve Account.
 
(a)           The Debt Service Reserve Account may be funded, if necessary, from
monies transferred from the Revenue Account.
 
(b)           When there are insufficient monies in the Bond Payment Account on
any Bond Payment Date to pay the interest or principal then due on the Bonds,
the Collateral Agent shall, upon receipt prior to such Bond Payment Date of an
Officer’s Certificate of the Company and as directed on such certificate,
withdraw monies on deposit in the Debt Service Reserve Account to the extent
necessary to make such interest or principal payment on the Bonds and transfer
such monies to the Trustee for deposit in the Bond Payment Account for
application against such payment.
 
SECTION 3.11.    Major Maintenance Reserve Account.
 
(a)           The Major Maintenance Reserve Account may be funded from funds
transferred by the Collateral Agent from the Revenue Account.
 
(b)           Upon receipt by the Collateral Agent of an Officer’s Certificate
of the Company detailing the amounts to be paid, the Collateral Agent shall
transfer funds in the Major Maintenance Reserve Account to the Company or to
whomsoever the Company directs.
 
SECTION 3.12.      Distribution Account.
 
(a)           The Distribution Account may be funded from funds transferred from
the Revenue Account.
 
(b)           Funds on deposit in or credited to the Distribution Account may be
distributed to, or as directed by, the Company upon receipt by the Collateral
Agent of an Officer’s Certificate of the Company requesting such a distribution.
 
SECTION 3.13.         Restoration Account.
 
(a)           All Casualty Proceeds and Eminent Domain Proceeds shall be
deposited into the Restoration Account. Subject to Sections 3.13(d) and 3.13(e),
the Collateral Agent shall apply the amounts in the Restoration Account as
directed in writing by the Company to the payment, or reimbursement to the
extent the same have been paid or satisfied by the Company, of the costs of
rebuilding, repair and restoration of the Facility or any part thereof that has
been affected by an Event of Loss or an Event of Eminent Domain.
 
(b)           The Collateral Agent is hereby authorized to disburse from the
Restoration Account the amount required to be paid for the repair or replacement
of the Facility or any part thereof as specified in Section 3.13(a). The
Collateral Agent is hereby authorized and directed to issue its checks or
transfer funds electronically for each disbursement from the Restoration
Account, upon receipt of a Restoration Certificate signed by an Authorized
Representative of the Company. The Collateral Agent shall be entitled to rely on
all certifications and statements in such Restoration Certificate.
 
(c)           If an Event of Loss or an Event of Eminent Domain shall occur with
respect to any Collateral, the Company shall (i) diligently pursue all its
rights to compensation against any Person with respect to such Event of Loss or
Event of Eminent Domain, (ii) in the reasonable judgment of the Company,
compromise or settle any claim against any Person with respect to such Event of
Loss or Event of Eminent Domain and (iii) hold all amounts of Casualty Proceeds
or Eminent Domain Proceeds (including instruments) received in respect of any
Event of Loss or Event of Eminent Domain (after deducting all reasonable
expenses incurred by it in litigating, arbitrating, compromising or settling any
claims) in trust for the benefit of the Collateral Agent segregated from other
funds of the Company and will promptly transfer to the Collateral Agent for
deposit in the Restoration Account such Casualty Proceeds or Eminent Domain
Proceeds.
 
(d)           If either an Event of Loss or an Event of Eminent Domain shall
occur, as soon as reasonably practicable but no later than the date of receipt
by the Company or the Collateral Agent of Eminent Domain Proceeds or Casualty
Proceeds, as the case may be, the Company shall make a reasonable good faith
determination as to whether (i) the Facility or any portion thereof can be
rebuilt, repaired or restored to permit operation of the Facility or a portion
thereof on a commercially feasible basis and (ii) the Casualty Proceeds or the
Eminent Domain Proceeds, as the case may be, together with any other amounts
that are available to the Company for such rebuilding, repair or restoration,
are sufficient to permit such rebuilding, repair or restoration of the Facility
or a portion thereof, including the making of all required payments of interest
and principal on the Company’s Debt during such rebuilding, repair or
restoration. The determination of the Company shall be evidenced by a
Certificate as to Redemption filed with the Collateral Agent which, in the event
the Company determines that the Facility or a portion thereof can be rebuilt,
repaired or restored to permit operation thereof on a commercially feasible
basis and that the Casualty Proceeds or the Eminent Domain Proceeds, as the case
may be, together with any other amounts that are available to the Company for
such rebuilding, repair or restoration, are sufficient, shall also set forth a
reasonable good faith estimate by the Company of the total cost of such
rebuilding, repair or restoration. The Company shall deliver to the Collateral
Agent at the time it delivers the Certificate as to Redemption referred to above
a certificate of the Independent Engineer, dated the date of the Certificate as
to Redemption, stating that, based upon reasonable investigation and review of
the determination made by the Company, the Independent Engineer believes the
determination and the estimate of the total cost set forth in the Certificate as
to Redemption to be reasonable.
 
(e)           (i)           If, following an Event of Loss or an Event of
Eminent Domain, the determination is made pursuant to Section 3.13(d) above that
the Facility cannot be rebuilt, repaired or restored to permit operation on a
commercially feasible basis or that the Casualty Proceeds or the Eminent Domain
Proceeds, together with any other amounts that are available to the Company for
such rebuilding, repair or restoration, are not sufficient to permit such
rebuilding, repair or restoration, all of the Casualty Proceeds or the Eminent
Domain Proceeds, as the case may be, shall be distributed in accordance with
Section 4.2(a).
 
(ii)           If, following an Event of Loss or an Event of Eminent Domain, the
determination is made pursuant to Section 3.13(d) above that the entire Facility
can be rebuilt, repaired or restored to permit operation on a commercially
feasible basis and that the Casualty Proceeds or the Eminent Domain Proceeds,
together with any other amounts that are available to the Company for such
rebuilding, repair or restoration, are sufficient to permit such rebuilding,
repair or restoration, all of the Casualty Proceeds or the Eminent Domain
Proceeds, as the case may be, together with such other amounts as are available
to the Company for such rebuilding, repair or restoration, shall be deposited in
the Restoration Account in accordance with Section 3.13(a) and applied in
accordance with Section 3.13(b).
 
(iii)           If, following an Event of Loss or an Event of Eminent Domain,
the determination is made pursuant to Section 3.13(d) above that a portion of
the Facility can be rebuilt, repaired or restored to permit operation on a
commercially feasible basis and that the Casualty Proceeds or the Eminent Domain
Proceeds, together with any other amounts that are available to the Company for
such rebuilding, repair or restoration, are sufficient to permit such
rebuilding, repair or restoration, (A) an amount equal to the estimate of the
total cost of such rebuilding, repair or restoration set forth in the
Certificate as to Redemption filed with the Collateral Agent pursuant to Section
3.13(d) above shall be deposited in the Restoration Account in accordance with
Section 3.13(a) and applied in accordance with Section 3.13(b) and (B) the
amount, if any, by which all of the Casualty Proceeds or the Eminent Domain
Proceeds, as the case may be, exceed the estimate of the total cost shall be
distributed in accordance with Section 4.2(a).
 
(f)           In the event the Company receives Casualty Proceeds or Eminent
Domain Proceeds, as the case may be, from an Event of Loss or an Event of
Eminent Domain that do not exceed in the aggregate $5,000,000 during any Fiscal
Year of the Company, the Company shall not have to comply with the provisions of
Section 3.13(d) and the Casualty Proceeds or the Eminent Domain Proceeds, as the
case may be, shall be deposited in the Restoration Account in accordance with
Section 3.13(a) and applied in accordance with Section 3.13(b).
 
SECTION 3.14.         Fuel Conversion Volume Rebate Account.
 
(a)           The Fuel Conversion Volume Rebate Account may be funded from funds
transferred by the Collateral Agent from the Revenue Account.
 
(b)           Upon receipt of an Officer’s Certificate of the Company detailing
the amounts to be paid, funds in the Fuel Conversion Volume Rebate Account shall
be transferred to the Power Purchaser as set forth in such Officer’s Certificate
within two (2) Business Days of receipt of such Officer’s Certificate.
 
