EXHIBIT 4.7
EXECUTION COPY
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GUARANTEE AND COLLATERAL AGREEMENT
made by
NRG ENERGY, INC.,
NRG POWER MARKETING INC.
and certain of the Subsidiaries of NRG Energy, Inc.
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Trustee
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
as Administrative Agent
and
LAW DEBENTURE TRUST COMPANY OF NEW YORK,
as Trustee
Dated as of December 23, 2003
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINED TERMS.......................................................................... 2
1.1. Definitions............................................................................ 2
1.2. Other Definitional Provisions.......................................................... 19
SECTION 2. GUARANTEE.............................................................................. 19
2.1. Guarantee.............................................................................. 19
2.2. Rights of Reimbursement, Contribution and Subrogation.................................. 21
2.3. Amendments, etc. with respect to the Borrower Obligations.............................. 23
2.4. Guarantee Absolute and Unconditional................................................... 23
2.5. Reinstatement.......................................................................... 24
2.6. Payments............................................................................... 25
SECTION 3. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL..................... 25
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................................... 27
4.1. Representations in Secured Debt Documents.............................................. 27
4.2. Title; No Other Liens.................................................................. 28
4.3. Perfected First Priority Liens......................................................... 28
4.4. Name; Jurisdiction of Organization, etc................................................ 28
4.5. Inventory and Equipment................................................................ 29
4.6. Condition and Maintenance of Equipment................................................. 29
4.7. Farm Products.......................................................................... 29
4.8. Investment Property.................................................................... 29
4.9. Receivables............................................................................ 30
4.10. Contracts.............................................................................. 31
4.11. Intellectual Property.................................................................. 32
4.12. Letters of Credit and Letter of Credit Rights.......................................... 34
4.13. Commercial Tort Claims................................................................. 34
SECTION 5. COVENANTS.............................................................................. 34
5.1. Covenants in Secured Debt Documents.................................................... 34
5.2. Delivery and Control of Instruments, Certificated Securities, Chattel Paper,
Negotiable Documents, Investment Property and Letter of Credit Rights.................. 34
5.3. Maintenance of Insurance............................................................... 36
5.4. Payment of Secured Obligations......................................................... 37
5.5. Maintenance of Perfected Security Interest; Further Documentation...................... 37
5.6. Changes in Location, Name, Jurisdiction of Incorporation, etc.......................... 38
5.7. Notices................................................................................ 38
5.8. Investment Property.................................................................... 39
5.9. Receivables............................................................................ 40
5.10. Contracts.............................................................................. 41
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5.11. Intellectual Property.................................................................... 42
5.12. Commercial Tort Claims................................................................... 44
5.13. Deposit and Securities Accounts.......................................................... 45
5.14. Collections.............................................................................. 45
SECTION 6. REMEDIAL PROVISIONS...................................................................... 46
6.1. Certain Matters Relating to Receivables.................................................. 46
6.2. Communications with Obligors; Grantors Remain Liable..................................... 47
6.3. Pledged Securities....................................................................... 47
6.4. Intellectual Property; Grant of License.................................................. 48
6.5. Intellectual Property Litigation and Protection.......................................... 48
6.6. Proceeds to be Turned Over To Collateral Trustee......................................... 49
6.7. Application of Proceeds.................................................................. 49
6.8. Code and Other Remedies.................................................................. 49
6.9. Registration Rights...................................................................... 51
6.10. Deficiency............................................................................... 52
6.11. Separate Liens........................................................................... 52
SECTION 7. THE COLLATERAL TRUSTEE................................................................... 52
7.1. Collateral Trustee's Appointment as Attorney-in-Fact, etc................................ 52
7.2. Duty of Collateral Trustee............................................................... 54
7.3. Execution of Financing Statements........................................................ 54
7.4. Authority of Collateral Trustee.......................................................... 55
7.5. Access to Collateral, Books and Records; Other Information............................... 55
7.6. Appointment of Co-Collateral Agents...................................................... 55
SECTION 8. MISCELLANEOUS............................................................................ 56
8.1. Amendments in Writing.................................................................... 56
8.2. Notices.................................................................................. 56
8.3. No Waiver by Course of Conduct; Cumulative Remedies...................................... 56
8.4. Enforcement Expenses; Indemnification.................................................... 56
8.5. Successors and Assigns................................................................... 57
8.6. Set-Off.................................................................................. 57
8.7. Counterparts............................................................................. 57
8.8. Severability............................................................................. 57
8.9. Section Headings......................................................................... 58
8.10. Integration.............................................................................. 58
8.11. APPLICABLE LAW........................................................................... 58
8.12. Submission to Jurisdiction; Waivers...................................................... 58
8.13. Acknowledgments.......................................................................... 58
8.14. Additional Grantors...................................................................... 59
8.15. Releases................................................................................. 59
8.16. Conflicts................................................................................ 59
8.17. WAIVER OF JURY TRIAL..................................................................... 59
8.18. Additional Guaranteed Secured Debt Representatives....................................... 59
8.19. Rights and Immunities of Secured Debt Representatives.................................... 60
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Exhibits:
Exhibit A Form of Control Agreement (Deposit and Securities Accounts)
Exhibit B Form of Control Agreement (Commodity Contracts)
Exhibit C Form of Acknowledgment and Consent
Exhibit D Form of Intellectual Property Security Agreement
Exhibit E Form of After-Acquired Intellectual Property Security Agreement
Annex:
Annex 1 Assumption Agreement
Schedules:
Schedule 1.1(a) Excluded Foreign Subsidiaries
Schedule 1.1(b) Excluded Project Subsidiaries
Schedule 1.1(c) Immaterial Subsidiaries
Schedule 4.3(a) Filings and Other Actions Required to Perfect Security
Interests
Schedule 4.3(b) Existing Liens
Schedule 4.4 Organizational Information
Schedule 4.5(a) Location of Inventory and Equipment
Schedule 4.5(b) Bailees and Warehousemen
Schedule 4.8(a) Description of Equity Instruments
Schedule 4.8(b) Description of Pledged Debt Instruments
Schedule 4.8(c) Description of Pledged Accounts
Schedule 4.10(a) Material Contracts
Schedule 4.10(b) Non-Assignable Contracts
Schedule 4.11(a) Intellectual Property
Schedule 4.11(c) Licenses, etc.
Schedule 4.11(e) Releases, etc.
Schedule 4.12 Letter of Credit Rights
Schedule 4.13 Commercial Tort Claims
Schedule 8.2 Notice Addresses of Guarantors
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GUARANTEE AND COLLATERAL AGREEMENT, dated as of December 23,
2003, made by each of the signatories hereto, in favor of Deutsche Bank Trust
Company Americas, as Collateral Trustee for (i) Credit Suisse First Boston,
acting through its Cayman Islands Branch, as administrative agent (in such
capacity and together with its successors, the "Administrative Agent") and as
collateral agent (in such capacity and together with its successors, the
"Collateral Agent") and for the banks and other financial institutions or
entities (the "Lenders") from time to time parties to the Credit Agreement,
dated as of the date hereof (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among NRG Energy, Inc., a Delaware
corporation (the "Company"), NRG Power Marketing Inc., a Delaware corporation
("NRG Power Marketing" and, together with the Company, the "Credit Agreement
Borrowers"), the Lenders, Credit Suisse First Boston, acting through its Cayman
Islands Branch, and ▇▇▇▇▇▇ Brothers Inc., as joint lead book runners and joint
lead arrangers (in such capacity, the "Arrangers"), ▇▇▇▇▇▇ Commercial Paper
Inc., as syndication agent (in such capacity, the "Syndication Agent"), General
Electric Capital Corporation, as revolver agent, the Administrative Agent, the
Collateral Agent and the other Priority Lien Secured Parties thereunder, (ii)
Law Debenture Trust Company of New York, as trustee (in such capacity and
together with its successors, the "Trustee") under the Indenture, dated as of
the date hereof (as amended, supplemented, or otherwise modified from time to
time, the "Indenture"), among the Company, certain of its subsidiaries, the
Trustee and the other Secured Parity Lien Parties thereunder and (iii) any other
Secured Parties (as hereinafter defined) from time to time entitled to the
benefits of the Collateral Trust Agreement, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Collateral
Trust Agreement"), among the Company, the other Grantors, the Administrative
Agent, the Trustee, the Collateral Trustee and the other parties from time to
time party thereto; and, for purposes of Section 2, in favor of the
Administrative Agent and the Trustee and any other future Guaranteed Secured
Debt Representative (as hereinafter defined) with respect to any Series of
Guaranteed Secured Debt (as hereinafter defined) that becomes entitled to the
benefits of the Collateral Trust Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Credit Agreement Borrowers
upon the terms and subject to the conditions set forth therein, and, pursuant to
the Indenture, the Company will issue $1,250,000,000 in aggregate principal
amount of Second Priority Senior Secured Notes due 2013 (the "Notes");
WHEREAS, the Credit Agreement Borrowers are members of an
affiliated group of companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement and the proceeds of the offering of the Notes will be used in
part to enable the Credit Agreement Borrowers or the Company, as the case may
be, to make valuable transfers to one or more of the other Grantors in
connection with the operation of their respective businesses;
WHEREAS, the Credit Agreement Borrowers and the other Grantors
are engaged in related businesses, and each Grantor will derive substantial
direct and indirect benefit from the making of the extensions of credit under
the Credit Agreement and the offering of the Notes;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Credit Agreement
Borrowers under the Credit Agreement and a condition precedent to the obligation
of the initial purchasers to purchase the Notes that the Grantors shall have
executed and delivered this Agreement to the Collateral Trustee for the benefit
of the applicable Secured Parties; and
WHEREAS, the Credit Agreement Borrowers and the other Grantors
have entered into the Collateral Trust Agreement which sets forth the terms on
which each Secured Party has appointed the Collateral Trustee as trustee for the
present and future holders of the Secured Obligations (as hereinafter defined)
to receive, hold, maintain, administer and distribute the Collateral at any time
delivered to the Collateral Trustee and to enforce the Security Documents,
including this Agreement, and all interests, rights, powers and remedies of the
Collateral Trustee in respect thereto or thereunder and the proceeds thereof;
NOW, THEREFORE, in consideration of the premises and to induce
the Secured Parties to enter into the Secured Debt Documents and to induce such
Secured Parties to make their respective extensions of credit to the applicable
Grantors thereunder, each Grantor hereby agrees with the Collateral Trustee, for
the benefit of the applicable Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1. Definitions. (a) Unless otherwise defined herein,
terms defined in the Collateral Trust Agreement and used herein shall have the
meanings given to them in the Collateral Trust Agreement, and the following
terms are used herein as defined in the New York UCC (and if defined in more
than one Article of the New York UCC shall have the meanings given in Article 9
thereof): Accounts, Account Debtor, Certificated Security, Chattel Paper,
Commercial Tort Claim, Commodity Account, Commodity Contract, Commodity
Intermediary, Documents, Electronic Chattel Paper, Equipment, Farm Products,
Financial Asset, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Letter of Credit, Letter of Credit Rights, Money, Payment Intangibles,
Securities Account, Securities Intermediary, Security, Security Entitlement,
Supporting Obligations, Tangible Chattel Paper and Uncertificated Security.
(b) The following terms shall have the following
meanings:
"Administrative Agent" shall have the meaning assigned to such
term in the preamble.
"After-Acquired Intellectual Property" shall have the meaning
assigned to such term in Section 5.11(k).
"Agreement" shall mean this Guarantee and Collateral
Agreement, as the same may be amended, supplemented, replaced or
otherwise modified from time to time.
"Arrangers" shall have the meaning assigned to such term in
the preamble.
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"Borrower" shall mean (i) in the case of the Revolving Loans,
Revolving Credit Commitments and Revolving Letters of Credit (each as
defined in the Credit Agreement) and all related obligations under the
Credit Agreement, the Credit Agreement Borrowers, (ii) in the case of
the Term Loans, Credit-Linked Deposits, Term Loan Commitments and
Funded Letters of Credit (as defined in the Credit Agreement) and all
related obligations under the Credit Agreement, the Company, (iii) in
the case of the Notes issued under the Indenture and all related
obligations under the Indenture, the Company and (iv) in the case of
the obligations in respect of any future Series of Guaranteed Secured
Debt, the Company and any other applicable Grantor who shall act as the
borrower or issuer under the applicable Secured Debt Documents with
respect to such Series of Guaranteed Secured Debt.
"Borrower Obligations" shall mean, without duplication, the
collective reference to the unpaid principal of and interest on the
loans (or other extensions of credit), notes (or other debt
securities), credit-linked deposits (or other similar deposits) and all
other obligations and liabilities of any Borrower in each case with
respect to any Series of Guaranteed Secured Debt (including interest
accruing at the then applicable rate provided in any applicable Secured
Debt Document after the maturity of such loans (or other extensions of
credit), notes (or other debt securities) or credit-linked deposits (or
other similar deposits) and interest accruing at the then applicable
rate provided in any applicable Secured Debt Document after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the applicable Borrower,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) to any applicable Secured Party (including,
in the case of any Specified Hedging Agreement, any Lender, the
Administrative Agent, the Collateral Agent, any Arranger or the
Syndication Agent or, in each case, any Affiliate thereof, regardless
of whether or not such Lender thereafter continues to be a Lender or
such person continues to have such capacity with respect to the Credit
Agreement), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with this Agreement, the Credit
Agreement (if applicable), the Indenture (or the Notes) (if applicable)
or any other applicable Secured Debt Documents (including any letters
of credit, any Specified Hedging Agreement or any other document made,
delivered or given in connection with any of the foregoing), in each
case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including
all fees and disbursements of counsel to the Secured Parties that are
required to be paid by the applicable Borrower pursuant to the terms of
any of the foregoing agreements).
