Exhibit 10.57
ASSIGNMENT AND
SECURITY AGREEMENT
Dated as of August , 1998
by
YORK POWER FUNDING (CAYMAN) LIMITED
to
THE BANK OF NEW YORK,
as Collateral Agent
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1. Definitions.....................................................................2
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTEREST
2.1. Assignment and Grant of Security Interest.......................................6
2.2. Security Interest Absolute......................................................7
2.3. Power of Attorney...............................................................8
2.4. Inspection and Verification....................................................10
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Title and Authority............................................................11
3.2. Validity, Perfection and Priority of Lien......................................11
3.3. No Liens; Other Financing Statements...........................................12
3.4. Chief Executive Office; Name; Records..........................................13
3.5. Additional Statements and Schedules............................................13
3.6. Further Actions................................................................13
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
4.1. Maintenance of Insurance; Protection of Security Interest......................14
4.2. Location of Inventory and Equipment............................................14
4.3. Inventory Records..............................................................14
ARTICLE V
SPECIAL PROVISIONS CONCERNING RECEIVABLES
AND INSTRUMENTS
5.1. Additional Representations and Warranties......................................14
5.2. Maintenance of Records; Legending of Records...................................15
5.3. Modification of Terms; No Payment to Grantor...................................15
5.4. Collection.....................................................................15
5.5. Direction to Account Debtors, Contracting Parties..............................15
5.6. Instruments....................................................................16
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ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS
6.1. Security Interest in Contract Rights...........................................16
6.2. Further Protection.............................................................17
6.3. Liabilities Under Receivables and Contracts....................................17
6.4. Remedies.......................................................................17
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1. Remedies; Obtaining the Funding Company Security Agreement Collateral
upon Default...................................................................18
7.2. Remedies; Disposition of the Funding Company Security Agreement
Collateral.....................................................................19
7.3. Waiver.........................................................................20
7.4. No Waiver; Remedies Cumulative.................................................21
7.5. Discontinuance of Proceedings..................................................21
ARTICLE VIII
MISCELLANEOUS
8.1. Notices........................................................................22
8.2. Amendment......................................................................22
8.3. Successors and Assigns.........................................................22
8.4. Survival.......................................................................22
8.5. Section Headings...............................................................23
8.6. Severability...................................................................23
8.7. Grantor's Duties...............................................................23
8.8. Continuing Security Interest...................................................23
8.9. Termination; Release...........................................................23
8.10. Reinstatement.................................................................23
8.11. Counterparts..................................................................24
8.12. Governing Law; Submission to Jurisdiction.....................................24
8.13. Conflict with Intercreditor Agreement.........................................25
8.14. Entire Agreement..............................................................25
8.15. Collateral Agent..............................................................25
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SCHEDULES
SCHEDULE I - Filing Offices
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SCHEDULE II - Instruments
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SCHEDULE III - Copyrights
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SCHEDULE IV - Patents
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SCHEDULE V - Trademarks
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SCHEDULE 3.4(A) - Chief Executive Offices
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SCHEDULE 4.2 - Locations of Funding Company Security Agreement Collateral
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ASSIGNMENT AND SECURITY AGREEMENT
ASSIGNMENT AND SECURITY AGREEMENT, dated as of August 4, 1998
(this "FUNDING COMPANY SECURITY AGREEMENT"), made by York Power Funding (Cayman)
Limited, a limited liability company incorporated under the laws of the Cayman
Islands (the "GRANTOR") in favor of THE BANK OF NEW YORK, a New York banking
corporation, as collateral agent for the benefit of the Secured Parties (the
"COLLATERAL AGENT").
W I T N E S S E T H:
WHEREAS, Grantor is a limited liability company established
for the sole purpose of issuing the Securities in its individual capacity as
principal and as agent acting on behalf of the U.S. Guarantors pursuant to the
Indenture and to make loans to the Project Borrowers pursuant to the Project
Loan Agreements;
WHEREAS, Grantor has simultaneously with the execution and
delivery of this Agreement issued and sold the Initial Securities pursuant to
the Indenture;
WHEREAS, pursuant to the Trinidad Project Loan Agreement,
Grantor intends to make the Trinidad Project Loan to the Trinidad Project
Borrower and pursuant to the U.S. Project Loan Agreement, Grantor intends to
make the U.S. Project Loan to the U.S.
Guarantors.
WHEREAS, to secure its obligations under the Finance
Documents, the Grantor is entering into this Funding Company Security Agreement
with the Collateral Agent, pursuant to which the Collateral Agent, acting on
behalf of the Secured Parties, will obtain a continuing Lien on and perfected
security interest in the Funding Company Security Agreement Collateral; and
NOW, THEREFORE, in consideration of the premises hereby and
the agreements, provisions and covenants contained herein, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS.
(a) For all purposes of this Funding Company Security
Agreement, capitalized terms used but not otherwise defined herein shall have
the meaning set forth in APPENDIX A of the Indenture.
(b) The following terms shall have the following respective
meanings unless the context otherwise requires. Such definitions shall be
equally applicable to the singular and plural forms of the terms defined.
Commercial terms used herein and not otherwise defined shall have the meaning
specified for such terms in the Uniform Commercial Code as in effect in the
State of New York.
"CHATTEL PAPER" shall mean "chattel paper" as such term is
defined in the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"CONTRACT RIGHTS" shall have the meaning specified in SECTION
6.1 (Security Interest in Contract Rights).
"CONTRACTS" shall mean all contracts to which the Grantor now
is, or hereafter will be, bound, or a party, beneficiary or assignee, including
all exhibits, schedules and appendices thereto, and all other instruments,
agreements and documents executed and delivered with respect to such contracts,
and all revenues, rentals, Proceeds and other sums of money due and to become
due from any of the foregoing, as the same may be modified, supplemented or
amended from time to time in accordance with their terms.
"COPYRIGHTS" shall mean all of the following now owned or
hereafter acquired by the Grantor: (a) all copyright rights in any work subject
to the copyright laws of the United States, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office, including those listed
on SCHEDULE III.
"DOCUMENTS" shall mean "documents" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction.
"EQUIPMENT" shall mean all "equipment" (as such term is
defined in the Uniform Commercial Code as in effect in any relevant
jurisdiction), now or hereafter owned or leased by the Grantor and, in any
event, shall include, but shall not be limited
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to, all equipment used in connection with the Site, all machinery, manufacturing
equipment, data processing equipment, computers, tools, office equipment,
appliances, furniture, furnishings, fixtures, spare parts, vehicles, motor
vehicles, and any manuals, instructions, blueprints, computer software and
similar items which relate to the above, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all improvements thereon and all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"EVENT OF DEFAULT" shall mean an "event of default" (or any
correlative term) under SECTION 5.1 (Events of Default) of the Indenture.
"GENERAL INTANGIBLES" shall mean all "general intangibles" (as
such term is defined in the Uniform Commercial Code as in effect in any relevant
jurisdiction) now or hereafter owned by the Grantor and shall include, but not
be limited to, all Trademarks, trademark applications, trademark registrations,
prints, labels, and service marks (whether or not registered), including logos
and/or designs, Copyrights, Patents, patent applications, goodwill of the
Grantor's business symbolized by any of the foregoing, trade secrets, license
rights, license agreements, permits, franchises, and any rights to tax refunds
to which the Grantor are now or hereafter may be entitled.
