Exhibit 10.1
EXECUTION COPY
 
 
EQUITY COMMITMENT AGREEMENT
among
SANDY CREEK ENERGY ASSOCIATES, L.P.,
a Delaware limited partnership,
as Borrower
and
DYNEGY SANDY CREEK HOLDINGS, LLC,
a Delaware limited liability company,
as Equity Investor
and
CREDIT SUISSE,
as Collateral Agent
Dated as of August 29, 2007
 
 

 

 

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TABLE OF CONTENTS

         
ARTICLE 1. DEFINITIONS
    3  
1.1 Defined Terms
    3  
1.2 Rules of Interpretation
    6  
1.3 UCC Definitions
    6  
ARTICLE 2. OBLIGATIONS OF EQUITY INVESTOR AND THE BORROWER
    6  
2.1 Equity Contributions
    6  
2.2 Payments
    10  
2.3 Waiver of Defenses; Obligations Unconditional
    11  
2.4 Subrogation
    12  
ARTICLE 3. SPECIFIC PROVISIONS
    13  
3.1 Reinstatement
    13  
3.2 Specific Performance
    13  
3.3 Bankruptcy Code Waiver by Equity Investor
    14  
3.4 Commencement of Bankruptcy Proceedings
    14  
3.5 Grant of Security Interest; Actions by Collateral Agent
    14  
3.6 Set-Off
    15  
ARTICLE 4. PURCHASE OF PARTICIPATING INTEREST
    15  
4.1 Required Purchase of Participating Interest
    15  
4.2 Effect of Purchase of Participating Interest
    16  
4.3 Subordinate Nature of Participating Interest
    16  
4.4 Rights of Agents and the Secured Parties
    16  
4.5 No Voting Rights
    17  
4.6 Outright Purchase; Obligations Unconditional
    17  
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
    17  
5.1 Corporate Existence and Business
    17  
5.2 Power and Authorization; Enforceable Obligations
    17  
5.3 No Legal Bar
    18  
5.4 Ownership Interests
    18  
5.5 EPC Contract and Credit Documents
    18  
5.6 Solvency Matters
    18  
5.7 Compliance with Laws
    18  
5.8 No Litigation or Proceeding
    18  
5.9 Investment Company Act
    19  
ARTICLE 6. COVENANTS
    19  
6.1 Existence
    19  
6.2 Compliance with Laws
    19  
6.3 Credit Support
    19  
ARTICLE 7. MISCELLANEOUS
    19  
7.1 Successions or Assignments
    19  
7.2 Waivers
    20  
7.3 Interpretation
    20  
7.4 Remedies Cumulative
    20  
7.5 Severability
    20  
7.6 Amendments
    20  
7.7 Jurisdiction
    21  
7.8 Governing Law
    21  
7.9 Integration of Terms
    21  
7.10 Notices
    21  
7.11 Counterparts
    22  
7.12 Further Assurances
    22  
7.13 Termination of Agreement
    22  
7.14 No Third Party Beneficiaries
    22  
7.15 Consequential Damages
    22  
7.16 Scope of Liability
    22  

 

i

EQUITY COMMITMENT AGREEMENT
This EQUITY COMMITMENT AGREEMENT, dated as of August 29, 2007 (this
“Agreement”), by and among SANDY CREEK ENERGY ASSOCIATES, L.P., a limited
partnership organized and existing under the laws of the State of Delaware (the
“Borrower”), DYNEGY SANDY CREEK HOLDINGS, LLC, a limited liability company
organized and existing under the laws of the State of Delaware (the “Equity
Investor) and CREDIT SUISSE, in its capacity as collateral agent for the Secured
Parties under the Intercreditor Agreement (in such capacity, together with its
successors and permitted assigns, the “Collateral Agent”).
RECITALS
WHEREAS, the Borrower desires to develop, construct, finance and operate,
together with one or more Co-Participants (with such term and each other
capitalized term used but not defined in this preamble having the meaning
assigned thereto in Article I of the Credit Agreement referred to below), an
approximately 900 net megawatt coal-fired power generation facility, to be
located in Riesel, Texas, known as the “Sandy Creek Energy Station” (as more
fully defined in the Credit Agreement referred to below, the “Project”).
WHEREAS, in order to finance the development, construction, operation and
maintenance of its interests in the Project, (a) the Borrower has entered into
that certain Credit Agreement, dated as of the date hereof (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the lenders from time to time party thereto,
Credit Suisse, as administrative agent for the Lenders under the Credit
Agreement, the Collateral Agent, and, among others, Credit Suisse Securities
(USA) LLC and RBS Securities Corporation as joint lead arrangers and as joint
book managers, and (b) the Sponsors and Holdco have agreed to contribute (or
cause to be contributed) cash in the form of common equity to the Borrower to
fund a portion of the Project Costs, in the case of the Equity Investor,
pursuant to this Agreement, and, in the case of the other Sponsor and Holdco,
pursuant to the other Equity Commitment Agreements.
WHEREAS, as of the Closing Date, the Equity Investor is the indirect owner of
50% of the outstanding economic and beneficial ownership interests in the
Borrower.
WHEREAS, the Equity Investor has agreed to make Equity Contributions (as defined
below) in accordance with this Agreement in order to finance a portion of the
cost of developing and constructing the Project and to satisfy certain other
conditions under and in accordance with the Loan Documents.
WHEREAS, the Equity Investor has agreed to provide credit support for its Equity
Commitment obligations in the form of one or more irrevocable letters of credit,
in form and substance reasonably acceptable to the Collateral Agent, issued by
one or more Acceptable Credit Providers (each such letter of credit, “Acceptable
Credit Support”).
WHEREAS, the execution and delivery of this Agreement, and the provision of
Acceptable Credit Support, is a condition precedent to the Lenders’ obligation
to make Loans and other extensions of credit to the Borrower under the Credit
Agreement.

 

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AGREEMENT
NOW, THEREFORE, in consideration of the promises contained herein, and in order
to induce the Lenders to enter into the Credit Agreement and the other Loan
Documents and to make the advances of credit contemplated thereby, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Defined Terms. Each capitalized term used and not otherwise defined herein
(including the preamble and recitals) shall have the meaning assigned to such
term (whether directly or by reference to another agreement or document) in the
Credit Agreement. In addition to the terms defined in the Credit Agreement, the
following terms shall have the following respective meanings:
“Acceptable Credit Support” has the meaning given in the recitals.
“Act of Required Secured Parties” has the meaning given in the Intercreditor
Agreement.
“Agreement” has the meaning given in the preamble.
“Borrower” has the meaning given in the preamble.
“Borrower Interests” has the meaning give in the Pledge Agreement.
“Collateral Agent” has the meaning given in the preamble.
“Contribution Amount” has the meaning given in Section 2.1(e).
“Contribution Date” has the meaning given in Section 2.1(e).
“Contribution Request” has the meaning given in Section 2.1(e).
“Credit Agreement” has the meaning given in the recitals.
“Date Certain Funding Contribution” has the meaning given in Section
2.1(a)(iii).
“Debt Equity Ratio” has the meaning given in the Depositary Agreement.
“Default Funding Contribution” has the meaning given in Section 2.1(a)(ii).
“Defaulted Payment” has the meaning given in Section 4.1.
“Discharge Date” has the meaning given in the Intercreditor Agreement.