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which commercial banks in New York City are authorized
or required by law to close.
"Closing Date" shall mean the date hereof.
"Collateral" shall mean have the meaning assigned to such term
in Section 3.
"Collateral Account" shall mean any collateral account
established by the Collateral Trustee as provided in Section 6.1 or
6.6.
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"Collateral Account Funds" shall mean, collectively, the
following from time to time on deposit in a Collateral Account: all
funds (including all trust monies), investments (including all cash
equivalents) credited to, or purchased with funds from, any Collateral
Account and all certificates and instruments from time to time
representing or evidencing such investments; all notes, certificates of
deposit, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Collateral Trustee for or on
behalf of any Grantor in substitution for, or in addition to, any or
all of the Collateral; and all interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the items
constituting Collateral.
"Collateral Trust Agreement" shall have the meaning assigned
to such term in the preamble.
"Company" shall have the meaning assigned to such term in the
preamble.
"Contracts" shall mean all contracts and agreements (in each
case, whether written or oral, or third party or intercompany) between
any Grantor and other person, as the same may be amended, assigned,
extended, restated, supplemented, replaced or otherwise modified from
time to time, including (i) all rights of any Grantor to receive moneys
due and to become due to it thereunder or in connection therewith, (ii)
all rights of any Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect thereto, (iii) all rights
of any Grantor to damages arising thereunder and (iv) all rights of any
Grantor to terminate, and to perform and compel performance of, such
Contracts and to exercise all remedies thereunder.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative thereto; provided that
when used in connection with the Collateral Trustee's rights with
respect to, or security interest in, any Collateral, "control" shall
have the meaning specified in the UCC with respect to that type of
Collateral.
"Control Agreement (Deposit and Securities Accounts)" shall
mean a Control Agreement in the form of Exhibit A, to be executed and
delivered by the applicable Grantor and the other party or parties
thereto with respect to each Deposit Account or Securities Account of
such Grantor except to the extent that the same constitutes an Excluded
Perfection Asset at any time.
"Control Agreement (Commodities Contracts)" shall mean a
Control Agreement in the form of Exhibit B, to be executed and
delivered by the applicable Grantor and the other party or parties
thereto with respect to each Commodity Contract of such Grantor as
required by Section 5.2(e).
"Copyright Licenses" shall mean any agreement, whether written
or oral, naming any Grantor as licensor or licensee (including those
listed in Schedule 4.11 (as such
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schedule may be amended or supplemented from time to time)), granting
any right in, to or under any Copyright, including the grant of rights
to manufacture, distribute, exploit and sell materials derived from any
Copyright.
"Copyrights" shall mean (i) all copyrights arising under the
laws of the United States, any other country, or union of countries, or
any political subdivision of any of the foregoing, whether registered
or unregistered and whether published or unpublished (including those
listed in Schedule 4.11 (as such schedule may be amended or
supplemented from time to time)), all registrations and recordings
thereof, and all applications in connection therewith and rights
corresponding thereto throughout the world, including all
registrations, recordings and applications in the United States
Copyright Office, (ii) the right to, and to obtain, all extensions and
renewals thereof, and the right to ▇▇▇ for past, present and future
infringements of any of the foregoing, (iii) all proceeds of the
foregoing, including licenses, royalties, income, payments, claims,
damages, and proceeds of suit and (v) all other rights of any kind
whatsoever accruing thereunder or pertaining thereto.
"Core Collateral" shall mean all Equity Interests in, and
property and assets of, ▇▇▇ ▇▇▇-▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ and their respective subsidiaries (other than NRG Sterlington
Power LLC, Bayou Cove Peaking Power LLC and Big Cajun I Peaking Power
LLC for so long as such entities shall constitute Excluded Project
Subsidiaries), whether now owned or hereafter acquired.
"Credit Agreement" shall have the meaning assigned to such
term in the preamble.
"Credit Agreement Borrowers" shall have the meaning assigned
to such term in the preamble.
"Credit Agreement Guarantors" shall mean the Revolving Loan
Guarantors and the Term Loan Guarantors.
"Deposit Account" shall mean (i) all "deposit accounts" as
defined in Article 9 of the New York UCC, (ii) all other accounts
maintained with any financial institution (other than Securities
Accounts or Commodity Accounts) and (iii) shall include all of the
accounts listed on Schedule 4.8(c) under the heading "Deposit Accounts"
(as such schedule may be amended or supplemented from time to time)
together, in each case, with all funds held therein and all
certificates or instruments representing any of the foregoing.
"Depositary Bank" shall mean a financial institution that has
delivered to the Collateral Trustee an executed Control Agreement
(Deposit and Securities Accounts).
"Domestic Subsidiaries" shall mean all Subsidiaries
incorporated, formed or organized under the laws of the United States
of America, any State thereof or the District of Columbia.
"dollars" or "$" shall mean lawful money of the United States
of America.
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"Equity Interests" shall mean shares of capital stock,
partnership interests, membership interests in a limited liability
company, beneficial interests in a partnership or limited liability
company, beneficial interests in a trust or other equity interests in
any person, or any obligations convertible into or exchangeable for, or
giving any person a right, option or warrant to acquire, such equity
interests or such convertible or exchangeable obligations.
"Excluded Assets" shall mean (i) any lease, license, contract,
property right or agreement to which any Grantor is a party or any of
such Grantor's rights or interests thereunder if and only for so long
as the grant of a security interest therein under the Security
Documents shall constitute or result in a breach, termination or
default or invalidity under any such lease, license, contract, property
right or agreement (other than to the extent that any such term would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the UCC of any relevant jurisdiction or any other applicable
law or principles of equity); provided that such lease, license,
contract, property right or agreement shall be an Excluded Asset only
to the extent and for so long as the consequences specified above shall
result and shall cease to be an Excluded Asset and shall become subject
to the security interest granted under the Security Documents,
immediately and automatically, at such time as such consequences shall
no longer result; (ii) any interests in real property owned or leased
by any Grantor only for so long as such interest represents an Excluded
Perfection Asset; (iii) any Equity Interests in any Excluded Project
Subsidiary the pledge of which pursuant to the Security Documents would
constitute a default under the applicable Non-Recourse Indebtedness in
respect of which it is an obligor and any voting Equity Interests in
excess of 66% (or, in the case of NRG International Holdings GmbH, NRG
International Holdings (No.2) GmbH and NRGenerating International BV,
65%) of the total outstanding voting Equity Interests in any Excluded
Foreign Subsidiary; (iv) any Deposit Account, Securities Account or
Commodities Account (and all cash, cash equivalents permitted by the
terms of the Secured Debt Documents and Commodity Contracts held
therein) if and only for so long as such Deposit Account, Securities
Account or Commodities Account is subject to a Lien permitted under
Section 6.02(g)(ii) of the Credit Agreement and the other Secured Debt
Documents; (v) the Equity Interests in, and all properties and assets
of, NRG Energy Insurance Ltd. (Cayman Islands); (vi) the Equity
Interests in, and all properties and assets of, NRGenerating Holdings
(No. 4) GmbH (only for so long as such entity shall remain a direct
subsidiary of NRG International LLC and shall have no assets other than
those owned on the date hereof), NRGenerating III (Gibraltar),
NRGenerating Holdings (No. 23) BV, NRGenerating IV Gibraltar, ONSITE
Marianas Corporation, NGR Pacific Corporate Services Pty Ltd., Coniti
Holding BV (only for so long as such entity shall own no assets other
than the Equity Interests in Tosli (Gibraltar) BV) and Tosli
(Gibraltar) BV (only for so long as such entity shall own no assets);
(vii) the Equity Interests in, and all properties and assets of, NRG
Latin America Inc., Sterling Luxembourg (No. 4) S.a.r.l, NRGenerating
Luxembourg (No. 6) S.a.r.l., NRGenerating Holdings (No. 21) BV (only
for so long as such entity shall own no assets other than the stock of
its subsidiaries owned on the date hereof) and Compania Boliviana de
Energia Electrica S.A. (Cobee Nova Scotia); (viii) the Equity Interests
in NRG Sterlington Power LLC and Big Cajun I Peaking Power LLC for so
long as such Equity Interests are pledged within 90 days of the Closing
Date to the lenders of Non-Recourse Indebtedness
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of NRG Peaker Finance Co. LLC existing on the date hereof; (ix) any
Equity Interest of a person (other than a Subsidiary) held by any
Grantor if and for so long as the pledge thereof under the Security
Documents shall constitute or result in a breach, termination or
default under any joint venture, stockholder or partnership agreement
between such Grantor and one or more other holders of Equity Interests
of such person; provided that (A) such Grantor shall have used
reasonable efforts to obtain the consent or waiver of such other
holders of Equity Interests of such person to such a pledge and such
consent or waiver shall not have been obtained and (B) such Equity
Interest shall be an Excluded Asset only to the extent and for so long
as the consequences specified above shall result and shall cease to be
an Excluded Asset and shall become subject to the security interest
granted under the Security Documents, immediately and automatically, at
such time as such consequences shall no longer result; (x) all personal
property and equipment (except two heat recovery steam generators) of
Meriden Gas Turbines LLC; provided that such equipment is transferred
to Dick Corporation within 180 days of the Closing Date; (xi) all
properties and assets of the Company's resource recovery facility
located at North Newport, MN and all properties and assets of the
Company's resource recovery facility located at Elk River, MN if and
for so long as the grant of a security interest therein under the
Security Documents shall constitute or result in a breach, termination
or default under any service agreement with the applicable
municipalities in which such facilities reside; provided that (A) the
Company shall have used reasonable efforts to obtain the consent or
waiver of such municipalities to the grant of such security interests
and such consent or waiver shall not have been obtained and (B) such
properties and assets shall be an Excluded Asset only to the extent and
for so long as the consequences specified above shall result and shall
cease to be an Excluded Asset and shall become subject to the security
interest granted under the Security Documents, immediately and
automatically, at such time as such consequences shall no longer
result; (xii) any Account of NRG Power Marketing solely to the extent
that (x) such Account relates to the sale by NRG Power Marketing of
power or capacity that was purchased by NRG Power Marketing from a
Subsidiary that is an Excluded Project Subsidiary and (y) the grant of
a security interest in such Account under the Security Documents shall
constitute or result in a breach, termination or default under any
agreement or instrument governing the applicable Existing Non-Recourse
Indebtedness of such Subsidiary (as such agreement or instrument is in
effect on the date hereof); (xiii) the Deposit Account (and all cash
held therein not to exceed $37,000,000) which has been pledged to ANZ
Bank to cash collateralize a letter of credit issued by ANZ Bank and
the Deposit Account (and all cash held therein not to exceed $600,000)
which has been pledged to ▇▇▇▇▇▇ Bank to cash collateralize a letter of
credit issued by ▇▇▇▇▇▇ Bank; provided that each such Deposit Account
(and all cash held therein) shall automatically cease to be an Excluded
Asset from and after the date that is 60 days after the Closing Date,
(xiv) the Equity Interests in (x) either of the NEO Companies and (y)
any of Commonwealth Atlantic Power LLC, Hanover Energy Company,
Chickahominy River Energy Corp. or Commonwealth Atlantic Power Limited
Partnership, in the case of each of clause (x) and (y) to the extent
that a grant of a security interest in such Equity Interests under the
Security Documents shall constitute or result in a breach, termination
or default under any agreement or instrument governing the applicable
Existing Non-Recourse Indebtedness of their subsidiaries (as such
agreement or instrument is in effect on the date hereof); provided
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that the Equity Interests in the entities listed in clause (y) shall
automatically cease to be Excluded Assets from and after the date that
is 180 days after the Closing Date; (xv) the Deposit Account
established by the Company pursuant to the NRG Plan in respect of the
Consolidated Edison dispute and all cash held therein not to exceed (x)
$11,700,000 as of the Closing Date plus (y) any amounts required by the
NRG Plan to be deposited therein in respect of invoices owing to
Consolidated Edison; provided that such Deposit Account (and all cash
therein) shall automatically cease to be an Excluded Asset from and
after the date that such dispute is resolved and (xvi) the Xcel Cash
Account and all Xcel Cash therein.
"Excluded Foreign Subsidiaries" shall mean, at any time, any
Foreign Subsidiary that is (or is treated as) for United States federal
income tax purposes either (a) a corporation or (b) a pass-through
entity owned directly or indirectly by another Foreign Subsidiary that
is (or is treated as) a corporation; provided that (i) none of NRG
Mid-Atlantic, NRG Northeast or NRG South Central or any of their
respective subsidiaries may at any time be an Excluded Foreign
Subsidiary and (ii) notwithstanding the foregoing, the following
entities will be deemed to be "Excluded Foreign Subsidiaries": Sterling
Luxembourg (No. 4) S.a.r.l., Tosli Acquisition BV, NRGenerating
Luxembourg (No. 6) S.a.r.l., NRGenerating Holdings (No. 4) GmbH (only
for so long as such entity shall remain a direct subsidiary of NRG
International LLC and shall have no assets other than those owned on
the date hereof), NRGenerating Holdings (No. 23) BV, NRG Pacific
Corporate Services Pty Ltd., NRGenerating III (Gibraltar), NRGenerating
IV (Gibraltar), Coniti Holding BV (only for so long as such entity
shall own no assets other than the Equity Interests in Tosli
(Gibraltar) BV) and Tosli (Gibraltar) BV (only for so long as such
entity shall own no assets). The Excluded Foreign Subsidiaries on the
Closing Date are set forth on Schedule 1.01(a).
"Excluded Foreign Subsidiary Voting Stock" shall mean the
voting Equity Interests in any Excluded Foreign Subsidiary.
