EQUITY SECURITY PLEDGE AGREEMENT
Dated as of July 1, 1996
between
OLD DOMINION ELECTRIC COOPERATIVE,
as Pledgor
and
WILMINGTON TRUST COMPANY,
as Collateral Agent
CLOVER UNIT 2 GENERATING FACILITY
AND
COMMON FACILITIES
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINED TERMS................................................... 1
SECTION 2. PLEDGE.......................................................... 1
SECTION 3. SECURED CLAIMS.................................................. 2
SECTION 4. REMEDIES........................................................ 3
4.1. RIGHTS OF THE COLLATERAL AGENT.................................. 3
4.2. FILINGS......................................................... 4
4.3. ATTORNEY-IN-FACT................................................ 4
4.4. APPOINTMENT OF COLLATERAL AGENT; THE COLLATERAL AGENT'S DUTIES.. 4
4.5. MONTHLY REPORTS................................................. 5
5.1. RELEASE OF COLLATERAL........................................... 5
5.2. REINVESTMENT.................................................... 5
5.3. DISCHARGE....................................................... 5
SECTION 6. REPRESENTATIONS AND WARRANTIES.................................. 6
6.1. OWNER........................................................... 6
6.2. RIGHTS IN THE COLLATERAL........................................ 6
SECTION 7. COVENANTS OF THE PLEDGOR........................................ 6
SECTION 8. MISCELLANEOUS................................................... 6
8.1. AMENDMENTS AND WAIVERS.......................................... 6
8.2. NOTICES......................................................... 6
8.3. SURVIVAL........................................................ 7
8.4. SUCCESSORS AND ASSIGNS.......................................... 8
8.5. BUSINESS DAY.................................................... 8
8.6. GOVERNING LAW................................................... 8
8.7. SEVERABILITY.................................................... 8
8.8. COUNTERPARTS.................................................... 8
8.9. HEADINGS........................................................ 8
8.10. FURTHER ASSURANCES.............................................. 8
8.11. EFFECTIVENESS OF AGREEMENT...................................... 8
ii
EQUITY SECURITY PLEDGE AGREEMENT
This EQUITY SECURITY PLEDGE AGREEMENT, dated as of July 1,
1996 (this "Pledge Agreement" or this "Agreement"), between OLD DOMINION
ELECTRIC COOPERATIVE, a wholesale power supply cooperative, organized under the
laws of the Commonwealth of Virginia, as pledgor (the "Pledgor"), and WILMINGTON
TRUST COMPANY, as collateral agent on behalf of EPC Corporation and Clover Unit
2 Generating Trust (in such capacity, the "Collateral Agent").
WHEREAS, the Pledgor, the Clover Unit 2 Generating Trust (the
"Facility Owner"), Wilmington Trust Company (in the capacities set forth
therein), EPC Corporation (the "Owner Participant") and Utrecht-America Finance
Co., have entered into a Participation Agreement dated as of July 1, 1996 (the
"Participation Agreement");
WHEREAS, the Pledgor and the Facility Owner have entered into
the Operating Equipment Agreement and the Operating Foundation Agreement;
WHEREAS, the Pledgor has deposited the Collateral (as defined
in Section 2 hereof) with Wilmington Trust Company, as Collateral Agent pursuant
to this Agreement, for the benefit of the Facility Owner and the Owner
Participant to secure payment of the Secured Claims.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINED TERMS.
Capitalized terms used in this Agreement and not otherwise
defined herein shall have the respective meanings specified in Appendix A to the
Participation Agreement. Notwithstanding the foregoing, except as otherwise
defined or indicated by the context herein, all terms that are defined in the
Uniform Commercial Code as in effect in the State of New York from time to time
("Uniform Commercial Code") shall have their respective meanings as used in
Articles 8 and 9 of the Uniform Commercial Code.
SECTION 2. PLEDGE.
To secure its obligation to pay the Secured Claims (defined in
Section 3 hereof), the Pledgor hereby grants, bargains, pledges, sells, assigns,
transfers, conveys, mortgages, warrants and confirms to the Collateral Agent,
for the benefit of the Facility Owner and the Owner Participant, a security
interest in, mortgage on, and pledge of, all of the Pledgor's rights, title and
interest in and to all securities, cash, instruments and other property
delivered to the Collateral Agent on the Closing Date and described below
and all interest, securities, cash, instruments and other property from
time to time received, receivable or otherwise distributed to it in respect
thereto; all property into which such right, title and interest may be
exchanged or converted or reinvested; and all proceeds of any and all of the
foregoing and, to the extent not otherwise included, all cash in respect
of such securities (the "Collateral"). The Collateral delivered on the
Closing Date shall consist of the securities, cash, instruments and other
property described in Schedule 1 hereto. All securities and instruments
delivered from time to time hereunder shall be registered in the name of, or
book-entry notations in respect thereof shall be made for the benefit of, the
Collateral Agent.