 

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“Discharge of Secured Obligations” has the meaning given in the Intercreditor
Agreement.
“Drawing Amount” has the meaning given in Section 2.1(d).
“Drawstop Equity Contributions” has the meaning given in the Depositary
Agreement.
“Equity Commitment” means, at any time, the Equity Contribution to be made by
the Equity Investor at such time (and in such amounts) as specified in
Section 2.1(a), as may be reduced from time to time in accordance with
(i) Section 2.1(c) in connection with a Permitted Project Interest Transfer and
(ii) Section 2.1(g) in connection with a transfer by the Equity Investor of all
or a portion of its ownership interest in the Equity Interests of the Borrower.
The initial Equity Commitment of the Equity Investor, which may be reduced as
specified in the preceding sentence, as of the Closing Date is $223,000,000 (the
“Initial Equity Commitment”). Notwithstanding any contrary provision contained
in any Transaction Document, the aggregate Equity Commitment shall not exceed
the Initial Equity Commitment.
“Equity Contribution” means any Equity Funds provided by the Equity Investor in
accordance with the terms of this Agreement.
“Equity Contribution Date” means each Contribution Date and each other date on
which any Equity Contribution is required to be made hereunder.
“Equity Funds” means any cash capital contribution in exchange for or in respect
of common equity interests provided by the Equity Investor to the Borrower
either directly or indirectly through one or more companies in which the Equity
Investor has ownership interest, in each case pursuant to the terms of this
Agreement.
“Equity Investor” has the meaning given in the preamble.
“Equity Letter of Credit” means each letter of credit provided in accordance
with this Agreement that constitutes Acceptable Credit Support.
“Final Equity Contribution” means an amount equal to the equity contributions
required to be made hereunder and under the other Equity Commitment Agreements
necessary for the Borrower to achieve a Debt Equity Ratio (as defined in the
Depositary Agreement) of 56.8 : 43.2 on the Term Conversion Date, after giving
effect to the application of such proceeds to the prepayment of the Loans in
accordance with Section 3.11(c) of the Depositary Agreement and Sections 2.10(c)
and 2.11(b) of the Credit Agreement and the reduction of Commitments in
accordance with Section 2.08 of the Credit Agreement; provided, that in no event
shall the Investor Percentage of such amount, together with all other Equity
Contributions made by the Equity Investor in accordance with the terms of this
Agreement, exceed the Equity Commitment.

 

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“Funding Contribution” means each Project Cost Funding Contribution, each
Default Funding Contribution, each Date Certain Funding Contribution and each
Term Conversion Date Funding Contribution.
“Holdco Equity Contributions” means any Holdco Equity Funds provided by Holdco
in accordance with the terms of the Holdco Equity Commitment Agreement.
“Holdco Equity Funds” means any cash capital contribution in exchange for or in
respect of common equity interests provided by Holdco to the Borrower either
directly or indirectly through the Pledgors pursuant to the terms of the Holdco
Equity Commitment Agreement.
“Investor Percentage” means 50%, as may be adjusted in accordance with Section
2.1(g).
“Limited Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of Sandy Creek Energy Associates, L.P., dated as of
August 29, 2007.
“Pro Rata Basis” means, with respect to any Equity Letter of Credit drawn to
fund a Funding Contribution, a percentage equal to the undrawn amount of such
Equity Letter of Credit divided by the total undrawn amount of the Equity
Letters of Credit being drawn to fund such Funding Contribution.
“Project Cost Funding Contribution” has the meaning given in Section 2.1(a)(i).
“Retained Interest” has the meaning given in Section 4.3.
“Secured Obligations” has the meaning given such term in the Intercreditor
Agreement.
“Secured Parties” has the meaning given such term in the Intercreditor
Agreement.
“Term Conversion Date Funding Contribution” has the meaning given in Section
2.1(a)(iv).
“Transferee” has the meaning given in Section 2.1(g).
“Trigger Event” shall have the meaning given such term in the Intercreditor
Agreement.
“UCC” shall mean the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of New York; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the perfection or priority
of the security interest in any Pledged Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.

 

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1.2 Rules of Interpretation. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the rules
of interpretation set forth in Section 1.02 of the Credit Agreement are hereby
incorporated by reference, mutatis mutandis, as if fully set forth herein.
1.3 UCC Definitions. All terms defined in the UCC shall have the respective
meanings given to those terms in the UCC, except where the context otherwise
requires.
ARTICLE 2.
OBLIGATIONS OF EQUITY INVESTOR AND THE BORROWER
2.1 Equity Contributions.
(a) Contributions by Equity Investor. Notwithstanding any provision to the
contrary contained herein (but subject to the last sentence of the definition of
Equity Commitment), the Equity Investor hereby agrees, for the benefit of the
Borrower and the Collateral Agent (on behalf of the Secured Parties), as
follows:
(i) from and after the date on which (A) the proceeds of the Term Loans and the
Construction Loans and the proceeds of any Permitted Tax-Exempt Bonds (to the
extent such Permitted Tax Exempt Bonds are funded in accordance with the terms
of the Credit Agreement) have been fully utilized (and prior to the Term
Conversion Date) or (B) a Default (but not an Event of Default) arises prior to
the Term Conversion Date under Section 7.01(l)(iii) of the Credit Agreement
(and, in the case of each of (A) and (B) above, the Holdco Equity Contributions
funded in accordance with the terms and conditions of the Holdco Equity
Commitment Agreement have been fully utilized), the Equity Investor hereby
agrees to make, or cause to be made through its direct or indirect subsidiaries,
an Equity Contribution to the Borrower in an amount equal to the Investor
Percentage of Project Costs as they are incurred (each, a “Project Cost Funding
Contribution”) until the Equity Commitment is fully funded (or, in the case of
clause (B) above, the earlier date when the applicable Default has been cured in
accordance with the terms of the Credit Agreement), each such Project Cost
Funding Contribution to be made not less than two (2) Business Days prior to the
date on which such Project Costs are reasonably expected to become due and
payable unless, prior to such second Business Day, such Project Costs are paid
with Drawstop Equity Contributions (provided that, in the case of clause
(B) above, the Equity Investor shall have received at least ten (10) Business
Days prior written notice of the applicable Default from the Borrower or the
Collateral Agent);
(ii) upon the occurrence of an Event of Default under the Credit Agreement at
any time prior to the Term Conversion Date, the Equity Investor hereby agrees to
make, or cause to be made through its direct or indirect subsidiaries, an Equity
Contribution to the Borrower in an amount equal to the then-unfunded Equity
Commitment (each, a “Default Funding Contribution”), such Default Funding
Contribution to be made not less than five (5) Business Days from receipt by the
applicable Equity Investor of notice from the Collateral Agent that an Event of
Default has occurred and is continuing;

 

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(iii) if the Term Conversion Date has not occurred by the Date Certain, the
Equity Investor hereby agrees to make, or cause to be made through its direct or
indirect subsidiaries, an Equity Contribution to the Borrower in an amount equal
to the then-unfunded Equity Commitment (a “Date Certain Funding Contribution”),
such Date Certain Funding Contribution to be made on the Date Certain; and
(iv) if and to the extent that on the Term Conversion Date any portion of the
Equity Commitment remains unfunded, the Equity Investor hereby agrees to make,
or cause to be made through its direct or indirect subsidiaries, an Equity
Contribution to the Borrower in an amount equal to the Investor Percentage of
the Final Equity Contribution (a “Term Conversion Date Funding Contribution”),
such Term Conversion Date Funding Contribution to be made on the Term Conversion
Date.
(b) Treatment of Proceeds. (i) (i) Not later than two (2) Business Days prior to
each Equity Contribution Date, the Equity Investor shall notify the Collateral
Agent whether it intends to fund all or any portion of its applicable Funding
Contribution (such notice, a “Funding Notice”). If the Equity Investor elects to
fund all or any portion of its Funding Contribution, it shall deposit such
Funding Contribution in Dollars and immediately available funds directly into
the relevant Project Account as set forth below in clause (ii) for application
in accordance with such clause. If the Equity Investor funds a portion (but not
all) of any Funding Contribution in Dollars, the Equity Investor shall notify
the Collateral Agent which Equity Letters of Credit should be drawn on a Pro
Rata Basis to fund the balance of such Funding Contribution (provided, however,
that the Collateral Agent’s failure to draw in any particular manner or on any
particular Equity Letter of Credit shall not limit or relieve the obligations of
the Equity Investor hereunder or prevent the Collateral Agent from making any
other drawing on any other Equity Letter of Credit in accordance with the terms
hereof so long as the aggregate of all such drawings does not exceed the Drawing
Amount). If the Equity Investor does not pay any of its Funding Contribution in
accordance with this Section 2.1(b)(i), the Collateral Agent shall draw upon all
Equity Letters of Credit on a Pro Rata Basis in the amount of such Funding
Contribution, and, on the applicable Equity Contribution Date, the Collateral
Agent shall deposit the proceeds of such draw (or draws) into the relevant
Project Account as set forth below in clause (ii) for application in accordance
with such clause (provided, however, that the Collateral Agent’s failure to draw
in any particular manner or on any particular Equity Letter of Credit shall not
limit or relieve the obligations of the Equity Investor hereunder or prevent the
Collateral Agent from making any other drawing on any other Equity Letter of
Credit in accordance with the terms hereof so long as the aggregate of all such
drawings does not exceed the Drawing Amount).

 

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(ii) The proceeds of each Project Cost Funding Contribution, Default Funding
Contribution and Date Certain Funding Contribution shall be deposited directly
into the Construction Account and applied solely to the payment of Project Costs
in accordance with Section 3.1 of the Depositary Agreement. The proceeds of each
Term Conversion Date Funding Contribution shall be deposited directly into the
Prepayment Account and applied to the prepayment of the Loans in accordance with
Section 3.11(c) of the Depositary Agreement. Notwithstanding that the Equity
Contributions of the Equity Investor shall be deposited directly into the
Construction Account or the Prepayment Account, as applicable, the Equity
Investor and the Borrower hereby agree that any and all Equity Contributions
made by the Equity Investor in accordance with the terms hereof shall be deemed
to be Equity Contributions by the Equity Investor (or its direct or indirect
subsidiary) in the Borrower (which Equity Contributions shall be evidenced
solely by one or more certificates that have been previously delivered to the
Collateral Agent, together with applicable transfer powers executed in blank, in
accordance with the terms of the applicable Security Documents). The Equity
Investor irrevocably consents to the application of Equity Contributions to the
payment of Project Costs and to the prepayment of the Loans as specified above
or in a manner otherwise permitted by the Loan Documents.
(iii) Any draw upon the Acceptable Credit Support which is paid by the issuing
bank thereof to the Collateral Agent to fund a Funding Contribution shall
satisfy the funding obligations of the Equity Investor in respect of such
Funding Contribution.
(c) Permitted Project Interest Transfers. In connection with any Permitted
Project Interest Transfer that is conducted in accordance with the terms of the
applicable Loan Documents, including, without limitation, the obligation to
prepay the Loans under and in accordance with Section 3.10(b) of the Depositary
Agreement, from and after the date on which such prepayment has been made, the
Equity Commitment shall be reduced by an amount equal to the Equity Investor’s
original Equity Commitment (as in effect on the date hereof) multiplied by the
Permitted Project Transfer Interest Percentage applicable to such Permitted
Project Interest Transfer.
(d) Pro Rata Treatment of Acceptable Credit Support. Subject to
Section 2.1(b)(i), in the event that the Equity Investor has provided more than
one Equity Letter of Credit and the Collateral Agent is permitted to draw upon
such Acceptable Credit Support in any amount as permitted hereunder (the
“Drawing Amount”), the Collateral Agent shall draw upon all such Equity Letters
of Credit on a Pro Rata Basis; provided, however, the Collateral Agent’s failure
to draw in any particular manner or on any particular Equity Letter of Credit
shall not limit or relieve the obligations of the Equity Investor hereunder or
prevent the Collateral Agent from making any other drawing on any other Equity
Letter of Credit in accordance with the terms hereof so long as the aggregate of
all such drawings does not exceed the Drawing Amount. If and to the extent that
any Drawing Amount has been funded in Dollars, the Collateral Agent shall not
draw upon an Equity Letter of Credit unless and to the extent that the
obligations of the Equity Investor in respect of such cash contributions have
been reinstated in accordance with Section 3.1.

 

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(e) Contribution Requests. The Borrower shall deliver to each Sponsor a written
request (a “Contribution Request”), with a copy to the Collateral Agent, at any
time that a Project Cost Funding Contribution is reasonably anticipated to be
required in accordance with Section 2.1(a)(i). Each Contribution Request shall
specify the Project Costs then incurred, the amount of such Contribution
Request, each Sponsor’s Investor Percentage of such amount (such amount for each
such Sponsor, such Sponsor’s “Contribution Amount”) and the requested date of
contribution (which shall be at least ten (10) calendar days following the date
of such Contribution Request) (the “Contribution Date”). No later than the
applicable Contribution Date, the Equity Investor shall pay or cause to be paid
to the Collateral Agent its Contribution Amount pursuant to Section 2.1(b).
(f) Failure to Provide Acceptable Credit Support. (i) If at any time the Equity
Investor shall have failed to cause its Equity Commitment to be supported by
Acceptable Credit Support in accordance with Section 6.3 (or if any Equity
Letter of Credit previously delivered to the Collateral Agent by the Equity
Investor ceases to be Acceptable Credit Support) and, in either case, such
condition has continued for a period of fifteen (15) days, the Collateral Agent
shall make a drawing under such Acceptable Credit Support in an amount equal to
the full available amount of such Acceptable Credit Support at such time on the
Business Day immediately following the conclusion of the fifteen (15) day period
referred to above in accordance with the terms of such Acceptable Credit
Support, and the Collateral Agent shall promptly deposit or cause to be
deposited the proceeds thereof in the Construction Account for application in
accordance with this Agreement.
(ii) In the event that the Equity Investor elects to fund any Funding
Contributions in Dollars and immediately available funds instead of by a drawing
on the Acceptable Credit Support in accordance with Section 2.1(b)(i), or the
Equity Commitment is reduced in accordance with Section 2.1(c) or
Section 2.1(g), the Equity Investor shall be entitled to deliver to the
Collateral Agent, and the Collateral Agent thereafter (if it has determined that
such reduction is permitted hereunder and such Funding Contribution has not been
reinstated in accordance with Section 3.1 at any time within ninety-one
(91) days after such Equity Contribution has been made; provided that the
Collateral Agent shall not be entitled to draw under such Equity Letter of
Credit unless and to the extent that such amounts have been reinstated in
accordance with Section 3.1) shall countersign and, promptly after the
applicable Equity Contribution Date or the date of reduction in the Equity
Commitment, deliver to the issuer of such Acceptable Credit Support, an Equity
Letter of Credit reduction certificate in the form attached to such Acceptable
Credit Support (or otherwise satisfactory to the issuer of such Acceptable
Credit Support) and the face amount of such Acceptable Credit Support may be
reduced from time to time as provided in such certificate.
(iii) If the issuer of any Equity Letter of Credit has notified the Collateral
Agent in accordance with the terms hereof (and the Collateral Agent has so
notified the Equity Investor within 10 days thereafter), that such Equity Letter
of Credit will not be extended beyond the scheduled expiration date therefor
(such date, the “Scheduled Expiration Date”), the Equity Investor shall cause
such Equity Letter of Credit to be renewed or replaced at least thirty (30) days
prior to the Scheduled Expiration Date with Acceptable Credit Support.

 

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(g) Permitted Sell-Down. In connection with a transfer by the Equity Investor of
all or a portion of its ownership interest in the Equity Interests of the
Borrower that is permitted under the terms of the applicable Loan Documents, any
portion of the unfunded Equity Commitment may be transferred to and assumed by
the applicable transferee (a “Transferee”) on a pro rata basis (based on the
Equity Interests so transferred) and the Equity Commitment shall be reduced on a
dollar-for-dollar basis (based on the amount so transferred to and assumed by
such Transferee); provided that (i) no Default or Event of Default shall have
occurred as a result of such transfer and be continuing and no Change of Control
shall have occurred; (ii) such Transferee shall have executed an equity
commitment agreement on substantially the same terms and conditions as this
Agreement with respect to the portion of the Equity Commitment so assumed and
(iii) such Transferee’s obligations under such equity commitment agreement shall
be supported at all times by Acceptable Credit Support. In connection with any
such transfer and assumption (and related execution of a new equity commitment
agreement), the Investor Percentage of the Equity Investor shall be reduced by a
corresponding amount of Equity Interests so transferred and the applicable
Transferee’s Investor Percentage will be deemed to be the amount by which the
Equity Investor’s Investor Percentage has been reduced.
(h) Notwithstanding anything contained herein to the contrary (but subject to
Section 3.1), in no event shall the Equity Contributions made by the Equity
Investor pursuant to this Agreement, when taken together with all purchases of
undivided participating interests under Section 4.1, exceed the Equity
Commitment of the Equity Investor.
2.2 Payments.
2.2.1. Taxes. Except as otherwise required by applicable Legal Requirements,
each payment required to be made by the Equity Investor to the Borrower
hereunder shall be made without deduction or withholding for or on account of
any Taxes. If such deduction or withholding is so required, the Equity Investor
shall (a) pay the amount required to be deducted or withheld to the appropriate
authorities before penalties attach thereto or interest accrues thereon and (b)
forthwith pay to the Borrower (for deposit in the applicable Project Account in
accordance with Section 2.1) such additional amount as may be necessary to
ensure that the net amount actually received by the Borrower is equal to the
amount that the Borrower would have received had there been no such deduction or
withholding.
2.2.2. Late Payment. In the event that any Equity Contribution is not made on
the related Equity Contribution Date, the amount of such delinquent Equity
Contribution shall bear interest at a per annum rate equal to 2% plus the
interest rate then applicable to ABR Loans as provided in Section 2.13(a) of the
Credit Agreement until such time as such Equity Contribution is deposited in the
applicable Project Account in accordance with Section 2.1.

 

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2.3 Waiver of Defenses; Obligations Unconditional.
2.3.1. Waiver of Defenses. To the extent permitted by applicable law, the Equity
Investor hereby unconditionally and irrevocably waives and relinquishes all
rights and remedies accorded by applicable Legal Requirements to sureties or
guarantors and agrees not to assert or take advantage of any such rights or
remedies, including (a) any right to require the Collateral Agent or any Secured
Party to proceed against the Borrower or any other person or to proceed against
or exhaust any security held by the Collateral Agent or any other Secured Party
at any time or to pursue any other remedy in the Collateral Agent’s or any
Secured Party’s power before proceeding against the Equity Investor, (b) any
defense that may arise by reason of the incapacity, lack of power or authority,
death, dissolution, merger, termination or disability of the Borrower or any
other person or the failure of the Collateral Agent or any other Secured Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of the Borrower or any other person, (c) demand,
presentment, protest and notice of any kind (other than any notice required
pursuant to the express provisions of this Agreement), including notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of the Borrower, the
Collateral Agent, the Secured Parties, any endorser or creditor of the foregoing
or on the part of any other person under this or any other instrument in
connection with any obligation or evidence of indebtedness held by the
Collateral Agent or any Secured Party as collateral or in connection with any of
the Secured Obligations, (d) any defense based upon an election of remedies by
the Collateral Agent or the Secured Parties, including an election to proceed by
non-judicial rather than judicial foreclosure, which destroys or otherwise
impairs the subrogation rights of the Equity Investor, the right of the Equity
Investor to proceed against the Borrower or another person for reimbursement, or
both, (e) any defense based on any offset against any amounts which may be owed
by any person to the Equity Investor or the Borrower for any reason whatsoever,
(f) any defense based on any act, failure to act, delay or omission whatsoever
on the part of the Borrower or the failure by the Borrower to do any act or
thing or to observe or perform any covenant, condition or agreement to be
observed or performed by it under the EPC Contract, the Credit Agreement or any
other Transaction Document, (g) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal
(provided that in no event shall the obligations of the Equity Investor
hereunder exceed its Equity Commitment), (h) any defense, setoff or counterclaim
which may at any time be available to or asserted by the Borrower against the
Collateral Agent, the Secured Parties or any other person under the EPC
Contract, the Credit Agreement or the other Transaction Document, (i) any duty
on the part of the Collateral Agent or any Secured Party to disclose to the
Equity Investor any facts the Collateral Agent or any Secured Party may now or
hereafter know about the Borrower, regardless of whether the Collateral Agent or
any Secured Party has reason to believe that any such facts materially increase
the risk beyond that which the Equity Investor intends to assume, or have reason
to believe that such facts are unknown to the Equity Investor, or have a
reasonable opportunity to communicate such facts to the Equity Investor, since
the Equity Investor acknowledges that it is fully responsible for being and
keeping informed of the financial condition of the Borrower, (j) any defense
based on any change in the time, manner or place of any payment under, or in any
other term of, the EPC Contract, the Credit Agreement or any other Transaction
Document or any other amendment, renewal, extension, acceleration, compromise or
waiver of or any consent or departure from the terms of the EPC Contract, the
Credit Agreement or any other Transaction Document, (k) any defense arising
because of the Collateral Agent’s or any Secured Party’s election, in any
proceeding instituted under the Federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the Federal Bankruptcy Code, (l) any defense based upon
any borrowing or grant of a security interest under Section 364 of the Federal
Bankruptcy Code and (m) any other circumstance (including any statute of
limitations) or any existence of or reliance on any representation by the
Collateral Agent or any Secured Party that might otherwise constitute a defense
available to, or discharge of, any guarantor or surety (in each of the foregoing
cases other than, subject to Section 3.1, defense of payment of the applicable
amounts).

 

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2.3.2. Obligations Unconditional. All rights of the Collateral Agent and the
Secured Parties and all obligations of the Equity Investor and the Borrower
hereunder shall be absolute and unconditional irrespective of:
(a) any lack of validity, legality or enforceability of the Credit Agreement,
this Agreement or any other Loan Document;
(b) the failure of any Secured Party (i) to assert any claim or demand or to
enforce any right or remedy against the Borrower, the Equity Investor or any
other Person (including any guarantor) under the provisions of the EPC Contract,
the Credit Agreement, any other Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor of, or collateral securing, any
of the Secured Obligations;
(c) any change in the time, manner or place of payment of, or in any other term
of, all of the Secured Obligations, or any other extension or renewal of any
Secured Obligation of the Borrower, the Equity Investor or otherwise;
(d) any reduction, limitation, impairment or termination of any of the Secured
Obligations for any reason other than the written agreement of the Secured
Parties to terminate the Secured Obligations in full, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to, and the Equity Investor hereby waives any right to or claim of, any defense
or setoff, counterclaim, recoupment, or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any Secured
Obligation of the Borrower, the Equity Investor or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or any
consent to departure from, any of the terms of the EPC Contract, the Credit
Agreement, this Agreement or any other Transaction Document;
(f) any addition, exchange, release, surrender or non-perfection of any
collateral, or any amendment to or waiver or release or addition of, or consent
to departure from, any other security interest held by the Collateral Agent or
any Secured Party; or
(g) any other circumstance which might otherwise constitute a defense available
to, or a legal or equitable discharge of the Borrower, the Equity Investor, any
surety or any guarantor (in each of the foregoing cases other than the defense,
subject to Section 3.1, of payment of the applicable amounts).

 

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2.4 Subrogation. So long as any of the Secured Obligations remain outstanding
(subject to Section 3.1 and other than those contingent Secured Obligations that
are intended to survive the termination of, as applicable, the Credit Agreement,
the other Loan Documents or the other applicable documents), (a) the Equity
Investor shall not have any right of subrogation and the Equity Investor waives
all rights to enforce any remedy which the Collateral Agent and/or the other
Secured Parties now have or may hereafter have against the Borrower or the
Pledgors, that arises hereunder or from the performance by the Equity Investor
hereunder, and waives the benefit of, and all rights to participate in, any
security now or hereafter held by the Collateral Agent (for the benefit of the
Secured Parties) from the Borrower or the Pledgors, and (b) the Equity Investor
waives any claim, right or remedy which it may now have or hereafter acquire
against the Borrower or the Pledgors that arises hereunder and/or from the
performance by the Equity Investor hereunder, including any claim, remedy or
right of subrogation, reimbursement, exoneration, contribution, indemnification,
or participation in any claim, right or remedy of the Collateral Agent and/or
the other Secured Parties against Borrower or the Pledgors or any security or
collateral which the Collateral Agent and/or the other Secured Parties now have
or hereafter acquire, whether or not such claim, right or remedy arises in
equity, under contract, by statute, under common law or otherwise. Any amount
paid to the Equity Investor on account of any such subrogation rights prior to
the indefeasible payment in full in cash of the Secured Obligations, the
termination of all Secured Commodity Hedges, Interest Rate Hedging Agreements
and Other Interest Rate Hedging Agreements and the termination of all
Commitments and other obligations of the Collateral Agent and the other Secured
Parties (subject to Section 3.1 and other than those contingent Secured
Obligations that are intended to survive the termination of, as applicable, the
Credit Agreement, the other Loan Documents or the other applicable documents)
shall be held in trust for the benefit of the Collateral Agent and shall
immediately thereafter be paid to the Collateral Agent for application in
accordance with this Agreement and the Intercreditor Agreement.
ARTICLE 3.
SPECIFIC PROVISIONS
3.1 Reinstatement. This Agreement and the obligations of the Equity Investor
hereunder shall automatically be reinstated if and to the extent that for any
reason any payment made pursuant to this Agreement is rescinded or otherwise
restored to the Equity Investor, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise with respect to Borrower or any other
person or as a result of any settlement or compromise with any person (including
the Equity Investor) in respect of such payment, and the Equity Investor shall
pay the Collateral Agent on demand all of its reasonable costs and expenses
(including reasonable fees of counsel) incurred by the Collateral Agent in
connection with such rescission or restoration.
3.2 Specific Performance. The Equity Investor hereby irrevocably waives, to the
extent it may do so under applicable Legal Requirements, any defense based on
the adequacy of a remedy at law that may be asserted as a bar to the remedy of
specific performance in any action brought against the Equity Investor for
specific performance of this Agreement by the Borrower, the Collateral Agent or
any successor or assign thereof or for their benefit by a receiver, custodian or
trustee appointed for the Borrower or in respect of all or a substantial part of
its assets, under the bankruptcy or insolvency laws of any jurisdiction to which
the Borrower or its assets are subject.

 