"Excluded Neo Companies" shall mean any of the Neo Companies
to the extent that the guarantee of the Note Borrower Obligations by
such company would constitute or result in a breach, termination or
default under any agreement or instrument governing the applicable
Existing Non-Recourse Indebtedness of such Neo Company (as such
agreement or instrument is in effect on the date hereof); provided that
such company shall cease to be an Excluded Neo Company and shall
automatically be subject to the guarantee in Section 2 to the extent
that such guarantee shall not constitute or result in such a breach,
termination or default.
"Excluded Perfection Assets" shall mean (a) any Specified
Assets Held for Sale if and only to the extent that the grant of a
security interest with respect thereto cannot be perfected by the
filing of a financing statement under the UCC of the relevant
jurisdiction or, in the case of any Specified Assets Held for Sale that
consist of Equity Interests, either the filing of a financing statement
under the UCC of the relevant jurisdiction or the possession of
certificates representing such Equity Interests; provided that any of
such Specified Assets Held for Sale that are not sold or otherwise
disposed of by the Company or any of the Subsidiaries to any person
other than the Company or any of the
8
Subsidiaries within 12 months of the Closing Date shall cease to be an
Excluded Perfection Asset; and (b) any other property or assets (other
than any Core Collateral except (i) the lease of Dunkirk Power LLC
relating to ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, (ii) the lease of Astoria
Gas Turbine Power LLC relating to the Consolidated Edison site located
at ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, (▇▇▇) the lease of Astoria Gas
Turbine Power LLC relating to the A-11 dock located at ▇▇-▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, (iv) the lease of NRG New Roads Holding LLC
relating to the turbine storage facilities located at GTS Duratek, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, (v) the lease of NRG New Roads Holding LLC
relating to the turbine storage facilities located at Liebherr American
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ and (vi) the lease of NRG New
Roads Holding LLC relating to the warehouse facilities for turbine
storage located at Tidewater Warehouses, Bay 3, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇) in which a security interest cannot be perfected by the
filing of a financing statement under the UCC of the relevant
jurisdiction or, in the case of Equity Interests, either the filing of
a financing statement under the UCC of the relevant jurisdiction or the
possession of certificates representing such Equity Interests; provided
that such property or assets shall not have a fair market value at any
time exceeding $2,000,000 (or, if such property or asset is a Deposit
Account or Securities Account, $250,000) individually or $20,000,000 in
the aggregate and, to the extent that the fair market value of any such
property or asset shall exceed $2,000,000 (or, if such property or
asset is a Deposit Account or Securities Account, $250,000)
individually, such property or asset shall cease to be an Excluded
Perfection Asset and, to the extent that the fair market value of such
property or assets shall exceed $20,000,000 in the aggregate at any
time, such property or assets shall cease to be Excluded Perfection
Assets to the extent of such excess fair market value.
"Excluded Project Subsidiaries" shall mean, at any time, (a)
any Subsidiary existing as of the Closing Date that is an obligor with
respect to Existing Non-Recourse Indebtedness outstanding at such time
and (b) any Subsidiary that is set forth on Schedule 1.01(b) as of the
Closing Date (so long as such Subsidiary does not become (and remain
for a period of 365 days or more) a Guarantor after the Closing Date)
or any Subsidiary that becomes a Subsidiary after the Closing Date that
is an obligor with respect to Additional Non-Recourse Indebtedness
outstanding at such time, in each case if and for so long as the grant
of a security interest in the property or assets of such Subsidiary or
the pledge of the Equity Interests of such Subsidiary, in each case in
favor of the Collateral Trustee for the benefit of the Secured Parties,
shall constitute or result in a breach, termination or default under
the agreement or instrument governing the applicable Non-Recourse
Indebtedness; provided that such Subsidiary shall be an Excluded
Project Subsidiary only to the extent that and for so long as the
requirements and consequences above shall exist; provided further that
none of NRG Mid-Atlantic, NRG Northeast or NRG South Central or any of
their respective subsidiaries (other than NRG Sterlington Power LLC,
Bayou Cove Peaking Power LLC and Big Cajun I Peaking Power LLC for so
long as such entities shall constitute Excluded Project Subsidiaries)
may at any time be an Excluded Project Subsidiary. The Excluded Project
Subsidiaries on the Closing Date are set forth on Schedule 1.01(b).
"Excluded Project Subsidiary Stock" shall mean the Equity
Interests in any Excluded Project Subsidiary.
9
"Existing Non-Recourse Indebtedness" shall mean secured
indebtedness for borrowed money outstanding as of the Closing Date of a
Subsidiary (or of Cadillac Renewable Energy LLC) existing as of the
Closing Date and any refinancing indebtedness in respect of such
indebtedness that is permitted by each of the Secured Debt Documents
that was incurred to finance the development, construction or
acquisition of or by, or repairs, improvements or additions to, fixed
or capital assets of such Subsidiary (including power generation
facilities); provided that, except as set forth on Schedule 1.01(c) to
the Credit Agreement, (a) such indebtedness is without recourse to the
Company or any other Subsidiary or to any property or assets of the
Company or any other Subsidiary (other than, in each such case, another
Subsidiary (x) which is the direct parent or a direct or indirect
Subsidiary of the Subsidiary that incurred or issued such indebtedness
(other than any such indebtedness constituting a guarantee) or (y) that
is a Subsidiary that itself has Non-Recourse Indebtedness (as defined
in the Credit Agreement) (other than any such indebtedness constituting
a guarantee) or is the direct parent or a direct or indirect Subsidiary
of a Subsidiary that itself has Non-Recourse Indebtedness (as defined
in the Credit Agreement) (other than any such indebtedness constituting
a guarantee)), (b) neither the Company nor any other Subsidiary (other
than another Subsidiary (x) which is the direct parent or a direct or
indirect Subsidiary of the Subsidiary that incurred or issued such
indebtedness (other than any such indebtedness constituting a
guarantee) or (y) that is a Subsidiary that itself has Non-Recourse
Indebtedness (as defined in the Credit Agreement) (other than any such
indebtedness constituting a guarantee) or is the direct parent or a
direct or indirect Subsidiary of a Subsidiary that itself has
Non-Recourse Indebtedness (as defined in the Credit Agreement) (other
than any such indebtedness constituting a guarantee)) provides credit
support of any kind (including any undertaking, agreement or instrument
that would constitute indebtedness) or is directly or indirectly liable
as a guarantor or otherwise in respect of such indebtedness or in
respect of the business or operations of the applicable Subsidiary that
is the obligor on such indebtedness or any of its subsidiaries (other
than (i) any such credit support or liability consisting of
reimbursement obligations in respect of letters of credit issued under,
and subject to the terms of, the Credit Agreement to support
obligations of such applicable subsidiary and (ii) any investments in
such applicable subsidiary made in accordance with each of the Secured
Debt Documents), (c) neither the Company nor any other Subsidiary or
Affiliate of any thereof constitutes the lender of such indebtedness,
(d) no default with respect to such Indebtedness (including any rights
that the holders of such Indebtedness may have to take enforcement
action against a Subsidiary that is not a Credit Agreement Guarantor)
would permit upon notice, lapse of time or both any holder of any other
Indebtedness of the Company or any Credit Agreement Guarantor (other
than indebtedness permitted pursuant to Section 6.01(a), (b) or (f) of
the Credit Agreement) to declare a default on such other indebtedness
or cause the payment of the indebtedness to be accelerated or payable
prior to its stated maturity and (e) the Liens securing such
indebtedness shall exist only on (i) the property and assets of any
Subsidiary that is not a Credit Agreement Guarantor and (ii) the Equity
Interests in any Subsidiary that is not a Credit Agreement Guarantor
(and shall not apply to any other property or assets of the Company or
any other Subsidiary that is a Credit Agreement Guarantor), except, in
the case of each of clauses (a) and (b) for (x) agreements of the
Company or any other Subsidiary to provide corporate or management
10
services or operation and maintenance services to such Subsidiary, (y)
guarantees of the Company or any other Subsidiary with respect to debt
service reserves established with respect to such Subsidiary to the
extent that such guarantee shall result in the immediate payment of
funds, pursuant to dividends or otherwise, in the amount of such
guarantee to the Company or such other Subsidiary and (z) contingent
obligations of the Company or any other Subsidiary to make capital
contributions to such Subsidiary, in the case of each of clauses (x),
(y) and (z), which are otherwise permitted under each of the Secured
Debt Documents.
"Foreign Subsidiary" shall mean any Subsidiary that is not a
Domestic Subsidiary.
"Future Debt Borrower Obligations" shall mean the Borrower
Obligations of the applicable Borrower under, and in respect of, the
applicable Secured Debt Documents governing such future Series of
Guaranteed Secured Debt.
"Future Debt Guarantors" shall mean the collective reference
to each Subsidiary that is or becomes a party hereto as provided
herein, except to the extent that any such Subsidiary is not required
to guarantee the Future Debt Borrower Obligations under such future
Series of Guaranteed Secured Debt pursuant to the terms of the Secured
Debt Documents that govern such Series of Guaranteed Secured Debt.
"Good Utility Practices" shall mean any of those practices,
methods, standards and acts (including the practices, methods,
standards and acts engaged in or approved by a significant portion of
the electric power generation industry in the United States) that, at a
particular time, in the exercise of reasonable judgment in light of the
facts known or that should have reasonably been expected to have been
known at the time a decision was made, could have reasonably been
expected to accomplish the desired result consistent with good business
practices, reliability, economy, safety and expedition, and which
practices, methods, standards and acts conform in all material respects
to applicable law, permits and other governmental approvals.
"Governmental Authority" shall mean the government of the
United States of America or any other nation, any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Grantors" shall mean (i) in the case of the Secured
Obligations under, or in respect of, the Credit Agreement, any
Specified Hedging Agreement permitted thereunder and the other Secured
Debt Documents relating thereto, the Company and the Credit Agreement
Guarantors, (ii) in the case of the Secured Obligations under, or in
respect of, the Indenture and the Notes and the other Secured Debt
Documents relating thereto, the Company and the Note Guarantors and
(iii) in the case of the Secured Obligations under, or in respect of,
the Secured Debt Documents governing any future Series of Guaranteed
Secured Debt, the Company and the applicable Future Debt Guarantors.
11
"Guaranteed Secured Debt Representative" shall mean each
Secured Debt Representative with respect to each Series of Guaranteed
Secured Debt.
"Guaranteed Secured Parties" shall mean any Secured Party who
is holding a Secured Obligation with respect to a Series of Guaranteed
Secured Debt (including any Guaranteed Secured Debt Representative and
the Collateral Trustee), at any time.
"Guarantor Obligations" shall mean with respect to any
Guarantor, all obligations and liabilities of such Guarantor which may
arise under or in connection with this Agreement (including Section 2)
or any other Secured Debt Document to which such Guarantor is a party,
in each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including
all fees and disbursements of counsel to any Secured Party that are
required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Secured Debt Document).
"Guarantors" shall mean, as applicable, the Future Debt
Guarantors, the Note Guarantors, the Revolving Loan Guarantors and the
Term Loan Guarantors.
"Immaterial Subsidiary" shall mean, at any time, any
Subsidiary that is designated by the Company as an "Immaterial
Subsidiary" if and for so long as such Subsidiary, together with all
other Immaterial Subsidiaries, has (i) total assets at such time not
exceeding 5% of the Company's consolidated assets as of the most recent
fiscal quarter for which balance sheet information is available and
(ii) total revenues and operating income for the most recent 12-month
period for which income statement information is available not
exceeding 5% of the Company's consolidated revenues and operating
income, respectively; provided that such Subsidiary shall be an
Immaterial Subsidiary only to the extent and for so long as all of the
above requirements are satisfied. The Immaterial Subsidiaries on the
Closing Date are set forth on Schedule 1.1(c).
"Indenture" shall have the meaning assigned to such term in
the preamble.
"Intellectual Property" shall mean the collective reference to
all rights, priorities and privileges relating to intellectual
property, whether arising under United States, multinational or foreign
laws or otherwise, including the Copyrights, the Copyright Licenses,
the Patents, the Patent Licenses, the Trademarks, the Trademark
Licenses, the Trade Secrets and the Trade Secret Licenses, and all
rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intercompany Note" shall mean any promissory note evidencing
loans made by any Grantor to the Company or any of the Subsidiaries.
"Insurance" shall mean (i) all insurance policies covering any
or all of the Collateral (regardless of whether the Collateral Trustee
is the loss payee thereof) and (ii) any key man life insurance
policies.
12
"Investment Property" shall mean the collective reference to
(i) all "investment property" as such term is defined in Section
9-102(a)(49) of the New York UCC (other than any Excluded Foreign
Subsidiary Voting Stock and any Excluded Project Subsidiary Stock, in
each case excluded from the definition of "Pledged Equity Interests")
including all Certificated Securities and Uncertificated Securities,
all Security Entitlements, all Securities Accounts, all Commodity
Contracts and all Commodity Accounts, (ii) security entitlements, in
the case of any United States Treasury book-entry securities, as
defined in 31 C.F.R. section 357.2, or, in the case of any United
States federal agency book-entry securities, as defined in the
corresponding United States federal regulations governing such
book-entry securities and (iii) whether or not otherwise constituting
"investment property", all Pledged Notes, all Pledged Equity Interests,
all Pledged Security Entitlements and all Pledged Commodity Contracts.
"Issuers" shall mean the collective reference to each issuer
of a Pledged Security.
"Lenders" shall have the meaning assigned to such term in the
preamble.
"Licensed Intellectual Property" shall have the meaning
assigned to such term in Section 4.11.
"Material Adverse Effect" shall mean a material adverse change
in or material adverse effect on (a) the condition (financial or
otherwise), results of operations, assets, liabilities or prospects of
the Company and the Subsidiaries, taken as a whole, or (b) the validity
or enforceability of any of the Secured Debt Documents or the rights
and remedies of the Collateral Trustee or any of the other Secured
Parties thereunder.