"INSTRUMENTS" shall mean "instruments" as such term is defined
in the Uniform Commercial Code as in effect in any relevant jurisdiction.
"INVENTORY" shall mean all of the inventory of the Grantor of
every type or description, including all "inventory" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction, now owned
or hereafter acquired and wherever located, including without limitation,
whether raw, in process or finished, all materials usable in processing the same
and all documents of title covering any inventory, including but not limited to
work in process, materials used or consumed in the Grantor's business, now owned
or hereafter acquired or manufactured by the Grantor and held for sale in the
ordinary course of its business; all present and future substitutions therefor,
parts and accessories thereof and all additions thereto; and all proceeds
thereof and products of such inventory in any form whatsoever.
"INVENTORY RECORDS" shall mean all books, records and other
property and General Intangibles at any time relating to the Inventory.
"INVESTMENT PROPERTY" shall mean "investment property" as such
term is defined in the Uniform Commercial Code in effect in any relevant
jurisdiction.
"OBLIGATIONS" shall mean all obligations and liabilities of
the Grantor in respect of (a) the principal and premium (if any) of and interest
on the Securities pursuant to the Indenture, (b) all fees payable under this
Agreement or any other Transaction
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Document and (c) all other amounts due and to become due to the Grantor or the
Collateral Agent pursuant to this Funding Company Security Agreement or any
other Transaction Document to which the Grantor is a party, including, without
limitation, (i) expenses, attorneys' fees and accountants' fees chargeable to
the Grantor, indemnities and interest which would accrue on any of the
foregoing, (ii) any and all sums advanced by the Collateral Agent in order to
preserve the Funding Company Security Agreement Collateral or preserve the
Collateral Agent's Security Interest in the Funding Company Security Agreement
Collateral and (iii) in the event of any proceeding for the collection or
enforcement of the Obligations, after an Event of Default shall have occurred
and be continuing, the reasonable expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the Funding
Company Security Agreement Collateral, or of any exercise by the Collateral
Agent of its rights under this Funding Company Security Agreement, together with
reasonable attorneys' fees and court costs related thereto.
"PATENTS" shall mean all of the following now owned or
hereafter acquired by the Grantor: (a) all letters patent of the United States,
all registrations and recordings thereof, and all applications for letters
patent of the United States, including registrations, recordings and pending
applications in the United States Patent and Trademark Office, including those
listed on SCHEDULE IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"PROCEEDS" shall mean "proceeds" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction or under
other relevant Law and, in any event, shall include, but shall not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Grantor from time to time, and claims for insurance, indemnity,
warranty or guaranty effected or held for the benefit of the Grantor, with
respect to any of the Funding Company Security Agreement Collateral, (ii) any
and all payments (in any form whatsoever) made or due and payable to the Grantor
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Funding Company
Security Agreement Collateral by any Governmental Authority (or any person
acting under color of Governmental Authority) and (iii) any and all other
amounts from time to time paid or payable under or in
connection with any of the Funding Company Security Agreement Collateral.
"RECEIVABLES" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect in any relevant jurisdiction and in
any event shall include, but not be limited to, all of the Grantor's rights to
payment for goods (including, without limitation, electricity) sold or leased,
or services performed, by the Grantor, whether now in existence or arising from
time to time hereafter, including, without limitation, rights evidenced by an
account, note, contract, contract rights (including any
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and all rights to liquidated damage payments), document, chattel paper, or other
evidence of indebtedness or security, together with (i) all security pledged,
assigned, hypothecated or granted to or held by the Grantor to secure the
foregoing, (ii) all of each of the Grantor's right, title and interest in and to
any goods (including, without limitation, electricity), the sale of which gave
rise thereto, (iii) all guarantees, warranties, endorsements, indemnifications
or collateral on, or of, any of the foregoing, (iv) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (v) all books, correspondence, credit files, records,
ledger cards, invoices, and other papers relating thereto, including without
limitation all similar information stored on a magnetic medium or other similar
storage device and other papers and documents in the possession or under the
control of the Grantor or any computer bureau from time to time acting for the
Grantor, (vi) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith and
amendments thereto, notices to other creditors or the Collateral Agent, and
certificates from filing or other registration officers, (vii) all credit
information, reports and memoranda relating thereto, and (viii) all other
writings related in any way to the foregoing.
"SECURITY INTEREST" shall have the meaning assigned to such
term in SECTION 2.1.
"TRADEMARKS" shall mean all of the following now owned or
hereafter acquired by the Grantor: (a) all trademarks, service marks,
tradenames, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any political subdivision
thereof, and all extensions or renewals thereof, including those listed on
SCHEDULE V, (b) all goodwill associated therewith or symbolized thereby, and (c)
all other assets, rights and interests that uniquely reflect or embody such
goodwill.
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTEREST
SECTION 2.1. ASSIGNMENT AND GRANT OF SECURITY INTEREST. (a) As
security for the prompt and complete payment and performance when due of all of
the Obligations, whether now existing or hereafter arising and however
evidenced, the Grantor hereby grants to the Collateral Agent, for the benefit of
the Secured Parties, a
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continuing security interest (the "SECURITY INTEREST"), in all of the Grantor's
right, title and interest in, to and under the following, in each case, whether
now owned or existing or hereafter acquired, arising or created, and wherever
located: (i) all Receivables, (ii) all Documents, (iii) all Equipment, (iv) all
General Intangibles, (v) all Inventory, (vi) all Investment Property, (vii) all
Contracts and Contract Rights, (viii) all cash collateral accounts and
securities accounts established with respect to the Grantor, including, without
limitation, the Depositary Accounts and all checking, savings, deposit or other
accounts of the Grantor and all monies, cash, securities, investment property,
financial assets, insurance policies and instruments deposited, credited or
required to be deposited or credited in such cash collateral, securities or
other account and all security entitlements with respect thereto, now or at any
time hereafter in the possession or under the control of the Grantor or its
bailees and any interest therein, (ix) all Governmental Approvals, PROVIDED that
any Governmental Approval which by its terms or by operation of law would become
void, voidable, terminable or revocable if mortgaged, pledged, charged or
assigned hereunder or if a security interest therein were granted hereunder are
expressly excepted and excluded from the Lien and the terms of this Funding
Company Security Agreement to the extent necessary so as to avoid such voidness,
voidability, terminability or revocability, (x) without limiting the generality
of the foregoing, all other personal property, goods, Instruments, Chattel
Paper, credits, claims, demands, assets, and books and records, customer lists,
ledger cards, credit files, print-outs, and other materials and records
pertaining to any of the foregoing, of the Grantor, whether now existing or
hereafter acquired from time to time, and (xi) any and all additions and
accessions to any of the foregoing, all improvements thereto, all substitutions
and replacements therefor and all products and Proceeds thereof (all of the
above collectively, the "FUNDING COMPANY SECURITY AGREEMENT COLLATERAL"). The
Funding Company Security Agreement Collateral hereunder expressly excludes and
the Security Interest granted thereupon shall not attach to the amount of the
transaction fee paid by the Sponsor to the Grantor and the paid-up share capital
of the Grantor, in an initial aggregate amount equal to US$2000.00. Subject to
Permitted Liens, such Security Interest shall be a first priority security
interest.