SECTION 3.15.         Subordinated Debt Account.
 
(a)           The Subordinated Debt Account may be funded from funds transferred
by the Collateral Agent from the Revenue Account.
 
(b)           Upon receipt of an Officer’s Certificate of the Company detailing
the amounts to be paid, funds in the Subordinated Debt Account shall be
transferred to the appropriate Subordinated Debt Providers as set forth in such
Officer’s Certificate within two (2) Business Days of receipt of such Officer’s
Certificate.
 
ARTICLE IV
 
APPLICATION OF CERTAIN PROCEEDS
 
SECTION 4.1.   Division of Foreclosure Proceeds.
 
(a)           Following a foreclosure or other exercise of remedies following a
Trigger Event, the proceeds of any sale, disposition or other realization by the
Collateral Agent or by any Senior Party upon the Collateral (or any portion
thereof) pursuant to the Security Documents shall be distributed in the
following order of priorities:
 
first, to the Collateral Agent and the Trustee, ratably, all administrative
fees, costs and expenses owed to such Parties under the Financing Documents;
provided, that prior to any such distribution to the Trustee, the Collateral
Agent shall have received a certificate signed by an Authorized Representative
of the Trustee, in form and substance satisfactory to the Collateral Agent,
setting forth the amount payable to the Trustee as of the date of such
distribution;
 
second, to the Senior Parties, ratably (based on the amount owing to specified
recipients), an amount equal to the unpaid amount of all Financing Liabilities
owed to the Senior Parties by the Company; provided, that prior to any such
distribution, the Collateral Agent shall have received a certificate executed by
an Authorized Representative of each such Senior Party, in form and substance
reasonably satisfactory to the Collateral Agent, setting forth the amount
payable to such Senior Party pursuant to this clause as of the date of such
distribution;
 
third, to any Subordinated Debt Providers, ratably, an amount equal to the
unpaid obligations owed to such Subordinated Debt Providers by the Company under
any Subordinated Loan Agreement; provided, that prior to any such distribution,
the Collateral Agent shall have received a certificate executed by an Authorized
Representative of each such Subordinated Debt Provider, in form and substance
reasonably satisfactory to the Collateral Agent, setting forth the amount
payable to such Subordinated Debt Provider pursuant to this clause as of the
date of such distribution; and
 
fourth, to the Company (or its successors or assigns) or to whomever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, any surplus then remaining from such proceeds.
 
(b)           As used in this Section 4.1, “proceeds” of Collateral shall mean
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 Company or any issuer of or obligor on
any of the Collateral.
 
(c)           The Collateral Agent shall, upon receipt of indemnity satisfactory
to it, use reasonable efforts to join in any foreclosure or similar proceeding
instituted by a junior lienor with respect to the Collateral. The Collateral
Agent shall hold all proceeds of the Collateral received by it in connection
with such proceeding instituted by a junior lienor and not consolidated with any
action by the Collateral Agent on behalf of the Senior Parties pending
application of such proceeds by the Collateral Agent in accordance with the
written instructions of the Required Senior Parties.
 
SECTION 4.2.   Application of Casualty Proceeds and Eminent Domain Proceeds.
 
(a)           If the determination is made pursuant to Section 3.13(d) above
that all or a portion of the Facility is incapable of being rebuilt, repaired or
restored to permit operation on a commercially feasible basis, all Casualty
Proceeds or Eminent Domain Proceeds received by the Collateral Agent shall be
distributed by the Collateral Agent within five (5) Business Days of receipt in
the following order of priorities:
 
first, to the Collateral Agent and the Trustee in an amount equal to the amounts
owed in respect of the Collateral Agent Claims and the Trustee Claims,
respectively, due and payable as of the date of such distribution; provided,
that, prior to any such distribution to the Collateral Agent or the Trustee, the
Collateral Agent shall have received a certificate signed by an Authorized
Representative of the Trustee, in form and substance satisfactory to the
Collateral Agent, setting forth the amount payable to the Trustee as of the date
of such distribution;
 
second, to the Senior Parties, ratably (based on the amount owing to the
specified recipients), an amount equal to the unpaid amount of all Financing
Liabilities owed to or required to be deposited for the account of such Senior
Parties, including the amount required to be applied to a mandatory redemption
of the Bonds pursuant to the Indenture; provided, that prior to any such
distribution the Collateral Agent shall have received a certificate executed by
an Authorized Representative of each such Senior Party, in form and substance
reasonably satisfactory to the Collateral Agent, setting forth the amount
payable to such Senior Party pursuant to this clause as of the date of such
distribution;
 
third, to the Subordinated Debt Providers, ratably, an amount equal to the
unpaid amounts owed to or required to be deposited for the account of such
Subordinated Debt Providers by the Company under any Subordinated Loan
Agreement; provided, that prior to any such distribution, the Collateral Agent
shall have received a certificate executed by an Authorized Representative of
each such Subordinated Debt Provider, in form and substance reasonably
satisfactory to the Collateral Agent, setting forth the amount payable to such
Subordinated Debt Provider pursuant to this clause as of the date of such
distribution; and
 
fourth, to the Company or their successors or assigns or to whomever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, any surplus then remaining from such proceeds.
 
ARTICLE V
 
COLLATERAL AGENT; DEPOSITARY BANK
 
SECTION 5.1.   Appointment and Duties of Collateral Agent and Depositary Bank.
 
(a)           The Senior Parties hereby designate and appoint The Bank of New
York Mellon to act as the Collateral Agent under the Security Documents and this
Agreement, and each of the Senior Parties hereby authorizes The Bank of New York
Mellon, as the Collateral Agent, to take such actions on its behalf under the
provisions of the Security Documents and this Agreement and to exercise such
powers and perform such duties as are expressly delegated to the Collateral
Agent by the terms of the Security Documents and this Agreement, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in the Security Documents and this
Agreement, the Collateral Agent shall not have any duties or responsibilities,
except those expressly set forth in the Security Documents and this Agreement,
or any discretionary or fiduciary duties or responsibilities with any Senior
Party under this Agreement or any other Security Documents, and no implied
covenants, functions or responsibilities shall be read into the Security
Documents, this Agreement or otherwise exist against the Collateral Agent. The
Collateral Agent shall not be liable for any action taken or omitted to be taken
by it hereunder or under any Security Document, or in connection herewith or
therewith, or in connection with the Collateral, unless caused by its gross
negligence or willful misconduct.
 
(b)           The Collateral Agent and each other Senior Party hereby designate
and appoint The Bank of New York Mellon to act as the Depositary Bank under this
Agreement, and the Depositary Bank hereby agrees to act as “securities
intermediary” (within the meaning of Section 8-102(a)(14) of the UCC) with
respect to the Project Accounts. The Company hereby acknowledges that the
Depositary Bank shall act as securities intermediary with respect to the Project
Accounts and pursuant to this Agreement. The Depositary Bank shall not have any
duties or responsibilities except those expressly set forth in this Agreement.
 
(c)           The Collateral Agent will give notice to the Senior Parties of any
action taken, or notices received, hereunder or under any Security Document;
notice of action taken shall be given prior to the taking of such action unless
the Collateral Agent determines that to do so would be detrimental to the
interest of the Senior Parties, in which event such notice shall be given
promptly after the taking of such action.
 
(d)           The Senior Parties agree that all liens and security interests in
the Collateral securing the Secured Obligations shall be held in the name of the
Collateral Agent and administered by and through the Collateral Agent and in
accordance with this Agreement and the other Security Documents. If, as of the
date hereof, or at any time in the future, any Senior Party at any time holds a
lien or security interest on any Collateral in its own name, it agrees to assign
it, without warranty or recourse, to the Collateral Agent (to be held by the
Collateral Agent as the collateral agent for the Senior Parties). The Collateral
Agent shall hold its security interests in and liens on the Collateral for the
benefit of the Senior Parties as provided herein and in the Security Documents.
 
(e)           Notwithstanding anything to the contrary in this Agreement or any
Security Document, the Collateral Agent shall not be required to exercise any
rights or remedies under any of the Security Documents or this Agreement or give
any consent under any of the Security Documents or this Agreement or enter into
any agreement amending, modifying, supplementing or waiving any provision of any
Security Document unless it shall have been directed to do so in Senior Party
Certificates of the Required Senior Parties.
 
