INVESTMENT AGREEMENT PLEDGE AGREEMENT
Dated as of July 1, 1996
among
OLD DOMINION ELECTRIC COOPERATIVE,
as Investment Agreement Pledgor,
AMBAC INDEMNITY CORPORATION,
EPC CORPORATION
and
CLOVER ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇ GENERATING FACILITY
AND
COMMON FACILITIES
INVESTMENT AGREEMENT PLEDGE AGREEMENT
This INVESTMENT AGREEMENT PLEDGE AGREEMENT, dated as of July
1, 1996 (this "Agreement"), among OLD DOMINION ELECTRIC COOPERATIVE, a wholesale
power supply cooperative, organized under the laws of the Commonwealth of
Virginia, as pledgor (the "Investment Agreement Pledgor"), AMBAC INDEMNITY
CORPORATION, a Wisconsin-domiciled stock insurance company ("AMBAC"), EPC
CORPORATION, a Delaware corporation (the "Owner Participant") and CLOVER UNIT 2
GENERATING TRUST, a Delaware business trust created pursuant to the Trust
Agreement (as defined pursuant to Section 1) (the "Facility Owner").
WHEREAS, the Investment Agreement Pledgor, the Owner
Participant, Wilmington Trust Company (in the capacities set forth therein), the
Facility Owner and Utrecht-America Finance Co., have entered into a
Participation Agreement dated as of July 1, 1996 (the "Participation
Agreement");
WHEREAS, the Investment Agreement Pledgor and the Facility
Owner have entered into the Operating Equipment Agreement and the Operating
Foundation Agreement;
WHEREAS, pursuant to the Participation Agreement, the
Investment Agreement Pledgor has obtained from AMBAC the Surety Bond;
WHEREAS, the Investment Agreement Pledgor and AMBAC have
entered into the AMBAC Guaranty, pursuant to which the Investment Agreement
Pledgor has agreed, among other things, to reimburse AMBAC for any payments made
under the Surety Bond; and
WHEREAS, the Investment Agreement Pledgor has entered into an
Investment Agreement with AMBAC Capital Funding, Inc. ("AMBAC Capital") and
AMBAC, dated as of July 1, 1996 (the "Investment Agreement"), and is willing to
pledge to AMBAC, the Owner Participant and the Facility Owner (collectively, the
"Secured Parties") substantially all of its rights under the Investment
Agreement to secure the Secured Obligations.
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.
SECTION 2. PLEDGE.
SECTION 2.1 PLEDGE OF INVESTMENT AGREEMENT. To secure the Secured
Obligations (as defined in Section 3 hereof) the Investment Agreement Pledgor
hereby transfers, assigns, pledges and grants a security interest in each and
all of its right, title and interest in the Investment Agreement (including,
without limitation, the right of the Investment Agreement Pledgor to receive all
amounts payable under the Investment Agreement in accordance therewith), but
excluding the Investment Agreement Pledgor's rights to elect remedies under
Sections 4.2, 4.3 and 5.3 thereof, all instruments or certificates evidencing
the Investment Agreement and all interest, cash, instruments or other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for, any or all of the Investment Agreement and all proceeds of the
Investment Agreement to the Secured Parties for their benefit; provided,
however, that so long as no event of default under any of the Secured
Obligations has occurred and is continuing, interest payable under the
Investment Agreement shall be paid to the Investment Agreement Pledgor, free and
clear of the Lien and security which is created hereunder. The Secured Parties
hereby accept such transfer, assignment, pledge and security interest.
SECTION 2.2 DISTRIBUTION OF PROCEEDS OF INVESTMENT AGREEMENT. Any
amounts received in respect of the Investment Agreement after an event of
default under the Guaranty Agreement shall have occurred and be continuing shall
be applied or distributed ratably among AMBAC, the Facility Owner and the Owner
Participant according to the Secured Obligations held by each, to the extent and
only to the extent that (A) AMBAC is obligated to pay such obligations in
accordance with the terms of the Surety Bond and (B) such obligations are not
paid by AMBAC in accordance with the terms of the Surety Bond.