"Material Contract" shall mean any agreement, contract or
license or other arrangement (other than an agreement, contract or
arrangement representing indebtedness for borrowed money) to which any
Grantor is a party that is material to the Grantors and their
subsidiaries, taken as a whole, and for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to have a
Material Adverse Effect.
"Material Intellectual Property" shall have the meaning
assigned to such term in Section 4.11.
"Neo Companies" shall mean NEO Hackensack, LLC and NEO Prima
Deshecha LLC.
"New York UCC" shall mean the Uniform Commercial Code as from
time to time in effect in the State of New York.
"Non-Assignable Contract" shall mean any Contract that by its
terms purports to restrict or prevent the assignment thereof or
granting of a security interest therein (either by its terms or by any
federal or state statutory prohibition or otherwise, irrespective of
whether such prohibition or restriction is enforceable under Sections
9-407 through 409 of the New York UCC).
13
"Note Borrower Obligations" shall mean the Borrower
Obligations of the Company under, or in respect of, the Notes and the
Indenture, any Specified Hedging Agreements permitted thereunder and
each other Secured Debt Document relating thereto or in respect
thereof.
"Note Guarantors" shall mean the collective reference to each
Subsidiary (other than the Immaterial Subsidiaries and the Excluded Neo
Companies) that is or becomes a party hereto as provided herein.
"Notes" shall have the meaning assigned to such term in the
recitals.
"NRG Mid-Atlantic" shall mean NRG Mid-Atlantic Generating LLC,
a Delaware limited liability company that is a wholly owned Subsidiary.
"NRG Northeast" shall mean NRG Northeast Generating LLC, a
Delaware limited liability company that is a wholly owned Subsidiary.
"NRG Power Marketing" shall have the meaning assigned to such
term in the preamble.
"NRG South Central" shall mean NRG South Central Generating
LLC, a Delaware limited liability company that is a wholly owned
Subsidiary.
"Owned Intellectual Property" shall have the meaning assigned
to such term in Section 4.11.
"Patent License" shall mean all agreements, whether written or
oral, providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including any of the foregoing listed in Schedule 4.11 (as such
schedule may be amended or supplemented from time to time).
"Patents" shall mean (i) all letters patent of the United
States, any other country, union of countries or any political
subdivision of any of the foregoing, all reissues and extensions
thereof and all goodwill associated therewith, including any of the
foregoing listed in Schedule 4.11 (as such schedule may be amended or
supplemented from time to time), (ii) all applications for letters
patent of the United States or any other country or union of countries
or any political subdivision of any of the foregoing and all divisions,
continuations and continuations-in-part thereof, including any of the
foregoing listed in Schedule 4.11 (as such schedule may be amended or
supplemented from time to time), (iii) all rights to, and to obtain,
any reissues or extensions of the foregoing and (iv) all proceeds of
the foregoing, including licenses, royalties, income, payments, claims,
damages and proceeds of suit.
"person" shall mean any natural person, corporation, trust,
business trust, joint venture, joint stock company, association,
company, limited liability company, partnership, Governmental Authority
or other entity.
"Plans" shall have the meaning assigned to such term in the
Credit Agreement.
14
"Pledged Accounts" shall have the meaning assigned to such
term in Section 5.13.
"Pledged Alternative Equity Interests" shall mean all
interests of any Grantor in participation or other interests in any
equity or profits of any business entity and the certificates, if any,
representing such interests and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
interests and any other warrant, right or option to acquire any of the
foregoing; provided, however, that Pledged Alternative Equity Interests
shall not include any Pledged Stock, Pledged Partnership Interests,
Pledged LLC Interests or Pledged Trust Interests.
"Pledged Commodity Contracts" shall mean all commodity
contracts listed on Schedule 4.8(c) (as such schedule may be amended or
supplemented from time to time) and all other commodity contracts to
which any Grantor is party from time to time.
"Pledged Debt Securities" shall mean all debt securities now
owned or hereafter acquired by any Grantor, including the debt
securities listed on Schedule 4.8(b) (as such schedule may be amended
or supplemented from time to time), together with any other
certificates, options, rights or security entitlements of any nature
whatsoever in respect of the debt securities of any person that may be
issued or granted to, or held by, any Grantor while this Agreement is
in effect.
"Pledged Equity Interests" shall mean all Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust
Interests and Pledged Alternative Equity Interests.
"Pledged LLC Interests" shall mean all interests of any
Grantor now owned or hereafter acquired in any limited liability
company (other than those interests described in clauses (iii), (v),
(vi), (vii), (viii) and (ix) of the definition of "Excluded Assets"),
including all limited liability company interests listed on Schedule
4.8(a) under the heading "Pledged LLC Interests" (as such schedule may
be amended or supplemented from time to time) and the certificates, if
any, representing such limited liability company interests and any
interest of such Grantor on the books and records of such limited
liability company and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability
company interests and any other warrant, right or option to acquire any
of the foregoing.
"Pledged NEO Notes" shall mean the promissory notes listed
under subsection VI of Schedule 4.8(a) hereto as in effect on the date
hereof.
"Pledged Notes" shall mean all promissory notes now owned or
hereafter acquired by any Grantor including those listed on Schedule
4.8(b) (as such schedule may be amended or supplemented from time to
time) and all Intercompany Notes at any time issued to or held by any
Grantor (other than promissory notes in an aggregate principal
15
amount not to exceed $250,000 at any time outstanding issued in
connection with extensions of trade credit by any Grantor in the
ordinary course of business).
"Pledged Partnership Interests" shall mean all interests of
any Grantor now owned or hereafter acquired in any general partnership,
limited partnership, limited liability partnership or other partnership
(other than those interests described in clauses (iii), (v), (vi),
(vii), (viii) and (ix) of the definition of "Excluded Assets"),
including all partnership interests listed on Schedule 4.8(a) under the
heading "Pledged Partnership Interests" (as such schedule may be
amended or supplemented from time to time) and the certificates, if
any, representing such partnership interests and any interest of such
Grantor on the books and records of such partnership and all dividends,
distributions, cash, warrants, rights, options, instruments, securities
and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of
such partnership interests and any other warrant, right or option to
acquire any of the foregoing.
"Pledged Securities" shall mean the collective reference to
the Pledged Debt Securities, the Pledged Notes and the Pledged Equity
Interests.
"Pledged Security Entitlements" shall mean all security
entitlements with respect to the financial assets listed on Schedule
4.8(c) (as such schedule may be amended or supplemented from time to
time) and all other security entitlements of any Grantor.
"Pledged Stock" shall mean all shares of capital stock now
owned or hereafter acquired by any Grantor (other than those shares of
capital stock described in clauses (iii), (v), (vi), (vii), (viii) and
(ix) of the definition of "Excluded Assets"), including all shares of
capital stock listed on Schedule 4.8(a) under the heading "Pledged
Stock" (as such schedule may be amended or supplemented from time to
time) and the certificates, if any, representing such shares and any
interest of such Grantor in the entries on the books of the issuer of
such shares and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such shares and any other warrant,
right or option to acquire any of the foregoing; provided, however,
that in no event shall more than 66% of the total outstanding Excluded
Foreign Subsidiary Voting Stock or any Excluded Project Subsidiary
Stock be required to be pledged hereunder.
"Pledged Trust Interests" shall mean all interests of any
Grantor now owned or hereafter acquired in a Delaware business trust or
other trust (other than those interests described in clauses (iii),
(v), (vi), (vii), (viii) and (ix) of the definition of "Excluded
Assets"), including all trust interests listed on Schedule 4.8(a) under
the heading "Pledged Trust Interests" (as such schedule may be amended
or supplemented from time to time) and the certificates, if any,
representing such trust interests and any interest of such Grantor on
the books and records of such trust or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities
and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any
16
or all of such trust interests and any other warrant, right or option
to acquire any of the foregoing.
"Proceeds" shall mean all "proceeds" as such term is defined
in Section 9-102(a)(64) of the New York UCC and, in any event, shall
include all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Recapitalization" shall have the meaning assigned to such
term in the Credit Agreement.
"Receivable" shall mean all Accounts and any other any right
to payment for goods or other property sold, leased, licensed or
otherwise disposed of or for services rendered, whether or not such
right is evidenced by an Instrument or Chattel Paper or classified as a
Payment Intangible and whether or not it has been earned by
performance. References herein to Receivables shall include any
Supporting Obligation or collateral securing such Receivable.
"Requirement of Law" shall mean as to any person, the
certificate of incorporation and by-laws or other organizational or
governing documents of such person and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
person or any of its property or to which such person or any of its
property is subject, or which pertains to or governs the legality,
validity, perfection, performance or enforcement of the Secured Debt
Documents or the Liens thereunder.
"Revolving Loan Borrower Obligations" shall mean the Borrower
Obligations of the Credit Agreement Borrowers under, or in respect of,
the Credit Agreement, any Specified Hedging Agreements permitted
thereunder and each other Secured Debt Document relating thereto,
including in respect of the Revolving Loans, Revolving Credit
Commitments and Revolving Letters of Credit (each as defined in the
Credit Agreement).
"Revolving Loan Guarantors" shall mean the collective
reference to each Subsidiary (other than NRG Power Marketing) that is
or becomes a party hereto as provided herein.
"Secured Obligations" shall mean (i) in the case of any
Borrower, the applicable Borrower Obligations and (ii) in the case of
each Guarantor, the applicable Borrower Obligations and its Guarantor
Obligations.
"Secured Parties" shall mean any person who is holding a
Secured Obligation (including any Secured Debt Representative and the
Collateral Trustee) at any time.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series of Guaranteed Secured Debt" shall mean each Series of
Secured Debt that pursuant to the terms of the Secured Debt Documents
governing such Series of Secured Debt is guaranteed by the Guarantors
pursuant to Section 2 hereof and shall include, in
17
the case of the Credit Agreement and any other Credit Facility the
Indebtedness under which constitutes Priority Lien Debt, any
obligations in respect of Specified Hedging Agreements that are
permitted by the terms of the Priority Lien Documents relating to the
Credit Agreement or such other Credit Facilities to be secured equally
and ratably with the Priority Lien Obligations thereunder.
"Specified Hedging Agreement" shall have the meaning assigned
to such term in the Credit Agreement.
"Subsidiary" shall mean any subsidiary of the Company.
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, limited
liability company, association or other entity (a) of which securities
or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is
being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Term Loan Borrower Obligations" shall mean the Borrower
Obligations of the Company under, or in respect of, the Credit
Agreement, and Specified Hedging Agreements permitted thereunder and
each other Secured Debt Document relating thereto, including in respect
of the Term Loans, Credit-Linked Deposits, Term Loan Commitments and
Funded Letters of Credit (each as defined in the Credit Agreement).
"Term Loan Guarantors" shall mean the collective reference to
each Subsidiary that is or becomes a party hereto as provided herein.
"Trademark License" shall mean any agreement, whether written
or oral, providing for the grant by or to any Grantor of any right in,
to or under any Trademark, including any of the foregoing listed in
Schedule 4.11 (as such schedule may be amended or supplemented from
time to time).
"Trademarks" shall mean (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country,
union of countries, or any political subdivision of any of the
foregoing, or otherwise, and all common-law rights related thereto,
including any of the foregoing listed in Schedule 4.11 (as such
schedule may be amended or supplemented from time to time), (ii) the
right to, and to obtain, all renewals thereof, (iii) the goodwill of
the business symbolized by the foregoing, (iv) other source or business
identifiers, designs and general intangibles of a like nature and (v)
the right to ▇▇▇ for past, present and future infringements or dilution
of any of the foregoing or for any injury to goodwill, and all
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proceeds of the foregoing, including royalties, income, payments,
claims, damages and proceeds of suit.
"Trade Secret License" shall mean any agreement, whether
written or oral, providing for the grant by or to any Grantor of any
right in, to or under any Trade Secret, including any of the foregoing
listed in Schedule 4.11 (as such schedule may be amended or
supplemented from time to time).
"Trade Secrets" shall mean all trade secrets and all other
confidential or proprietary information and know-how (all of the
foregoing being collectively called a "Trade Secret"), whether or not
reduced to a writing or other tangible form, including all documents
and things embodying, incorporating, or describing such Trade Secret,
the right to ▇▇▇ for past, present and future infringements of any
Trade Secret and all proceeds of the foregoing, including royalties,
income, payments, claims, damages and proceeds of suit.
"Trustee" shall have the meaning assigned to such term in the
preamble.
1.2. Other Definitional Provisions. (a)The words "hereof",
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to the
specific provisions of this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to the property or assets such Grantor has granted as Collateral or the relevant
part thereof.
(d) The words "include", "includes" and "including", and
words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase "without limitation".
(e) All references to the Lenders herein shall, where
appropriate, include any Lender, the Administrative Agent, the Collateral Agent,
any Arranger or the Syndication Agent or, in each case, any Affiliate thereof
that is party to a Specified Hedging Agreement.
SECTION 2. GUARANTEE
2.1. Guarantee.
(a) Each of the Revolving Loan Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Secured Parties identified (and defined
in) in the Credit Agreement and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by each
Credit Agreement Borrower when due (whether at the stated maturity, by
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acceleration or otherwise) of the Revolving Loan Borrower Obligations. Each of
the Term Loan Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Secured Parties identified (and defined in) in the Credit Agreement and
their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Term Loan Borrower Obligations.
Each of the Note Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Trustee, for the ratable benefit of each holder
of Notes (and the Trustee) and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Company when due (whether at the stated maturity, by acceleration or otherwise)
of the Note Borrower Obligations. Each of the Future Debt Guarantors hereby,
jointly and severally, unconditionally and irrevocably, guarantees to the
applicable future Guaranteed Secured Debt Representative, for the ratable
benefit of the holders of the applicable obligations (and the applicable future
Guaranteed Secured Debt Representatives) thereunder and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the applicable Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the applicable Future Debt Borrower
Obligations. Notwithstanding anything to the contrary contained herein, the
guarantee by any of the Neo Companies of the Revolving Loan Borrower Obligations
and the Term Loan Borrower Obligations and, if applicable, any Future Debt
Borrower Obligations shall be limited to the extent that such guarantee does not
constitute or result in a breach, termination or default under any agreement or
instrument governing the applicable Existing Non-Recourse Indebtedness of such
Neo Company (as such agreement or instrument is in effect on the date hereof).
(b) If and to the extent required in order for the
Guarantor Obligations of any Guarantor to be enforceable under applicable
federal, state and other laws relating to the insolvency of debtors, the maximum
liability of such Guarantor hereunder shall be limited to the greatest amount
which can lawfully be guaranteed by such Guarantor under such laws, after giving
effect to any rights of contribution, reimbursement and subrogation arising
under Section 2.2. Each Guarantor acknowledges and agrees that, to the extent
not prohibited by applicable law, (i) such Guarantor (as opposed to its
creditors, representatives of creditors or bankruptcy trustee, including such
Guarantor in its capacity as debtor in possession exercising any powers of a
bankruptcy trustee) has no personal right under such laws to reduce, or request
any judicial relief that has the effect of reducing, the amount of its liability
under this Agreement, (ii) such Guarantor (as opposed to its creditors,
representatives of creditors or bankruptcy trustee, including such Guarantor in
its capacity as debtor in possession exercising any powers of a bankruptcy
trustee) has no personal right to enforce the limitation set forth in this
Section 2.1(b) or to reduce, or request judicial relief reducing, the amount of
its liability under this Agreement and (iii) the limitation set forth in this
Section 2.1(b) may be enforced only to the extent required under such laws in
order for the obligations of such Guarantor under this Agreement to be
enforceable under such laws and only by or for the benefit of a creditor,
representative of creditors or bankruptcy trustee of such Guarantor or other
person entitled, under such laws, to enforce the provisions thereof.
(c) Each Guarantor agrees that the applicable Borrower
Obligations may at any time and from time to time be incurred or permitted in an
amount exceeding the maximum
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liability of such Guarantor under Section 2.1(b) without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of any Secured
Party hereunder.
(d) The guarantee contained in this Section 2 shall
remain in full force and effect until all the Borrower Obligations and the
obligations of each Guarantor under the guarantee contained in this Section 2
shall have been satisfied by payment in full in cash (other than indemnification
and other contingent obligations not then due and payable), no letter of credit
shall be outstanding and all commitments to extend credit under any Secured Debt
Documents shall have been terminated or expired, notwithstanding that from time
to time during the term of the Secured Debt Documents any Borrower may be free
from any or all of its Borrower Obligations.
(e) No payment made by any applicable Borrower, any of
the Guarantors, any other guarantor or any other person or received or collected
by any Secured Party from any applicable Borrower, any of the Guarantors, any
other guarantor or any other person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full (other than indemnification and other contingent obligations not then due
and payable), no letter of credit shall be outstanding and all commitments to
extend credit under any Secured Debt Documents shall have been terminated or
expired.
2.2. Rights of Reimbursement, Contribution and
Subrogation. In case any payment is made on account of the Secured Obligations
by any Grantor or is received or collected on account of the Secured Obligations
from any Grantor or its property:
(a) If such payment is made by the applicable Borrower or
from its respective property, then, if and to the extent such payment is made on
account of Secured Obligations arising from or relating to a loan or other
extension of credit made to such Borrower or a letter of credit issued for the
account of such Borrower, such Borrower shall not be entitled (i) to demand or
enforce reimbursement or contribution in respect of such payment from any other
Grantor or (ii) to be subrogated to any claim, interest, right or remedy of any
Secured Party against any other person, including any other Grantor or its
property; and
(b) If such payment is made by a Guarantor or from its
property, such Guarantor shall be entitled, subject to and upon payment in full
of the Secured Obligations (other than indemnification and other contingent
obligations not then due and payable), (i) to demand and enforce reimbursement
for the full amount of such payment from the applicable Borrower and (ii) to
demand and enforce contribution in respect of such payment from each other
applicable Guarantor that has not paid its fair share of such payment, as
necessary to ensure that (after giving effect to any enforcement of
reimbursement rights provided hereby) each applicable Guarantor pays its fair
share of the unreimbursed portion of such payment. For this purpose, the fair
share of each Guarantor as to any unreimbursed payment shall be determined based
on an
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equitable apportionment of such unreimbursed payment among all applicable
Guarantors based on the relative value of their assets and any other equitable
considerations deemed appropriate by a court of competent jurisdiction.
(c) If and whenever (after payment in full of the Secured
Obligations (other than indemnification and other contingent obligations not
then due and payable) and delivery of notification thereof to the Collateral
Trustee in accordance with Article 4 of the Collateral Trust Agreement) any
right of reimbursement or contribution becomes enforceable by any Grantor
against any other Grantor under Sections 2.2(a) or 2.2(b), such Grantor shall be
entitled, subject to and upon payment in full of the Secured Obligations (other
than indemnification and other contingent obligations not then due and payable),
to be subrogated (equally and ratably with all other Grantors entitled to
reimbursement or contribution from any other Grantor as set forth in this
Section 2.2) to any security interest that may then be held by the Collateral
Trustee upon any Collateral granted to it in this Agreement. Such right of
subrogation shall be enforceable solely against the Grantors, and not against
the Collateral Trustee or any other Secured Party, and neither the Collateral
Trustee nor any other Secured Party shall have any duty whatsoever to warrant,
ensure or protect any such right of subrogation or to obtain, perfect, maintain,
hold, enforce or retain any Collateral for any purpose related to any such right
of subrogation. If subrogation is demanded by any Grantor, then (after payment
in full in cash of the Secured Obligations and, if applicable, the termination
of all commitments to extend credit thereunder, the discharge or cash
collateralization (at 100% of the aggregate undrawn amount) of all outstanding
letters of credit issued thereunder and the return of any Credit-Linked Deposit
(or similar deposit) made thereunder) the Collateral Trustee shall deliver to
the Grantors making such demand, or to a representative of such Grantors or of
the Grantors generally, an instrument reasonably satisfactory to the Collateral
Trustee transferring, on a quitclaim basis without any recourse, representation,
warranty or obligation whatsoever, whatever security interest the Collateral
Trustee then may hold in whatever Collateral may then exist that was not
previously released or disposed of by the Collateral Trustee (provided that such
Grantors shall prepare and deliver the initial draft of such instrument to the
Collateral Trustee).
(d) All rights and claims arising under this Section 2.2
or based upon or relating to any other right of reimbursement, indemnification,
contribution or subrogation that may at any time arise or exist in favor of any
Grantor as to any payment on account of the Secured Obligations made by it or
received or collected from its property shall be fully subordinated in all
respects to the prior payment in full in cash of all of the Secured Obligations
(other than indemnification and other contingent obligations not then due and
payable) and, if applicable, the termination of all commitments to extend credit
thereunder, the discharge or cash collateralization (at 100% of the aggregate
undrawn amount) of all outstanding letters of credit issued thereunder and the
return of any Credit-Linked Deposit (or similar deposit) made thereunder. Until
payment in full in cash of the Secured Obligations and, if applicable, the
termination of all commitments to extend credit thereunder, the discharge or
cash collateralization (at 100% of the aggregate undrawn amount) of all
outstanding letters of credit issued thereunder and the return of any
Credit-Linked Deposit (or similar deposit) made thereunder, no Grantor shall
demand or receive any collateral security, payment or distribution whatsoever
(whether in cash, property or securities or otherwise) on account of any such
right or claim. If any such payment or distribution is made or becomes available
to any Grantor in any bankruptcy case or receivership, insolvency or liquidation
proceeding, such payment or
22
distribution shall be delivered by the person making such payment or
distribution directly to the applicable Guaranteed Secured Debt Representative,
for application to the payment of the Secured Obligations. If any such payment
or distribution is received by any Grantor, it shall be held by such Grantor in
trust, as trustee of an express trust for the benefit of the Guaranteed Secured
Parties, and shall forthwith be transferred and delivered by such Grantor to the
Collateral Trustee, in the exact form received and, if necessary, duly endorsed.
(e) The obligations of the Grantors under the Secured
Debt Documents, including their liability for the Secured Obligations and the
enforceability of the security interests granted thereby, are not contingent
upon the validity, legality, enforceability, collectibility or sufficiency of
any right of reimbursement, contribution or subrogation arising under this
Section 2.2. The invalidity, insufficiency, unenforceability or uncollectibility
of any such right shall not in any respect diminish, affect or impair any such
obligation or any other claim, interest, right or remedy at any time held by the
Collateral Trustee or any other Secured Party against any Grantor or its
property. The Secured Parties make no representations or warranties in respect
of any such right and shall have no duty to assure, protect, enforce or ensure
any such right or otherwise relating to any such right.
(f) Each Grantor reserves any and all other rights of
reimbursement, contribution or subrogation at any time available to it as
against any other Grantor, but (i) the exercise and enforcement of such rights
shall be subject to Section 2.2(d) and (ii) neither the Collateral Trustee nor
any other Secured Party shall ever have any duty or liability whatsoever in
respect of any such right, except as provided in Section 2.2(c).
2.3. Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations made by any Guaranteed Secured Debt Representative or any
other Guaranteed Secured Party may be rescinded by such Guaranteed Secured Debt
Representative or such other Guaranteed Secured Party and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, increased, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by any Guaranteed
Secured Debt Representative or any other Guaranteed Secured Party, and the other
Secured Debt Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the requisite parties thereto may deem advisable from time
to time, and any collateral security, guarantee or right of offset at any time
held by any Secured Party for the payment of the Borrower Obligations may be
sold, exchanged, waived, surrendered or released. No Guaranteed Secured Debt
Representative or any other Guaranteed Secured Party shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
2.4. Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and
23
notice of or proof of reliance by any Guaranteed Secured Debt Representative or
any other Guaranteed Secured Party upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 2; and all dealings between the
applicable Borrower and any of the Guarantors, on the one hand, and the
Guaranteed Secured Debt Representative and the other Guaranteed Secured Parties,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the applicable Borrower or any of the
Guarantors with respect to the Borrower Obligations. Each Guarantor understands
and agrees that the guarantee contained in this Section 2 shall be construed as
a continuing, absolute and unconditional guarantee of payment and performance
without regard to (a) the validity or enforceability of any Secured Debt
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by any Guaranteed Secured Debt Representative or any
other Guaranteed Secured Party, (b) any defense, set-off or counterclaim (other
than a defense of payment or performance hereunder) which may at any time be
available to or be asserted by the applicable Borrower or any other person
against any Guaranteed Secured Debt Representative or any other Guaranteed
Secured Party, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the applicable Borrower or such Guarantor) which constitutes,
or might be construed to constitute, an equitable or legal discharge of the
applicable Borrower for the Borrower Obligations, or of such Guarantor under the
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, any Guaranteed Secured Debt Representative or
any other Guaranteed Secured Party may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the applicable Borrower, any other Guarantor or any other person or
against any collateral security or guarantee for the Borrower Obligations or any
right of offset with respect thereto, and any failure by any Guaranteed Secured
Party to make any such demand, to pursue such other rights or remedies or to
collect any payments from the applicable Borrower, any other Guarantor or any
other person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the applicable Borrower,
any other Guarantor or any other person or any such collateral security,
guarantee or right of offset, shall not relieve any Guarantor of any obligation
or liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of any Guaranteed
Secured Debt Representative or any other Guaranteed Secured Party against any
Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
2.5. Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
is rescinded or must otherwise be restored or returned by any Guaranteed Secured
Debt Representative or any other Guaranteed Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the applicable
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator
24
of, or trustee or similar officer for, the applicable Borrower or any Guarantor
or any substantial part of its property, or otherwise, all as though such
payments had not been made.
2.6. Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to each Guaranteed Secured Debt Representative
without set-off or counterclaim in dollars in immediately available funds at the
office of such Guaranteed Secured Debt Representative specified in the
applicable Secured Debt Documents as the office for payments thereunder.
SECTION 3. GRANT OF SECURITY INTEREST;
CONTINUING LIABILITY UNDER COLLATERAL
(a) Each Grantor hereby (i) assigns and transfers to the
Collateral Trustee, and hereby grants to the Collateral Trustee, for the ratable
benefit of the Priority Lien Secured Parties, a lien on and, except as set forth
in Section 4.2 or 4.3, a first priority security interest in all of the personal
property of such Grantor, including the following property, in each case,
wherever located and now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Priority Lien
Obligations and (ii) assigns and transfers to the Collateral Trustee, and hereby
grants to the Collateral Trustee, for the ratable benefit of the Parity Lien
Secured Parties, a lien on and, except as set forth in Section 4.2 or 4.3, a
second priority security interest in all of the Collateral, as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Parity Lien
Obligations:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Collateral Accounts and all Collateral
Account Funds;
(iv) all Commercial Tort Claims from time to time
specifically described on Schedule 4.13;
(v) all Contracts;
(vi) all Deposit Accounts;
(vii) all Documents;
(viii) all Equipment;
(ix) all Fixtures;
(x) all General Intangibles;
(xi) all Goods;
25
(xii) all Instruments;
(xiii) all Insurance;
(xiv) all Intellectual Property;
(xv) all Inventory;
(xvi) all Investment Property;
(xvii) all Letters of Credit and Letter of Credit
Rights;
(xviii) all Money;
(xix) all Securities Accounts;
(xx) all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software and
similar items that at any time pertain to or evidence or contain
information relating to any of the Collateral or are otherwise
necessary or helpful in the collection thereof or realization
thereupon; and
(xxi) to the extent not otherwise included, all
other property, whether tangible or intangible, of the Grantor and all
Proceeds and products accessions, rents and profits of any and all of
the foregoing and all collateral security, Supporting Obligations and
guarantees given by any person with respect to any of the foregoing;
provided, however, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not, at any time, constitute a grant of a
security interest in any property that is, at such time, an Excluded Asset. The
Grantor and the Collateral Trustee hereby acknowledge and agree that the
security interest created hereby in the Collateral is not, in and of itself, to
be construed as a grant of a fee interest in (as opposed to a security interest
in) any Copyright, Trademark, Patent, Copyright License, Patent License,
Trademark License, Trade Secret or Trade Secret License.
This Agreement, and the security interests and Liens granted
and created herein, secures the payment and performance of all Secured
Obligations now or hereafter in effect, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest
(including any interest accruing at the then applicable rate provided in any
applicable Secured Debt Document after the maturity of the Indebtedness
thereunder and reimbursement obligations therein and interest accruing at the
then applicable rate provided in any applicable Secured Debt Document after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to any Grantor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
fees, premiums, penalties, indemnifications, expenses or otherwise, and
including all amounts that constitute part of the Secured Obligations and would
be owed by any Grantor but for the fact that they are unenforceable or not
allowed due to a pending Bankruptcy Case or Insolvency
26
Proceeding. Without limiting the generality of the foregoing, it is the intent
of the parties that (i) the Liens securing the Parity Lien Obligations are
subject and subordinate to the Liens securing the Priority Lien Obligations and
(ii) this Agreement creates two separate and distinct Liens: the first priority
Lien securing the payment and performance of the Priority Lien Obligations and
the second priority Lien securing the payment and performance of the Parity Lien
Obligations, in each case as may be more particularly set forth in the
Collateral Trust Agreement. For purposes of perfecting the security interests
hereunder, all property in the possession or control of the Collateral Trustee
will be held by the Collateral Trustee both as agent for the benefit of the
Priority Lien Secured Parties and as agent for the benefit of the Parity Lien
Secured Parties, subject to the terms of the Collateral Trust Agreement.
(b) Notwithstanding anything herein to the contrary, (i)
each Grantor shall remain liable for all obligations under and in respect of the
Collateral and nothing contained herein is intended or shall be a delegation of
duties to the Collateral Trustee or any other Secured Party, (ii) each Grantor
shall remain liable under each of the agreements included in the Collateral,
including any Receivables, any Contracts and any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Collateral Trustee nor any
other Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related hereto nor shall the Collateral Trustee nor any other Secured Party have
any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or
enforce any rights under any agreement included in the Collateral, including any
agreements relating to any Receivables, any Contracts, or any agreements
relating to Pledged Partnership Interests or Pledged LLC Interests and (iii) the
exercise by the Collateral Trustee of any of its rights hereunder shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral, including any agreements relating to
any Receivables, any Contracts and any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the applicable Secured Parties to enter into the
Secured Debt Documents and to induce the applicable Secured Parties to make
their respective extensions of credit to the applicable Grantor or Grantors
thereunder, each Grantor hereby represents and warrants to the Collateral
Trustee and each other applicable Secured Party that:
4.1. Representations in Secured Debt Documents. In the
case of each Grantor, the representations and warranties set forth in each
credit agreement and indenture constituting a Secured Debt Document as they
relate to such Grantor or to the Secured Debt Documents to which such Grantor is
a party, each of which is hereby incorporated herein by reference, are true and
correct in all material respects, except for representations and warranties
expressly stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date, and the Collateral Trustee and the other
Secured Parties shall be entitled to rely on each of them as if they were fully
set forth herein (to the extent that such Secured Parties are parties to or have
the benefit of the Secured Debt Document in which such representatives and
warranties are contained); provided that each
27
reference in each such representation and warranty to a person's knowledge
shall, for the purposes of this Section 4.l, be deemed to be a reference to such
Grantor's knowledge.
4.2. Title; No Other Liens. Such Grantor owns each item of
the Collateral in which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder free and clear of
any and all Liens or claims, including Liens arising as a result of such Grantor
becoming bound (as a result of merger or otherwise) as grantor under a security
agreement entered into by another person, except for Liens expressly permitted
to exist on the Collateral by each of the Secured Debt Documents. No financing
statement, mortgage or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Collateral Trustee, for the benefit of the Secured
Parties, pursuant to this Agreement or as are expressly permitted by each of the
Secured Debt Documents.
4.3. Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) upon completion of the filings
and other actions specified on Schedule 4.3(a) (all of which, in the case of all
filings and other documents listed on such schedule, have been delivered to the
Collateral Trustee in duly completed and duly executed form, as applicable, and
may be filed by or on behalf of the Collateral Trustee at any time) and payment
of all filing fees, will constitute valid, fully-perfected security interests in
all of the Collateral (other than the Excluded Perfection Assets) in favor of
the Collateral Trustee, for the benefit of the Secured Parties, as collateral
security for such Grantor's Secured Obligations, enforceable in accordance with
the terms hereof and of the Collateral Trust Agreement, (b) are, to the extent
that such Liens have been granted to the Collateral Trustee for the benefit of
the Priority Lien Secured Parties, prior to all other Liens on the Collateral
except for Liens expressly permitted by each of the Secured Debt Documents and
(c) are, to the extent that such Liens have been granted to the Collateral
Trustee for the benefit of the Parity Lien Secured Parties, prior to all other
Liens on the Collateral except for the prior Liens for the benefit of the
Priority Lien Secured Parties and for Liens expressly permitted by each of the
Secured Debt Documents. Without limiting the foregoing, each Grantor has taken
all actions necessary or desirable, including those specified in Section 5.2,
to: (i) establish the Collateral Trustee's "control" (within the meanings of
Sections 8-106 and 9-106 of the New York UCC) over any portion of the Investment
Property constituting Certificated Securities, Uncertificated Securities,
Securities Accounts, Securities Entitlements or Commodity Accounts, (ii)
establish the Collateral Trustee's "control" (within the meaning of Section
9-104 of the New York UCC) over all Deposit Accounts, (iii) establish the
Collateral Trustee's "control" (within the meaning of Section 9-107 of the New
York UCC) over all Letter of Credit Rights, (iv) establish the Collateral
Trustee's control (within the meaning of Section 9-105 of the New York UCC) over
all Electronic Chattel Paper and (v) establish the Collateral Agent's "control"
(within the meaning of Section 16 of the Uniform Electronic Transaction Act as
in effect in the applicable jurisdiction (the "UETA")) over all "transferable
records" (as defined in UETA).
4.4. Name; Jurisdiction of Organization, etc. On the date
hereof, such Grantor's exact legal name (as indicated on the public record of
such Grantor's jurisdiction of formation or organization), jurisdiction of
organization, organizational identification number, if any, and the location of
such Grantor's chief executive office or sole place of business are specified on
Schedule 4.4. Each Grantor is organized solely under the law of the jurisdiction
so specified and has not filed any certificates of domestication, transfer or
continuance in any other
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jurisdiction. Except as specified on Schedule 4.4, (i) no such Grantor has
changed its name, jurisdiction of organization, chief executive office or sole
place of business within the past five years, (ii) no such Grantor has within
the last five years become bound (whether as a result of merger or otherwise) as
a grantor under a security agreement entered into by another person which has
not heretofore been terminated and (iii) no such Grantor has changed its
corporate structure in any way (e.g. by merger, consolidation, change in
corporate form or otherwise) within the past two years.
4.5. Inventory and Equipment. (a) On the date hereof, the
Inventory and the Equipment (other than mobile goods) that is included in the
Collateral are kept at the locations listed on Schedule 4.5(a). Within the two
years preceding execution of this agreement, such Grantor has not changed the
location of a material portion of its Equipment and Inventory that is included
in the Collateral except as otherwise disclosed on Schedule 4.5(a).
(b) None of the Inventory or Equipment that is included
in the Collateral having a book value (net of depreciation) in excess of
$250,000 is in the possession of an issuer of a negotiable document (as defined
in Section 7-104 of the New York UCC) therefor or, except as set forth on
Schedule 4.5(b), is otherwise in the possession of any bailee or warehouseman.
4.6. Condition and Maintenance of Equipment. The Equipment
of such Grantor that is included in the Collateral is in good repair, working
order and condition, reasonable wear and tear excepted. Each Grantor shall cause
its Equipment that is included in the Collateral to be maintained and preserved
in good repair, working order and condition, reasonable wear and tear excepted,
and shall as quickly as commercially practicable make or cause to be made all
repairs, replacements and other improvements which are necessary or appropriate
in the conduct of such Grantor's business in its prudent business judgment.
4.7. Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
4.8. Investment Property. (a) Schedule 4.8(a) (as such
schedule may be amended or supplemented from time to time) sets forth under the
headings "Pledged Stock," "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," respectively, all of the Pledged
Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust
Interests owned by any Grantor and such Pledged Equity Interests constitute the
percentage of issued and outstanding shares of stock, percentage of membership
interests, percentage of partnership interests or percentage of beneficial
interest of the respective issuers thereof indicated on such Schedule. Schedule
4.8(b) (as such schedule may be amended or supplemented from time to time) sets
forth under the heading "Pledged Debt Securities" or "Pledged Notes" all of the
Pledged Debt Securities and Pledged Notes (if any) owned by any Grantor and each
of such Pledged Debt Securities and Pledged Notes (if any) has been duly
authorized, authenticated or issued and delivered and is the legal, valid and
binding obligation of the issuers thereof enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principals of equity, regardless of whether considered in a proceeding in equity
or at law, and is not in default and constitutes all of the issued and
outstanding inter-company indebtedness evidenced by an instrument or
certificated security of the respective issuers thereof
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owing to such Grantor. Schedule 4.8(c) (as such schedule may be amended or
supplemented from time to time) sets forth under the headings "Securities
Accounts," "Commodities Accounts," and "Deposit Accounts" respectively, all of
the Securities Accounts, Commodities Accounts and Deposit Accounts in which each
Grantor has an interest that are included in the Collateral. Each Grantor is the
sole entitlement holder or customer of each such account set forth opposite its
name on such schedule, and such Grantor has not consented to, and is not
otherwise aware of, any person (other than the Collateral Trustee pursuant
hereto) having "control" (within the meanings of Sections 8-106, 9-106 and 9-104
of the New York UCC) over, or any other interest in, any such Securities
Account, Commodity Account or Deposit Account or any securities, commodities or
other property credited thereto, except for any such account that constitutes an
Excluded Asset.
(b) The shares of Pledged Equity Interests pledged by
such Grantor hereunder constitute all of the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Excluded Foreign Subsidiary Voting Stock, if less, 66% of the
outstanding Excluded Foreign Subsidiary Voting Stock of each relevant Issuer.
(c) The Pledged Equity Interests have been duly and
validly issued and all the shares of the Pledged Stock are fully paid and
nonassessable.
(d) As of the Closing Date, the terms of any
uncertificated Pledged LLC Interests and Pledged Partnership Interests do not
provide that they are securities governed by Article 8 of the Uniform Commercial
Code in effect from time to time in the "issuer's jurisdiction" of each Issuer
thereof (as such term is defined in the Uniform Commercial Code in effect in
such jurisdiction).
(e) There shall be no certificated Pledged LLC Interests
or Pledged Partnership Interests which expressly provide that they are
securities governed by Article 8 of the Uniform Commercial Code in effect from
time to time in the "issuer's jurisdiction" of each Issuer thereof, except if
such certificate has been delivered to the Collateral Trustee pursuant to the
terms hereof.
(f) Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Investment Property and Deposit
Accounts pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other person, except Liens expressly permitted to exist
thereon by each of the Secured Debt Documents, and there are no outstanding
warrants, options or other rights to purchase, or shareholder, voting trust or
similar agreements outstanding with respect to, or property that is convertible
into, or that requires the issuance or sale of, any Pledged Equity Interests.
(g) Each Issuer that is not a Grantor hereunder has
executed and delivered to the Collateral Trustee an Acknowledgment and Consent,
in substantially the form of Exhibit C, to the pledge of the Pledged Securities
pursuant to this Agreement.
4.9. Receivables. (a) No amount payable to such Grantor
under or in connection with any Receivable that is included in the Collateral is
evidenced by any Instrument or Tangible Chattel Paper which has not been
delivered to the Collateral Trustee or constitutes
30
Electronic Chattel Paper that has not been subjected to the control (within the
meaning of Section 9-105 of the New York UCC) of the Collateral Trustee.
(b) None of the obligors (other than "independent system
operators") on any Receivable that is included in the Collateral in excess of
$500,000 individually or $1,000,000 in the aggregate is a Governmental
Authority.
(c) Each Receivable that is included in the Collateral
(i) is and will be the legal, valid and binding obligation of the Account Debtor
in respect thereof, representing an unsatisfied obligation of such Account
Debtor, (ii) is and will be enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law,
(iii) is not and will not be subject to any defenses or taxes and (iv) is and
will be in compliance with all applicable laws and regulations.
4.10. Contracts.
(a) Schedule 4.10(a) (as such schedule may be amended or
supplemented form time to time) sets forth all of the Material Contracts in
which such Grantor has any right or interest.
(b) Except as set forth on Schedule 4.10(b), no Material
Contract prohibits assignment or encumbrance by such Grantor or requires or
purports to require consent of, or notice to, any party (other than such
Grantor) to any Material Contract in connection with the execution, delivery and
performance of this Agreement, including the exercise of remedies by the
Collateral Trustee with respect to such Material Contract, except for such
consents that have been obtained and such notices that have been given.
(c) Each Material Contract is in full force and effect
and constitutes a valid and legally enforceable obligation of the Grantor party
thereto and (to the best of such Grantor's knowledge) each other party thereto,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(d) The right, title and interest of such Grantor in, to
and under the Material Contracts are not subject to any defenses, rights of
recoupment or claims.
(e) Neither such Grantor nor (to the best of such
Grantor's knowledge) any of the other parties to the Material Contracts is in
default in the performance or observance of any of the terms thereof.
(f) The right, title and interest of such Grantor in, to
and under the Material Contracts are not subject to any defenses or claims.
(g) Such Grantor has delivered to the Collateral Trustee
a complete and correct copy of each Material Contract, including all amendments,
supplements and other modifications thereto.
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(h) No amount payable to such Grantor under or in
connection with any Contract which has a value in excess of $500,000
individually or $1,000,000 in the aggregate is evidenced by any Instrument or
Tangible Chattel Paper which has not been delivered to the Collateral Trustee or
constitutes Electronic Chattel Paper that is not under the control (within the
meaning of Section 9-105 of the New York UCC) of the Collateral Trustee.
(i) None of the parties to any Contract (other than
"independent system operators") which has a value in excess of $500,000
individually or $1,000,000 in the aggregate is a Governmental Authority.
4.11. Intellectual Property. (a) Schedule 4.11(a) lists all
Intellectual Property which is registered with a Governmental Authority or is
the subject of an application for registration and all material unregistered
Intellectual Property forming part of the Core Collateral, in each case which is
owned by such Grantor in its own name on the date hereof (collectively, the
"Owned Intellectual Property"). Except as set forth in Schedule 4.11, such
Grantor is the exclusive owner of the entire and unencumbered right, title and
interest in and to all Owned Intellectual Property and is otherwise entitled to
use, and grant to others the right to use, all Owned Intellectual Property,
subject only to the license terms of the licensing or franchise agreements
referred to in paragraph (c) below. Such Grantor has a valid and enforceable
right to use all Intellectual Property which it uses in its business, but does
not own (collectively, the "Licensed Intellectual Property").
(b) On the date hereof, all Owned Intellectual Property
and, to such Grantor's knowledge, all Licensed Intellectual Property, in each
case, which is material to such Grantor's business (collectively, and subject to
the foregoing knowledge qualifier in the case of Licensed Intellectual Property,
the "Material Intellectual Property"), is valid, subsisting, unexpired and
enforceable, has not been abandoned. Neither the operation of such Grantor's
business as currently conducted or as contemplated to be conducted nor the use
of the Intellectual Property in connection therewith conflicts with, infringes,
misappropriates, dilutes, misuses or otherwise violates the intellectual
property rights of any other person, in each case, which conflict, infringement,
misappropriation, dilution, misuse or violation could reasonably be expected to
have a Material Adverse Effect, and no claim has been so asserted by any other
person.
(c) Except as set forth in Schedule 4.11(c), on the date
hereof (i) none of the Material Intellectual Property is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor and (ii) there are no other agreements, obligations, orders or
judgments which affect the use of any Material Intellectual Property.
(d) To such Grantor's knowledge, no holding, decision or
judgment has been rendered by any Governmental Authority or arbitrator in the
United States or outside the United States which would limit, cancel or question
the validity or enforceability of, or such Grantor's rights in, any Material
Intellectual Property. Such Grantor is not aware of any uses of any item of
Material Intellectual Property that could reasonably be expected to lead to such
item becoming invalid or unenforceable, including unauthorized uses by third
parties and uses which were not supported by the goodwill of the business
connected with Trademarks and Trademark Licenses.
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(e) No action or proceeding is pending, or, to such
Grantor's knowledge, threatened, on the date hereof (i) seeking to limit, cancel
or question the validity of any Owned Intellectual Property, (ii) alleging that
any services provided by, processes used by, or products manufactured or sold by
such Grantor infringe any patent, trademark, copyright, or any other right of
any other person, (iii) alleging that any Material Intellectual Property is
being licensed, sublicensed or used in violation of any intellectual property or
any other right of any other person or (iv) which, if adversely determined,
would have a material adverse effect on the value of any Material Intellectual
Property. To such Grantor's knowledge, no person is engaging in any activity
that infringes upon, or is otherwise an unauthorized use of, any Material
Intellectual Property or upon the rights of such Grantor therein. Except as set
forth in Schedule 4.11(e), such Grantor has not granted any license, release,
covenant not to ▇▇▇, non-assertion assurance, or other right to any person with
respect to any part of the Material Intellectual Property. The consummation of
the transactions contemplated by this Agreement (including the enforcement of
remedies) will not result in the termination or impairment of any of the
Material Intellectual Property.
(f) With respect to each Copyright License, Trademark
License, Trade Secret Licenses and Patent License which relates to Material
Intellectual Property or the loss of which could otherwise have a Material
Adverse Effect: (i) such license is valid and binding and in full force and
effect and represents the entire agreement between the respective licensor and
licensee with respect to the subject matter of such license; (ii) such license
will not cease to be valid and binding and in full force and effect on terms
identical to those currently in effect as a result of the rights and interests
granted herein, nor will the grant of such rights and interests constitute a
breach or default under such license or otherwise give the licensor or licensee
a right to terminate such license; (iii) such Grantor has not received any
notice of termination or cancellation under such license; (iv) such Grantor has
not received any notice of a breach or default under such license, which breach
or default has not been cured; (v) such Grantor has not granted to any other
person any rights, adverse or otherwise, under such license; and (vi) such
Grantor is not in breach or default in any material respect, and no event has
occurred that, with notice and/or lapse of time, would constitute such a breach
or default or permit termination, modification or acceleration under such
license.
(g) Except as set forth in Schedule 4.11, such Grantor
has performed all acts and has paid all required fees and taxes to maintain each
and every item of registered owned Intellectual Property that is material to its
business in full force and effect and to protect and maintain its interest
therein. Such Grantor has used proper statutory notice in connection with its
use of each Patent, Trademark and Copyright that is material to its business
included in the Intellectual Property.
(h) (i) None of the Trade Secrets of such Grantor that
are material to its business has been used, divulged, disclosed or appropriated
to the detriment of such Grantor for the benefit of any other person; (ii) no
employee, independent contractor or agent of such Grantor has misappropriated
any trade secrets of any other person in the course of the performance of his or
her duties as an employee, independent contractor or agent of such Grantor; and
(iii) no employee, independent contractor or agent of such Grantor is in default
or breach of any term of any employment agreement, non-disclosure agreement,
assignment of
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inventions agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor's
Intellectual Property.
(i) Such Grantor has taken all commercially reasonable
steps to use consistent standards of quality in the manufacture, distribution
and sale of all products sold and provision of all services provided under or in
connection with any item of Intellectual Property and has taken all steps to
ensure that all licensed users of any kind of Intellectual Property use such
consistent standards of quality.
4.12. Letters of Credit and Letter of Credit Rights. No
Grantor is a beneficiary or assignee under any Letter of Credit other than the
Letters of Credit described on Schedule 4.12 (as such schedule may be amended or
supplemented from time to time). With respect to any Letters of Credit that are
by their terms transferable, each Grantor has caused (or, in the case of the
Letters of Credit that are specified on Schedule 4.12 on the date hereof, will
use commercially reasonable efforts to cause) all issuers and nominated persons
under Letters of Credit in which the Grantor is the beneficiary or assignee to
consent to the assignment of such Letter of Credit to the Collateral Trustee and
has agreed that upon the occurrence of a Secured Debt Default it shall cause all
payments thereunder to be made to the Collateral Account. With respect to any
Letters of Credit that are not transferable, each Grantor shall obtain (or, in
the case of the Letters of Credit that are specified on Schedule 4.12 on the
date hereof, use commercially reasonable efforts to obtain) the consent of the
issuer thereof and any nominated person thereon to the assignment of the
proceeds of the released Letter of Credit to the Collateral Trustee in
accordance with Section 5-114(c) of the New York UCC.
4.13. Commercial Tort Claims. No Grantor has any Commercial
Tort Claims as of the date hereof individually or in the aggregate in excess of
$500,000 and, except as specifically described on Schedule 4.13 (as such
schedule may be amended or supplemented from time to time), no Grantor has any
Commercial Tort Claims after the date hereof individually or in the aggregate in
excess of $500,000.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Collateral Trustee
and the other Secured Parties that, from and after the date of this Agreement,
until the Secured Obligations (other than Secured Obligations in respect of any
Specified Hedging Agreement and indemnification and other contingent obligations
not then due and payable) shall have been paid in full in cash, no letter of
credit issued under any Secured Debt Document shall be outstanding, any
Credit-Linked Deposits (or similar deposits) shall have been returned and all
commitments to extend credit under all Secured Debt Documents shall have expired
or been terminated:
5.1. Covenants in Secured Debt Documents. Each Grantor
shall take, or shall refrain from taking, as the case may be, each action that
is necessary to be taken or not taken, as the case may be, so that no Secured
Debt Default under any Secured Debt Document is caused by the failure to take
such action or to refrain from taking such action by such Grantor.
5.2. Delivery and Control of Instruments, Certificated
Securities, Chattel Paper, Negotiable Documents, Investment Property and Letter
of Credit Rights. (a) If any of the
34
Collateral is or shall become evidenced or represented by any Instrument,
Certificated Security, Negotiable Document or Tangible Chattel Paper, such
Instrument (other than checks received in the ordinary course of business),
Certificated Security, Negotiable Documents or Tangible Chattel Paper shall
promptly be delivered to (or, in the case of the Pledged NEO Notes, the Company
or such other applicable Grantor shall use commercially reasonable efforts to
cause such Pledged NEO Notes to be delivered to) the Collateral Trustee, duly
endorsed in a manner reasonably satisfactory to the Collateral Trustee, to be
held as Collateral pursuant to this Agreement, and all of such property owned by
any Grantor as of the Closing Date shall be delivered on the Closing Date.
(b) If any of the Collateral is or shall become
"Electronic Chattel Paper" such Grantor shall ensure that (i) a single
authoritative copy exists which is unique, identifiable, unalterable (except as
provided in clauses (iii), (iv) and (v) of this paragraph), (ii) such
authoritative copy identifies the Collateral Trustee as the assignee and is
communicated to and maintained by the Collateral Trustee or its designee, (iii)
copies or revisions that add or change the assignee of the authoritative copy
can only be made with the participation of the Collateral Trustee, (iv) each
copy of the authoritative copy and any copy of a copy is readily identifiable as
a copy and not the authoritative copy and (v) any revision of the authoritative
copy is readily identifiable as an authorized or unauthorized revision.
(c) If any of the Collateral is or shall become evidenced
or represented by an Uncertificated Security, such Grantor shall cause the
Issuer thereof either (i) to register the Collateral Trustee as the registered
owner of such Uncertificated Security, upon original issue or registration of
transfer or (ii) to agree in writing with such Grantor and the Collateral
Trustee that such Issuer will comply with instructions with respect to such
Uncertificated Security originated by the Collateral Trustee without further
consent of such Grantor, such agreement to be in substantially the form of
Exhibit C, and such action shall be taken on or prior to the Closing Date with
respect to any Uncertificated Securities owned as of the Closing Date by any
Grantor.
(d) Each Grantor shall maintain Securities Entitlements,
Securities Accounts and Deposit Accounts (other than any which constitute
Excluded Perfection Assets) only with financial institutions that have agreed,
pursuant to Control Agreements (Deposit and Securities Accounts), to comply with
entitlement orders and instructions issued or originated by the Collateral
Trustee without further consent of such Grantor.
(e) If any of the Collateral is or shall become evidenced
or represented by a Commodity Contract, such Grantor shall cause the Commodity
Intermediary with respect to such Commodity Contract to agree in writing with
such Grantor and the Collateral Trustee, pursuant to a Control Agreement
(Commodity Contracts), that such Commodity Intermediary will apply any value
distributed on account of such Commodity Contract as directed by the Collateral
Trustee without further consent of such Grantor.
(f) In addition to and not in lieu of the foregoing, if
any Issuer of any Investment Property is organized under the law of, or has its
chief executive office in, a jurisdiction outside of the United States, each
Grantor shall take such additional actions, including causing the issuer to
register the pledge on its books and records, as may be necessary or advisable
or as may be reasonably requested by the Collateral Trustee, under the laws of
such
35
jurisdiction to insure the validity, perfection and priority of the security
interest of the Collateral Trustee.
(g) In the case of any transferable Letters of Credit in
excess of $250,000 individually or in the aggregate, each Grantor shall use
commercially reasonable efforts to obtain the consent of any issuer thereof to
the transfer of such Letter of Credit to the Collateral Trustee. In the case of
any other Letter-of-Credit Rights in excess of $250,000 individually or in the
aggregate each Grantor shall use commercially reasonable efforts to obtain the
consent of the issuer thereof and any nominated person thereon to the assignment
of the proceeds of the related Letter of Credit in accordance with Section
5-114(c) of the New York UCC.
(h) Each Grantor agrees (i) to cause (or, in the case of
any Pledged LLC Interest that have been issued by an Issuer that is not a
Subsidiary, to use commercially reasonable efforts to cause) each Pledged LLC
Interest and Pledged Partnership Interest to be represented by a certificate
delivered to the Collateral Trustee pursuant to the terms hereof and (ii) to
cause (or, in the case of any Pledged LLC Interest that have been issued by an
Issuer that is not a Subsidiary, to use commercially reasonable efforts to
cause)the terms thereof to expressly provide that each such Pledged LLC Interest
and Pledged Partnership Interest is a security governed by Article 8 of the New
York UCC, in each case no later than 60 days following the date hereof and for
all times thereafter during the term of this Agreement.
