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TO. BOARD OF SUPERVISORS
FROM: JOHN SWEETEN, o _ryas,►� ,_: ...a;��
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County Administrator -�
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DATE: February 8, 2005
SUBJECT: Consent to Collateral Assignment of Fire Protection Service
Agreement related to Crockett Cogeneration Refinancing
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
APPROVE and AUTHORIZE the Chair, Board of Supervisors, to execute a Consent and Agreement
(Fire Protection Service Agreement) by and among the County and Crockett Cogeneration, Inc. for
the benefit of the LaSalle Bank National Association ("LaSalle"), as collateral agent, only upon
County's receipt of a fully executed "Pledge and Security Agreement," by which Crockett
Cogeneration assigns its interests in and to the Fire Protection Service agreement granted to it by the
County, to LaSalle.
FISCAL IMPACT: None. The staff costs of reviewing and processing the documents will be
recovered from Crockett Cogeneration Inc.
BACKGROUND:
Crockett Cogeneration, A California Limited Partnership ("Crockett Cogen"), operates an electrical
generation plant in the unincorporated area of Crockett. On July 1, 1993, Crockett Cogen and the
Crockett-Carquinez Fire Protection District entered into a contract for the District to make its services
available to the portion of the project and the site located outside of the District, for an annual service
fee and a one-time capital contribution (the "Contract"). Crockett Cogen then assigned its interest in
the Contract to a lender as collateral for a loan, in accordance with the terms of the Contract, which
permit such collateral assignment. Crockett Cogen applied for and received the County's consent to
the assignment as required by its lenders. Crockett Cogen now desires to refinance its loan, and
again desires the County's consent to assign its interest in the Contract as collateral for the financing.
Crockett Cogen has requested that County execute the attached Consent and Agreement (Fire
Protection Service Agreement). The new consent also provides for termination of the prior the
consent executed bud the County in connection with the prior financing.
The Chair, Board of Supervisors will not be asked to deliver a signed Consent document until the
County has received a fully executed "Pledge and Security Agreement," evidencing the actual
assignment by Crockett Cogen to the collateral agent for the benefit of the lenders, LaSalle Bank
National Association.
CONTINUED ON ATTACHMENT: X YES SIGNATURE: '•
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RECOMMENDATION OF COUNTY ADMINISTRATOR RECMIMENDATION OF BOARD COMMITTE
✓ APPROVE OTHER
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SIGNATURE(S):
ACTION OF BOON '� APPROVED AS RECOMMENDED
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OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT
COPY OF AN ACTION TAKEN AND ENTERED ON MINUTES OF
THE BOARD OF SUPERVISORS ON THE DATE SHOWN.
UNANIMOUS(ABSENT )
AYES: NOES:
ABSENT: ABSTAIN:
Contact:
Cc: Steve Dexter—Supervisor Uilkema s office ATTESTED °
Sharon Anderson—County Counsel JOHN SWEETEN,CLERK OF E BOARD OFSUPERVISORS
C tl,:
CONSENT AND AGREEMENT
(FIRE PROTECTION SERVICE AGREEMENT)
This FIRE PROTECTION SERVICE AGREEMENT CONSENT AND
AGREEMENT(this"Consent and Agreement"), dated as of —9 2005, is
executed by CROCKETT-CARQUINEZ FIRE PROTECTION DISTRICT ("District"),,
and CROCKETT COGENERATION, A CALIFORNIA LIMITED PARTNERSHIP, a
limited partnership organized under the laws of California("Borrower") for the benefit of
LASALLE BANK NATIONAL ASSOCIATION, as Collateral Agent("Collateral
Agent")under the Security Agreement(as defined below).
A. District and Borrower have entered into that certain Fire Protection
Service Agreement(Health and Safety Code Section 13877 and 13878), effective as of
July 1, 1993 (the"Contract").
B. Borrower has entered into (i)the Indenture, dated as of
—1� 2005, by and among Borrower,LaSalle Bank National Association, as
trustee, and the financial institutions party thereto(the "Indenture") and(ii)the Letter of
Credit Reimbursement Agreement, dated as of —!12005,by and between
Borrower and BNP Paribas, acting through its New York Branch, as Bank Facility Agent
(the"Letter of Credit Reimbursement Agreement", and together with the Indenture,the
"Loan Documents"),both of which,together with the other senior secured obligations
described therein,, are secured by the Pledge and Security Agreement, dated as of
—! 2005, by and between Borrower and Collateral Agent(the
"Security Agreement"),,pursuant to which Borrower has assigned its interest under the
Contracts to the Collateral Agent for the benefit of the secured parties thereunder(the
"Secured Parties").