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3.3 Bankruptcy Code Waiver by Equity Investor. The Equity Investor hereby
irrevocably waives, to the extent it may do so under applicable Legal
Requirements, any protection to which it may be entitled under
Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law or equivalent
provisions of the laws or regulations of any other jurisdiction with respect to
any proceedings, or any successor provision of law of similar import, in the
event of any Bankruptcy Event with respect to the Borrower. Specifically, in the
event that the trustee (or similar official) in a Bankruptcy Event with respect
to the Borrower or the debtor-in-possession takes any action (including the
institution of any action, suit or other proceeding for the purpose of enforcing
the rights of the Borrower under this Agreement), the Equity Investor shall not
assert any defense, claim or counterclaim denying liability hereunder on the
basis that this Agreement is an executory contract or a “financial
accommodation” that cannot be assumed, assigned or enforced or on any other
theory directly or indirectly based on Section 365(c)(1), 365(c)(2) or 365(e)(2)
of the Bankruptcy Law, or equivalent provisions of the laws or regulations of
any other jurisdiction with respect to any proceedings or any successor
provision of law of similar import. If a Bankruptcy Event with respect to the
Borrower shall occur, the Equity Investor agrees, after the occurrence of such
Bankruptcy Event, to reconfirm in writing, to the extent permitted by applicable
Legal Requirements, its pre-petition waiver of any protection to which it may be
entitled under Sections 365(c)(1), 365(c)(2) and 365(e)(2) of the Bankruptcy Law
or equivalent provisions of the laws or regulations of any other jurisdiction
with respect to proceedings and, to give effect to such waiver, the Equity
Investor consents to the assumption and enforcement of each provision of this
Agreement by the debtor-in-possession or the Borrower’s trustee in bankruptcy,
as the case may be.
3.4 Commencement of Bankruptcy Proceedings. None of the obligations of the
Equity Investor under this Agreement shall be altered, limited or affected by
any proceeding, voluntary or involuntary, involving the bankruptcy,
reorganization, insolvency, receivership, liquidation or arrangement of the
Borrower or the Equity Investor, or by any defense which the Borrower or the
Equity Investor may have by reason of any order, decree or decision of any court
or administrative body resulting from any such proceeding.
3.5 Grant of Security Interest; Actions by Collateral Agent. The Equity Investor
hereby consents to the assignment, pursuant to the applicable Security
Documents, by the Borrower of all of its right, title and interest in, to and
under this Agreement to the Collateral Agent (for the benefit of the Secured
Parties). Each of the Equity Investor and the Borrower agrees that the
Collateral Agent and any assignee thereof shall be entitled to enforce this
Agreement in its own name and to exercise any and all rights of the Borrower
under this Agreement in accordance with the terms hereof (either in its own
name, or in the name of the Borrower, as the Collateral Agent may elect), and
the Equity Investor and the Borrower each agree to comply and cooperate in all
respects with such exercise. Without limiting the generality of the foregoing,
the Collateral Agent and any assignee thereof shall have the full right and
power to enforce directly against the Equity Investor all obligations of the
Equity Investor under this Agreement, and otherwise to exercise all remedies
available to the Borrower hereunder and to make all demands and give all notices
and make all requests (either in its own name or in the name of the Borrower, as
the Collateral Agent may elect) required or permitted to be made or given by the
Borrower under this Agreement, including the right to make demand for payment of
Equity Contributions in accordance with Article 2 and to make a claim under any
Acceptable Credit Support, and the Equity Investor acknowledges and agrees that
any such action taken by the Collateral Agent shall be deemed effective for all
purposes of this Agreement to the same extent as if such action had been taken
directly by the Borrower. If the Equity Investor shall receive inconsistent
directions under this Agreement from the Borrower and the Collateral Agent, the
directions of the Collateral Agent shall be deemed the effective directions, and
the Equity Investor shall accordingly comply with such directions of the
Collateral Agent to the extent such directions comply with the provisions
hereof.

 

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3.6 Set-Off. In addition to any rights now or hereafter granted under applicable
Legal Requirements or otherwise, and not by way of limitation of any such
rights, upon the failure of the Equity Investor to make any Equity Contribution
as and when required hereunder and the failure of any Acceptable Credit Provider
to make such Equity Contribution in accordance with the terms of any Applicable
Credit Support, the Collateral Agent is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Equity Investor or to any other person, any such notice being hereby
expressly waived, to set-off and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or owing by the
Collateral Agent or any Secured Party (including by branches and agencies of the
Collateral Agent and each Secured Party wherever located) to or for the credit
or the account of the Equity Investor, against and on account of the obligations
of the Equity Investor under this Agreement, irrespective of whether or not the
Collateral Agent or any Secured Party shall have made any demand hereunder.
ARTICLE 4.
PURCHASE OF PARTICIPATING INTEREST
4.1 Required Purchase of Participating Interest. If by reason of a Bankruptcy
Event or any act of a Governmental Authority, (a) any Equity Contribution due
hereunder has not been deposited in the applicable account within five
(5) Business Days after the date on which such amount is payable hereunder, or
(b) any Equity Contribution theretofore deposited pursuant to Article 2 is
rescinded or otherwise restored to the Equity Investor and five (5) Business
Days have elapsed after the date that such Equity Contribution was rescinded or
otherwise restored (such Equity Contribution, whether required but not made as
provided in clause (a) or made and returned as provided in clause (b), being
herein called the “Defaulted Payment”), the Equity Investor shall, without any
further notice or demand by the Collateral Agent or any Secured Party, purchase
an undivided participating interest in each of the Loans, Letters of Credit and
Commitments which shall then be outstanding, as provided in the following
sentence, in an aggregate principal amount equal to the amount of the Defaulted
Payment. The Equity Investor’s purchase of an undivided participating interest
in such Loans, Letters of Credit and Commitments shall be made pro rata among
such Loans, Letters of Credit and Commitments based on the respective
outstanding amounts thereof. The Equity Investor shall effect its purchase of
undivided participating interests in such Loans, Letters of Credit and
Commitments pursuant to this Section 4.1 by paying to the Collateral Agent, for
the account of the holders of such Loans, Letters of Credit and Commitments, in
immediately available funds in Dollars, the amount of the Defaulted Payment.

 

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4.2 Effect of Purchase of Participating Interest. The Equity Investor’s purchase
of an undivided participating interest in the Loans, Letters of Credit and
Commitments in the full amount (if any) required pursuant to Section 4.1
following a Defaulted Payment in respect of Equity Contributions, shall satisfy
the Equity Investor’s obligation pursuant to Section 2.1 to make Equity
Contributions to the extent of the amount of such Loans, Letters of Credit and
Commitments so purchased by the Equity Investor.
4.3 Subordinate Nature of Participating Interest. The Equity Investor hereby
agrees that its participating interest in the Loans, Letters of Credit and
Commitments purchased by it pursuant to Section 4.1 shall be subordinate in all
respects to the interest in such Loans, Letters of Credit and Commitments
retained by the holders (other than the Equity Investor) thereof (the “Retained
Interest”), so that all payments received or collected on account of such Loans,
Letters of Credit and Commitments and applied to the payment or termination
thereof, whether received or collected through repayment of such Loans, Letters
of Credit or Commitments by the Borrower or through right of set-off with
respect thereto or realization upon any collateral security therefor or
otherwise, shall first be applied to the payment of the principal, interest,
fees and other amounts then due (whether at its stated maturity, by acceleration
or otherwise) on the Retained Interest until such principal, interest, fees and
other amounts are paid in full, before any such payments are applied pro rata on
account of the Equity Investor’s and the other Sponsor’s participating interest
(if any) in such Loans, Letters of Credit and Commitments.
4.4 Rights of Agents and the Secured Parties. Notwithstanding the purchase and
ownership by the Equity Investor of participating interests in the Loans,
Letters of Credit and Commitments, and notwithstanding the rights of
participants under the Credit Agreement, the Collateral Agent and, to the extent
permitted, each Secured Party shall have the right, in their sole discretion in
each instance and without any notice to the Equity Investor, (a) to agree to the
modification or waiver of any of the terms of any of the Loan Documents or any
other agreement or instrument relating thereto (but not to reduce any amount
payable in respect of the portion of the Loans, Letters of Credit subject to
participations purchased pursuant to Section 4.1), (b) to consent to any action
or failure to act by the Borrower, the Equity Investor or any other person party
to a Loan Document and (c) to exercise or refrain from exercising any rights or
remedies which the Collateral Agent or any Secured Party may have under the Loan
Documents or any other agreement or instrument relating thereto, including the
right at any time to declare, or refrain from declaring, the Secured Obligations
due and payable upon the occurrence of any event of default thereunder, and to
rescind and annul any such declaration, and to foreclose and sell or exercise
any other remedy, or refrain from foreclosing and selling or exercising any
other remedy, with respect to any collateral securing the Secured Obligations.
Neither the Collateral Agent nor any Secured Party shall be liable to the Equity
Investor for any error in judgment or for any action taken or omitted to be
taken by it while the Equity Investor holds a participating interest in the
Loans, Letters of Credit and/or Commitments, except to the extent found in a
final and non-appealable judgment of a court of competent jurisdiction to have
resulted primarily from the gross negligence or willful misconduct of such
person. Neither the Collateral Agent nor any Secured Party shall have any duty
or responsibility to provide the Equity Investor with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any other party to a Loan Document or which may come into their
possession or the possession of any of their respective Affiliates, or to notify
the Equity Investor of any default by the Borrower or any other person under any
of the Loan Documents.