The balance, if any, of such amounts remaining shall be distributed to
the Investment Agreement Pledgor.
SECTION 3. SECURED OBLIGATIONS.
The purpose of this pledge is to secure (a) the Investment Agreement
Pledgor's obligations to pay the Covered Obligations to the extent and only to
the extent that (x) AMBAC is obligated to pay such Covered Obligations under the
Surety Bond (y) a timely Demand for Payment is made in accordance with the terms
of the Surety Bond and (z) AMBAC shall have failed to honor such Demand for
Payment and (b) the Investment Agreement Pledgor's obligations under the AMBAC
Guaranty. All of the foregoing obligations shall be referred to as "Secured
Obligations."
Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts that constitute part of the Secured
Obligations and that would be payable to the Secured Parties under the Operative
Documents 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 Investment Agreement Pledgor or
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(b) other laws relating to or effecting the enforcement of creditor's rights
generally against the Investment Agreement Pledgor.
SECTION 4. REMEDIES.
SECTION 4.1 RIGHTS OF THE SECURED PARTIES. Upon the happening and
during the occurrence of any event of default under the Guaranty Agreement,
subject to the provisions of Section 4.2 hereof, the Secured Parties may (in
addition to any other actions permitted under the other Operative Documents or
by statute or at law or in equity) exercise any rights or remedies granted
hereunder. The Secured Parties may enforce the right of pledge created hereby to
the fullest extent possible in accordance with, and shall be entitled to all
rights, remedies and benefits afforded to pledgees under, the laws of the State
of New York. To the extent necessary to realize the benefit of the pledge of the
Investment Agreement effected by Section 3, the Investment Agreement Pledgor
authorizes the Secured Parties to exercise any of its rights under the
Investment Agreement other than the Investment Agreement Pledgor's rights under
the Investment Agreement to elect remedies pursuant to Sections 4.2, 4.3 and 5.2
thereof.
SECTION 4.2 CONTROL OF REMEDIES. Notwithstanding anything else
contained in this Agreement, upon the occurrence and during the continuance of
an event of default under the Guaranty Agreement, AMBAC shall be entitled to
control and direct the enforcement of all rights and remedies granted to the
Secured Parties for the benefit of all Secured Parties, and to give sole consent
wherever the consent of all Secured Parties is required in this Agreement;
PROVIDED, HOWEVER, that if (a) a Secured Obligation is covered under the Surety
Bond and (b) AMBAC fails to pay when due a claim properly made under the Surety
Bond, the Facility Owner and the Owner Participant shall have the right to
appoint a party to control and direct the enforcement of all rights and remedies
under this Agreement.
SECTION 4.3 FILINGS. The Investment Agreement Pledgor agrees that it
shall, at its own expense, execute and deliver all financing statements
necessary to perfect the Secured Parties' or any assignee's interest in the
Investment Agreement or any assignment or other document reasonably requested by
the Secured Parties to perfect, protect, enforce or otherwise give effect to the
Secured Parties' rights and remedies hereunder.
SECTION 4.4 ATTORNEY-IN-FACT. If the Investment Agreement Pledgor is
unable or unwilling to sign such assignments, financing statements or other
documents and to file financing statements or other public notices or recording
with the appropriate authorities, as and when reasonably requested by counsel to
the Secured Parties, the Investment Agreement Pledgor hereby authorizes the
Secured Parties to sign as the Investment Agreement Pledgor's true and lawful
agent and attorney-in-fact any such assignments, financing statement or other
documents and to make any such filings.
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SECTION 4.5 THE SECURED PARTIES' DUTIES. The powers conferred on the
Secured Parties hereunder are solely to protect their interests in the
Investment Agreement and shall not impose any duty upon any of them to exercise
any such powers. Except for the accounting for monies actually received by any
of them hereunder, the Secured Parties shall have no duty as to the
Investment Agreement or other matters relative to the Investment Agreement,
whether or not the Secured Parties have or are 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 Investment
Agreement.
