Exhibit 4.3
COMPANY & PARTNER
PLEDGE AGREEMENT
of
NEA and NJEA Partnership Interests
NE LLC Member Interests
and the Note evidencing the Bond Loan
THIS COMPANY & PARTNER PLEDGE AGREEMENT (this "Agreement") is made and
entered into as of February 19, 1998 by Northeast Energy, LP, a Delaware limited
partnership ("NE LP"), Northeast Energy, LLC, a Delaware limited liability
company and a wholly-owned subsidiary of NE LP ("NE LLC") and ESI Tractebel
Acquisition Corp., a Delaware corporation (the "Company" and together with NE LP
and NE LLC the "Company & Partner Pledgors" and each a "Company and Partner
Pledgor"), each having its principal office at ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, in favor of State Street Bank and Trust Company, a
Massachusetts banking corporation ("State Street Bank") having an office at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ as collateral agent (the
"Collateral Agent") for State Street Bank, as trustee (the "Trustee") for the
holders (the "Holders") of the 7.99% Secured Bonds Due 2011 of the Company.
Capitalized terms used and not defined herein shall have the meanings given to
such terms in the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company & Partner Pledgors and State Street Bank, as
trustee, have entered into that certain indenture dated as of February 19, 1998
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Indenture"), pursuant to which the Company issued $220 million in
aggregate principal amount of 7.99% Secured Bonds due 2011 (together with any
bonds issued in replacement thereof or in exchange or substitution therefor, the
"Bonds"); and
WHEREAS, NE LP and NE LLC are the legal and beneficial owners of all
of the partnership interests, including the "Interests" as defined in the
amended and restated agreement of limited partnership of NEA, dated as of
November 21, 1997 by NE LP and NE LLC (the "NEA Partnership Agreement") set
forth on Schedule I hereto (the "Pledged NEA Interests") of Northeast Energy
Associates, A Limited Partnership, a Massachusetts limited partnership ("NEA");
and
WHEREAS, NE LP and NE LLC are the legal and beneficial owners of all
of the partnership interests, including the "Interests" as defined in the
amended and restated agreement of limited partnership of NJEA, dated as of
November 21, 1997 by NE LP and NE LLC (the "NJEA Partnership Agreement") set
forth on Schedule I hereto (the "Pledged NJEA Interests" and together with the
Pledged NEA Interests, the "Pledged Partnership Interests")
of North Jersey Energy Associates, A Limited Partnership, a New Jersey limited
partnership ("NJEA"), and
WHEREAS, NE LP is the legal and beneficial owner of all of the member
interests including the "Interest" as defined in the operating agreement of NE
LLC, dated as of November 21, 1997 by NE LP (the "NE LLC Operating Agreement")
set forth on Schedule I hereto (the "Pledged Member Interests") of NE LLC (in
such capacity an "Owned Entity" and together with NEA and NJEA, the "Owned
Entities"); and
WHEREAS, the Company is the legal and beneficial owner of a promissory
note issued by NE LP evidencing NE LP's obligation to repay the Bond Loan from
the Company to NE LP of the proceeds received by the Company from the sale of
the Bonds, together with any note issued in replacement thereof or in exchange
or substitution thereof (the "Pledged Note"); and
WHEREAS, the terms of the Indenture require that each Company &
Partner Pledgor (i) pledge to the Collateral Agent for its benefit, the benefit
of the Trustee and the ratable benefit of the Holders of Bonds, and grant to the
Collateral Agent for its benefit, the benefit of the Trustee and the ratable
benefit of the Holders of Bonds a security interest in, the Pledged Collateral
(as defined herein) and (ii) execute and deliver this Agreement in order to
secure the payment and performance by each Company & Partner Pledgor of all of
the Obligations of the Company, NE LP and NE LLC under the Indenture, the Note,
the Bond Guaranty and the Bonds.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to
induce the Holders of Bonds to purchase the Bonds, each Company & Partner
Pledgor hereby agrees with the Collateral Agent for its benefit, the benefit of
the Trustee and the ratable benefit of the Holders of Bonds as follows:
SECTION 1. Pledge. Each Company & Partner Pledgor, with respect to the
Pledged Collateral now owned or hereafter acquired by such Company & Partner
Pledgor, hereby pledges to the Collateral Agent for its benefit, the benefit of
the Trustee and for the ratable benefit of the Holders of Bonds, and grants to
the Collateral Agent for its benefit, the benefit of the Trustee and the ratable
benefit of the Holders of Bonds, the following (the "Pledged Collateral"):
(a) a continuing first priority perfected security interest in all of
their right, title and interest in the Pledged Partnership Interests (other
than the 1% general partner interests in each of NEA and NJEA owned by NE
LP, which is covered by clause (b) below), and all products and proceeds of
any of such Pledged Partnership Interests, including, without limitation,
all dividends, cash, rights, and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Partnership Interests or any of the
foregoing including distributions of "Cash Flow" (as defined in each of the
NEA Partnership Agreement and the NJEA Partnership Agreement); and
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(b) a continuing second priority security interest in all of their
right, title and interest in the general partner interests in each of NEA
and NJEA owned by NE LP and all products and proceeds of any of such 1%
general partner interests of the Pledged Partnership Interests, including,
without limitation, all dividends, cash, rights, and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Partnership
Interests or any of the foregoing including distributions of "Cash Flow" (as
defined in each of the NEA Partnership Agreement and the NJEA Partnership
Agreement); and
(c) a continuing first priority perfected security interest in all of
its right, title and interest in the Pledged Member Interests, and all
products and proceeds of any of the Pledged Member Interests, including,
without limitation, all dividends, cash, rights, and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Member Interests or
any of the foregoing including distributions of "Distributable Cash" (as
defined in the NE LLC Operating Agreement);
(d) continuing first priority perfected security interest in all of its
right, title and interest in all additional Equity Interests in the Owned
Entities from time to time acquired by each NE LP and NE LLC in any manner,
and the certificates, if any, representing such additional Equity Interests
(any such additional Equity Interests and other items shall constitute part
of the Pledged Partnership Interests and the Pledged Member Interests);
(e) continuing first priority security interest in all of its right,
title and interest in the Pledged Note and the instrument representing the
Pledged Note, and all products and proceeds of the Pledged Note, including,
without limitation, all interest, principal and premium payments (if any)
and Registration Default Damages (if any), and all instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for the Pledged Note or any of the foregoing.