SECTION 5.2.   Rights of Collateral Agent.
 
(a)           The Collateral Agent may execute any of its duties under the
Security Documents or this Agreement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.
 
(b)           Neither the Collateral Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it under or in connection with
any Security Document or this Agreement (except for its gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Senior
Parties for any recitals, statements, representations or warranties made in any
Security Document or this Agreement or in any certificate, report, statement or
other document referred to or provided for in, or received by the Collateral
Agent under or in connection with, any Security Document or this Agreement or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Security Documents or this Agreement or for any failure of
the Company or any other Person to perform their obligations thereunder. The
Collateral Agent shall not be under any obligation to any Senior Party or any
other Person to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, any Security Document or
this Agreement, or to inspect the properties, books or records of the Company.
 
(c)           The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, request, direction,
certificate, notice, consent, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and/or upon advice and/or statements of legal
counsel (including, without limitation, counsel to the Company), independent
accountants and other experts selected by the Collateral Agent. In connection
with any request or direction of the Required Senior Parties, the Collateral
Agent shall be entitled to rely, and shall be fully protected in relying on any
Senior Party Certificate delivered by a Senior Party; provided, however, that in
the event the Collateral Agent receives conflicting directions contained in
Senior Party Certificates representing two or more groups of Required Senior
Parties, the Collateral Agent shall act in accordance with directions contained
in Senior Party Certificates representing the greatest percentage of the
Combined Exposure. The Collateral Agent shall be fully justified in failing or
refusing to take any action under any Security Document or this Agreement (i) if
such action would, in the opinion of the Collateral Agent (which may be based on
the opinion of legal counsel), be contrary to law or the terms of this Agreement
or the other Security Documents, (ii) if such action is not specifically
provided for in such Security Document or this Agreement or it shall not have
received any such advice or concurrence of the Required Senior Parties as it
deems appropriate, (iii) if, in connection with the taking of any such action
hereunder or under any Security Document that would constitute an exercise of
remedies under such Security Document or this Agreement, it shall not first be
indemnified to its satisfaction by the Senior Parties (other than the Trustee in
its individual capacity and the Collateral Agent) against any and all risk of
nonpayment, liability and expense which may be incurred by it by reason of
taking or continuing to take any such action or (iv) if, notwithstanding
anything to the contrary contained in Section 5.2(e), in connection with the
taking of any such action that would constitute a payment due under any
Transaction Document, it shall not first have received from the Senior Parties
funds equal to the amount payable. The Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under any Security
Document or this Agreement in accordance with a request of the Required Senior
Parties contained in Senior Party Certificates, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Senior
Parties.
 
(d)           If, with respect to a proposed action to be taken by it, the
Collateral Agent shall determine in good faith that the provisions of any
Security Document or this Agreement relating to the functions or
responsibilities or discretionary powers of the Collateral Agent are or may be
ambiguous or inconsistent, the Collateral Agent shall notify the Senior Parties,
identifying the proposed action, and may decline either to perform such function
or responsibility or to take the action requested unless it has received the
written confirmation of the Required Senior Parties executed by Authorized
Representatives of such Persons that the Required Senior Parties concur in the
circumstances that the action proposed to be taken by the Collateral Agent is
consistent with the terms of this Agreement or such Security Document or is
otherwise appropriate. The Collateral Agent shall be fully protected in acting
or refraining from acting upon the confirmation of the Required Senior Parties
in this respect, and such confirmation shall be binding upon the Collateral
Agent and the other Senior Parties.
 
(e)           The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect knowledge or notice of the occurrence of any
default or Event of Default or any other event unless and until a Responsible
Officer of the Collateral Agent has received a written notice or a certificate
from an Authorized Representative of a Senior Party or the Company stating that
a default or an Event of Default has occurred. The Collateral Agent shall have
no obligation whatsoever either prior to or after receiving such notice or
certificate to inquire whether a default or an Event of Default has in fact
occurred and shall be entitled to rely conclusively, and shall be fully
protected in so relying, on any notice or certificate so furnished to it. No
provision of this Agreement or any other Security Document shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or under
any Security Document or the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability including an advance of funds
necessary to take the action requested is not reasonably assured to it, except
that in respect of any potential environmental liability or the taking of title
to any real property, the Collateral Agent may decline to act unless it receives
indemnity satisfactory to it in its sole discretion, including, but not limited
to, an advance of funds necessary to take the action requested. If the
Collateral Agent receives such a notice of the occurrence of any Event of
Default, the Collateral Agent shall give notice thereof to the Senior Parties.
The Senior Parties shall provide evidence of satisfactory indemnity to the
Collateral Agent for any action directed by the Required Senior Parties
including, but not limited to, an advance of funds necessary to take the action
requested. The Collateral Agent shall take such action with respect to such
Event of Default as so requested pursuant to Section 2.3(a) subject, however, to
the third sentence of this Section 5.2(e).
 
(f)           The Company will pay upon demand to the Collateral Agent the
amount of any and all reasonable fees and out-of-pocket expenses, including the
reasonable fees and expenses of its counsel (and any one local counsel) and of
any experts and agents, which the Collateral Agent may incur in connection with
(i) the administration of this Agreement and the other Security Documents, (ii)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement
(whether through negotiations, legal proceedings or otherwise) of any of the
rights of the Collateral Agent or the Senior Parties hereunder or under the
other Security Documents or (iv) the failure by the Company to perform or
observe any of the provisions hereof or of any of the other Security Documents.
The provision of this Section 5.2(f) shall survive the expiration or earlier
termination of this Agreement.
 
SECTION 5.3.   Lack of Reliance on the Collateral Agent.
 
Each of the Senior Parties expressly acknowledges that neither the Collateral
Agent nor any of its officers, directors, employees, agents or attorneys-in-fact
has made any representations or warranties to it and that no act by the
Collateral Agent hereafter taken, including, without limitation, any review of
the Facility or of the affairs of the Company, shall be deemed to constitute any
representation or warranty by the Collateral Agent to any Senior Party. Each
Senior Party (other than the Trustee) represents to the Collateral Agent that it
has, independently and without reliance upon the Collateral Agent or any other
Senior Party, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Facility and the Company. Each Senior Party (other than the Trustee) also
represents that it will, independently and without reliance upon the Collateral
Agent or any other Senior Party, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Facility and the Company. Except for notices, reports
and other documents expressly required to be furnished to the Senior Parties by
the Collateral Agent hereunder, the Collateral Agent shall not have any duty or
responsibility to provide any Senior Party with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Facility and the Company which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents or attorneys-in-fact.
 
SECTION 5.4.   Indemnification.
 
(a)           The Senior Parties (other than the Collateral Agent) severally
agree to indemnify the Collateral Agent in its capacity as such and in its
individual capacity (to the extent not reimbursed by the Company and without
limiting the obligation of the Company to do so), ratably according to the
aggregate amounts of their respective Secured Obligations on the date the
activities giving rise to the Collateral Agent’s demand for indemnification
occurred, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time be imposed on, incurred by or
asserted against the Collateral Agent in its capacity as such and in its
individual capacity in any way relating to or arising out of the Security
Documents or this Agreement, or the performance of its duties as Collateral
Agent hereunder or thereunder or any action taken or omitted by the Collateral
Agent in its capacity as such under or in connection with any of the foregoing
(including, but not limited to, any claim that the Collateral Agent is the owner
or operator of the Facility and liable as such pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act or any other
Environmental Requirement); provided, that the Senior Parties shall not be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent that any of the foregoing result from the Collateral Agent’s gross
negligence or willful misconduct. The agreements in this Section 5.4 shall
survive the payment or satisfaction in full of the Secured Obligations or any
other termination of this Agreement.
 
(b)           The Company agrees to indemnify the Collateral Agent and each
Senior Party from and against any and all claims, losses and liabilities growing
out of or resulting from (i) any Security Document or this Agreement (including,
without limitation, enforcement of such Security Document, but excluding any
such claims, losses or liabilities resulting from the Collateral Agent’s or such
Senior Party’s gross negligence or willful misconduct) or (ii) any refund or
adjustment of any amount paid or payable to the Collateral Agent or any Senior
Party under or in respect of any Transaction Document or any other Collateral,
or any interest thereon, which may be ordered or otherwise required by any
Person. The agreements under this Section 5.4(b) shall survive the payment in
full of any secured obligation or termination of this Agreement or any other
Security Document.
 
SECTION 5.5.   Resignation of the Collateral Agent or Depositary Bank.
 
(a)           Either of the Collateral Agent or Depositary Bank may resign its
appointment hereunder at any time without providing any reason therefor by
giving not less than 60 days’ prior written notice to that effect to each of the
other parties hereto, provided that no such resignation pursuant to this Section
5.5 or removal pursuant to Section 5.6 shall be effective until:
 
(i)           a successor for the Collateral Agent or Depositary Bank is
appointed in accordance with (and subject to) the succeeding provisions of this
Section 5.5;
 
(ii)           the resigning or removed Collateral Agent or Depositary Bank has
transferred to its successor all of its rights and obligations in its capacity
as Collateral Agent or Depositary Bank under this Agreement and the other
Transaction Documents; and
 
(iii)           the successor Collateral Agent or Depositary Bank has executed
and delivered an agreement to be bound by the terms hereof and the other
Transaction Documents and perform all duties required of the Collateral Agent or
Depositary Bank hereunder and under the other Transaction Documents.
 
(b)           If the Collateral Agent or Depositary Bank has given notice of its
resignation pursuant to this Section 5.5 or if the Required Senior Parties give
the Collateral Agent, or the Collateral Agent gives the Depositary Bank, notice
of removal pursuant to Section 5.6, then a successor to the Collateral Agent or
Depositary Bank may be appointed by the Required Senior Parties during the
period of such notice but, if no such successor is so appointed within sixty
(60) days after the above notice, the Collateral Agent or Depositary Bank may
appoint such a successor which (i) is authorized under the laws of its
jurisdiction of formation to exercise corporation trust powers, (ii) shall have
a combined capital and surplus of at least U.S.$250,000,000 and (iii) shall be
acceptable to the Required Senior Parties (provided, that if the Required Senior
Parties do not confirm such acceptance or reject such appointee in writing
within thirty (30) days following selection of such successor by the Collateral
Agent or Depositary Bank, then they shall be deemed to have given acceptance
thereof and such successor shall be deemed appointed as the Collateral Agent or
Depositary Bank hereunder by and on behalf of the Senior Parties).
 
(c)           If a successor to the Collateral Agent or Depositary Bank is
appointed under the provisions of clauses (a) or (b) above, then:
 
(i)           the predecessor Collateral Agent or Depositary Bank shall be
discharged from any further obligation hereunder (but without prejudice to any
accrued liabilities);
 
(ii)           the predecessor Collateral Agent or Depositary Bank’s resignation
pursuant to this Section 5.5 or removal pursuant to Section 5.6 notwithstanding,
the provisions of this Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement and the other
Transaction Documents while it was acting as the Collateral Agent or Depositary
Bank; and
 
(iii)           the successor Collateral Agent or Depositary Bank and each of
the other parties hereto shall have the same rights and obligations amongst
themselves as they would have had if such successor Collateral Agent or
Depositary Bank had been an original party hereto.
 
SECTION 5.6.   Removal of the Collateral Agent or Depositary Bank.
 
The Required Senior Parties may remove the Collateral Agent from its appointment
hereunder, and the Collateral Agent may remove the Depositary Bank hereunder, in
each case with or without cause by giving not less than 60 days’ prior written
notice to that effect to the Collateral Agent (or to the Depositary Bank, as the
case may be); provided, that no such removal shall be effective until a
successor for the Collateral Agent (or the Depositary Bank, as the case may be)
is appointed in accordance with Section 5.5.
 
SECTION 5.7.   Merger, Conversion, Consolidation or Succession to Business.
 
Any corporation or bank into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any corporation or bank
resulting from any merger, conversion or consolidation to which the Collateral
Agent shall be a party, or any corporation or bank succeeding to all or
substantially all of the corporate trust business of the Collateral Agent, shall
be the successor of the Collateral Agent hereunder, provided such corporation or
bank shall be otherwise qualified and eligible under this Article V, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
 
SECTION 5.8.   Power of Attorney.
 
Each Senior Party (other than the Collateral Agent) hereby gives a power of
attorney, coupled with an interest, to the Collateral Agent and appoints, makes,
constitutes and designates the Collateral Agent its true and lawful
attorney-in-fact, subject to Section 5.1, to consent on its behalf under the
Security Documents and the other Transaction Documents to which the Collateral
Agent is a party to the extent that the consent of the Required Senior Parties
(whether or not acting through the Collateral Agent) is required under any
agreement and upon the instructions of the Required Senior Parties acting
pursuant to this Agreement, and to take such actions on its behalf under the
provisions of such agreements as are reasonably incidental thereto, to execute
and deliver in the name of and on behalf of, or in its own name, as the case may
be, all documents required to be executed by such Senior Party (in its capacity
as such) in connection therewith and to do, take and perform each and every act
and thing whatsoever requisite, proper or necessary to be done, in the exercise
of any of the rights and powers herein granted, as fully to all intents and
purposes as such Senior Party (in its capacity as such) might or could do, with
full power of substitution or revocation, hereby ratifying and confirming all
that such attorney-in-fact, or its substitute or substitutes, shall lawfully do
or cause to be done by virtue of this power of attorney and the rights and
powers herein granted; provided, that the Collateral Agent shall not so consent
or take such other actions other than in accordance with this Agreement, the
Security Documents and the other Transaction Documents to which the Collateral
Agent is a party. The enumeration of specific items, rights, acts or powers
herein does not limit or restrict and is not intended to limit or restrict, and
is not to be construed or interpreted as limiting or restricting, the powers
herein granted to such attorney-in-fact. The rights, power and authority of such
attorney-in-fact herein granted shall commence and be in full force and effect
on the date hereof, and such rights, powers and authority shall remain in full
force and effect thereafter until this Agreement is terminated or until the
Collateral Agent’s resignation or removal hereunder.
 
ARTICLE VI
 
REPRESENTATIONS AND WARRANTIES
 
SECTION 6.1.   Representations and Warranties.
 
(a)           The Company hereby makes the following representations and
warranties as of the date hereof with respect to itself for the benefit of the
Senior Parties:
 
(i)           The Company (A) is a limited liability corporation duly formed,
validly existing and in good standing under the laws of the State of Delaware
and (B) is duly authorized, to the extent necessary, to do business in the
Commonwealth of Pennsylvania and in each other jurisdiction where the character
of its properties or the nature of its activities makes such qualification
necessary, except to the extent any failure could not reasonably be expected to
have a Material Adverse Effect. The Company has all requisite power and
authority to own and operate the property it purports to own and to carry on its
business as now being conducted and as proposed to be conducted in respect of
the Facility.
 
(ii)           The Company has all necessary power and authority to execute,
deliver and perform its obligations under this Agreement. All action on the part
of the Company that is required for the authorization, execution, delivery and
performance of this Agreement, in each case has been duly and effectively taken;
and the execution, delivery and performance of this Agreement does not require
the approval or consent of any holder or trustee of any debt or other
obligations of the Company which has not been obtained.
 
(iii)           This Agreement has been duly executed and delivered by the
Company. This Agreement constitutes a legal, valid and binding obligation of the
Company enforceable against them in accordance with the terms thereof, except as
such enforceability (A) may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors’ rights and remedies generally and (B) is subject to general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
 
(iv)           Neither the execution, delivery and performance of this Agreement
nor the consummation of any of the transactions contemplated hereby nor
performance of or compliance with the terms and conditions hereof (A)
contravenes any material requirement of Applicable Law applicable to the Company
or any of the Collateral which contravention would reasonably be expected to
have a Material Adverse Effect, (B) constitutes a default under or results in
the violation of the provisions of the certificate of formation or operating
agreement, or of any Transaction Documents that would reasonably be expected to
have a Material Adverse Effect or (C) results in the creation or imposition of
any Liens (other than Permitted Liens) on any of the Collateral under, or
results in the acceleration of, any obligation.
 