NOW THEREFORE, District hereby agrees as follows:
1. District acknowledges the assignment referred to in paragraph B
above and consents to such assignment and agrees with Collateral Agent for the benefit
of the Secured Parties,their designee(s) and assignee(s), effective as of the closing date
under the Indenture and the Security Agreement(the"Effective Date"), as follows:
(a) Collateral Agent shall be entitled to exercise all rights and
to cure any defaults of Borrower under the Contract. Upon receipt of notice from
Collateral Agent,District agrees to accept such exercise and cure by Collateral
Agent and to render all performance due by it under the Contract and this Consent
and Agreement to Collateral Agent. District agrees to make all payments (if any)
to be made by it under the Contract directly to Collateral Agent for the benefit of
the Secured Parties, for the account of the Borrower,upon receipt of Collateral
Agent's written instructions.
(b) District will not,without the prior written consent of
Collateral Agent(such consent not to be unreasonably withheld), (i) cancel or
terminate the Contract except as provided in the Contract and in accordance with
•
Section I(c)hereof, or(ii) sell, assign or otherwise dispose (by operation of law
or otherwise) of any part of its interest in the Contract. District acknowledges and
accepts that pursuant to the Indenture, Borrower may be required to obtain
consent from Collateral Agent to amend,modify, cancel or terminate the
Contract. District agrees to deliver duplicates or copies of(i) all notices of default
delivered under or pursuant to the Contract and (ii)all additional amendments to
the Contract to Collateral Agent promptly upon receipt or dispatch thereof.
(c) District Will not terminate the Contract on account of any
default or breach of Borrower thereunder without written notice to Collateral
Agent and first providing to Collateral Agent(i)thirty(3 0) days from the date
notice of default or breach is delivered to Collateral Agent to cure such default if
such default is the failure to pay amounts to District which are due and payable
under the Contract or(ii) a reasonable opportunity,but not fewer than ninety(90)
days,to cure such breach or default if the breach or default cannot be cured by the
payment of money to District so long as Collateral Agent or its designee shall
have commenced to cure the breach or default within such ninety-day period and
thereafter diligently pursues such cure to completion and continues to perform
any monetary obligations under the Contract and all other obligations under the
Contract are performed by Borrower or Collateral Agent, If possession of the
Project is necessary to cure such breach or default, and Collateral Agent or its
designee(s) or assignee(s) declares Borrower in default and commences
foreclosure proceedings, Collateral Agent or its designee(s) or assignee(s) will be
allowed a reasonable period to complete such proceedings. If Collateral Agent or
its designee(s) or assignee(s) are prohibited by any court order or bankruptcy or
insolvency proceedings from curing the default or from commencing or
prosecuting foreclosure proceedings,the foregoing time periods shall be extended
by the period of such prohibition. District consents to the transfer of Borrower's
interest under the Contract to Collateral Agent or a purchaser or grantee at a
foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance
by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or
conveyance, District shall recognize Collateral Agent or other purchaser or
grantee as the applicable party under the Contract(provided that Collateral Agent
or purchaser or grantee assume the obligations of Borrower under the Contract).
(d) In the event Collateral Agent or its designee(s) or
assignee(s) elect to perform Borrower's obligations under the Contract as
provided in subparagraph(c) above, Collateral Agent, its designees and assignees,
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shall not have personal liability to District for the performance of such
obligations, and the sole recourse, of District in seeking the enforcement of such
obligations shall be to such parties' interest in the Project.
(e) In the event Collateral Agent or its designee(s) or
assignee(s) succeed to Borrower's interest under the Contract, Collateral Agent or
its designee(s)or assignee(s) shall cure any defaults for failure to pay amounts
owed under the Contract, but shall not otherwise be required to perform or be
subject to any defenses or offsets by reason of any of Borrower's other obligations
under the Contract that were unperformed at such time. Collateral Agent shall
have the right to assign all or a pro rata interest in the Contract to a person or
entity to whom the Project is transferred,provided such transferee assumes the
obligations of Borrower(or Collateral Agent)under the Contract. Upon such
assignment, Collateral Agent shall be released from any further liability
thereunder to the extent of the interest assigned.