SECTION 2. Security for Obligations. This Agreement secures the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all Obligations of the Company, NE LP and NE LLC
under the Indenture, the Note, the Bond Guaranty and the Bonds (including,
without limitation, interest, premium and Registration Default Damages, if any,
and any other Obligations accruing after the date of any filing by each Company
& Partner Pledgor of any petition in bankruptcy or the commencement of any
bankruptcy, insolvency or similar proceeding with respect to any of the Company
& Partner Pledgors) (the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. Each Company & Partner Pledgor
hereby agrees that all certificates or instruments representing or evidencing
the Pledged Collateral shall be immediately delivered to and held at all times
by the Collateral Agent pursuant hereto in the State of New York and shall be in
suitable form for transfer by delivery, or issued in the name of such Company &
Partner Pledgor and accompanied by instruments of transfer or assignment duly
executed in blank and undated and bearing appropriate signature guarantees, and
in either case having attached thereto all requisite federal or state stock
transfer tax stamps, all in form and substance satisfactory to the Collateral
Agent. The Collateral Agent
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shall have the right to transfer Pledged Collateral into its name, as
Collateral Agent hereunder, or into the name of its nominee.
SECTION 4. Representations and Warranties. Each Company & Partner
Pledgor hereby makes all representations and warranties applicable to such
Company & Partner Pledgor contained in the Indenture. Each Company & Partner
Pledgor further represents and warrants that:
(a) The execution, delivery and performance by each Company & Partner
Pledgor of this Agreement are within each such Company & Partner Pledgor's
full power and authority (corporate or other) have been duly authorized by
all necessary action (corporate or other) and do not contravene, or
constitute a default under, any provision of applicable law or regulation or
of the certificate of incorporation, bylaws, operating agreement or
agreement of limited partnership of each such Company & Partner Pledgor or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon each such Company & Partner Pledgor, or result in the creation
or imposition of any Lien on any assets of each such Company & Partner
Pledgor, other than the Lien contemplated hereby and, with respect to the
pledge by NE LP of its one percent general partnership interest in each NEA
and NJEA, other than the Lien securing NEA's and NJEA's obligations in
respect of the Project Indebtedness.
(b) The Pledged Note has been duly authorized, issued and delivered by
NE LP and constitutes the legal, valid and binding obligation of NE LP,
enforceable against NE LP in accordance with its terms.
(c) The Pledged Note constitutes all of the promissory notes of NE LP in
favor of the Company.
(d) The execution, delivery and performance of the NEA Partnership
Agreement creating the Pledged Partnership Interests has been duly
authorized by NE LP and NE LLC and constitutes the valid and binding
obligations of NE LP and NE LLC in accordance with its terms.
(e) The execution, delivery and performance of the NJEA Partnership
Agreement creating the Pledged Partnership Interests has been duly
authorized by NE LP and NE LLC and constitutes the valid and binding
obligations of NE LP and NE LLC in accordance with its terms.
(f) The execution, delivery and performance of the NE LLC Operating
Agreement creating the Pledged Member Interests has been duly authorized by
NE LP and such NE LLC Operating Agreement constitutes the valid and binding
obligations of NE LP in accordance with its terms.
(g) The Pledged Member Interests constitute all of the authorized,
issued and outstanding Equity Interests of NE LLC and constitute all of the
Equity Interests of NE LLC beneficially owned by NE LP. The Pledged
Partnership Interests constitute all of the authorized Equity Interests of
NEA and NJEA and constitute all of the Equity Interests of the NE LP
beneficially owned by the Owners of NE LP.
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(h) NE LP is the legal, record and beneficial owners of the Pledged
Member Interests, free and clear of any Lien or claims of any Person except
for the security interest created by this Agreement. NE LP and NE LLC are
the legal, record and beneficial owners of the Pledged Partnership
Interests, free and clear of any Lien or claims of any Person except for the
security interest created by this Agreement and except for the first
priority pledge of the general partner interest of each of NEA and NJEA
securing, among other things, the obligations of ESI Tractebel Funding Corp.
(formerly known as IEC Funding Corp.) with respect to the Project Securities
(as defined in the Indenture).
(i) Each Company & Partner Pledgor has full power and authority to enter
into this Agreement and has the right to vote, pledge and grant a security
interest in the Pledged Collateral as provided by this Agreement.
(j) This Agreement has been duly executed and delivered by each Company
& Partner Pledgor and constitutes a legal, valid and binding obligation of
each Company & Partner Pledgor, enforceable against each Company & Partner
Pledgor in accordance with its terms.
(k) Upon the delivery to the Collateral Agent of the Pledged Collateral
and the filing of Uniform Commercial Code (the "UCC") financing statements,
the pledge of the Pledged Collateral (other than the Pledged Collateral set
forth in Section 1(b) hereof with respect to which this Agreement creates a
valid and perfected second priority security interest) pursuant to this
Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the payment of the Secured Obligations for
the benefit of the Collateral Agent, the Trustee and the Holders of Bonds,
and enforceable as such against all creditors of the Company & Partner
Pledgors and any Persons purporting to purchase any of the Pledged
Collateral from the Company & Partner Pledgors.
(l) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the
pledge by any Company & Partner Pledgor of the Pledged Collateral pursuant
to this Agreement or for the execution, delivery or performance of this
Agreement by any Company & Partner Pledgor or (ii) for the exercise by the
Collateral Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to
this Agreement (except as may be required in connection with such
disposition by laws affecting the offering and sale of securities).