(v)           Other than as set forth in the Indenture, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority now pending against the Company or, to the best of the Company’s
knowledge, threatened against the Company or any property or other assets or
rights of the Company or with respect to this Agreement that would reasonably be
expected to have a Material Adverse Effect.
 
(b)           The Trustee hereby makes the following representations and
warranties as of the date hereof with respect to itself and for the benefit of
the Collateral Agent and the Depositary Bank:
 
(i)           It is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified to do
business in, and is in good standing in all jurisdictions where the nature of
its business makes such qualification necessary, except where the failure to
effect such qualification would not have a material adverse effect upon its
ability to perform its obligations pursuant to this Agreement or the Indenture
to which it is a party.
 
(ii)           It has all necessary corporate power to execute, deliver and
perform under this Agreement and the Indenture. All action on its part that is
required for the authorization, execution, delivery and performance of this
Agreement and the Indenture has been duly and effectively taken; and the
execution, delivery and performance of this Agreement and the Indenture do not
require the approval or consent of any shareholder or the holder or trustee of
any debt or other obligations which has not been obtained.
 
(iii)           This Agreement and the Indenture have been duly executed and
delivered by the Trustee and constitute the legal, valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with the terms
thereof, except as such enforceability (A) may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors’ rights and remedies generally and (B) is
subject to general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
 
(iv)           Neither the execution, delivery and performance of this Agreement
and the Indenture nor the consummation of any of the transactions contemplated
hereby or thereby nor performance of or compliance with the terms and conditions
hereof or thereof (A) contravenes any material Applicable Law to such Person or
(B) constitutes a default under or results in the violation of the provisions in
the charter, certificate of incorporation or by-laws of such Person or of any
indenture, loan or credit agreement or any other agreement, lease, instrument or
document to which such Person is a party or by which it or its properties may be
bound.
 
(v)           There are no actions, suits or proceedings at law or in equity or
by or before any Governmental Authority now pending or, to the best of such
Person’s knowledge, threatened which could reasonably be expected to have a
material and adverse effect on the performance by such Person of its obligations
hereunder or under the Indenture or which questions the validity, binding effect
or enforceability hereof or of the Indenture, any action to be taken pursuant
hereto or thereto or any transactions contemplated hereby or thereby.
 
ARTICLE VII
 
MISCELLANEOUS
 
SECTION 7.1.   Agreement for Benefit of Parties Hereto.
 
Nothing in this Agreement, express or implied, is intended or shall be construed
to confer upon, or to give to, any Person other than the parties hereto and
their respective successors and assigns, any right, remedy or claim under or by
reason of this Agreement or any covenant, condition or stipulation hereof; and
the covenants, stipulations and agreements contained in this Agreement are and
shall be for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns.
 
SECTION 7.2.   No Warranties.
 
Except as otherwise expressly provided herein, the Senior Parties have not made
to each other nor do they hereby or otherwise make to each other any warranties,
express or implied, nor do they assume any liability to each other with respect
to the enforceability, validity, value or collectability of the Collateral (or
any portion thereof). No Senior Party shall be liable to any other Senior Party
for any action or failure to act or any error of judgment, negligence, or
mistake, or oversight whatsoever on the part of any Senior Party or any Senior
Party’s agents, officers, employees or attorneys with respect to any transaction
relating to any of the notes or agreements evidencing or entered into with
respect to any of the Secured Obligations or any security therefor.
 
SECTION 7.3.   Severability.
 
In case any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected and/or impaired thereby.
 
SECTION 7.4.   Notices.
 
All notices, demands, certificates or other communications hereunder shall be in
writing and shall be deemed sufficiently given or served for all purposes when
delivered personally, when sent by certified or registered mail, postage
prepaid, return receipt requested or by private courier service, or, if followed
and confirmed by mail or courier service notice, when telecopied, in each case,
with the proper address as indicated below. Each party may, by written notice
given to the other parties, designate any other address or addresses to which
notices, certificates or other communications to them shall be sent as
contemplated by this Agreement. Until otherwise so provided by the respective
parties, all notices, certificates and communications to each of them shall be
addressed as follows:
 

 
Company:
PPL Ironwood, LLC
829 Cumberland Street
Lebanon, PA 17042
Attention:         Project Manager
Facsimile:         717-228-1271
       
Trustee:
The Bank of New York Mellon
101 Barclay Street, 4W
New York, NY 10286
Attention:         Corporate Trust Administration
Facsimile:         212-815-5596
       
Collateral Agent:
The Bank of New York Mellon
101 Barclay Street, 4W
New York, NY 10286
Attention:         Corporate Trust Administration
Facsimile:         212-815-5596
       
Depositary Bank:
The Bank of New York Mellon
101 Barclay Street, 4W
New York, NY 10286
Attention:         Corporate Trust Administration
Facsimile:         212-815-5596

 
SECTION 7.5.   Successors and Assigns.
 
Whenever in this Agreement any party hereto is named or referred to, the
successors and assigns of such party shall be deemed to be included and all
covenants, promises and agreements in this Agreement by or on behalf of the
respective parties hereto shall bind and inure to the benefit of the respective
successors and assigns of such parties, whether so expressed or not.
 
SECTION 7.6.   Counterparts.
 
This Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all counterparts together constituting
only one instrument.
 
SECTION 7.7.   Governing Law.
 
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to contracts made and to be
performed in such state. All terms used herein which are not defined herein and
are defined in the UCC shall have the meanings therein stated, unless the
context otherwise requires.
 
SECTION 7.8.   Impairments of Other Rights.
 
Subject to Section 7.13, nothing in this Agreement is intended or shall be
construed to impair, diminish or otherwise adversely affect any other rights the
Senior Parties may have or may obtain against the Company pursuant to the
Financing Documents.
 
SECTION 7.9.   Amendment: Waiver.
 
No amendment, modification or supplement of this Agreement shall be effective
unless such amendment, modification or supplement was effected in accordance
with this Agreement. Any approval of an amendment to, or any waiver of any
provision of, this Agreement shall be effective only in the specific instance
and for the specific purpose for which such approval or waiver is given. No
delay on the part of any Senior Party in the exercise of any right, power or
remedy shall operate as a waiver thereof, nor shall any single or partial waiver
by such Senior Party of any right, power or remedy preclude any further exercise
thereof, or the exercise of any other right, power or remedy.
 
SECTION 7.10.         Headings.
 
Headings herein are for convenience only and shall not be relied upon in
interpreting or enforcing this Agreement.
 
SECTION 7.11.         Termination.
 
This Agreement shall remain in full force and effect until payment in full of
all the Financing Liabilities and termination of the Financing Commitments.
Following the Senior Debt Termination Date, this Agreement shall continue in
full force and effect among the Company, the Subordinated Debt Providers, and
the Collateral Agent, and the Subordinated Debt Providers shall have all powers,
duties and obligations granted hereunder to the Senior Parties or the Senior
Parties as if it were a Senior Party.
 
SECTION 7.12.         Entire Agreement.
 
This Agreement, including the documents referred to herein, embodies the entire
agreement and understanding of the parties hereto and supersedes all prior
agreements and understandings of the parties hereto relating to the subject
matter herein contained.
 
SECTION 7.13.         Limitation of Liability.
 
Satisfaction of the obligations of the Company under this Agreement and each
other Financing Documents, for the payment of the principal of or premium, if
any, or interest on any Financing Liability, or any part thereof, or for any
claim based thereon or otherwise in respect thereof or related thereto, shall be
had solely from the Collateral and the assets of the Company and no recourse
shall be had in the event of any non-performance by the Company of any such
obligations to (i) any assets or properties of the Members (or any Person that
controls any Member within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) or (ii) any Affiliate of the Company or any
incorporators, officers, directors or employees thereof, and no judgment for any
deficiency upon the obligations of the Company under this Agreement or any other
Financing Document, for the payment of the principal of or premium, if any, or
interest on any Financing Liability, or any part thereof, or for any claim based
thereon or otherwise in. respect thereof or related thereto, shall be obtainable
by the Senior Parties or any of them against any Member or Affiliate of the
Company or any other incorporator, stockholder, officer, employee or director,
past, present or future of the Company or any Affiliate of the Company;
provided, however, that nothing contained herein shall prevent the taking of any
action permitted by law against the Company or any of its Affiliates, or in any
way affect or impair the rights of the Trustee or Bondholders to take any action
permitted by law, in either case to realize upon the Collateral and; provided,
further, that nothing herein shall be deemed to affect the obligations of any
Affiliate of the Company under any Transaction Document to which such Affiliate
is a party.
 