(f) In the event that the Contract is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding, or if the
Contract is terminated for any reason other than a default which could have been
but was not cured by Collateral Agent as provided in paragraph 1(c) above, and if,
within forty-five(45) days after such rejection or termination, Collateral Agent or
its successors or assigns shall so request,the District will execute and deliver to
Collateral Agent a new Contract,which Contract shall be on the terms and
conditions as the original Contract for the remaining term of the Contract before
giving effect to such termination.
2. The District further acknowledges and agrees with the Collateral
Agent, for the benefit of the Secured Parties, and the Borrower:
(a) that, as of the Effective Date,the Consent and Agreement,
executed on or around September 29, 1993 by the District and the Borrower for
the benefit of ABN AMBO Bank N.V., as Administrative Agent(the
"Administrative Agent")under the Construction Loan Agreement, dated as of
September 29, 1993, among the Borrower,the Administrative Agent, the co-
agents and certain financial institutions named therein, shall terminate and be of
no further effect; and
(b) that this Consent and Agreement shall terminate upon
delivery of written notice from the Borrower to the District that the obligations
secured by the Security Agreement have been satisfied or otherwise terminated.
3. District hereby represents and warrants that:
(a) The execution,delivery and performance by District of the
Contract and this Consent and Agreement have been duly authorized by all
necessary corporate action, and do not and will not require any further consents or
approvals which have not been obtained, or violate any provision of any law,
regulation, order,judgment, injunction or similar matters or breach any agreement
presently in effect with respect to or binding on District;
(b) This Consent and Agreement and the Contract are legal,
valid and binding obligations of District enforceable against District in
accordance with their respective terms;
(c) All government approvals necessary for the execution,
delivery and performance by District of its obligations under the Contract have
been obtained and are in full force and effect;
(d) As of the date hereof,the Contract is in full force and effect
and has not been amended, supplemented or modified; and
(e) To the best of District's knowledge Borrower has fulfilled
all of its obligations under the Contract, and there are no breaches or unsatisfied
conditions presently existing(or which would exist after the passage of time
and/or giving of notice)that would allow District to terminate the Contract.
4. All Notices required or permitted hereunder shall be in writing and
shall be effective(a)upon receipt if hand delivered, (b)upon telephonic verification of
receipt if sent by facsimile and(c) if otherwise delivered, upon the earlier of receipt or
two (2)Banking Days after being sent registered or certified mail,return receipt
requested,with proper postage affixed thereto, or by private courier or delivery service
with charges prepaid, and addressed as specified below:
Attention:
If to District:
CROCKETT—CARQUINEZ FIRE PROTECTION DISTRICT
746 Loring Avenue
Crockett, CA 94525
Attention: Jerry Littleton Jr., Chief
Fax: (510) 787-2717
If to Collateral Agent:
LaSalle Bank National Association
Corporate Trust Administration
135 S. LaSalle Street, Suite 1960
Chicago, Illinois 60603
Attn: Wayne M. Evans COTS, First Vice President
Fax:(312) 904-2236
5. This Consent and Agreement shall be binding upon and benefit the
successors and assigns of District, Borrower, Collateral Agent and their respective
successors,transferees and assigns. District agrees to confirm such continuing obligation
in writing upon the reasonable request of Borrower, Collateral Agent or any of their
respective successors,transferees or assigns. No termination, amendment,variation or
waiver of any provisions of this Consent and Agreement shall be effective unless in
writing and signed by District, Collateral Agent and Borrower. This Consent and
Agreement shall be governed by the laws of the State of California, without reference to
principles of conflicts of laws.
6. This Consent and Agreement may be executed in one or more
duplicate counterparts, and when executed and delivered by all the parties listed below,
shall constitute a single binding agreement.
Accepted and Agreed:
LASALLE BANK NATIONAL ASSOCIATION,,
as Collateral Agent
By:
Name:
Title:
CROCKETT COGENERATION, A CALIFORNIA
LIMITED PARTNERSHIP, a limited partnership
organized under the laws of California
By: Pacific Crockett Energy, LLC, a Utah limited liability company,
its general partner
By:
Name.-
Title:
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M
IN WITNESS WHEREOF. District by its officer thereunto duly
authorized,has duly executed this Consent and Agreement as of the date first set forth
above.
CROCKETT-CARQUINEZ FIRE PROTECTION
DISTRICT
B"► r
y
N . G.AMB. iTRM6i
Title:tKAIR,SUSM DISMCr III
BOARD OF SUPERVISORS