(m) No litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the best knowledge of
any Company & Partner Pledgor, threatened by or against such Company &
Partner Pledgor or against any of its properties or revenues with respect to
this Agreement or any of the transactions contemplated hereby.
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(n) The pledge of the Pledged Collateral pursuant to this Agreement is
not prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System).
(o) All information set forth herein relating to the Pledged Collateral
is accurate and complete in all respects.
SECTION 5. Further Assurance. The Company & Partner Pledgors will at all
times cause the security interests granted pursuant to this Agreement to
constitute valid perfected first priority security interests in the Pledged
Collateral (except to the extent that the Company and Partner Pledgors cause the
security interest in the general partner interests in NEA and NJEA to constitute
perfected second priority security interests), enforceable as such against all
creditors of Company & Partner Pledgors and (except as otherwise specifically
provided herein) any Persons purporting to purchase any Pledged Collateral from
the Company & Partner Pledgors. Each Company & Partner Pledgor will, promptly
upon request by the Collateral Agent, execute and deliver or cause to be
executed and delivered, or use its best efforts to procure, all stock powers,
proxies, tax stamps, assignments, instruments and other documents, all in form
and substance satisfactory to the Collateral Agent, deliver any instruments to
the Collateral Agent and take any other actions that are necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect, continue the
perfection of, or protect the first priority or second priority, as applicable,
of the Collateral Agent's security interest in, the Pledged Collateral, to
protect the Pledged Collateral against the rights, claims, or interests of third
persons, to enable the Collateral Agent to exercise or enforce its rights and
remedies hereunder, or otherwise to effect the purposes of this Agreement. Each
Company & Partner Pledgor also hereby authorizes the Collateral Agent to file
any financing or continuation statements with respect to the Pledged Collateral
without the signature of such Company & Partner Pledgor to the extent permitted
by applicable law. The Company & Partner Pledgors will pay all costs incurred in
connection with any of the foregoing.
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, each Company & Partner Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Pledged Member
Interests or the Pledged Partnership Interests or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Indenture;
provided, however, that such Company & Partner Pledgor shall not exercise or
shall refrain from exercising any such right if such action would have a
material adverse effect on the value of the Pledged Collateral or any part
thereof or be inconsistent with or violate any provisions of this Agreement
or the Indenture.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the Indenture,
each Company & Partner Pledgor shall be entitled to receive, and to utilize
(subject to the provisions of the Indenture) free and clear of the Lien of
this Agreement, all regular and ordinary cash dividends paid from time to
time in respect of the Pledged Member Interests and the Pledged Partnership
Interests.
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(c) Any and all (i) dividends, other distributions, interest and
principal payments paid or payable in the form of instruments and/or other
property (other than cash interest payments permitted under Section 6(b)
hereof and cash dividends permitted under Section 6(c) hereof) received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral, (ii) dividends and other distributions paid or payable
in cash in respect of any Pledged Member Interests or the Pledged
Partnership Interests in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, shall in each
case be forthwith delivered to the Collateral Agent to hold as Pledged
Collateral and shall, if received by a Company & Partner Pledgor, be
received in trust for the benefit of the Collateral Agent, the Trustee and
the Holders of Bonds, be segregated from the other property and funds of
such Company & Partner Pledgor and be forthwith delivered to the Collateral
Agent as Pledged Collateral in the same form as so received (with any
necessary endorsements).
(d) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to each Company & Partner Pledgor all such proxies
and other instruments as such Company & Partner Pledgor may reasonably
request for the purpose of enabling such Company & Partner Pledgor to
exercise the voting and other rights that it is entitled to exercise
pursuant to Sections 6(a) through 6(c) above.
(e) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of each Company & Partner Pledgor to exercise the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 6(a) shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, which, to the extent
permitted by law, shall thereupon have the sole right to exercise such
voting and other consensual rights, and (ii) all cash interest payments and
dividends and other distributions payable in respect of the Pledged
Collateral shall be paid to the Collateral Agent and each Company & Partner
Pledgor's right to receive such cash payments pursuant to Sections 6(b) and
6(c) hereof shall immediately cease.
(f) Upon the occurrence and during the continuance of an Event of
Default, each Company & Partner Pledgor shall execute and deliver (or cause
to be executed and delivered) to the Collateral Agent all such proxies,
dividend and interest payment orders and other instruments as the Collateral
Agent may reasonably request for the purpose of enabling the Collateral
Agent to exercise the voting and other rights that it is entitled to
exercise pursuant to Section 6(f) above.
(g) All payments of interest, principal or premium and all dividends and
other distributions that are received by a Company & Partner Pledgor
contrary to the provisions of this Section 6 shall be received in trust for
the benefit of the Collateral Agent and the Holders, shall be segregated
from the other property or funds of such Company & Partner Pledgor and shall
be forthwith delivered to the Collateral Agent as Pledged Collateral in the
same form as so received (with any necessary endorsements).
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SECTION 7. Covenants. Each Company & Partner Pledgor hereby covenants
and agrees with the Collateral Agent and the Holders of Bonds that it will
comply with all of the obligations, requirements and restrictions applicable to
such Company & Partner Pledgor contained in the Indenture. Each Company &
Partner Pledgor further covenants and agrees, from and after the date of this
Agreement and until the Secured Obligations have been paid in full, as follows:
(a) Each Company & Partner Pledgor agrees that it will not (i) sell,
assign, transfer, convey or otherwise dispose of, or grant any option or
warrant with respect to, any of the Pledged Collateral without the prior
written consent of the Collateral Agent and except as permitted under the
Indenture, (ii) create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral, except for the security interest granted
under this Agreement, and at all times will be the sole beneficial owner
with respect to its Pledged Collateral, (iii) enter into any agreement or
understanding that purports to or that may restrict or inhibit the
Collateral Agent's rights or remedies hereunder, including, without
limitation, the Collateral Agent's right to sell or otherwise dispose of the
Pledged Collateral, (iv) take any action, or permit the taking of any action
by the Owned Entities, with respect to the Pledged Collateral the taking of
which would result in a material impairment of the economic value of the
Pledged Collateral as Collateral or a violation of the Indenture or this
Agreement, including, without limitation, the issuance by the Owned Entities
of any additional Equity Interests or promissory notes or the incurrence by
the Owned Entities of any Indebtedness to Persons other than a Company &
Partner Pledgor (except as permitted by the Indenture), (v) enter into any
agreement amending, modifying or supplementing the interest, principal or
maturity terms of the Pledged Note (except as permitted by the Indenture) in
a manner adverse to the interests of the Collateral Agent, the Trustee and
the Holders of Bonds; (vi) fail to give prompt notice to the Collateral
Agent of any notice of default given by NE LP to the Company under or with
respect to the Pledged Note together with a complete copy of such notice;
(vii) permit the Owned Entities to merge or consolidate with or into another
person or entity or sell or transfer all or substantially all of its assets
to another person or entity, except as permitted under the Indenture and
unless all outstanding Capital Stock, notes, other securities or Equity
Interests of the surviving entity in such merger or consolidation or of the
entity to whom such sale or transfer was made, together with any promissory
notes issued by such entity in favor of such Company & Partner Pledgor are,
upon such merger or consolidation, pledged hereunder to and deposited with
the Collateral Agent or (viii) fail to pay or discharge any tax, assessment
or levy of any nature not later than five days prior to the date of any
proposed sale under any judgment, writ or warrant of attachment with regard
to the Pledged Collateral.
(b) Each Company & Partner Pledgor agrees that immediately upon becoming
the beneficial owner of any additional shares of Capital Stock, notes, other
securities or Equity Interests of the Owned Entities (including as a result
of the merger or consolidation of the Owned Entities with or into another
entity) it will pledge and deliver to the Collateral Agent for its benefit,
the benefit of the Trustee and the ratable benefit of the Holders and grant
to the Collateral Agent for its benefit, the benefit of the Trustee and the
ratable benefit of the Holders, a continuing first priority (or with respect
to the Pledged Collateral set forth in Section 1(b) hereof, a continuing
second priority) security interest in such shares, notes, other
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securities or Equity Interests (as well as instruments of transfer or
assignment duly executed in blank and undated and any necessary stock
transfer tax stamps, all in form and substance satisfactory to the
Collateral Agent). Each Company & Partner Pledgor further agrees that it
will promptly deliver to the Collateral Agent a certificate executed by a
principal executive officer of such Company & Partner Pledgor describing
such additional shares, notes, other securities or Equity Interests and
certifying that the same have been duly pledged and delivered to the
Collateral Agent hereunder.
(c) The Company & Partner Pledgors agree that upon the acquisition or
creation of any new subsidiaries of any Company & Partner Pledgor, such
Company & Partner Pledgors will promptly pledge and deliver to the
Collateral Agent for its benefit, the benefit of the Trustee and the ratable
benefit of the Holders and grant to the Collateral Agent for its benefit,
the benefit of the Trustee and the ratable benefit of the Holders a first
priority security interest in any shares, notes, other securities or Equity
Interests (as well as instruments of transfer or assignment duly executed in
blank and undated and any necessary stock transfer tax stamps, all in form
and substance satisfactory to the Collateral Agent) of such subsidiaries.
SECTION 8. Power of Attorney. In addition to all of the powers granted
to the Collateral Agent pursuant to Section 11.06 of the Indenture, each Company
& Partner Pledgor hereby appoints and constitutes the Collateral Agent as such
Company & Partner Pledgor's attorney-in-fact to exercise all of the following
powers upon and at any time after the occurrence of an Event of Default: (i)
collection of proceeds of any Pledged Collateral; (ii) conveyance of any item of
Pledged Collateral to any purchaser thereof; (iii) giving of any notices or
recording of any Liens under Section 5 hereof; (iv) making of any payments or
taking any acts under Section 9 hereof and (v) paying or discharging taxes or
Liens levied or placed upon or threatened against the Pledged Collateral, the
legality or validity thereof and the amounts necessary to discharge the same to
be determined by the Collateral Agent in its sole discretion, and such payments
made by the Collateral Agent to become the obligations of such Company & Partner
Pledgor to the Collateral Agent, due and payable immediately without demand. The
Collateral Agent's authority hereunder shall include, without limitation, the
authority to endorse and negotiate, for the Collateral Agent's own account, any
checks or instruments in the name of each Company & Partner Pledgor, execute and
give receipt for any certificate of ownership or any document, transfer title to
any item of Pledged Collateral, sign each Company & Partner Pledgor's name on
all financing statements or any other documents deemed necessary or appropriate
to preserve, protect or perfect the security interest in the Pledged Collateral
and to file the same, prepare, file and sign each Company & Partner Pledgor's
name on any notice of Lien, and prepare, file and sign each Company & Partner
Pledgor's name on a proof of claim in bankruptcy or similar document against any
customer of each Company & Partner Pledgor, and to take any other actions
arising from or incident to the powers granted to the Collateral Agent in this
Agreement. This power of attorney is coupled with an interest and is irrevocable
by each Company & Partner Pledgor.