The Pledgor hereby represents that the Collateral described in
Schedule 1 are Qualifying Securities. The Collateral Agent acknowledges receipt
of the Collateral in accordance with this Agreement and agrees to hold such
Collateral and to apply such Collateral, including the proceeds thereof, in
accordance with the terms of this Agreement.
The Pledgor shall have the right to replace the Collateral,
from time to time, with replacement Qualifying Securities, but only in
accordance with the provisions of Section 5 hereof.
The Collateral Agent shall, at the written direction of the
Pledgor, reinvest cash balances, including cash proceeds from maturing
securities and from payments of interest and premiums on securities, as provided
herein.
SECTION 3. SECURED CLAIMS.
The purpose of this pledge is to secure all of the Pledgor's
obligations to pay any and all amounts of (i) Basic Payments, Supplemental
Payments (including, in the event that the Purchase Option or Foundation
Purchase Option is exercised, each installment of the Purchase Option Price),
Termination Value and amounts computed by reference to Termination Value under
the Operating Equipment Agreement, (ii) Foundation Basic Payments, Foundation
Supplemental Payments (including, in the event that the Purchase Option or
Foundation Purchase Option is exercised, each installment of Foundation Purchase
Option Price), Termination Value and amounts computed by reference to
Termination Value under the Operating Foundation Agreement and (iii) the Special
Equity Remedy Amount under the Participation Agreement. All of the obligations
described in the immediately preceding sentence shall be referred to herein as
"Secured Claims."
Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts that constitute part of the Secured
Claims and that would be payable to the Facility Owner
2
or the Owner Participant, as the case may be, under the Operating Equipment
Agreement, the Operating Foundation Agreement or Section 12 of the
Participation Agreement but for the fact that they are unenforceable or not
allowable due to (a) the existence of a bankruptcy, insolvency, reorganization,
arrangement or moratorium involving the Pledgor or (b) other laws relating
to, or effecting the enforcement of, creditor's rights generally against the
Pledgor.
SECTION 4. REMEDIES.
4.1. RIGHTS OF THE COLLATERAL AGENT. If (a) any Event of
Default under the Operating Equipment Agreement or the Operating Foundation
Agreement shall have occurred and be continuing, whether or not the Operating
Equipment Agreement or the Operating Foundation Agreement has been declared in
default pursuant to the terms thereof, or (b) (i) a Special Equity Event shall
have occurred and be continuing, (ii) the Owner Participant has given the notice
contemplated by Section 12 of the Participation Agreement to exercise the
Special Equity Remedy and (iii) the Pledgor has not paid all amounts required by
Section 12 of the Participation Agreement by the date set forth in the Owner
Participant's notice:
(i) the Collateral Agent, at the written direction of
the Owner Participant, shall exercise in respect of the
Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform
Commercial Code and, if so directed in writing by the Owner
Participant, shall, without notice except as specified below,
sell the Collateral or any part thereof at public or private
sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercially
reasonable. The Collateral Agent shall provide 10 calendar
days' written notice to the Pledgor at the Pledgor's address
specified in the Participation Agreement by (i) registered
mail, (ii) hand delivery, or (iii) special courier service
(such as DHL, TNT, Worldcourier or similar courier) and if the
purchaser fails to take up and pay for the Collateral so sold,
such Collateral may again be similarly sold. The Owner
Participant or the Collateral Agent may be the purchaser of
any or all of the Collateral sold and thereafter shall hold
such Collateral free from any right of redemption, stay or
appraisal; provided, however, that in the sale of securities
neither the Owner Participant nor the Collateral Agent shall
be entitled to purchase any of the Collateral at any private
sale for less than the current market value of such
securities;
(ii) Without limitation of the foregoing, the
Collateral Agent may exercise, in its own name or in the name
of the Owner Participant and the Facility Owner or in the name
and on behalf of the Pledgor, all of the Pledgor's rights
under and in respect of the Collateral and the documentation
evidencing or governing the Collateral; and
(iii) All cash proceeds received by the Collateral
Agent with respect to the Collateral or in respect of any sale
of, collection from, or other realization upon all or any part
of the Collateral shall be held by the Collateral Agent as
collateral for, and then
3
or at any time thereafter, at the written direction of the
Owner Participant, shall be applied in whole or in part by
the Collateral Agent against, all or any part of the
Secured Claims in such order as the Owner Participant
shall direct. Any surplus of such cash or cash proceeds
held by the Collateral Agent and remaining after payment
in full of all the Secured Claims shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.
4.2. FILINGS. The Pledgor agrees that it shall, at its own
expense, execute and deliver all financing statements necessary to perfect the
Collateral Agent's interest in the Collateral or any assignment or other
document reasonably requested by the Collateral Agent or the Owner Participant
to perfect, protect, enforce, or otherwise give effect to the Collateral Agent's
rights and remedies hereunder.