 

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4.5 No Voting Rights. Without limiting the generality of the provisions of
Section 4.4, in determining whether the required consent of the Lenders (or any
portion thereof) has been obtained for all purposes under the Loan Documents the
participating interests in the Loans, Letters of Credit and Commitments
purchased by the Equity Investor pursuant to Section 4.1 shall not be deemed to
be outstanding.
4.6 Outright Purchase; Obligations Unconditional. The obligations of the Equity
Investor under this Article 4 to purchase participating interests in or purchase
and take an assignment of the Loans, Letters of Credit and Commitments, as the
case may be, is absolute and unconditional and shall not be affected by the
occurrence of any default or event of default or any other circumstance,
including any circumstance of the nature described in Section 2.3.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
The Equity Investor hereby represents and warrants to and in favor of the
Borrower, the Collateral Agent and the Secured Parties that:
5.1 Corporate Existence and Business. The Equity Investor (a) is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and (b) is duly qualified to do business and
in good standing in each jurisdiction in which such qualification is necessary
to execute, deliver and perform this Agreement and each of the other Transaction
Documents to which it is a party.
5.2 Power and Authorization; Enforceable Obligations. The Equity Investor has
all limited liability company power and authority to execute, deliver and
perform this Agreement and each other Transaction Document to which it is a
party and to take all action as may be necessary to complete the transactions
contemplated hereunder and thereunder. The Equity Investor has taken all
necessary limited liability company action to authorize the execution, delivery
and performance of this Agreement and each other Transaction Document to which
it is a party and to complete the transactions contemplated hereby. No consent
or authorization of, filing with, or other act by or in respect of any other
person or Governmental Authority is required in connection with the execution,
delivery or performance by the Equity Investor, or the validity or
enforceability as to the Equity Investor, of this Agreement and each other
Transaction Document to which it is a party, except such consents or
authorizations or filings or other acts as have already been obtained or made or
where the failure to obtain such consent or authorization would not reasonably
be expected to have a Material Adverse Effect. This Agreement and each other
Transaction Document to which the Equity Investor is a party have been duly
executed and delivered by the Equity Investor and constitute, and each other
Transaction Document to which it is a party will upon execution and delivery
thereof by the Equity Investor and the other parties thereto (if any)
constitute, a legal, valid and binding obligation of the Equity Investor
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by general
principles of equity.

 

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5.3 No Legal Bar. The execution, delivery and performance by the Equity Investor
of this Agreement and each other Transaction Document to which it is a party and
the consummation of the transactions contemplated hereby (including the making
by the Equity Investor of any payments hereunder) or under any other Transaction
Document to which it is a party will not violate any applicable Legal
Requirement or any material contractual obligation of the Equity Investor and
will not result in, or require, the creation or imposition of any Lien on any of
the properties or revenues of the Equity Investor pursuant to any applicable
Legal Requirement or any such contractual obligation except, in each case, where
such violation, creation or imposition would not reasonably be expected to have
a Material Adverse Effect.
5.4 Ownership Interests. As of the Closing Date, the Equity Investor indirectly
owns 50% of the ownership interests in the Borrower.
5.5 EPC Contract and Credit Documents. The Equity Investor has reviewed and is
familiar with the terms of the EPC Contract and the other Transaction Documents
that are material to its obligations hereunder.
5.6 Solvency Matters
5.6.1. Financial Information. The Equity Investor has established adequate means
of obtaining financial and other information pertaining to the businesses,
operations and condition (financial and otherwise) of the Borrower and its
properties on a continuing basis (including any amendments to any relevant
Transaction Document that are material to its obligations hereunder), and the
Equity Investor now is and hereafter will be completely familiar with the
businesses, operations and condition (financial and otherwise) of the Borrower
and its properties.
5.6.2. Insolvency.
(a) After giving effect to the transactions contemplated by this Agreement and
the contingent obligations evidenced hereby, the Equity Investor is not
insolvent as such term is used or defined in any applicable Bankruptcy Law, and
the Equity Investor has and will have assets which, fairly valued, exceed its
indebtedness, liabilities or obligations.
(b) The Equity Investor is not executing this Agreement with any intention to
hinder, delay or defraud any creditor or creditors of any of them.
5.7 Compliance with Laws. The Equity Investor is in compliance with applicable
Legal Requirements, except to the extent any non-compliance would not reasonably
be expected to have a Material Adverse Effect.
5.8 No Litigation or Proceeding. No litigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the Equity Investor’s
knowledge, threatened against or affecting the Equity Investor or against or
affecting any of its properties or assets or the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party, which
would reasonably be expected to have a Material Adverse Effect.

 

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5.9 Investment Company Act. The Equity Investor is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.
ARTICLE 6.
COVENANTS
The Equity Investor hereby covenants and agrees for the benefit of the Borrower,
the Collateral Agent and the Secured Parties that from and after the date hereof
until the Discharge Date:
6.1 Existence. The Equity Investor shall maintain and preserve its existence in
good standing in the state of its formation and its qualification to do business
in each other jurisdiction where such qualification is necessary to perform its
obligations hereunder and each other Transaction Document to which it is a party
and all material rights, privileges and franchises necessary in the normal
course of conduct of its business.
6.2 Compliance with Laws. The Equity Investor shall comply with all Legal
Requirements applicable to it, except where such non-compliance would not
reasonably be expected to have a Material Adverse Effect.
6.3 Credit Support. Notwithstanding anything to the contrary herein or in any
other Loan Document the Equity Investor shall cause its Equity Commitment to be
supported at all times by Acceptable Credit Support.
ARTICLE 7.
MISCELLANEOUS
7.1 Successions or Assignments.
(a) This Agreement shall inure to the benefit of the Collateral Agent, the
Secured Parties and their respective successors and permitted assigns.
(b) This Agreement is binding upon the Equity Investor and the Borrower and
their respective successors and permitted assigns. Neither the Equity Investor
nor the Borrower may assign any of their respective rights and obligations
hereunder without the prior written consent of the Required Lenders (and any
purported assignment in violation of this Section shall be void), except as
provided in Section 2.1(g).
(c) This Agreement shall inure to the benefit of the Equity Investor and its
successors and permitted assigns.

 

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7.2 Waivers.
(a) No delay or omission on the part of the Collateral Agent or any Secured
Party in exercising any of their rights (including those hereunder) and no
partial or single exercise thereof and no action or non-action by the Collateral
Agent or any Secured Party, with or without notice to the Equity Investor or
anyone else, shall constitute a waiver of any rights or shall affect or impair
this Agreement.
(b) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COLLATERAL AGENT, THE
BORROWER, AND THE EQUITY INVESTOR HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE COLLATERAL AGENT, THE OTHER SECURED PARTIES, THE BORROWER, OR THE
EQUITY INVESTOR. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES HERETO AND THE SECURED PARTIES TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE.
7.3 Interpretation. The section headings in this Agreement are for the
convenience of reference only and shall not affect the meaning or construction
of any provision hereof.
7.4 Remedies Cumulative. Each and every right and remedy of the Collateral Agent
and the Secured Parties hereunder shall be cumulative and shall be in addition
to any other right or remedy given hereunder or under the Credit Agreement or
any other Loan Document, or now or hereafter existing at law or in equity.
7.5 Severability. Any provision of this Agreement that may be determined by
competent authority to be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7.6 Amendments. This Agreement may be amended, waived or otherwise modified only
with the written consent of the parties hereto and otherwise in accordance with
the Credit Agreement.

 

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7.7 Jurisdiction. The Collateral Agent, the Borrower and the Equity Investor
agree that any legal action or proceeding by or against the Borrower or the
Equity Investor or with respect to or arising out of this Agreement, the Credit
Agreement, or any other Loan Document may be brought in or removed to the courts
of the State of New York, in and for the County of New York, or of the United
States of America for the Southern District of New York, as the Collateral Agent
may elect. By execution and delivery of this Agreement, the Collateral Agent,
the Borrower, and the Equity Investor accept, for themselves and in respect of
their property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts. The Collateral Agent, the Borrower and the Equity Investor
irrevocably consent to the service of process out of any of the aforementioned
courts in any manner permitted by Legal Requirements. Any such process or
summons in connection with any such action or proceeding may also be served by
mailing a copy thereof by certified or registered mail, or any substantially
similar form of mail, addressed to the Borrower, the Equity Investor or the
Collateral Agent as provided for notices hereunder. Nothing herein shall affect
the right of the Collateral Agent to bring legal action or proceedings in any
other competent jurisdiction. The Collateral Agent, the Borrower and the Equity
Investor further agree that the aforesaid courts of the State of New York and of
the United States of America shall have exclusive jurisdiction with respect to
any claim or counterclaim of the Borrower or the Equity Investor based upon the
assertion that the rate of interest charged on or under this Agreement, the
Credit Agreement and/or the other Loan Documents is usurious. To the fullest
extent permitted by applicable law, the Collateral Agent, the Borrower, and the
Equity Investor hereby waive any right to stay or dismiss any action or
proceeding under or in connection with any or all of the Project, this
Agreement, the Credit Agreement or any other Loan Document brought before the
foregoing courts on the basis of improper venue or forum non-conveniens. The
Equity Investor hereby irrevocably appoints CT Corporation System, 111 8th
Avenue, 13th Floor, New York, New York 10011 as its agent for service of process
in relation to any proceedings before any courts located in the State of New
York in connection with this Agreement, the Credit Agreement and the other Loan
Documents to which it is a party.
7.8 Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed in accordance with, the law of the
State of New York without reference to principles of conflicts of law (other
than Section 5-1401 of the New York General Obligations Law).
7.9 Integration of Terms. This Agreement, together with other agreements
attached hereto or referred to herein, contains the entire agreement among the
parties hereto relating to the subject matter hereof and supersedes all oral
statements and prior writings with respect hereto.
7.10 Notices. All notices required or permitted under the terms and provisions
hereof shall be in writing and any such notice shall be effective if given in
accordance with the provisions of Section 9.01 of the Credit Agreement. Notices
to the Equity Investor shall be sent to the following address:
Dynegy Sandy Creek Holdings, LLC
1000 Louisiana St., Suite 5800
Houston, Texas 77002-5050
Attn: Charles C. Cook, Senior Vice President and Treasurer
Facsimile No.: 713-356-2200
Tel. No.: 713-767-8648
      and a copy to:
J. Kevin Blodgett
Executive Vice President and General Counsel
Facsimile No.: 713-356-2185
Tel. No.: 713-507-6847

 

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7.11 Counterparts. This Agreement may be executed in counterparts, and when
executed and delivered by all of the parties listed below shall constitute a
single binding agreement. Delivery of a facsimile counterpart signature shall be
effective as delivery of a manually executed counterpart signature.
7.12 Further Assurances. The parties hereto hereby agree to execute and deliver
all such instruments and take all such action as may be necessary to effectuate
fully the purposes of this Agreement.
7.13 Termination of Agreement. Notwithstanding anything contained herein to the
contrary (but subject to Section 3.1), this Agreement and the obligations of the
Borrower and the Equity Investor hereunder shall terminate on the earlier to
occur of: (a) the Discharge Date; (b) the payment and satisfaction by the Equity
Investor of all of its obligations under Articles 2 and 4; and (c) the date that
is 180 days after the Term Conversion Date.
7.14 No Third Party Beneficiaries. Subject to Section 7.1, there shall be no
third party beneficiaries to this Agreement or any provision hereof.
7.15 Consequential Damages. Anything in this Agreement to the contrary
notwithstanding, in no event shall any party be liable under or in connection
with this Agreement for indirect, special, incidental, punitive or consequential
losses or damages of any kind whatsoever, including but not limited to lost
profits, whether or not foreseeable, even if such party has been advised of the
possibility thereof and regardless of the form and action in what such damages
are sought.
7.16 Scope of Liability. Section 9.21 of the Credit Agreement is hereby
incorporated by reference, mutatis mutandis, as if fully set forth herein.
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IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Equity Commitment Agreement to
be duly executed as of the date first above written.

              SANDY CREEK ENERGY ASSOCIATES, L.P.
as Borrower
 
       
 
  By:   /s/ Joe Esteves
 
       
 
      Name: Joe Esteves
 
      Title: Authorized Signatory
 
            DYNEGY SANDY CREEK HOLDINGS, LLC
as Equity Investor
 
       
 
  By:   /s/ Charles C. Cook
 
       
 
      Name: Charles C. Cook
 
      Title: Senior Vice President and Treasurer
 
            CREDIT SUISSE, Cayman Islands Branch
as Collateral Agent
 
       
 
  By:   /s/ Thomas Cantello
 
       
 
      Name: Thomas Cantello
 
      Title: Director
 
       
 
  By:   /s/ Nupur Kumar
 
       
 
      Name: Nupur Kumar
 
      Title: Associate