SECTION 9. Collateral Agent May Perform. If any Company & Partner
Pledgor fails to perform any agreement contained herein, the Collateral Agent
may itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Collateral Agent incurred in
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connection therewith shall be payable by such Company & Partner Pledgor under
Section 14 hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the Collateral Agent's, the Trustee's and the Holders' of
Bonds security interest in and to the Pledged Collateral granted hereby and
shall not be interpreted to, and shall not, impose any duties on the Collateral
Agent in connection therewith. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
it being understood that the Collateral Agent shall not have any responsibility
for (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
SECTION 11. Subsequent Changes Affecting Collateral. Each Company &
Partner Pledgor represents to the Collateral Agent, the Trustee and the Holders
of Bonds that such Company & Partner Pledgor has made its own arrangements for
keeping informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, payments of interest and/or principal,
reorganization or other exchanges, tender offers and voting rights), and such
Company & Partner Pledgor agrees that the Collateral Agent, the Trustee and the
Holders of Bonds shall have no responsibility or liability for informing any
Company & Partner Pledgor of any such changes or potential changes or for taking
any action or omitting to take any action with respect thereto. Each Company &
Partner Pledgor covenants that it will not, without the prior written consent of
the Collateral Agent, vote to enable, or take any other action to permit, the
Owned Entities to issue any capital stock, notes, other securities or Equity
Interests or to sell or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral or create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security interests
granted under this Agreement. Each Company & Partner Pledgor will defend the
right, title and interest of the Collateral Agent, the Trustee and the Holders
of Bonds in and to the Pledged Collateral against the claims and demands of all
Persons.
SECTION 12. Remedies Upon Default.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent on behalf and for the benefit of the
Collateral Agent, the Trustee and the Holders of Bonds shall have, in
addition to all other rights given to such parties by law, by this
Agreement, the Sponsor Pledge Agreement or the Indenture, all of the rights
and remedies with respect to the Pledged Collateral of a secured party under
the UCC as in effect in the State of New York at that time. The Collateral
Agent may, without notice and at its option, transfer or register, and each
Company & Partner Pledgor shall register or cause to be registered upon
request therefor by the Collateral Agent, the Pledged Collateral or any part
thereof on the books of the Owned Entities into the name of the Collateral
Agent or the Collateral Agent's nominee(s), with or without any indication
that such Pledged Collateral is
10
subject to the security interest hereunder. In addition, with respect to any
Pledged Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the Collateral Agent may sell
or cause the same to be sold at any broker's board or at public or private
sale, in one or more sales or lots, at such price or prices as the
Collateral Agent may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk. The purchaser of any or all
Pledged Collateral so sold shall thereafter hold the same absolutely, free
from any claim, encumbrance or right of any kind whatsoever. Unless any of
the Pledged Collateral threatens to decline speedily in value or is or
becomes of a type sold on a recognized market, the Collateral Agent will
give the Company & Partner Pledgors reasonable notice of the time and place
of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks,
insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Pledged Collateral shall
be deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is mailed to the Company & Partner
Pledgors as provided below in Section 18.1, at least ten days before the
time of the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Collateral Agent or any Holder of Bonds may, in its own name or in the name
of a designee or nominee, buy any of the Pledged Collateral at any public
sale and, if permitted by applicable law, at any private sale. All expenses
(including court costs and reasonable attorneys' fees and disbursements) of,
or incident to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the
Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its right
to sell any or all of the Pledged Member Interests or the Pledged
Partnership Interests pursuant to Section 12(a) above, and if in the opinion
of counsel for the Collateral Agent it is necessary, or if in the opinion of
the Collateral Agent it is advisable, to have the Pledged Member Interests
or the Pledged Partnership Interests or that portion thereof to be sold,
registered under the provisions of the Securities Act of 1933, as amended
(the "Securities Act"), the Company & Partner Pledgors will cause the
applicable Owned Entity to (i) execute and deliver, and cause its directors
and officers to execute and deliver, all at such Owned Entity's expense, all
such instruments and documents, and to do or cause to be done all such other
acts and things as may be necessary or, in the opinion of the Collateral
Agent, advisable to register such Pledged Member Interests or the Pledged
Partnership Interests under the provisions of the Securities Act, (ii) cause
the registration statement relating thereto to become effective and to
remain effective for a period of 180 days from the date of the first public
offering of such Pledged Member Interests, Pledged Partnership Interests or
that portion thereof to be sold and (iii) make all amendments thereto and/or
to the related prospectus that, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. The Company & Partner Pledgors agree to cause
such Owned Entity to comply with the provisions of the securities or "Blue
Sky" laws of any jurisdiction that the Collateral Agent shall designate for
the sale of the Pledged Member Interests or the Pledged Partnership
Interests and to make available to such Owned Entity's security holders, as
soon
11
as practicable, an earnings statement (which need not be audited) that will
satisfy the provisions of Section 11(a) of the Securities Act. The Company &
Partner Pledgors will cause such Owned Entity to furnish to the Collateral
Agent such number of copies as the Collateral Agent may reasonably request
of each preliminary and final prospectus, to notify the Collateral Agent
promptly of the happening of any event as a result of which any then
effective prospectus includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of then existing
circumstances, and to cause the Collateral Agent to be furnished with such
number of copies as the Collateral Agent may request of such supplement to
or amendment of such prospectus. The Company & Partner Pledgors will cause
such Owned Entity, to the extent permitted by law, to indemnify, defend and
hold harmless the Collateral Agent, the Trustee and the Holders of Bonds
from and against all losses, liabilities, expenses or claims (including
reasonable legal expenses and the reasonable costs of investigation) that
the Collateral Agent, the Trustee or the Holders of Bonds may incur under
the Securities Act or otherwise, insofar as such losses, liabilities,
expenses or claims arise out of or are based upon any alleged untrue
statement of a material fact contained in such registration statement (or
any amendment thereto) or in any preliminary or final prospectus (or any
amendment or supplement thereto), or arise out of or are based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except to the
extent that any such losses, liabilities, expenses or claims arise solely
out of or are based upon any such alleged untrue statement made or such
alleged omission to state a material fact included or excluded on the
written direction of the Collateral Agent. The Company & Partner Pledgors
will cause such Owned Entity to bear all costs and expenses of carrying out
its obligations hereunder.