SECTION 4.6 RELEASE OF INVESTED MONIES. If the Investment Agreement
Pledgor pays the first installment of the Purchase Option Price or Foundation
Option Price on the Expiration Date pursuant to Section 15.1 of each of the
Operating Agreements, any remaining principal balance of the Invested Monies (as
defined in the Investment Agreement) shall be distributed to the Investment
Agreement Pledgor. So long as the Investment Agreement Pledgor is not in default
under its Secured Obligations, interest on the Invested Monies shall be
distributed to the Investment Agreement Pledgor as provided in the Investment
Agreement).
SECTION 5. DISCHARGE.
The Secured Parties agree that when the Secured Obligations shall have
been fully paid and discharged, the Secured Parties, at the written request and
cost of the Investment Agreement Pledgor, shall immediately confirm the release
of the Investment Agreement from any Lien created pursuant to this Agreement and
of all claims that the Secured Parties may have hereunder.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
SECTION 6.1 UNLIMITED HOLDER. The Investment Agreement Pledgor
represents and warrants that it is the legal and beneficial owner of the
Investment Agreement and that the Investment Agreement is not subject to any
Lien or to any other right of any third party, except as provided by the
Operative Documents.
SECTION 6.2 RIGHTS IN THE INVESTMENT AGREEMENT. The Investment
Agreement Pledgor represents and warrants that the pledge of the Investment
Agreement under this Agreement vests in the Secured Parties a valid security
interest in the Investment Agreement, as contemplated by this Agreement, subject
to the provisions, if applicable, of Section 9-306 of the Uniform Commercial
Code as in effect in New York.
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SECTION 7. COVENANT OF THE INVESTMENT AGREEMENT PLEDGOR.
The Investment Agreement Pledgor shall not, without the prior written
consent of the Secured Parties (a) sell, assign or otherwise dispose of, or
grant any option with respect to, the Investment Agreement or (b) create or
permit any Lien upon or with respect to the Investment Agreement, except for the
pledge created hereby.
SECTION 8. MISCELLANEOUS.
SECTION 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 the
party against whom enforcement of such change is sought.
SECTION 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 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 Investment Agreement Pledgor:
Old Dominion Electric Cooperative
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President of Accounting and Finance
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If to AMBAC:
AMBAC Indemnity Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Owner Participant:
EPC Corporation
c/o Chrysler Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
If to the Facility Owner:
Clover Unit 2 Generating Trust
c/o Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
SECTION 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 Investment Agreement Pledge 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.
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SECTION 8.4 SUCCESSORS AND ASSIGNS.
(a) This Investment Agreement Pledge 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.
(b) Except as expressly provided herein or in any other Operative
Document, the Investment Agreement Pledgor may not assign its interests herein
without the consent of the Secured Parties.
SECTION 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.
SECTION 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.
SECTION 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.
SECTION 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.
SECTION 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.
SECTION 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.
SECTION 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 Secured Parties
and the Investment Agreement Pledgor.
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SECTION 8.12. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as
trustee of Clover Unit 2 Generating Trust (the "Trust") under the Trust
Agreement, in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, undertakings and agreements herein made on
the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose for binding only the Trust, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust
Company, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties hereto or by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Agreement or any
other Operative Documents.
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IN WITNESS WHEREOF, the Investment Agreement Pledgor and the
Secured Parties have caused this Investment Agreement Pledge Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized.
OLD DOMINION ELECTRIC COOPERATIVE,
as Investment Agreement Pledgor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Date: July 31, 1996
AMBAC INDEMNITY CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: First Vice President
Date: July 31, 1996
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
Acknowledged and consented to by:
AMBAC CAPITAL FUNDING, INC.
By:
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Name:
Title:
Date: