ATTACHMENT A - Special Assets Collateral Agent PWS_FINAL.pdf

Department of Energy (DOE) Loan Program Office (LPO)

PERFORMANCE WORK

STATEMENT

for

SPECIAL ASSETS COLLATERAL AGENT (SACA)

July 2021

DRAFT

ATTACHMENT A

PERFORMANCE WORK STATEMENT

1. BACKGROUND

The Department of Energy (DOE) Loan Program Office (LPO) has a requirement for a contractor to perform Collateral Agency services for distressed assets loans within the LPO portfolio. The contractor will be required to perform services as the Special Assets Collateral Agent (SACA).

The SACA services will only be required when loans have been determined by the DOE to be distressed. The SACA is expected to, at the direction of the LPO, expeditiously execute remedies, including any required filings or administration of documents, contemplated in the loan agreements and other finance documents to maximize recovery to the U.S Government.

The services will consist of providing specialized collateral agency services and expertise for LPO’s distressed assets, including the prompt enforcement of an expansive range of lender/guarantor rights and remedies for high-value, high-risk, distressed, non-recourse financing or corporate loans for energy related infrastructure, and manufacturing transactions. LPO has a portfolio of $40 Billion in loans with approximately $28 billion in exposure.

LPO is seeking contractors with substantial experience in collateral enforcement related to high-value, high-risk, distressed energy infrastructure projects and who can respond quickly on the good faith direction of LPO management when request for services are made.

2. SCOPE

The contractor shall provide all personnel, equipment, supplies, facilities, transportation, materials, supervision, technical expertise, as non-personal services, necessary to fully perform SACA duties, responsibilities, specifically delegated in the Collateral Agency and Account Agreement (CAAA), exercise such rights, powers, authorities and discretions as required by the CAAA, this Performance Work Statement (PWS), and any other Security Document, Transaction Document and Financing Documents, that the SACA is, or made a party to.

3. REQUIREMENTS

Upon such assignment, the SACA will be appointed the collateral agent pursuant to CAAA for the applicable project, accede to the existing security documents, and assume all collateral agency rights, duties, and responsibilities of the previous Collateral Agent. Loans that have been designated as distressed by DOE as a result of default, insolvency, bankruptcy, restructuring, or other negative credit event are expected to require an increased level of effort related to loan servicing.

3.1 Distressed Assets Services

3.1.1 As determined by DOE, the SACA shall initiate performance, often on a quick turnaround basis, e.g. one (1) to five (5) business days, such services including, but are not limited to, by:

3.1.1.1 Executing CAs successor agreements, equity pledge agreements, filling for foreclosure, receivership, proxy rights, amendments, and other agreements that enable DOE to exercise certain rights and remedies under various projects loan agreements.

3.1.1.2 Taking possession of the project collateral through:

i. Foreclosure and receivership.

ii. Occupying any premises where the collateral or any part thereof is assembled or located.

iii. Hold and safeguard certain collateral, (such as: stock certificates, letters of credit, contracts, deeds).

iv. Perform collection activities and notify DOE immediately of any material changes in the value of the collateral.

3.1.1.3 Hiring replacement officers, board members, and independent managers who will have the authority to vote at board meetings on behalf of DOE, and hire external legal counsel to address complex legal issues as it related to corporate governance as required.

3.1.1.4 Conducting analysis and providing oral and written advice and recommendations on the disposition of the collateral. Such written analysis, advice and recommendations may include legal briefs, memoranda, letters, and other documentation to support such analysis, advice, and recommendations. Any such written analysis, advice and recommendations shall be delivered in paper and/or electronic media as DOE shall deem appropriate.

3.1.1.5 Preserving and protecting the SACA's liens on, and security interest in, the collateral;

and create, preserve, and protect liens on additional collateral provided during any bankruptcy proceeding.

3.1.1.6 Filing any claims or take any action or institute any proceedings that the SACA deems necessary or desirable for the collection of any of the collateral or otherwise to accomplish the purposes of any security documents or loan agreement documents.

3.1.1.7 Enforcing any transactional agreements to which DOE is a party.

3.2 Programmatic Services

3.2.1 The SACA shall assist and advise DOE in connection with the liquidation of the collateral, including selecting specialists to assist in appraisal and liquidation of the collateral, recommending liquidation strategies, identifying potential buyers of the assets, and analyzing bids.

Ask for, demand, collect, sue for, recover; receive and give acquaintance and receipts for moneys due and to become due under or in respect of any collateral. Engage in negotiations and discussions regarding the distressed asset and close amendments, modifications, waivers, and forbearance agreements to existing the project and loan documents.

3.2.2 The SACA shall provide legal advice to DOE in all aspects of a bankruptcy process under applicable federal and local state law in consultation, as appropriate, with other U.S.

Government agencies, such as the U.S. Department of Justice, existing transactional counsel, other DOE agents or advisors.

3.2.3 The SACA shall provide assistance in responding to audits, investigations of, or inquiries by Governmental agencies that concern any borrower, sponsor, ultimate parent, or a project, as well as with agency documentation concerning any borrower, sponsor, ultimate parent or a project.

3.2.4 The SACA shall handle closing and post-closing issues arising in connection with distressed assets transactions, including closing checklists and operational memoranda for loan monitoring purposes, further disbursements, contract analysis, consents, amendments, waivers, and litigation.

3.2.5 The SACA shall obtain insurance for high-risk energy projects, including project companies, and its officers; and take such other actions with respect to the distressed asset as may be reasonably requested in writing by DOE.

3.2.6 The SACA shall monitor all required regulatory and UCC filings related to the collateral and the Borrower’s compliance with covenants and agreements related to the collateral.

3.2.7 The SACA shall give notices or provide instructions on behalf of DOE to any person in accordance with the terms and conditions of the transaction documents, including project documents and loan documents. Collect and manage security documents, enforce applicable agreements, i.e. transaction project documents and loan documents, draw on letters of credit, as required, and exercise lender rights and remedies in accordance with those agreements.

Receive, endorse, and collect any drafts or other instruments, documents, and chattel paper in connection with the loan.

3.2.8 The SACA shall prepare for, and participate in, meetings in respect of the work, to include (a) meetings at LPO with LPO Personnel, (b) meetings between LPO and other divisions of DOE, other Government agencies, export credit agencies, and governmental financing entities, (c) meetings with legal counsel or other consultants and (d) participate in routine conference calls with DOE staff and outside legal to recommend paths to maximize loan recovery.

3.2.9 The SACA shall appear at hearings related to any bankruptcy proceedings as requested by the COR and provide testimony as necessary.

3.3 Reports

3.3.1 In connection with these services, the SACA may be required to provide the following reports as requested by the COR:

3.3.1.1 Provide collateral reports that describes the location of all assets, appraisals, and information regarding perfection of liens, as requested by the COR.

3.3.1.2 Provide transactions reports, detailing all transaction history for money movement in the project accounts opened in connection with each transaction, as requested by the COR.

3.3.1.3 Provide insurance reports, detailing all insurance held for each project, sorted by renewal date, as requested by the COR.

3.3.1.4 Provide letter of credit and surety bond reports, listing all letters of credit and surety bonds, sorted by expiration date, as requested by the COR. Create project account bank statements reports, detailing the balances and activity for each project account opened in connection with each transaction, as requested by the COR.

3.3.1.5 Provide Unified Commercial Code (UCC) reports that listing all UCC financing statements filed for each transaction, sorted by filing date or expiration date and monitor all UCC filings related to the collateral to ensure that continuation statements, extensions or renewals, as applicable, are timely filed.

3.3.2 Keep, or cause to be kept, proper books of record and account in which complete and accurate entries shall be made of all transactions relating to the DOE guaranteed loans and all project accounts established pursuant to the loan documents. Such books of record and accounts shall be available for inspection by DOE, other secured parties and the borrower and their agents or representatives duly authorized in writing, at reasonable hours and under reasonable circumstances and upon reasonable prior written request, and subject to all reasonable security policies and procedures relative to the SACA's facilities. Maintain records of all receipts, disbursements, and investments of funds with respect to the project accounts until the fifth (5th) anniversary of the date the loan is discharged.

3.4 Quality Control

3.4.1 The SACA shall develop and maintain an effective quality control (QC) process to ensure services are performed in accordance with the CAAA, the PWS and all other applicable documents. The quality of service required for this contract is equivalent to that required by regulated lending institutions with large commercial or project finance loan portfolios. The QC process shall consist of processes that identify, prevent, and ensure non-recurrence of defective services. As part of the QC, individual projects and loan document files are periodically reviewed to ensure that loan-specific quality control measures such as document gathering, collateral identification, UCC filings and reporting are reviewed and are being completed as required. Through this process, feedback should be provided to those preparing documents and performing CA services to ensure continuous improvement and the prevention of problems and degradation of the services. The SACAs quality control process is the means by which it ensures that the services complies with the requirement of this contract, and ensure that prudent QC procedures and tools are in place and are being carried out with in accordance with the desired quality standards at the management, project and program levels of the organization.