(b) The Security Interest granted to the Collateral Agent
pursuant to this Funding Company Security Agreement extends to all Funding
Company Security Agreement Collateral of the kind which is the subject of this
Funding Company Security Agreement which the Grantor may acquire at any time
during the continuation of this Funding Company Security Agreement, whether such
Funding Company Security Agreement Collateral is in transit or in the Grantor's,
the Collateral Agent's, or any other Person's constructive, actual or exclusive
occupancy or possession until the release thereof pursuant to SECTION 8.7
(Termination; Release).
(c) The assignments and security interests under this Funding
Company Security Agreement granted to the Collateral Agent, for the benefit of
the Secured Parties, shall not relieve the Grantor from the performance of any
term, covenant, condition or agreement on the Grantor's part to be performed or
observed under or in
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respect of any of the Funding Company Security Agreement Collateral pledged by
it hereunder or from any liability to any Person under or in respect of any of
such Funding Company Security Agreement Collateral or impose any obligation on
the Collateral Agent to perform or observe any such term, covenant, condition or
agreement on the Grantor's part to be so performed or observed or impose any
liability on the Collateral Agent for any act or omission on the part of the
Grantor or for any breach of any representation or warranty on the part of the
Grantor contained in this Funding Company Security Agreement or any Finance
Document, or in respect of the Grantor pledged by it hereunder or made in
connection herewith or therewith. The obligations of the Grantor contained in
this paragraph shall survive the termination of this Funding Company Security
Agreement and the discharge of the Grantor's other obligations hereunder.
(d) This Funding Company Security Agreement shall create a
continuing Security Interest in the Funding Company Security Agreement
Collateral and shall remain in full force and effect until the Debt Termination
Date.
SECTION 2.2. SECURITY INTEREST ABSOLUTE. The Grantor shall not
challenge or question in any proceeding the validity or enforceability of this
Funding Company Security Agreement, as a whole or any term or provision
contained herein or therein or the validity of any Lien or financing statement
in favor of the Collateral Agent created hereunder. To the extent permitted by
Applicable Law, all rights of the Collateral Agent and all security interests
hereunder shall be absolute and unconditional irrespective of:
(a) any invalidity, irregularity or unenforceability of all or
any part of the Obligations, any Transaction Document, or any other agreement or
instrument relating thereto, or any amendment, change or modification of any of
the Transaction Documents;
(b) any impairment, modification, change, exchange, release or
subordination of or limitation on, any liability to, or stay of actions or lien
enforcement proceedings against, the Grantor, its property, or its estate in
bankruptcy resulting from any bankruptcy, arrangement, readjustment,
composition, liquidation, rehabilitation or similar proceeding against or
otherwise involving or affecting the Grantor;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Obligations, or any other amendment
or waiver of or any consent to any departure from or exercise or non-exercise of
any right under any Transaction Document or any other agreement or instrument
relating thereto;
(d) any change in the time, order or method of attachment or
perfection of Liens or the filing or recording of financing statements or other
Security Documents and irrespective of anything contained in any filing or
agreement to which any Secured Party may now or hereafter be a party;
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(e) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of, or consent to departure
from, any guaranty for all or any of the Obligations; or
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Grantor or any third party pledgor,
guarantor or obligor.
SECTION 2.3. POWER OF ATTORNEY. (a) The Grantor hereby
irrevocably constitutes and appoints the Collateral Agent or any Person, officer
or agent whom the Collateral Agent may designate, as the Grantor's true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Grantor and in the name of the Grantor or in its own name, at
the Grantor's cost and expense, to exercise at any time in the Collateral
Agent's discretion all or any of the following powers, which, being coupled with
an interest, shall be irrevocable until the Debt Termination Date:
(i) to receive, take, endorse, sign, assign and deliver,
all in the Collateral Agent's or the Grantor's name, any and
all checks, notes, drafts, and other documents or instruments
relating to the Funding Company Security Agreement Collateral;
(ii) to receive, open and dispose of all mail addressed to
the Grantor and to notify postal authorities to change the
address for delivery thereof to such address as the Collateral
Agent designates;
(iii) to request from account debtors of the Grantor, in
the Grantor's name or that of the Collateral Agent or that of
the Collateral Agent's designee, information concerning the
Receivables and the amounts owing thereon;
(iv) to transmit to account debtors indebted on Receivables
notice of the Collateral Agent's interest therein;
(v) to notify account debtors indebted on Receivables to
make payment directly to the Collateral Agent;
(vi) to take or bring, in the Grantor's name or in the
Collateral Agent's name, all steps, actions, suits or
proceedings deemed by the Collateral Agent to be necessary or
desirable to enforce or effect collection of the Receivables;
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(vii) to prepare, sign and file any Uniform Commercial Code
financing statements or file this Funding Company Security
Agreement in the name of the Grantor as debtor;
(viii) if the Grantor shall have failed to do so in a
timely manner, to take or cause to be taken all actions
necessary to perform or comply or cause performance or
compliance with the covenants of the Grantor contained in any
Transaction Document to which the Grantor is party;
(ix) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Funding Company
Security Agreement Collateral;
(x) to defend any suit, action or proceeding brought
against the Grantor with respect to any of the Funding Company
Security Agreement Collateral;
(xi) to settle, compromise or adjust any suit, action or
proceeding described in the preceding clause (x) and, in
connection therewith, to give such discharges or releases as
the Collateral Agent may deem appropriate;
(xii) generally, to sell or transfer and make any agreement
with respect to or otherwise deal with any of the Funding
Company Security Agreement Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof
for all purposes, and to do, at the Collateral Agent's option
and the Grantor's expense, at any time, or from time to time,
all acts and things which the Collateral Agent deems necessary
to protect, preserve or realize upon the Funding Company
Security Agreement Collateral and the Liens of the Collateral
Agent thereon;
(xiii) to execute, in connection with any foreclosure, any
endorsements, assignments or other instruments of conveyance
or transfer with respect to the Funding Company Security
Agreement Collateral; and
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(xiv) to exercise the Grantor' rights under any Contract in
accordance with SECTION 6.3 (Liabilities Under Receivables and
Contracts) hereof;
PROVIDED, HOWEVER, that the Collateral Agent shall not exercise its powers under
clauses (ii), (vi), (ix), (x), (xi), (xii) or (xiii) unless an Event of Default
has occurred and is continuing and in accordance with SECTION 7.1 (Remedies;
Obtaining the Funding Company Security Agreement Collateral Upon Default) of
this Funding Company Security Agreement.
(b) The Grantor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. The Grantor hereby
acknowledges and agrees that in acting pursuant to this power-of-attorney, the
Collateral Agent shall be acting in its own interest and the Grantor
acknowledges and agrees that the Collateral Agent shall have no fiduciary duties
to the Grantor and the Grantor hereby waives any claims to the rights of a
beneficiary of a fiduciary relationship hereunder.
SECTION 2.4. INSPECTION AND VERIFICATION. The Collateral Agent
and such Persons as the Collateral Agent may reasonably designate shall have the
right, no more often than once each year, unless an Event of Default has
occurred and is continuing, at any reasonable time or times, in each case, upon
ten (10) days' written notice and at the Grantor's own cost and expense, to
inspect the Funding Company Security Agreement Collateral, all records related
thereto (and to make extracts and copies from such records) and the premises
upon which any of the Funding Company Security Agreement Collateral is located,
to discuss the Grantor's affairs with the appropriate officers of the Grantor
and its independent accountants and to verify under reasonable procedures the
validity, amount, quality, quantity, value, condition and status of or any other
matter relating to the Funding Company Security Agreement Collateral, including,
in the case of Receivables or Funding Company Security Agreement Collateral in
the possession of any third party, by contacting account debtors or the third
party possessing such Funding Company Security Agreement Collateral for the
purpose of making such a verification.
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Grantor hereby represents, warrants and covenants to the
Collateral Agent, which representations, warranties and covenants shall survive
execution and delivery of this Funding Company Security Agreement, as follows:
SECTION 3.1. TITLE AND AUTHORITY. The Grantor has good and
valid rights in and title to the Funding Company Security Agreement Collateral,
subject to Permitted Liens, with respect to which it has purported to grant a
Security Interest
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hereunder and has full power and authority to grant to the Collateral Agent the
Security Interest in such Funding Company Security Agreement Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Funding Company Security Agreement, without the consent or
approval of any Person other than any consent or approval that has been
obtained.
SECTION 3.2. VALIDITY, PERFECTION AND PRIORITY OF LIEN.
(a) Upon execution and delivery by the parties hereto, this
Funding Company Security Agreement creates in favor of the Collateral Agent, for
the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Funding Company Security Agreement Collateral, subject
to permitted Liens, and Proceeds thereof owned by the Grantor, and when
financing statements in appropriate form are filed in the offices specified on
SCHEDULE I hereto, the Lien created under this Funding Company Security
Agreement will constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Grantor in such Funding Company Security
Agreement Collateral and the Proceeds thereof where security interests can be
perfected by filing, in each case prior and superior in right to any other
Person, subject to Permitted Liens, except for any variations therefrom that
could not reasonably be expected to result in a Material Adverse Effect.
(b)(i) Fully executed Uniform Commercial Code financing
statements or other appropriate filings, recordings or registrations containing
a description of the Funding Company Security Agreement Collateral have been
delivered to the Collateral Agent for filing in each governmental, municipal or
other office specified in Schedule I hereof, which are all the filings,
recordings and registrations that are necessary to publish notice of and protect
the validity of and to establish a valid and perfected security interest in
favor of the Collateral Agent in respect of all Funding Company Security
Agreement Collateral (other than Fixtures, except Fixtures appurtenant to the
Site) in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under Applicable Law with respect to the filing
of continuation statements and except that recordation of the Security Interest
in the United States Patent and Trademark Office may be necessary with respect
to Funding Company Security Agreement Collateral consisting of Patents and
Trademarks and recordation of the Security Interest, in addition to registration
of any unregistered copyrights, in the United States Copyright Office may be
necessary with respect to Funding Company Security Agreement Collateral
consisting of Copyrights. The Grantor will pay any applicable filing fees and
related expenses. The Grantor authorizes the Collateral Agent to file any such
financing statements without the signature of the Grantor.
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(ii) The Instruments listed on SCHEDULE II hereto, which, as
of the date hereof, constitute all Instruments of the Grantor, and all other
Chattel Paper have been stamped to indicate the Security Interest of the
Collateral Agent, on behalf of the Secured Parties.
(c) The Grantor shall ensure and warrants that fully executed
Funding Company Security Agreements in the form hereof and containing a
description of all Funding Company Security Agreement Collateral consisting of
Intellectual Property shall have been received and recorded, within three (3)
months after the execution of this Funding Company Security Agreement with
respect to the United States Patents and United States registered Trademarks
(and Patents and Trademarks for which United States registration applications
are pending) and within one (1) month after the execution of this Funding
Company Security Agreement with respect to United States registered Copyrights,
by the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, pursuant to ▇▇ ▇.▇.▇. ▇▇▇, ▇▇ ▇.▇.▇. ▇▇▇▇ or 17 U.S.C.
205 and the regulations thereunder, as applicable, to protect the validity of
and to establish a legal, valid and perfected security interest in favor of the
Collateral Agent in respect of all Funding Company Security Agreement Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Funding Company Security Agreement
Collateral consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date
hereof.)
SECTION 3.3. NO LIENS; OTHER FINANCING STATEMENTS. (a) Except
for the Lien granted to the Collateral Agent, the Grantor owns and will continue
to own, valid and, if applicable, marketable title in and to each item of the
Funding Company Security Agreement Collateral free and clear of any and all
Liens other than Permitted Liens and the Grantor shall defend the Funding
Company Security Agreement Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Collateral Agent.
(b) Other than financing statements filed in connection
herewith, there is no financing statement (or similar statement or instrument of
registration under the Laws of any jurisdiction) covering or purporting to cover
any interest of any kind in the Funding Company Security Agreement Collateral.
The Grantor will not execute or authorize any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Funding Company Security Agreement Collateral to be
filed in any public office, except financing statements filed or to be filed in
respect of and covering the Security Interests granted hereby or pursuant to the
other Security
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Documents to the Collateral Agent by the Grantor and financing statements filed
in respect of and covering Permitted Liens.
SECTION 3.4. CHIEF EXECUTIVE OFFICE; NAME; RECORDS. (a) The
chief executive office and principal place of business of the Grantor is located
c/o Queensgate SPV Services, Limited, P.O. Box 1093 GT, Compass Center, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The originals of all documents
evidencing all Contracts and Receivables of the Grantor, and the only original
books of accounts and records concerning the Funding Company Security Agreement
Collateral are, and will continue to be, kept at, and controlled and directed
(including, without limitation, for general accounting purposes) from, the chief
executive office of the Grantor as set forth on SCHEDULE 3.4(a), or at such new
location for such chief executive office as the Grantor may establish in
accordance with SECTION 3.4(b).
(b) The Grantor shall not establish a new location for its
chief executive office or change its name or the name under which it presently
conducts its business unless (i) it has given to the Collateral Agent not less
than sixty (60) days' prior written notice of its intention so to do, clearly
describing such new location or specifying such new name, as the case may be,
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, and (ii) with respect to such new location or such
new name, as the case may be, the Grantor shall have taken all action,
satisfactory to the Collateral Agent, to maintain the Security Interest of the
Collateral Agent in the Funding Company Security Agreement Collateral at all
times fully perfected and in full force and effect.
SECTION 3.5. ADDITIONAL STATEMENTS AND SCHEDULES. The Grantor
shall execute and deliver to the Collateral Agent, from time to time, for its
convenience in maintaining a record of the Funding Company Security Agreement
Collateral, such written statements and schedules as the Collateral Agent may
reasonably require, designating, identifying or describing the Funding Company
Security Agreement Collateral.
SECTION 3.6. FURTHER ACTIONS. The Grantor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent or to the appropriate governmental authorities from time to
time such lists, descriptions and designations of its Funding Company Security
Agreement Collateral, warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Funding Company Security
Agreement Collateral and other property or rights covered by the Security
Interest hereby granted by the Grantor, which it or the Collateral Agent deems
reasonably appropriate or advisable to perfect, preserve or protect its Security
Interest in the Funding Company Security Agreement Collateral within seven (7)
days after any request by the Collateral Agent or
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such earlier date as may be required by Applicable Law or necessary to preserve
or protect the Security Interests in the Funding Company Security Agreement
Collateral granted by the Grantor pursuant to this Funding Company Security
Agreement, including the payment of any fees and taxes required in connection
with the execution and delivery of this Funding Company Security Agreement, the
granting of the Lien created hereby and the filing of any financing statements
or other documents in connection herewith.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
SECTION 4.1. MAINTENANCE OF INSURANCE; PROTECTION OF SECURITY
INTEREST. The Grantor shall carry with respect to the Funding Company Security
Agreement Collateral and its use such insurance as shall be required under the
Trinidad Project Loan Agreement, the U.S. Project Loan Agreement or any of the
Project Documents.
SECTION 4.2. LOCATION OF INVENTORY AND EQUIPMENT. All
Inventory and Equipment owned on the date hereof by the Grantor is located at
one of the locations on SCHEDULE 4.2 (other than Equipment undergoing repairs).
The Grantor agrees that all Inventory and Equipment now held or subsequently
acquired by it shall be kept at (or shall be in transport to) one of the
locations on SCHEDULE 4.2.
SECTION 4.3. INVENTORY RECORDS. The Grantor shall maintain, at
its own cost and expense, satisfactory and complete Inventory Records.
ARTICLE V
SPECIAL PROVISIONS CONCERNING RECEIVABLES
AND INSTRUMENTS
SECTION 5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. As of
the time when each of its Receivables arises, the Grantor shall be deemed to
have represented and warranted that such Receivable and all records, papers and
documents relating thereto (if any) are genuine and in all respects what they
purport to be, and that all papers and documents (if any) relating thereto (i)
will (subject to dispute, return, replacement, settlement or compromise)
represent the genuine, legal, valid and binding obligation of the account debtor
evidencing indebtedness unpaid and owed by such account debtor arising out of
the performance of services or the sale and delivery of the goods listed
therein, or both, (ii) will be the only original writings evidencing and
embodying such obligation of the account debtor named therein (other than copies
created for purposes other than
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general accounting purposes), (iii) will (subject to dispute, return,
replacement, settlement or compromise) evidence true and valid obligations,
enforceable in accordance with their respective terms, not subject to the
fulfillment of any contract or condition whatsoever unless set forth in the
writing and not subject to any defenses, set-offs or counterclaims or stamp or
other taxes, and will not constitute a breach or violation of any Applicable
Laws, and (iv) will be in compliance and will conform with the Security Interest
granted.
SECTION 5.2. MAINTENANCE OF RECORDS; LEGENDING OF RECORDS. The
Grantor will keep and maintain at its own cost and expense satisfactory and
complete records of its Receivables for at least five (5) years from the date on
which the Receivable comes into existence, including, but not limited to,
records of all payments received and all credits granted thereon, and the
Grantor will make the same available to the Collateral Agent for inspection in
accordance with SECTION 2.4. The Grantor shall, at its own cost and expense,
deliver all tangible evidence that the Collateral Agent may request of its
Receivables (including, without limitation, all documents evidencing the
Receivables) and books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by the Grantor) at any reasonable time during normal business hours upon the
Collateral Agent's demand. The Grantor shall take all reasonable action to
legend the Receivables, Chattel Paper and Contracts, as well as books, records
and documents of the Collateral Agent evidencing or pertaining to the
Receivables with an appropriate reference to the fact that the Receivables and
Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
SECTION 5.3. MODIFICATION OF TERMS; NO PAYMENT TO GRANTOR.
After the occurrence of an Event of Default, the Grantor shall not rescind or
cancel any indebtedness evidenced by any Receivable or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or interest therein, without the prior written consent of the
Collateral Agent, except in the ordinary course of business. The Grantor will
duly fulfill all obligations on its part to be fulfilled under or in connection
with the Receivables, except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect and will do nothing to impair
the rights of the Collateral Agent in the Receivables.
SECTION 5.4. COLLECTION. The Grantor shall take all
commercially reasonable actions to cause to be collected from the account
debtors of each of the Receivables, as and when due (including Receivables that
are delinquent, such Receivables to be collected in accordance with customary
commercial collection procedures in the power generation industry), any and all
amounts owing under or on account of such Receivables, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Receivables. The costs and expenses (including
15
attorneys' fees) of collection, whether incurred by the Grantor, the Collateral
Agent or any other Person, shall be paid by the Grantor.
SECTION 5.5. DIRECTION TO ACCOUNT DEBTORS, CONTRACTING
PARTIES. (a) After the occurrence of an Event of Default, in accordance with the
Intercreditor Agreement, the Grantor agrees that the Collateral Agent may, at
its option, directly notify the account debtors or obligors with respect to any
Receivables and/or under any Project Document to make payments with respect
thereto directly to it.
(b) Upon the occurrence and during the continuance of an Event
of Default, the Grantor agrees to be bound by any collection, compromise,
forgiveness, extension or other action taken by the Collateral Agent with
respect to the Receivables and/or the Documents. The costs and expenses
(including reasonable attorneys' fees) of collection, whether incurred by the
Grantor, the Collateral Agent or any other Person, shall be paid by the Grantor.
SECTION 5.6. INSTRUMENTS. If any of the Receivables becomes
evidenced by an Instrument, the Grantor shall promptly notify the Collateral
Agent thereof, and within ten (10) days of request by the Collateral Agent
therefor, shall deliver such Instrument to the Collateral Agent appropriately
endorsed to the order of the Collateral Agent as further security hereunder.
Notwithstanding the foregoing, at such time that an Event of Default shall have
occurred and be continuing for at least ten (10) days, or at such time as the
Grantor shall own or acquire any Instruments, the Grantor shall deliver all
Instruments to the Collateral Agent within ten (10) days, appropriately endorsed
to the order of the Collateral Agent as further security hereunder.
ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS
SECTION 6.1. SECURITY INTEREST IN CONTRACT RIGHTS. The
Grantor's grant, pursuant to SECTION 2.1 (Assignment and Grant of Security
Interest), to the Collateral Agent, of a security interest in all of its right,
title and interest in and to each and all of the Contracts and the contract
rights thereunder, includes, but is not limited to:
(i) all (A) rights to payment under any Contract and (B)
payments due and to become due under any Contract, in each case
whether as contractual obligations, damages or otherwise;
(ii) all of its claims, rights, powers, or privileges and
remedies under any Contract; and
16
(iii) all of its rights under any Contract to make
determinations, to exercise any election (including, but not
limited to, election of remedies) or option or to give or receive
any notice, consent, waiver or approval together with full power
and authority with respect to any Contract to demand, receive,
enforce, or collect any of the foregoing rights or any property
the subject of any of the Contracts, to enforce or execute any
checks, or other instruments or orders, to file any claims and to
take any action which, in the reasonable opinion of the Collateral
Agent, may be necessary or advisable in connection with any of the
foregoing (the Contracts, together with all of the foregoing in
this SECTION 6.1, the "CONTRACT RIGHTS");
PROVIDED, HOWEVER, that, unless an Event of Default shall have occurred and be
continuing, notwithstanding anything else herein to the contrary, the Grantor
may, subject to the terms and provisions of the U.S. Project Loan Agreement and
the Trinidad Project Loan Agreement, exclusively exercise all of its rights,
powers, privileges and remedies under the Contracts, other than the right to
receive monies due or to become due under the Contracts.
SECTION 6.2. FURTHER PROTECTION. Subject to the terms and
conditions of the Intercreditor Agreement, the Grantor warrants and forever
shall defend its title to the Contract Rights against the claims and demands of
any other Person, except those made pursuant to Permitted Liens, and hereby
grants the Collateral Agent full power and authority, upon the occurrence or
during the continuance of an Event of Default, to take all actions as the
Collateral Agent reasonably deems necessary or advisable to effectuate the
provisions set forth in this sentence.
SECTION 6.3. LIABILITIES UNDER RECEIVABLES AND CONTRACTS.
Anything herein to the contrary notwithstanding (including, without limitation,
the grant of any rights to the Collateral Agent), the Grantor shall remain
liable under this Agreement and each of the Receivables and Contracts to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder and under or with respect to the Funding Company Security
Agreement Collateral, all in accordance with the terms of any agreement giving
rise to each such Receivable or Contract. Except as the parties hereto may
otherwise agree, the Collateral Agent shall not have any obligation or liability
under any Receivable (or any agreement giving rise thereto), Contract or with
respect to the Funding Company Security Agreement Collateral by reason of or
arising out of this Funding Company Security Agreement or the receipt by the
Collateral Agent of any payment relating to such Receivable or Contract pursuant
hereto, nor shall the Collateral Agent be obligated in any manner to perform any
of the obligations of the Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto) or under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the
17
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Receivable (or any agreement giving rise
thereto) or under any Contract, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.
SECTION 6.4. REMEDIES. Upon the occurrence of any Event of
Default, the Collateral Agent shall have the rights set forth in ARTICLE VII
hereof, and in addition may, subject to the terms of the Intercreditor Agreement
(i) enforce all remedies, rights, powers and privileges of the Grantor under any
or all of the Contracts, (ii) sell or assign any or all of the Contract Rights
which may be sold or assigned at public or private sale upon at least ten (10)
days' prior written notice and/or (iii) substitute itself or any nominee or
trustee in lieu of the Grantor as party to any of the Contracts and to notify
the obligor of any Contract Right (the Grantor hereby agreeing to deliver any
such notice at the request of the Collateral Agent) that all payments and
performance under the relevant Contract shall be made or rendered to the
Collateral Agent or such other Person as the Collateral Agent may designate.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
SECTION 7.1. REMEDIES; OBTAINING THE FUNDING COMPANY SECURITY
AGREEMENT COLLATERAL UPON DEFAULT. (a) Subject to the terms of the Intercreditor
Agreement and the Trinidad Project Loan Agreement, upon the occurrence and
during the continuance of an Event of Default and after the expiration of any
applicable grace or cure periods, the Collateral Agent, acting pursuant to the
Intercreditor Agreement, shall be entitled to exercise all the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
any relevant jurisdiction and all rights now or hereafter existing under all
other Applicable Laws to enforce this Funding Company Security Agreement and the
Security Interest contained herein, and, in addition, subject to any Applicable
Laws then in effect, the Collateral Agent may, in addition to its other rights
and remedies hereunder, including without limitation under SECTION 7.2
(Remedies; Disposition of the Funding Company Security Agreement Collateral) and
SECTION 7.5 (Discontinuance of Proceedings) of this Funding Company Security
Agreement, and also the rights of the Collateral Agent under any of the Finance
Documents, do any of the following:
(i) personally, or by agents, trustees or attorneys,
immediately take possession of the Funding Company Security Agreement Collateral
or any part thereof, from the Grantor or any other Person who then has
possession of any part thereof with or without notice or process of law, and for
that purpose may enter upon the Grantor's
18
premises or such other Person's premises where any of the Funding Company
Security Agreement Collateral is located and remove the same and use in
connection with such removal any and all services, supplies, aids and other
facilities of the Grantor;
(ii) instruct the obligor or obligors of any agreement,
instrument or other obligation (including, without limitation, the Receivables
and the Contracts) constituting the Funding Company Security Agreement
Collateral to make any payment required by the terms of such instrument or
agreement directly to the Collateral Agent, PROVIDED that such agreement or
instrument permits such payment; and
(iii) take possession of the Funding Company Security
Agreement Collateral or any part thereof, by directing the Grantor in writing to
turn over the same to the Collateral Agent at the Site or, to the extent such
Funding Company Security Agreement Collateral may be moved, to deliver the same
to the Collateral Agent at any other place or places designated by the
Collateral Agent, in which event the Grantor shall, at its own expense, (A)
forthwith turn over the same to the Collateral Agent at one of the locations on
SCHEDULE 4.2 or at such other location as the Grantor may establish in
accordance with SECTION 4.2 (Location of Inventory and Equipment) or cause the
same to be moved to the place or places so designated by the Collateral Agent
and there delivered to the Collateral Agent, as the case may be; (B) store and
keep any Funding Company Security Agreement Collateral so turned over or
delivered to the Collateral Agent at one of the locations on SCHEDULE 4.2 or at
such other location as the Grantor may establish in accordance with SECTION 4.2
(Location of Inventory and Equipment) or at such place or places pending further
action by the Collateral Agent as provided in SECTION 7.2 (Remedies; Disposition
of the Funding Company Security Agreement Collateral) hereof; and (C) while the
Funding Company Security Agreement Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain the Funding Company Security Agreement
Collateral in good condition.
(b) the Grantor's obligation to turn over or deliver the
Funding Company Security Agreement Collateral as set forth above is of the
essence of this Funding Company Security Agreement and, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Agent shall
be entitled to obtain a decree requiring specific performance by the Grantor of
said obligation.
(c) when the Funding Company Security Agreement Collateral is
in the Collateral Agent's possession, (i) the Grantor shall pay (or reimburse
the Collateral Agent on demand for) all reasonable expenses (including the cost
of any insurance and payment of taxes or other charges and attorneys' fees of
the Collateral Agent) incurred in the custody, preservation, use or operation of
the Funding Company Security Agreement Collateral, and the obligation to
reimburse all such expenses shall be secured hereby, and
19
(ii) the risk of accidental loss or damage shall be on the Grantor to the extent
of any deficiency in any effective insurance coverage.
(d) the Grantor shall reimburse the Collateral Agent for all
its expenses in connection with the exercise of its rights hereunder, including,
without limitation, all reasonable attorneys' fees and legal expenses incurred
by the Collateral Agent. Expenses of retaking, holding, preparing for sale,
selling or the like shall include the reasonable attorneys' fees and legal
expenses of the Collateral Agent. All such expenses shall be secured hereby.
SECTION 7.2. REMEDIES; DISPOSITION OF THE FUNDING COMPANY
SECURITY AGREEMENT COLLATERAL. Any Funding Company Security Agreement Collateral
repossessed by the Collateral Agent under or pursuant to SECTION 7.1 (Remedies;
Obtaining the Funding Company Security Agreement Collateral upon Default) and
any other Funding Company Security Agreement Collateral, whether or not so
repossessed by the Collateral Agent, may, to the extent permitted by any
Contract terms governing such Funding Company Security Agreement Collateral and
subject to the Intercreditor Agreement, be sold, leased or otherwise disposed of
under one or more contracts or as an entirety, whether by public or private sale
and without the necessity of gathering at the place of sale; the property to be
sold, may be sold in such manner, at such time or times, at such place or places
and on such terms (whether cash or credit, and in the case of credit, without
assumption of future credit risk) as the Collateral Agent may, in compliance
with Applicable Laws, determine to be commercially reasonable. If any Funding
Company Security Agreement Collateral is sold by the Collateral Agent upon
credit or for future delivery, the Collateral Agent shall not be liable for the
failure of the purchaser to pay for the same and in such event the Collateral
Agent may resell the Funding Company Security Agreement Collateral. In no event
shall the Grantor be credited with any part of the proceeds of sale of any
Funding Company Security Agreement Collateral until cash payment thereof has
actually been received by the Collateral Agent. Any of the Funding Company
Security Agreement Collateral may be sold, leased or otherwise disposed of, or
options or contracts may be entered to do so, in the condition in which the same
existed when taken by the Collateral Agent or after any overhaul or repair which
the Collateral Agent shall determine to be commercially reasonable. Any such
disposition shall be made upon not less than ten (10) Business Days' written
notice to the Grantor specifying the time such disposition is to be made and, if
such disposition shall be a public sale, specifying the place of such sale. Any
such sale may be adjourned by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned. To the extent permitted by Applicable Laws, the
Collateral Agent may itself bid for and become the buyer of the Funding Company
Security Agreement Collateral or any item thereof offered for sale at a public
auction without accountability to the Grantor.
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SECTION 7.3. WAIVER. (a) EXCEPT AS OTHERWISE PROVIDED IN THIS
FUNDING COMPANY SECURITY AGREEMENT, THE GRANTOR HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE
COLLATERAL AGENT'S TAKING POSSESSION OR THE FUNDING COMPANY SECURITY AGREEMENT
COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL IN ACCORDANCE WITH THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE GRANTOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, AND THE GRANTOR HEREBY FURTHER WAIVES TO THE EXTENT PERMITTED
BY APPLICABLE LAWS:
(i) all damages occasioned by such taking of possession
except any damages which are finally judicially determined to
have been the direct result of the Collateral Agent's gross
negligence or wilful misconduct;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement
of the Collateral Agent's rights hereunder;
(iii) demand of performance or other demand, notice of
intent to demand or accelerate, notice of acceleration,
presentment, protest, advertisement or notice of any kind to
or upon the Grantor or any other Person; and
(iv) all rights of redemption, appraisement, valuation,
stay, extension or moratorium now or hereafter in force under
any Applicable Laws in order to prevent or delay the
enforcement of this Funding Company Security Agreement or the
absolute sale of the Funding Company Security Agreement
Collateral or any portion thereof, and the Grantor, insofar as
it may now or hereafter lawfully do so, hereby waives the
benefit of such Applicable Laws.
(b) Without limiting the generality of the foregoing, the
Grantor hereby: (i) authorizes the Collateral Agent, in its sole discretion and
without notice to or demand upon the Grantor and without otherwise affecting the
obligations of the Grantor hereunder from time to time, to take and hold other
collateral granted to it by any other Person (in addition to the Funding Company
Security Agreement Collateral) for payment of any Obligations, or any part
thereof, and to exchange, enforce or release such other collateral or any part
thereof, and to accept and hold any endorsement or guarantee of payment of
21
the Obligations or any part thereof, and to release or substitute any endorser
or guarantor or any other Person granting security for or in any way obligated
upon any Obligations, or any part thereof; and (ii) waives and releases any and
all right to require the Collateral Agent to collect any of the Obligations from
any specific item or items of Funding Company Security Agreement Collateral or
from any other party liable as guarantor or in any other manner in respect of
any of the Obligations or from any collateral (other than the Funding Company
Security Agreement Collateral) for any of the Obligations.
(c) Any sale of, or the grant of options to purchase, or any
other realization upon, any Funding Company Security Agreement Collateral shall,
provided that it is done in accordance with Applicable Laws and this Funding
Company Security Agreement, operate to divest all right, title, interest, claim
and demand, either at law or in equity, of the Grantor therein and thereto, and
shall be a perpetual bar both at law and in equity against the Grantor and
against any and all Persons claiming or attempting to claim the Funding Company
Security Agreement Collateral so sold, optioned or realized upon, or any part
thereof, from, through and under the Grantor.
SECTION 7.4. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Collateral Agent in exercising any right, remedy, power
or privilege hereunder and no course of dealing between the Grantor and the
Collateral Agent shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. A waiver by the Collateral Agent of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Collateral Agent would otherwise have on any future occasion. The rights and
remedies herein expressly provided are cumulative and may be exercised singly or
concurrently and as often and in such order as the Collateral Agent deems
expedient and are not exclusive of any rights or remedies which the Collateral
Agent would otherwise have whether by agreement or now or hereafter existing
under Applicable Laws. No notice to or demand on the Grantor in any case shall
entitle the Grantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Collateral Agent to
any other or future action in any circumstances without notice or demand.
SECTION 7.5. DISCONTINUANCE OF PROCEEDINGS. In case the
Collateral Agent, on behalf of the Secured Parties, shall have instituted any
proceeding to enforce any right, power or remedy under this Funding Company
Security Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then, in every such case, subject
to the
22
terms of any final non-appealable judgment rendered in any such proceeding, the
Grantor, the Collateral Agent and any other holder of any of the Obligations
shall be restored to their former positions and rights hereunder with respect to
the Funding Company Security Agreement Collateral, subject to the Security
Interest created under this Funding Company Security Agreement, and all rights,
remedies and powers of the Collateral Agent shall continue as if no such
proceeding had been instituted.
SECTION 7.6. APPLICATION OF PROCEEDS; GRANTOR LIABLE FOR
DEFICIENCY. The Collateral Agent shall apply any proceeds from time to time held
by it and the net proceeds of any collection, recovery, receipt, appropriation,
realization or sale with respect to the Funding Company Security Agreement
Collateral in accordance with the Intercreditor Agreement. Any surplus remaining
after payment in full of all of the Obligations shall be paid over to the
Grantor or to whomever may be entitled to receive such surplus. The Grantor
shall be liable for any deficiency remaining after any application of funds
pursuant hereto.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
provided in writing and shall be delivered by hand or overnight courier service,
mailed, or sent by telecopy to the Grantor at its address set forth in SECTION
11.5 (Notices) of the Indenture and the Collateral Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ 21 East, New York, New York 10286, Attention: Corporate Trust
Administration - International Finance Unit or at such other address as shall be
designated by such Person in a written notice to the other party hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Funding Company Security Agreement shall be deemed to
have been given on the date of receipt, if delivered by hand or overnight
courier service or sent by telecopy, or on the date five (5) Business Days after
dispatch by certified or registered mail if mailed, in each case, delivered,
sent or mailed (properly addressed) to such party as provided in this SECTION
8.1 or in accordance with the latest unrevoked direction from such party given
in accordance with this SECTION 8.1.