(c) In view of the fact that federal and state securities laws
may impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after an Event of Default, each Company & Partner
Pledgor agrees that upon the occurrence or existence of any Event of
Default, the Collateral Agent may, from time to time, attempt to sell all or
any part of the Pledged Collateral by means of a private placement,
restricting the prospective purchasers to those who will represent and agree
that they are purchasing for investment only and not for distribution. In so
doing, the Collateral Agent may solicit offers to buy the Pledged
Collateral, or any part of it, for cash, from a limited number of investors
who might be interested in purchasing the Pledged Collateral. Each Company &
Partner Pledgor acknowledges and agrees that any such private sale may
result in prices and terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner.
The Collateral Agent shall be under no obligation to delay a sale of any of
the Pledged Collateral for the period of time necessary to permit a Owned
Entity to register such securities for public sale under the Securities Act,
or under applicable state securities laws, even if such Owned Entity agrees
to do so.
(d) Each Company & Partner Pledgor further agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Collateral
pursuant to this Section 12 valid and binding and in compliance with any and
all other applicable requirements of law. Each Company &
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Partner Pledgor further agrees that a breach of any of the covenants
contained in this Section 12 will cause irreparable injury to the Collateral
Agent, the Trustee and the Holders of Bonds, that the Collateral Agent, the
Trustee and the Holders of Bonds have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained
in this Section 12 shall be specifically enforceable against such Company &
Partner Pledgor, and each Company & Partner Pledgor hereby waives and agrees
not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred
under the Indenture.
SECTION 13. Irrevocable Authorization and Instruction to the Company The
Company & Partner Pledgors hereby authorize and instruct the Owned Entities to
comply with any instruction received by a Owned Entity from the Collateral Agent
that (i) states that an Event of Default has occurred and (ii) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from any Company & Partner Pledgor, and each Company & Partner
Pledgor agrees that such Owned Entity shall be fully protected in so complying.
SECTION 14. Fees and Expenses. The Company & Partner Pledgors will upon
demand pay to the Collateral Agent the amount of any and all reasonable fees and
expenses (including, without limitation, the reasonable fees and disbursements
of its counsel, of any investment banking firm, business broker or other selling
agent and of any other experts and agents retained by the Collateral Agent) that
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders of
Bonds hereunder or (iv) the failure by any Company & Partner Pledgor to perform
or observe any of the provisions hereof.
SECTION 15. Security Interest Absolute. All rights of the Collateral
Agent and the Holders of Bonds and the security interests created hereunder, and
all obligations of each Company & Partner Pledgor hereunder, shall be absolute
and unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Secured Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company or any Company & Partner
Pledgor in respect of the Secured Obligations or of this Agreement.
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SECTION 16. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Pledged Collateral and any cash held
shall be applied by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral Agent
and the Trustee, and all expenses, liabilities and advances incurred or made by
the Collateral Agent or the Trustee in connection therewith, and any other
unreimbursed fees and expenses for which the Collateral Agent is to be
reimbursed pursuant to Section 14 hereof;
second, to the ratable payment (based on the principal amount of Bonds
deemed by the Indenture to be outstanding at the time of distribution) of
amounts due and unpaid on such outstanding Bonds for principal, premium, and
Registration Default Damages (if any) and interest without preference or
priority of any kind, according to amounts due and payable on the Bonds for
principal, premium and Registration Default Damages (if any) and interest,
respectively;
third, to the ratable payment (based on the principal amount of Bonds
deemed by the Indenture to be outstanding at the time of distribution) of all
other Secured Obligations, until all Secured Obligations shall have been paid in
full; and
fourth, to payment to the applicable Company & Partner Pledgor or its
successors or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds;
provided that, at the written request of the Trustee, the Collateral Agent shall
pay any proceeds or cash as set forth in clauses first through third of this
Section to the Trustee to be paid and distributed by the Trustee in accordance
with the provisions of the Indenture, the Note and the Bonds, which payment
shall release the Collateral Agent from all responsibility for such payments
except for payments as set forth in clause fourth of this Section.
SECTION 17. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Pledged Member Interests (whether now owned or
acquired hereafter by any Company & Partner Pledgor) are uncertificated Pledged
Member Interests, such Company & Partner Pledgor shall promptly notify the
Collateral Agent, and shall promptly take all actions required to perfect the
security interest of the Collateral Agent under applicable law. Each Company &
Partner Pledgor further agrees to take such actions as the Collateral Agent
deems necessary or desirable to effect the foregoing and to permit the
Collateral Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an Opinion of Counsel satisfactory to the Collateral Agent
with respect to any such pledge of uncertificated Pledged Member Interests
promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
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Section 18.1. Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 13.02 of the Indenture, and delivered to the
addresses set forth in such Section, or, in the case of the Collateral Agent to:
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: Corporate Trust Department-ESI Tractebel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
Section 18.2. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by a Company & Partner Pledgor to the Collateral
Agent to take any action or omit to take any action under this Agreement, such
Company & Partner Pledgor shall deliver to the Collateral Agent an Officer's
Certificate and an Opinion of Counsel in accordance with the requirements of
Section 13.04 of the Indenture.
Section 18.3. No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another pledge, security or debt
agreement of any Company & Partner Pledgor, any Owned Entities or any subsidiary
thereof. No such pledge, security or debt agreement may be used to interpret
this Agreement.
Section 18.4. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 18.5. No Recourse Against Others. Except to the extent provided
in the Indenture, the Sponsor Pledge Agreement and this Agreement, no director,
officer, employee, stockholder or affiliate, as such, of any Company & Partner
Pledgor or any Owned Entity shall have any liability for any obligations of a
Company & Partner Pledgor under this Agreement or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder of
Bonds, by accepting a Bond, waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Bonds.
Section 18.6. Headings. The headings of the Articles and Sections of
this Agreement have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 18.7. Counterpart Originals. This Agreement may be signed in two
or more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
and delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
15
Section 18.8. Benefits of Agreement. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the Trustee and the Holders of Bonds, any benefit or any
legal or equitable right, remedy or claim under this Agreement.
Section 18.9. Amendments, Waivers and Consents. Any amendment or waiver
of any provision of this Agreement and any consent to any departure by any
Company & Partner Pledgor from any provision of this Agreement shall be
effective only if made or given in compliance with all of the terms and
provisions of the Indenture necessary for amendments or waivers of, or consents
to any departure by such Company & Partner Pledgor from any provision of the
Indenture, as applicable, and neither the Collateral Agent, the Trustee nor any
Holder of Bonds shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Event of Default or in any breach of any of the terms and conditions hereof.
Failure of the Collateral Agent, the Trustee or any Holder of Bonds to exercise,
or delay in exercising, any right, power or privilege hereunder shall not
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Collateral
Agent, the Trustee or any Holder of Bonds of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy that the
Collateral Agent, the Trustee or such Holder of Bonds would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
Section 18.10. Interpretation of Agreement. Time is of the essence in
each provision of this Agreement of which time is an element. All terms not
defined herein or in the Indenture shall have the meaning set forth in the
applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 18.11. Continuing Security Interest; Transfer. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until the payment in full of all the Secured
Obligations and all the fees and expenses owing to the Collateral Agent and the
Trustee, (ii) be binding upon each Company & Partner Pledgor, its successors and
assigns, and (iii) inure, together with the rights and remedies of the
Collateral Agent and the Trustee hereunder, to the benefit of the Collateral
Agent, the Trustee the Holders of Bonds and their respective successors,
transferees and assigns.
Section 18.12. Reinstatement. This Agreement shall continue to be
effective or be reinstated if at any time any amount received by the Collateral
Agent, the Trustee or any Holder of Bonds in respect of the Secured Obligations
is rescinded or must otherwise be restored or returned by the Collateral Agent,
the Trustee or any Holder of Bonds upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Company & Partner Pledgor or upon
16
the appointment of any receiver, intervenor, conservator, trustee or similar
official for any Company & Partner Pledgor or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
Section 18.13. Survival of Provisions. All representations, warranties
and covenants of each Company & Partner Pledgor contained herein shall survive
the execution and delivery of this Agreement, and shall terminate only upon the
full and final payment and performance by the Company of the Secured
Obligations.
Section 18.14. Waivers Each of the Company & Partner Pledgors waives
presentment and demand for payment of any of the Secured Obligations, protest
and notice of dishonor or default with respect to any of the Secured
Obligations, and all other notices to which such Company & Partner Pledgor might
otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture.
Section 18.15. Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to exercise all
powers hereunder that are specifically granted to the Collateral Agent by
the terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or in
connection with the Pledged Collateral by or through agents or employees and
shall be entitled to retain counsel and to act in reliance upon the advice
of counsel concerning all such matters. Neither the Collateral Agent nor any
director, officer, employee, attorney or agent of the Collateral Agent shall
be responsible for the validity, effectiveness or sufficiency hereof or of
any document or security furnished pursuant hereto. The Collateral Agent
shall be without liability for acting in good faith at the written direction
of a majority in interest of the Holders of the Bonds and in reliance
thereon. The Collateral Agent and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and
to have been signed or sent by the proper person or persons and shall be
without liability for any actions it or they take or omit to take in good
faith that the Collateral Agent reasonably believes to be authorized or
within its powers. The Company & Partner Pledgors agree to indemnify and
hold harmless the Collateral Agent, the Holders of Bonds and any other
Person from and against any and all costs, expenses (including the
reasonable fees and disbursements of counsel (including, the allocated costs
of inside counsel)), claims and liabilities incurred by the Collateral
Agent, the Holders of Bonds or such Person hereunder, unless such claim or
liability shall be due to willful misconduct or gross negligence on the part
of the Collateral Agent, the Holders of the Bonds or such Person.
(b) Each Company & Partner Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect
to any action taken by the Collateral Agent or the exercise or non-exercise
by the Collateral Agent of any option, right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Collateral Agent and the Holders of Bonds,
be governed by the Indenture and by such other agreements with
17
respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and the Company & Partner Pledgors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Holders
of Bonds with full and valid authority so to act or refrain from acting, and
the Company & Partner Pledgors shall not be obligated or entitled to make
any inquiry respecting such authority.
Section 18.16. Resignation or Removal of the Collateral Agent. Until
such time as the Secured Obligations shall have been paid in full, the
Collateral Agent may at any time, by giving written notice to the Company &
Partner Pledgors and Holders of Bonds, resign and be discharged of the
responsibilities hereby created, such resignation to become effective upon (i)
the appointment of a successor Collateral Agent and (ii) the acceptance of such
appointment by such successor Collateral Agent. As promptly as practicable after
the giving of any such notice, the Holders of Bonds by vote of a majority in
interest thereof, shall appoint a successor Collateral Agent. If no successor
Collateral Agent shall be appointed and shall have accepted such appointment
within 90 days after the Collateral Agent gives the aforesaid notice of
resignation, the Collateral Agent may apply to any court of competent
jurisdiction to appoint a successor Collateral Agent to act until such time, if
any, as a successor shall have been appointed as provided in this Section 18.16.
Any successor so appointed by such court shall immediately and without further
act be superseded by any successor Collateral Agent appointed by the Holders of
Bonds, as provided in this Section 18.16. Simultaneously with its replacement as
Collateral Agent hereunder, the Collateral Agent so replaced shall deliver to
its successor all documents, instruments, certificates and other items of
whatever kind (including, without limitation, the certificates and instruments
evidencing the Pledged Collateral and all instruments of transfer or assignment)
held by it pursuant to the terms hereof. The Collateral Agent that has resigned
shall be entitled to fees, costs and expenses to the extent incurred or arising,
or relating to events occurring, before its resignation or removal.
Section 18.17. Release; Termination of Agreement.