4.3. ATTORNEY-IN-FACT. The Pledgor hereby irrevocably
appoints, effective and during the continuance of any Event of Default or a
Special Equity Event, the Collateral Agent as the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for monies due
and to become due under or in respect of any of the Collateral,
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above, and
(c) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
compliance with the terms and conditions of any Collateral.
4.4. APPOINTMENT OF COLLATERAL AGENT; THE COLLATERAL AGENT'S
DUTIES. The Owner Participant and the Facility Owner each hereby appoints
Wilmington Trust Company to act as its Collateral Agent hereunder. The powers
conferred on the Collateral Agent hereunder are solely to protect its interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of the Collateral in its possession and the
accounting for monies actually received by it hereunder, the Collateral Agent
shall have no duty as to the Collateral or other matters relative to the
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to the
Collateral; PROVIDED, HOWEVER, that, if delivery or presentment of the
Collateral to any other Person is required in connection with any distribution
in respect of the Collateral, the Collateral Agent shall, at the Pledgor's
expense, cooperate to effect such delivery.
The liability of the Collateral Agent to transfer or to apply
funds for the payment of Secured Claims shall be limited to the proceeds of the
Collateral and the cash balances from time to
4
time received by the Collateral Agent in respect of the Collateral, and the
Collateral Agent shall not have any liability whatsoever for any insufficiency
of funds required to pay Secured Claims except to notify the Owner
Participant, the Pledgor and the Facility Owner of such insufficiency.
The Collateral Agent shall never be required to use or to
advance its own funds or otherwise to incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights and
powers hereunder. The Collateral Agent shall be not be liable for any action
taken or not taken by it in good faith in any exercise of reasonable care and
belief by it to be within the discretion or power conferred upon it by this
Agreement, nor shall the Collateral Agent be responsible for the consequences of
any error or judgment arising out of the exercise of reasonable care in
performing the duties of the Collateral Agent under this Agreement.
The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment equal to that which the
Collateral Agent accords its own property.
4.5. MONTHLY REPORTS. All Collateral delivered to the
Collateral Agent shall be segregated by the Collateral Agent from other assets
of the Collateral Agent, Old Dominion, the Facility Owner and the Owner
Participant or any other Person. The Collateral Agent shall prepare and deliver
to Old Dominion and the Owner Participant by the tenth Business Day of each
month a report specifying the identity and location of all Collateral as of the
end of the month preceding such report.
SECTION 5. RELEASE OF COLLATERAL; REINVESTMENT; DISCHARGE.
5.1. RELEASE OF COLLATERAL. Provided no Payment Default,
Bankruptcy Default or Event of Default under either Operating Agreement shall
have occurred and be continuing and no Special Equity Event shall have occurred
and be continuing, the Collateral Agent agrees that for the purpose of paying
Secured Claims, the Pledgor shall be entitled to receive all amounts of
principal and interest received by the Collateral Agent on the dates and in the
amounts set forth in Schedule 2 hereof. Collateral shall also be released by the
Collateral Agent against delivery by the Pledgor of a replacement Qualifying
Security or Qualifying Securities in full compliance with Section 7.6 of the
Participation Agreement.
5.2. REINVESTMENT. At the written direction of the Pledgor,
the Collateral Agent shall reinvest cash balances, including cash proceeds from
maturing securities and from payments of interest and premiums on securities, if
not needed immediately to pay Secured Claims, in Qualifying Securities that are
stated to mature or that are subject to redemption at the option of the holder
thereof, in a principal amount at least equal to their purchase price, on or
before the dates set forth in Schedule 2 hereof. Any remaining cash balances not
so reinvested shall be held by the Collateral Agent in trust as part of the
Collateral.
5.3. DISCHARGE. Provided that no Payment Default,
Bankruptcy Default or Event of Default under either Operating Agreement shall
have occurred and be continuing and no Special Equity Event shall have occurred
and be continuing, the Collateral Agent agrees that when the Secured
5
Claims shall have been fully paid and discharged and the Operating Equipment
Agreement and the Operating Foundation Agreement have expired or been
earlier terminated in accordance with their terms, the Collateral Agent,
at the written request and cost of the Pledgor, shall immediately
transfer the Collateral to or at the direction of the Pledgor and confirm in
writing the release of the Collateral of any pledge, Lien and security
interest created pursuant to this Agreement and of all claims that the
Collateral Agent may have hereunder.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. OWNER. The Pledgor represents and warrants as of the
date hereof that it is the legal and beneficial owner of the Collateral and that
the Collateral is not subject to any pledge, lien or security interest or any
other right of any third party, except as provided by this Agreement.
6.2. RIGHTS IN THE COLLATERAL. The Pledgor represents and
warrants that, assuming that the Collateral Agent maintains possession and
control over the Collateral in accordance with the applicable provisions of the
Uniform Commercial Code, the pledge and assignment of the Collateral and the
grant of a security interest therein under this Agreement vests in the
Collateral Agent a valid and perfected security interest in the Collateral as
contemplated by this Agreement, subject to the provisions of Section 9-306 of
the Uniform Commercial Code.
SECTION 7. COVENANTS OF THE PLEDGOR.
The Pledgor shall not, without the prior written consent of
the Collateral Agent, (a) sell, assign or otherwise dispose of, or grant any
option with respect to, the Collateral or (b) create or permit to exist any
Lien, upon or with respect to the Collateral, except for the Lien created
hereby.
SECTION 8. MISCELLANEOUS.
8.1. AMENDMENTS AND WAIVERS. No term, covenant, agreement or
condition of this Agreement may be terminated, amended or compliance therewith
waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto.
8.2. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all communications and notices provided for
herein to a party hereto shall be in writing or by a telecommunications device
capable of creating a written record, and any such notice shall become effective
(a) upon personal delivery thereof, including, without limitation, by overnight
mail or courier service, (b) in the case of notice by United States mail,
certified or registered, postage prepaid, return receipt requested, upon receipt
thereof, or (c) in the case of notice by such a telecommunications device, upon
transmission thereof, provided such transmission is promptly confirmed by either
of the methods set forth in clauses (a) or (b) above, in each case addressed to
such party at its address set
6
forth below or at such other address as such party may from time to time
designate by written notice to the other parties hereto:
If to the Pledgor:
Old Dominion Electric Cooperative
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President of Accounting and Finance
If to the Collateral Agent:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
with a copy to the Owner Participant:
EPC Corporation
c/o Chrysler Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
8.3. SURVIVAL. All warranties, representations, indemnities
and covenants made by either party hereto, herein or in any certificate or other
instrument delivered by either such party or on the behalf of either such party
under this Agreement shall be considered to have been relied upon by the other
party hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date regardless of any investigation made by either party
or on behalf of either party.
8.4. SUCCESSORS AND ASSIGNS. (a) This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by, the
parties hereto and their respective successors and assigns as permitted by and
in accordance with the terms hereof.
7
(b) Except as expressly provided herein or in any other
Operative Document, the Pledgor may not assign its interests herein without the
consent of the Collateral Agent. Except as expressly provided in the Operative
Documents, the Collateral Agent may not assign its interests herein during the
Term of the Operating Agreements without the consent of the Pledgor.
8.5. BUSINESS DAY. Notwithstanding anything herein to the
contrary, if the date on which any payment is to be made pursuant to this
Agreement is not a Business Day, the payment otherwise payable on such date
shall be payable on the next succeeding Business Day with the same force and
effect as if made on such scheduled date and (provided such payment is made on
such succeeding Business Day) no interest shall accrue on the amount of such
payment from and after such scheduled date to the time of such payment on such
next succeeding Business Day.
8.6. GOVERNING LAW. THIS AGREEMENT SHALL BE IN ALL
RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8.7. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
8.8. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Agreement.
8.9. HEADINGS. The headings of the sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
8.10. FURTHER ASSURANCES. Each party hereto will promptly and
duly execute and deliver such further documents to make such further assurances
for and take such further action reasonably requested by any party to whom such
first party is obligated, all as may be reasonably necessary to carry out more
effectively the intent and purpose of this Agreement.
8.11. EFFECTIVENESS OF AGREEMENT. This Agreement has been
dated as of the date first above written for convenience only. This Agreement
shall be effective on the date of execution and delivery by each of the
Collateral Agent and the Pledgor.
8
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have
caused this Pledge Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized.
OLD DOMINION ELECTRIC COOPERATIVE,
as Pledgor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Date: July 31, 1996
WILMINGTON TRUST COMPANY,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Date: July 31, 1996
9
Agreed, acknowledged and consented to by:
CLOVER UNIT 2 GENERATING TRUST
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
under the Trust Agreement
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Date: July 31, 1996
EPC CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Date: July 31, 1996
10
SCHEDULE 1
TO
EQUITY SECURITY PLEDGE AGREEMENT
DESCRIPTION OF COLLATERAL
Cash collateral in the amount of $29,480,263.22 deposited with Wilmington Trust
Company, as collateral agent (account no.: 403520 ref. Generating Trust).
S1-1
SCHEDULE 2
TO
EQUITY SECURITY PLEDGE AGREEMENT
DATES AND PAYMENTS
1/5/2020 39,288,119.88
4/15/2020 30,038,958.54
6/15/2020 30,038,958.54
9/15/2020 30,038,958.54
12/15/2020 30,038,958.54
S2-1