SECTION 8.2. AMENDMENT. No waiver, amendment, modification or
termination of any provision of this Funding Company Security Agreement, or
consent to any departure by the Grantor therefrom, shall in any event be
effective without the prior written consent of the Collateral Agent, acting
pursuant to SECTION 2.1 of the Intercreditor Agreement, and none of the Funding
Company Security Agreement Collateral shall be released without the written
consent of the Collateral Agent, acting pursuant to SECTION 2.1 of the
Intercreditor Agreement. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
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SECTION 8.3. SUCCESSORS AND ASSIGNS. All of the covenants,
promises and agreements in this Funding Company Security Agreement shall be
binding upon and inure to the benefit of the Grantor, the Collateral Agent, all
future holders of the Obligations and their respective successors and assigns,
except that the Grantor may not assign or transfer all or part of its rights or
obligations under this Funding Company Security Agreement without the prior
written consent of the Collateral Agent and in accordance with this Funding
Company Security Agreement.
SECTION 8.4. SURVIVAL. All agreements, statements,
representations and warranties made by the Grantor herein or in any certificate
or other instrument delivered by the Grantor or on its behalf under this Funding
Company Security Agreement shall be considered to have been relied upon by the
Collateral Agent and shall survive the execution and delivery of this Funding
Company Security Agreement and the Transaction Documents regardless of any
investigation made by the Collateral Agent, or on its behalf until the Debt
Termination Date.
SECTION 8.5. SECTION HEADINGS. Captions, section headings and
the table of contents appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Funding Company Security Agreement.
SECTION 8.6. SEVERABILITY. In case any provision in or
obligation under this Funding Company Security Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION 8.7. TERMINATION; RELEASE. Upon the Debt Termination
Date, this Agreement shall terminate, and the Collateral Agent, at the request
and expense of the Grantor and acting in accordance with the terms of the
Intercreditor Agreement, will promptly execute and deliver to the Grantor the
proper instruments (including Uniform Commercial Code termination statements on
form UCC-3) acknowledging the termination of this Funding Company Security
Agreement, and will duly assign, transfer and deliver to the Grantor (without
recourse and without any representation or warranty of any kind) such of the
Funding Company Security Agreement Collateral as may be in the possession of the
Collateral Agent and has not theretofore been disposed of or otherwise applied
or released.
SECTION 8.8. REINSTATEMENT. This Funding Company Security
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any amount received by the Collateral Agent in respect of the
Obligations is rescinded or must otherwise be restored or returned by the
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Grantor or upon the appointment of any
24
intervenor or conservator of, or trustee or similar official for, the Grantor or
any substantial part of its assets, or upon the entry of an order by a
bankruptcy court avoiding payment of such amount, or otherwise, all as though
such payments had not been made.
SECTION 8.9. COUNTERPARTS. This Funding Company Security
Agreement may be executed in any number of counterparts, all of which, taken
together, shall constitute one and the same instrument and any of the parties
hereto may execute this Funding Company Security Agreement by signing any such
counterpart.
SECTION 8.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. (i)
This Funding Company Security Agreement is a contract made under the laws of the
State of New York of the United States and shall for all purposes be governed by
and construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
(ii) Any legal action or proceeding against the Grantor with
respect to this Funding Company Security Agreement may be brought in the courts
of the State of New York in the County of New York or of the United States for
the Southern District of New York and, by execution and delivery of this
Agreement, the Grantor hereby irrevocably submits and accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Grantor agrees that a judgment, after exhaustion of all
available appeals, in any such action or proceeding shall be conclusive and
binding upon the Grantor, and may be enforced in any other jurisdiction by a
suit upon such judgment, a certified copy of which shall be conclusive evidence
of the judgment. The Grantor hereby irrevocably designates, appoints and
empowers Corporation Service Company with offices on the date hereof at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and in respect
of its property, service of any and all legal process, summons, notices and
documents which may be served in any such action or proceeding. If for any
reason such designee, appointee and agent shall cease to be available to act as
such, the Grantor agrees to designate a new designee, appointee and agent in New
York City on the terms and for the purposes of this provision satisfactory to
the Collateral Agent. The Grantor further irrevocably consents to the service of
process out 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 the Grantor at its address referred to in SECTION 8.1 (Notices),
such service to become effective thirty (30) days after such mailing. Nothing
herein shall affect the right of the Collateral Agent to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Grantor in any other jurisdiction.
(iii) The Grantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Funding Company
Security Agreement brought in the
25
courts referred to in clause (ii) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
(iv) WITH REGARD TO THIS FUNDING COMPANY SECURITY AGREEMENT, THE
PARTIES HERETO HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.
SECTION 8.11. CONFLICT WITH INTERCREDITOR AGREEMENT. In case
of a conflict between any provision of this Funding Company Security Agreement
and any provision of the Intercreditor Agreement, the provisions of the
Intercreditor Agreement shall control. No such conflict shall be deemed to exist
merely because this Funding Company Security Agreement imposes greater
obligations on the Grantor than the Intercreditor Agreement.
SECTION 8.12. ENTIRE AGREEMENT. This Funding Company Security
Agreement, together with any other agreement executed in connection herewith, is
intended by the parties as a final expression of their agreement as to the
matters covered hereby and is intended as a complete and exclusive statement of
the terms and conditions thereof.
SECTION 8.13. COLLATERAL AGENT. The rights, duties, benefits,
privileges and protections provided to the Collateral Agent in accordance with
the terms of the Intercreditor Agreement or the Indenture, as applicable, are
expressly incorporated herein by reference thereto.
26
IN WITNESS WHEREOF, the parties hereto have caused this
Funding Company Security Agreement to be duly executed and delivered as a deed
by their duly authorized officers as of the date first above written.
YORK POWER FUNDING (CAYMAN) LIMITED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
THE BANK OF NEW YORK, as Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: VICE PRESIDENT
27
SCHEDULE I TO
FUNDING COMPANY
SECURITY AGREEMENT
FILING OFFICES
1. Office of the New York Secretary of State
2. ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
28
SCHEDULE II TO
FUNDING COMPANY
SECURITY AGREEMENT
INSTRUMENTS
None
29
SCHEDULE III TO
FUNDING COMPANY
SECURITY AGREEMENT
COPYRIGHTS
None
30
SCHEDULE IV TO
FUNDING COMPANY
SECURITY AGREEMENT
PATENTS
None
31
SCHEDULE V TO
FUNDING COMPANY
SECURITY AGREEMENT
TRADEMARKS
None
32
SCHEDULE 3.4(A) TO
FUNDING COMPANY
SECURITY AGREEMENT
CHIEF EXECUTIVE OFFICES
York Power Funding (Cayman) Limited
c/o Queensgate SPV Services, Limited
P.O. Box 1093 GT,
Compass Center, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
33
SCHEDULE 4.2 TO
FUNDING COMPANY
SECURITY AGREEMENT
LOCATIONS OF FUNDING COMPANY SECURITY AGREEMENT COLLATERAL
c/o Queensgate SPV Services, Limited
P.O. Box 1093 GT,
Compass Center, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
34