(a) Subject to the provisions of Section 18.12 hereof, this Agreement
shall terminate (i) upon full and final payment and performance of the
Secured Obligations (and upon receipt by the Collateral Agent of the
Company's written certification that all such Secured Obligations have been
satisfied) and payment in full of all fees and expenses owing by the Company
& Partner Pledgors to the Collateral Agent or (ii) on the day after the
first anniversary of the Legal Defeasance of all of the Secured Obligations
pursuant to Section 8.02 of the Indenture (other than those surviving
Secured Obligations specified therein). At such time, the Collateral Agent
shall, at the request of the Company & Partner Pledgors, reassign and
redeliver to the Company & Partner Pledgors all of the Pledged Collateral
hereunder that has not been sold, disposed of, retained or applied by the
Collateral Agent in accordance with the terms hereof. Such reassignment and
redelivery shall be without warranty by or recourse to the Collateral Agent,
except as to the absence of any prior assignments by the Collateral Agent of
its interest in the Pledged Collateral, and shall be at the expense of the
Company & Partner Pledgors.
18
(b) Each Company & Partner Pledgor agrees that it will not, except as
permitted by the Indenture, sell or dispose of, or grant any option or
warrant with respect to, any of the Pledged Collateral.
Section 18.18. Final Expression. This Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 18.19. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER THE LAWS
OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE COMPANY &
PARTNER PLEDGORS, THE COLLATERAL AGENT AND THE HOLDERS OF BONDS IN CONNECTION
WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH (vi)
BELOW, EACH OF THE COMPANY & PARTNER PLEDGORS, THE COLLATERAL AGENT AND THE
HOLDERS OF BONDS AGREE THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS
LOCATED IN NEW YORK, NEW YORK, BUT EACH OF THE COMPANY & PARTNER PLEDGORS, THE
COLLATERAL AGENT AND THE HOLDERS OF BONDS ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW
YORK. EACH COMPANY & PARTNER PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS.
(iii) EACH COMPANY & PARTNER PLEDGOR AGREES THAT THE COLLATERAL AGENT
SHALL, IN ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF BONDS, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST SUCH
COMPANY & PARTNER PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY
SELECTED IN GOOD FAITH TO ENABLE THE COLLATERAL AGENT TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE
COLLATERAL AGENT. EACH
19
COMPANY & PARTNER PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON
SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
COLLATERAL AGENT. EACH COMPANY & PARTNER PLEDGOR WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS.
(iv) EACH OF THE COMPANY & PARTNER PLEDGORS, THE COLLATERAL AGENT AND
THE HOLDERS OF BONDS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) EACH COMPANY & PARTNER PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH COMPANY & PARTNER PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION
13.02 OF THE INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS
AFTER SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR
ANY HOLDER OF BONDS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY COMPANY & PARTNER
PLEDGOR IN ANY OTHER JURISDICTION.
(vii) EACH COMPANY & PARTNER PLEDGOR HEREBY AGREES THAT NEITHER THE
COLLATERAL AGENT NOR ANY HOLDER OF BONDS SHALL HAVE ANY LIABILITY TO SUCH
COMPANY & PARTNER PLEDGOR (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR
LOSSES SUFFERED BY SUCH COMPANY & PARTNER PLEDGOR IN CONNECTION WITH, ARISING
OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE
RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE COLLATERAL AGENT OR
SUCH HOLDER OF BONDS, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF
ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH HOLDER OF BONDS,
AS THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
20
(viii) EACH COMPANY & PARTNER PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND
HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER
OF BONDS OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO
REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. EACH COMPANY &
PARTNER PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE
COLLATERAL AGENT OR ANY HOLDER OF BONDS IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL
OR OTHER SECURITY FOR THE OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT OR ANY HOLDER OF BONDS, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR
PERMANENT INJUNCTION THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN
SUCH COMPANY & PARTNER PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS OF BONDS.
Section 18.20. TIA Provision. In the event that the TIA applies to this
Agreement, the provisions required by the TIA shall be deemed to be included
herein and shall supersede any provision hereof which may conflict with the TIA.
Section 18.21. Acknowledgments. Each Company & Partner Pledgor hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) neither the Collateral Agent nor any Holder of Bonds has any
fiduciary relationship to such Company & Partner Pledgor, and the
relationship between the Collateral Agent and the Holders of Bonds, on the
one hand, and such Company & Partner Pledgor, on the other hand, is solely
that of a secured party and a creditor; and
(c) no joint venture exists among the Holders of Bonds or among any
Company & Partner Pledgor and the Holders of Bonds.
[Signature Page Follows]
21
IN WITNESS WHEREOF, the Company & Partner Pledgors and the Collateral
Agent have each caused this Agreement to be duly executed and delivered as of
the date first above written.
COMPANY & PARTNER PLEDGORS:
Northeast Energy, LP,
a Delaware limited partnership
By: Tractebel Northeast Generation GP, Inc.,
a Delaware corporation,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
By: ESI Northeast Energy GP, Inc.,
a Florida corporation,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Northeast Energy, LLC,
a Delaware limited liability company
By: Northeast Energy, LP,
a Delaware limited partnership
By: Tractebel Northeast Generation GP, Inc.,
a Delaware corporation,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and
Treasurer
By: ESI Northeast Energy GP, Inc.,
a Florida corporation,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ESI Tractebel Acquisition Corp.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
COLLATERAL AGENT:
State Street Bank and Trust Company,
as Collateral Agent
By: /s/ Chi C. Ma
--------------------------------
Name: Chi C. Ma
Title: Assistant Vice President
SCHEDULE I
PLEDGED PARTNERSHIP INTERESTS AND PLEDGED MEMBER INTERESTS
Interest*
in each of
NEA and NJEA
NE LP 1% (general partner)
NE LP 98% (limited partner)
NE LLC 1% (limited partner)
--------------------
100%
Interest** in
NE LLC
NE LP 100%
--------
* As defined in the NEA Partnership Agreement or the NJEA Partnership Agreement,
as applicable.
**As defined in the NE LLC Operating Agreement.