SECTION 7.14.         Replacement and/or Removal of Independent Engineer;
Payment of Independent Engineer.
 
The Company shall in accordance with Section 1 of the Independent Engineer
Agreement, have the right to replace the then current Independent Engineer at
the expiration of the then current term of the Independent Engineer Agreement
and shall appoint a successor Independent Engineer from the engineers listed on
Exhibit 7.14. The Collateral Agent shall, upon receipt of a written request
contained in Senior Party Certificates of the Required Senior Parties, remove
the Independent Engineer if at any time the Independent Engineer becomes
incapable of acting or is, or is reasonably likely to be, adjudged bankrupt or
insolvent or a receiver is appointed for, or any public officer shall take
charge or control of, the Independent Engineer or its property or its affairs
for the purpose of rehabilitation, conservation or liquidation, and shall
appoint a successor Independent Engineer from those engineers then listed on
Exhibit 7.14. Within thirty (30) days of receipt by the Collateral Agent of a
written notification from the Company to the effect that the Independent
Engineer has failed to carry out its obligations in a timely manner, the
Collateral Agent shall, unless directed in Senior Party Certificates of the
Required Senior Parties not to do so, remove the Independent Engineer and
appoint a successor Independent Engineer from those engineers then listed on
Exhibit 7.14. The Company shall pay for all services performed by the
Independent Engineer and its reasonable costs and expenses related thereto.
 
SECTION 7.15.         Third-Party Engineer Dispute Resolution.
 
(a)           If the Company and the Independent Engineer are in dispute in
respect of a notice, plan, report, certificate or budget and they are unable to
resolve the dispute within seven (7) days of the Independent Engineer expressing
its disagreement with such notice, plan, report, certificate or budget, a single
independent engineer (the “Third-Party Engineer”) shall be designated to
consider and decide the issues raised by such dispute. The selection of such
Third-Party Engineer shall be made from the list of engineers described below,
the initial version of which is attached as Exhibit 7.14. The Company, as the
case may be, shall designate the Third-Party Engineer from such list not later
than the third (3rd) day following the expiration of the seven (7) day period
described above and such designation shall become effective in three (3) days.
Within three (3) days of the designation of a Third-Party Engineer, each of the
Company and the Independent Engineer shall submit to the Third-Party Engineer a
notice setting forth in detail such Person’s position in respect of the issues
in dispute. Such notice shall include supporting documentation, if appropriate.
 
(b)           The Third-Party Engineer shall complete all proceedings and issue
his decision with regard to the issues in dispute as promptly as reasonably
possible, but in any event within ten (10) days of the date on which he is
designated as the Third-Party Engineer unless the Third-Party Engineer
reasonably determines that additional time is required in order to give adequate
consideration to the issues raised. In such case the Third-Party Engineer shall
state in writing his reasons for believing that additional time is needed and
shall specify the additional period required, which such period shall not exceed
ten (10) days without the Company’s agreement.
 
(c)           If the Third-Party Engineer determines that the position set forth
in the Independent Engineer’s notice is correct, it shall so state and shall
state the corrective actions to be taken by the Company. In such case, the
Company shall promptly take such actions. The Company shall thereafter bear all
costs which may arise from actions taken pursuant to the Third-Party Engineer’s
decision. If the Third-Party Engineer determines that the position set forth in
the Independent Engineer’s notice is not correct, it shall so state and shall
state the appropriate actions to be taken by the Company. In such case, the
Company shall take such actions and for purposes of the Financing Documents, the
Independent Engineer and the Collateral Agent shall be deemed to have approved,
confirmed, concurred in or consented to the notice, plan, report, certificate or
budget in dispute. The decision of the Third-Party Engineer shall be final and
non-appealable. The Company shall bear all reasonable costs incurred by the
Third-Party Engineer in connection with this dispute resolution mechanism.
 
(d)           The Third-Party Engineer shall be chosen from the list of
qualified engineers set forth in Exhibit 7.14. Such list shall be used by the
Collateral Agent (upon written direction of the Required Senior Parties) to
choose a successor Independent Engineer as well. At any time either the Company
or the Collateral Agent (upon written direction of the Required Senior Parties)
may remove a particular engineer from the list by obtaining the other Person’s
reasonable consent to such removal. However, neither the Company nor the
Collateral Agent may remove a name or names from the list if such removal would
leave the list without at least two (2) names, unless, concurrently therewith,
the Company and the Collateral Agent (upon direction of the Required Senior
Parties) reasonably agree to the addition of one (I) or more names to such list.
 
(e)           During January of each year, each of the Company and the
Collateral Agent (upon direction of the Required Senior Parties) shall review
the current list of Third-Party Engineers and give notice to the other of any
proposed additions to the list and any intended deletions. Intended deletions
shall automatically become effective forty-five (45) days after notice is
received by the other Person unless written objection is made by such other
Person within thirty (30) days and provided that such deletions do not leave the
list without at least two (2) names. Proposed additions to the list shall
automatically become effective thirty forty-five (45) after notice is received
by the other Person unless written objection is made by such other Person within
thirty (30) days. By mutual agreement between the Company and the Collateral
Agent (upon direction of the Required Senior Parties), a new name or names may
be added to the list of Third-Party Engineers at any time.
 
[Remainder of This Page Intentionally Left Blank]
 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Collateral Agency Agreement to be duly executed by their respective officers
thereunto duly authorized, as of the day and year first above written.
 

 

   
PPL Ironwood, LLC
               
By:
       
Name:
     
Title:

 

   
The Bank of New York Mellon, as Trustee
               
By:
       
Name:
     
Title:

 

   
The Bank of New York Mellon,
   
as Collateral Agent
               
By:
       
Name:
     
Title:

 

   
The Bank of New York Mellon,
   
as Depositary Bank
               
By:
       
Name:
     
Title:

 

[A&R Collateral Agency Agreement]
 
 

--------------------------------------------------------------------------------

 
EXHIBIT 2.1
 
FORM OF DESIGNATION LETTER
 
[Date]
 
The Bank of New York Mellon
 
[_______]
 
Re:           PPL Ironwood Project
 
Ladies and Gentlemen:
 
Reference is made to the Amended and Restated Collateral Agency Agreement (the
“Collateral Agency Agreement”) dated as of February 12, 2013 among PPL Ironwood
L.L.C. (the “Company”), The Bank of New York Mellon, as Trustee, The Bank of New
York Mellon, as Collateral Agent, and The Bank of New York Mellon, as Depositary
Bank. Capitalized terms used herein and not defined herein shall have the
meanings set forth in the Collateral Agency Agreement.
 
The Company and the undersigned have agreed that the undersigned shall be [an
additional Lender] [the Agent for additional Lenders] under the Collateral
Agency Agreement ([each such Lender,] an “Additional Lender”) under the
[describe new debt document].
 
The undersigned is delivering this Designation Letter pursuant to the Collateral
Agency Agreement in order to permit (i) [the undersigned] [each Additional
Lender] to become a [Senior] [Subordinated] Party thereunder and (ii) the
undersigned [and the Additional Lender] to become secured parties under the
Collateral Agency Agreement and the other Financing Documents and to benefit
from the Collateral under the other Security Documents in accordance with the
terms of the Collateral Agency Agreement and the other Security Documents.
 
Attached hereto is a copy of the Collateral Agency Agreement.
 
The undersigned [on behalf of itself and the Additional Lenders] accedes to and
agrees to be bound by all of the terms and provisions of the Collateral Agency
Agreement, the Security Documents and the other Financing Documents. You are
hereby instructed to deliver a copy of this Designation Letter to each Person
party to the Collateral Agency Agreement.
 
Our address for notices is:
 
[Insert information]
 
Our wire transfer instructions are:
 
[Insert Information]
 
[Insert in the case of Additional Lenders that are to be Subordinated Debt
Providers only: Attached hereto as Annex A are the Terms of Subordination set
forth in the Collateral Agency Agreement, and the undersigned [on behalf of the
Additional Lenders] agrees that such Terms of Subordination shall be
incorporated herein and that [it] [the Additional Lenders] shall be bound by the
terms thereof.] If there is any conflict between such Terms of Subordination and
the lending documents between the Company and the undersigned, such Terms of
Subordination shall govern.
 
This Designation Letter may be executed in any number of counterparts, each
executed counterpart constituting an original but all counterparts together
constituting only one instrument.
 
THIS DESIGNATION LETTER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST
EXTENT A NEW YORK COURT WOULD PERMIT) ANY RULE OF LAW THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
 

 

   
[ADDITIONAL LENDER]
               
By:
       
Name:
     
Title:

 

   
Acknowledged:
         
PPL Ironwood, LLC
         
By:
       
Name:
     
Title:

 

   
Acknowledged:
         
The Bank of New York Mellon,
   
as Collateral Agent
         
By:
       
Name:
     
Title:

 
 

--------------------------------------------------------------------------------

 
EXHIBIT 2.2
 
TERMS OF SUBORDINATION
 
Reference is made herein to a certain Amended and Restated Collateral Agency
Agreement, dated as of February 12, 2013 (as amended and in effect from time to
time, the “Collateral Agency Agreement”), entered into among The Bank of New
York Mellon, as Collateral Agent (in such capacity, together with its successors
and permitted assigns in such capacity, the “Collateral Agent”), The Bank of New
York Mellon, (in such capacity, together with its successors and permitted
assigns in such capacity, the “Depositary Bank”), The Bank of New York Mellon,
as Trustee under the Indenture named therein, on its own behalf and on behalf of
the Bondholders described therein (in such capacity, together with its
successors and permitted assigns in such capacity, the “Trustee”), the other
Senior Parties identified therein, the Subordinated Debt Providers referred to
therein, and PPL Ironwood, LLC (the “Company”). Capitalized terms used but not
defined herein shall have the respective meanings ascribed thereto in the
Collateral Agency Agreement, the terms of which are incorporated herein.
 
(i)           Subordination of Subordinated Obligations. The Company, for itself
and its successors and assigns, covenants and agrees, and each Subordinated Debt
Provider that has entered into these Terms of Subordination set forth in this
annex or appendix (the “Terms of Subordination”), who then through the
incorporation of these terms into an executed agreement or otherwise, on its own
behalf and on behalf of each subsequent holder of the Subordinated Obligations
(defined below), likewise covenants and agrees, that, to the extent and in the
manner set forth in these Terms of Subordination, the Subordinated Debt, whether
of principal of and interest and premium (including any Make-Whole Premium) or
prepayment or liquidation penalty (if any) on the Subordinated Debt and fees and
expenses incurred in enforcement of the same (collectively, the “Subordinated
Obligations”), are hereby expressly made subordinate and subject in right of
payment to the prior payment in full in cash of all obligations in respect of
Senior Debt, whether of principal, interest or premium (including any Make-Whole
Premium), if any, and fees and expenses incurred in the enforcement of the same
and the fees, expenses and indemnities to be paid to the Collateral Agent and
the Depositary Bank pursuant to the Collateral Agency Agreement (collectively,
the “Senior Obligations”); provided, however, that nothing in these Terms of
Subordination shall be deemed to prohibit any Subordinated Debt Provider from
receiving payments in accordance with the terms of the Collateral Agency
Agreement, including but not limited to Article IV thereof
 
(ii)           Payment of Proceeds Upon Dissolution. In the event of (i) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relative to the Company or to its creditors, as such, or to its assets, or (ii)
any liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (iii) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company, then and in any such event:
 
(A)           the Senior Parties shall be entitled to receive payment in full in
cash of all amounts due or to become due on or in respect of all Senior
Obligations, or provision shall be made for such payment, before any
Subordinated Debt Provider shall be entitled to receive any payment of the
Subordinated Obligations;
 
(B)           any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or otherwise,
to which any Subordinated Party would be entitled but for the provisions of
these Terms of Subordination, including any such payment or distribution that
may be payable or deliverable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Subordinated
Obligations, shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, to the Collateral Agent for distribution in
accordance with the terms of the Collateral Agency Agreement.
 
(C)           if, notwithstanding the foregoing provisions of this clause (ii)
of these Terms of Subordination, any Subordinated Debt Provider shall have
received, before all Senior Obligations are paid in full in cash or payment
thereof provided for, any such payment or distribution of assets of the Company
of any kind or character, whether in cash; property or securities, including any
such payment or distribution arising out of the exercise by any Subordinated
Debt Provider of a right of set-off or counterclaim and any such payment or
distribution received by reason of any other indebtedness of the Company being
subordinated to the Subordinated Obligations, then, and in such event, such
payment or distribution shall be held in trust for the benefit of, and shall be
immediately paid over or delivered to, the Collateral Agent for distribution in
accordance with the terms of the Collateral Agency Agreement; and
 
(D)           if any Subordinated Debt Provider shall have failed to file claims
or proofs of claim with respect to the Subordinated Obligations earlier than
[15} days prior to the deadline for any such filing, the Subordinated Debt
Provider shall execute and deliver to the Senior Parties such powers of
attorney, assignments or other instruments as the Required Senior Parties may
reasonably request to file such claims or proofs of claim.
 
The consolidation of the Company with, or the merger of the Company into,
another entity or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an entirety
to another entity upon the terms and conditions set forth in the Indenture or
the correlative provisions of any other Financing Document shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for
purposes of these Terms of Subordination if the entity formed by such
consolidation or into which the Company is merged or the entity that acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in the Indenture or such
correlative provisions of any other Financing Document.
 
(iii)           No Payment. Each Subordinated Debt Provider hereby agrees that,
unless and until the Senior Obligations shall have been paid in full in cash,
(i) no payment on account of the Subordinated Obligations or any judgment with
respect thereto (and no payment on account of the purchase or redemption or
other acquisition of the Subordinated Obligations) shall be made by the Company
or by the Collateral Agent or the Depositary Bank on behalf of the Company and
(ii) no Subordinated Debt Provider shall (A) ask, demand, sue for, take or
receive from the Company, by set-off or in any other manner, or (B) seek any
other remedy allowed at law or in equity against the Company for breach of the
Company’s obligations under the instruments representing such Subordinated
Obligations, provided that nothing herein shall be deemed to prohibit payment of
any of the Subordinated Obligations on any day that, under the terms thereof, is
a scheduled payment date to the extent expressly permitted by the Collateral
Agency Agreement and the correlative provisions of any other Financing Document
and solely to the extent of available funds.
 
In the event that, notwithstanding the foregoing provisions of this clause (iii)
of these Terms of Subordination, any Subordinated Debt Provider shall have
received any payment prohibited by the foregoing provisions of this clause (iii)
including, without limitation, any such payment arising out of the exercise by
any Subordinated Debt Provider of a right of set-off or counterclaim and any
such payment received by reason of other indebtedness of the Company being
subordinated to the Subordinated Obligations, then, and in any such event, such
payment shall be held in trust for the benefit of, and shall be immediately paid
over or delivered to, the Collateral Agent for application in accordance with
the Collateral Agency Agreement.
 
The provisions of this clause (iii) of these Terms of Subordination shall not
alter the rights of the Senior Parties under the provisions of clause (ii) of
these Terms of Subordination.
 
(iv)           Subrogation. Subject to the payment in full in cash of all Senior
Obligations, the Subordinated Debt Providers shall be subrogated equally and
ratably with the holders of all indebtedness of the Company that by its express
terms is subordinated to Senior Obligations of the Company to the same extent as
the Subordinated Obligations are subordinated and that is entitled to like
rights of subrogation) to the rights of the Senior Parties to receive payments
and distributions of cash, property and securities applicable to the Senior
Obligations until the Subordinated Obligations shall be paid in full in cash.
For purposes of such subrogation, no payments or distributions to the Senior
Parties of any such, property or securities to which any Subordinated Debt
Provider would be entitled except for the provisions of these Terms of
Subordination, and no payments over pursuant to the provisions of these Terms of
Subordination to the Senior Parties by any Subordinated Debt Providers, shall be
deemed to be a payment or distribution by the Company to or on account of the
Senior Obligations.
 
(v)           Provisions Solely to Define Relative Rights. The provisions of
these Terms of Subordination are and are intended solely for the purpose of
defining the relative rights of the Subordinated Debt Providers on the one hand
and the Senior Parties and the Collateral Agent on the other hand. Nothing
contained in these Terms of Subordination or elsewhere in any of the Financing
Documents relating to the Subordinated Obligations is intended to or shall:
 
(A)           affect, as among the Company, its creditors other than the Senior
Parties and the Subordinated Debt Providers, the obligation of the Company to
pay to the Subordinated Debt Providers, the Subordinated Obligations as and when
the same shall become due and payable in accordance with their terms;
 
(B)           affect the relative rights against the Company of the Subordinated
Debt Providers and creditors of the Company other than the Senior Parties;
 
(C)           vitiate the occurrence of an “Event of Default” under the
Indenture or the correlative provisions of any other Financing Document to the
extent that any failure to make a payment of principal of, or interest on, any
Subordinated Obligations by reason of the conditions specified in clause (ii) or
(iii) of these Terms of Subordination would otherwise constitute such an Event
of Default; or
 
(D)           prevent any Subordinated Debt Provider from exercising all
remedies otherwise permitted by Applicable Law upon default under any of the
Financing Documents relating to the Subordinated Obligations, subject to the
rights, if any, under these Terms of Subordination of the Senior Parties, (i) in
the event of any proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other- marshalling of assets and
liabilities of the Company referred to in clause (ii) of these Terms of
Subordination, to receive, pursuant to and in accordance with such clause (ii),
cash, property and securities otherwise payable or deliverable to the
Subordinated Debt Providers, or (ii) under the conditions specified in clause
(iii) of these Terms of Subordination, to prevent any payment or action
prohibited by such clause (iii).
 
(vi)           No Waiver of Subordination Provisions. No right of any present or
future Senior Party or the Collateral Agent to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by. such Senior Party, or by any non-compliance by the Company with
the terms, provisions and covenants of these Terms of Subordination, regardless
of any knowledge thereof such Senior Party may have or be otherwise charged
with.
 
Without in any way limiting the generality of the foregoing paragraph, the
occurrence of any one or more of the following (without the consent of or notice
to any Subordinated Debt Provider), shall not cause any Senior Party to incur
any responsibility to any Subordinated Debt Provider or the obligations
hereunder of any Subordinated Debt Provider to the Senior Parties:
 
(A)           at any time or from time to time, the time for any performance of
or compliance with any Subordinated Obligation or any Senior Obligation shall be
extended, or such performance or compliance shall be waived;
 
(B)           any of the acts mentioned in any of the provisions of any of the
Collateral Agency Agreement, the Indenture, any other Transaction Document, any
other Financing Document or any other agreement or instrument referred to herein
or therein shall be done or omitted;
 
(C)           the maturity of any Subordinated Obligation or Senior Obligation
shall be accelerated, or any Subordinated Obligation or any Senior Obligation
shall be modified, supplemented or amended in any respect, or any right under
any of the Collateral Agency Agreement, the Indenture, any other Transaction
Document, any other Financing Document or any other agreement or instrument
referred to herein or therein shall be waived or any other guarantee of any
Subordinated Obligation or any Senior Obligation or any security therefor shall
be released or exchanged in whole or in part or otherwise dealt with; or
 
(D)           any lien or security interest granted to, or in favor of, the
Collateral Agent, the Depositary Bank or any Senior Party as security for any
Subordinated Obligation or any Senior Obligation shall fail to be perfected.
 
(vii)           Notice to Subordinated Debt Providers. The Company shall give
prompt written notice to each Subordinated Debt Provider of any fact known to
the Company that would prohibit the making of any payment to it in respect of
the Subordinated Obligations. Notwithstanding the provisions of these Terms of
Subordination, no Subordinated Debt Provider shall be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to it
in respect of the Subordinated Obligations, unless and until such Subordinated
Debt Provider shall have received written notice thereof from the Company or a
Senior Party or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, each Subordinated Debt Provider shall be
entitled in all respects to assume that no such facts exist.
 
Each Subordinated Debt Provider shall be entitled to rely on the delivery to it
of a written notice by a Person representing itself to be a Senior Party (or a
trustee, fiduciary or agent therefor) or the Collateral Agent to establish that
such notice has been given by a Senior Party (or a trustee, fiduciary or agent
therefor).
 
(viii)           Reliance on Judicial Order or Certificate of Liquidation Agent.
Upon any payment or distribution of assets of the Company referred to in these
Terms of Subordination, the Subordinated Debt Providers shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Subordinated Debt Providers, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the Senior Parties and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to these Terms of
Subordination.
 
(ix)           Specific Performance. Each of the Senior Parties may demand
specific performance of these terms of subordination, whether or not the Company
shall have complied with any of the provisions hereof applicable to them at any
time when the Subordinated Debt Provider shall have failed to comply with any of
such provisions applicable to it. The Subordinated Debt Providers hereby
irrevocably waive any defense based on the adequacy of a remedy at law, which
might be asserted as a bar to such remedy of specific performance.
 
(x)           Participation of Subordinated Debt Providers. So long as any of
the Senior Obligations shall remain unpaid or otherwise unsatisfied, no
Subordinated Debt Provider shall commence or join with any creditor other than
the Collateral Agent in commencing any proceeding referred to above for the
payment of any amounts which otherwise would be payable or deliverable upon or
with respect to the Subordinated Obligations.
 
(xi)           Survival. The obligations of the Company under these Terms of
Subordination shall survive the repayment of the Subordinated Obligations.
 
(xii)           Headings. The section headings appearing herein are included
solely for convenience of reference and are not intended to affect the
interpretation of any provision of these Terms of Subordination.
 
 

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EXHIBIT 2.3
 
FORM OF SENIOR PARTY CERTIFICATE
 
The Bank of New York Mellon
as Collateral Agent
PPL Ironwood Project
Senior Party Certificate
[Date]

 
Reference is made to that certain Amended and Restated Collateral Agency
Agreement, dated as of February 12, 2013 (as amended, modified or supplemented
from time to time, the “Collateral Agency Agreement”), among PPL Ironwood,
L.LC., (together with its successors and assigns, the “Company”) and The Bank of
New York Mellon, as trustee and depositary bank (together with its successors in
such capacity, the “Collateral Agent”). Each capitalized term used herein and
not otherwise defined herein shall have the meaning assigned to it in the
Indenture.
 
The undersigned, [INSERT NAME OF SENIOR PARTY], is a Senior Party under the
Collateral Agency Agreement and hereby certifies the following:
 
(a)           Trigger Event has occurred and is continuing [insert description
of Trigger Event, if applicable];
 
(b)           the aggregate principal amount of Senior Debt owed to the Senior
Party by the Company is $[INSERT AMOUNT];
 
(c)           the aggregate amount of all undrawn financing commitments from the
Senior Party to the Company is $[INSERT AMOUNT]1.
 
The undersigned hereby directs the Collateral Agent to, in accordance with the
terms of the Security Documents, take the following actions:
 
[INSERT DESCRIPTION OF THE ACTION TO BE TAKEN BY THE COLLATERAL AGENT]
 
 

   
[Name of Senior Party]
         
By:
       
Name:
     
Title:

 
 
 

_________________
1
Include the principal amount of any undrawn letter of credit here.

 
 

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EXHIBIT 7.14
 
THIRD-PARTY ENGINEERS
 
Black & Veatch - Kansas City Office
 
R.W. Beck - Framingham (Boston) Office
 
Sergeant & Lundy
 
Stone & Webster (to the extent not the Independent Engineer)