5.3. Maintenance of Insurance. (a) Such Grantor shall keep
its properties that are of an insurable character adequately insured at all
times by financially sound and responsible insurers, which, in the case of any
insurance on any property with respect to which a mortgage has been granted
pursuant to the terms of any Security Documents, are licensed to do business in
the States where the applicable property is located; maintain such other
insurance, to such extent and against such risks (and with such deductibles,
retentions and exclusions), including fire and other risks insured against by
extended coverage and coverage for acts of terrorism, in each case as is
customary with companies of a similar size operating in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage; and maintain such other insurance as may be
required by law; provided that in any event such Grantor shall maintain, to the
extent obtainable on commercially reasonable terms, (i) property and machinery
breakage insurance on all real and personal property on an all risks basis
(including the perils of flood and quake and loss by fire, explosion and theft),
covering the repair or replacement cost of all such property (with the exception
of losses from terrorism, earthquake and flood which may be subject to the
highest amount commercially and reasonably available), (ii) consequential loss
coverage for business interruption and extra expense (which shall include
construction expenses and such other business interruption expenses as are
otherwise generally available to similar businesses) in an amount of not less
than 12 months gross revenues and (iii) public liability insurance providing
limits of $150,000,000 per occurrence and in the aggregate for bodily injury and
property damage to third parties resulting from such Grantor's operations; which
public liability insurance shall be written to include worldwide risks on a
commercial general liability form. All such insurance with respect to such
Grantor shall be provided by insurers or reinsurers which have an A.M. Best
policyholders rating of not less than A- or a Standard & Poor rating of not less
than BBB, or, if the relevant insurance is not available from such insurers,
such other insurers as the Collateral Trustee may approve in writing, acting
reasonably. All insurance shall (i) provide that no cancellation, material
reduction in amount or
36
material change in coverage thereof shall be effective until at least 30 days
(or, in the case of non-payment of premium, 10 days) after receipt by the
Collateral Trustee of written notice thereof, (ii) if reasonably requested by
the Collateral Trustee, include a breach of warranty clause and (iii) be
reasonably satisfactory in all other respects to the Collateral Trustee.
(b) The Company shall deliver to the Collateral Trustee
on behalf of the Secured Parties, (i) on the Closing Date, a certificate dated
such date showing the amount and types of insurance coverage as of such date,
(ii) upon request of any Secured Debt Representative or the Collateral Trustee
from time to time, full information as to the insurance carried, (iii) promptly
following receipt of notice from any insurer, a copy of any notice of
cancellation of any material coverage or material change in coverage from that
existing on the Closing Date, (iv) forthwith, notice of any cancellation or
nonrenewal of material coverage by any Grantor and (v) promptly after such
information is available to the Company, full information as to any claim for an
amount in excess of $5,000,000 with respect to any property or machinery
breakage insurance policy maintained by such Grantor. The Collateral Trustee
shall be named as additional insured on all such liability insurance policies of
such Grantor and the Collateral Trustee shall be named as loss payee on all
property and machinery breakage insurance policies of each Grantor.
(c) Upon the request of any Secured Debt Representative
or the Collateral Trustee, the Company shall deliver to such Secured Debt
Representative and/or the Collateral Trustee a report of a reputable insurance
broker with respect to such insurance and such supplemental reports with respect
thereto as the Collateral Trustee or any Secured Debt Representative may from
time to time reasonably request but, unless a Secured Debt Default shall have
occurred and be continuing, not more than once per fiscal year.
5.4. Payment of Secured Obligations. Such Grantor shall
pay and discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5. Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain each of the security
interests created by this Agreement as a perfected security interest having at
least the priority described in Section 4.3 and shall defend such security
interest against the claims and demands of all persons whomsoever (other than
the Secured Parties), subject to the rights of such Grantor under the Secured
Debt Documents to dispose of the Collateral and subject to the provisions
relating to the release of the Liens in the Secured Debt Documents and the
Collateral Trust Agreement.
(b) Such Grantor shall furnish to the Collateral Trustee
from time to time statements and schedules further identifying and describing
the Collateral and such other reports
37
in connection with the assets and property of such Grantor as the Collateral
Trustee may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Collateral Trustee, and at the sole expense of such Grantor, such
Grantor shall promptly and duly authorize, execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Collateral Trustee may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts and any other relevant
Collateral, taking any actions necessary to enable the Collateral Trustee to
obtain "control" (within the meaning of the applicable Uniform Commercial Code)
with respect thereto, including executing and delivering and causing the
relevant depositary bank or securities intermediary to execute and deliver a
Control Agreement (Deposit and Securities Accounts).
5.6. Changes in Location, Name, Jurisdiction of
Incorporation, etc. Such Grantor shall not, except upon 15 days' prior written
notice to the Collateral Trustee and delivery to the Collateral Trustee of duly
authorized and, where required, executed copies of (a) all additional financing
statements and other documents reasonably requested by the Collateral Trustee to
maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to Schedule 4.5
showing any additional location at which Inventory or Equipment (other than
mobile goods) with a value in excess of $250,000 shall be kept:
(i) permit any of the Inventory or Equipment (other than
mobile goods) with a value in excess of $250,000 to be kept at a
location other than those listed on Schedule 4.5;
(ii) change its legal name, jurisdiction of organization
or the location of its chief executive office or sole place of business
from that referred to in Section 4.4; or
(iii) change its legal name, identity or structure to such
an extent that any financing statement filed by the Collateral Trustee
in connection with this Agreement would become misleading.
5.7. Notices. Such Grantor shall advise the Collateral
Trustee promptly, in reasonable detail, of:
(a) any Lien (other than any Lien expressly permitted
under the Secured Debt Documents) on any of the Collateral which would adversely
affect the ability of the Collateral Trustee to exercise any of its remedies
hereunder; and
(b) the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
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5.8. Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock or other ownership certificate
(including any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Equity Interests of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of or other
ownership interests in the Pledged Securities, or otherwise in respect thereof,
such Grantor shall accept the same as the agent of the Secured Parties, hold the
same in trust for the Secured Parties and deliver the same forthwith to the
Collateral Trustee in the exact form received, duly endorsed by such Grantor to
the Collateral Trustee, if required, together with an undated stock power or
similar instrument of transfer covering such certificate duly executed in blank
by such Grantor and with, if the Collateral Trustee so requests, signature
guaranteed, to be held by the Collateral Trustee, subject to the terms hereof,
as additional collateral security for the Secured Obligations. Upon the
occurrence and during the continuance of a Secured Debt Default, any sums paid
upon or in respect of the Pledged Securities upon the liquidation or dissolution
of any Issuer shall be paid over to the Collateral Trustee to be held by it
hereunder as additional collateral security for the Secured Obligations, and in
case any distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Trustee, be delivered to the Collateral Trustee to be
held by it hereunder as additional collateral security for the Secured
Obligations. If any sums of money or property so paid or distributed in respect
of the Pledged Securities shall be received by such Grantor, such Grantor shall,
until such money or property is paid or delivered to the Collateral Trustee,
hold such money or property in trust for the Secured Parties, segregated from
other funds of such Grantor, as additional collateral security for the Secured
Obligations.
(b) Without the prior written consent of the Collateral
Trustee, such Grantor shall not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock, partnership interests, limited liability
company interests or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock, partnership interests, limited liability company interests or other
equity securities of any nature of any Issuer, except to the extent expressly
permitted under the Secured Debt Documents, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, any of
the Investment Property or Proceeds thereof or any interest therein (except, in
each case, pursuant to a transaction expressly permitted by the provisions of
the Secured Debt Documents), (iii) create, incur or permit to exist any Lien or
option in favor of, or any claim of any person with respect to, any of the
Investment Property or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement or any other security interests
permitted by the Secured Debt Documents, (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the Collateral
Trustee to sell, assign or transfer any of the Investment Property or Proceeds
thereof or any interest therein or (v) without the prior written consent of the
Collateral Trustee, cause or permit any Issuer of any Pledged Partnership
Interests or Pledged LLC Interests which are not securities (for purposes of the
New York UCC) on the date hereof to elect or otherwise take any action to cause
such Pledged Partnership Interests or Pledged LLC Interests to be treated as
securities for purposes of the New York UCC; provided, however, notwithstanding
the foregoing, if any issuer of any Pledged Partnership
39
Interests or Pledged LLC Interests takes any such action in violation of the
provisions in this clause (v), such Grantor shall promptly notify the Collateral
Trustee in writing of any such election or action and, in such event, shall take
all steps necessary or advisable to establish the Collateral Trustee's "control"
thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it shall be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and shall comply with such terms insofar
as such terms are applicable to it, (ii) it shall notify the Collateral Trustee
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it. In addition, each Grantor which
is either an Issuer or an owner of any Pledged Security hereby consents to the
grant by each other Grantor of the security interest hereunder in favor of the
Collateral Trustee and to the transfer of any Pledged Security to the Collateral
Trustee or its nominee following a Secured Debt Default and to the substitution
of the Collateral Trustee or its nominee as a partner, member or shareholder of
the Issuer of the related Pledged Security.
5.9. Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor shall not (i) grant any
extension of the time of payment of any Receivable that is included in the
Collateral, (ii) compromise or settle any Receivable for less than the full
amount thereof, (iii) release, wholly or partially, any person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable that is included in the Collateral or (v) amend, supplement or modify
any Receivable that is included in the Collateral in any manner that could
adversely affect the value thereof.
(b) Such Grantor shall deliver to the Collateral Trustee
a copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 7.5% of the
aggregate amount of the then outstanding Receivables that are included in the
Collateral.
(c) Each Grantor shall perform and comply in all material
respects with all of its obligations with respect to the Receivables that are
included in the Collateral.
(d) Each Grantor shall keep and maintain at its own cost
and expense complete records of each Receivable that is included in the
Collateral, in a manner consistent with prudent business practice, including
records of all payments received, credits granted thereon, advances paid,
advances recouped, advances not recouped and all other documentation relating
thereto.
(e) Each Grantor shall legend, at the request of the
Collateral Trustee made at any time after the occurrence of any Secured Debt
Default under any Secured Debt Document and in form and manner reasonably
satisfactory to the Collateral Trustee, the Receivables that are included in the
Collateral and the other books, records and documents of such Grantor evidencing
or pertaining to the Receivables that are included in the Collateral with an
appropriate reference to the fact that the Receivables that are included in the
Collateral have been assigned to
40
the Collateral Trustee for the benefit of the Secured Parties and that the
Collateral Trustee has a security interest therein for the benefit of the
Secured Parties.
(f) No Grantor shall rescind or cancel any indebtedness
evidenced by any Receivable that is included in the Collateral or modify any
term thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such indebtedness except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto or sell any Receivable that is included in the
Collateral or interest therein except in the ordinary course of business
consistent with prudent business practice without the prior written consent of
the Collateral Trustee. Each Grantor shall timely fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables that are
included in the Collateral in a manner consistent with Good Utility Practices.
(g) Each Grantor shall cause to be collected from the
account debtor of each of the Receivables that are included in the Collateral,
as and when due in the ordinary course of business consistent with prudent
business practice (including Receivables that are delinquent, such Receivables
that are included in the Collateral to be collected in accordance with generally
accepted commercial collection procedures), any and all amounts owing under or
on account of such Receivable that is included in the Collateral, and apply
forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable, except that any Grantor may, with
respect to any Receivable that is included in the Collateral, allow in the
ordinary course of business such extensions of time to pay amounts due in
respect of Receivables that are included in the Collateral and such other
modifications of payment terms or settlements in respect of Receivables as shall
be commercially reasonable under the circumstances, all in accordance with such
Grantor's ordinary course of business consistent with its collection practices
as in effect from time to time. The costs and expenses (including attorneys'
fees) of collection, in any case, whether incurred by any Grantor, the
Collateral Trustee or any other Secured Party, shall be paid by the Grantors.
5.10. Contracts. (a) Such Grantor shall perform and comply
in all material respects with all its obligations under the Contracts.
(b) Such Grantor shall not amend, modify, terminate,
waive or fail to enforce any provision of any Contract in any manner which could
reasonably be expected to materially adversely affect the value of the
Collateral or otherwise have a Material Adverse Effect.
(c) Such Grantor shall exercise promptly and diligently
each and every material right which it may have under each Material Contract
(other than any right of termination).
(d) Such Grantor shall deliver to the Collateral Trustee
a copy of each material demand, notice or document received by it relating in
any way to any Material Contract and shall also deliver to the Collateral
Trustee a copy of all new Material Contracts entered into after the date hereof.
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(e) With respect to any Non-Assignable Contract that is a
Material Contract as of the date hereof, each Grantor shall, within thirty days
of the date hereof, request in writing the consent of the counterparty or
counterparties to such Non-Assignable Contract pursuant to the terms of such
Non-Assignable Contract or applicable law to the assignment or granting of a
security interest in such Non-Assignable Contract to the Collateral Trustee for
the benefit of the Secured Parties and use its commercially reasonable efforts
to obtain such consent as soon as practicable thereafter. No Grantor shall after
the Closing Date enter into any Non-Assignable Contract that is a Material
Contract unless, within 30 days, counterparties to such Non-Assignable Contract
consent in writing pursuant to the terms of such Non-Assignable Contract to the
assignment and granting of a security interest in such Non-Assignable Contract
to the Collateral Trustee for the benefit of the Secured Parties.
(f) Such Grantor shall not permit to become effective in
any document creating, governing or providing for any permit, lease, license or
Material Contract, a provision that would prohibit the creation or perfection
of, or exercise of remedies in connection with, a Lien on such permit, lease,
license or Material Contract in favor of the Collateral Trustee unless such
Grantor believes, in its reasonable judgment, that such prohibition is usual and
customary in transactions of such type.
5.11. Intellectual Property. (a) Such Grantor (either
itself or through licensees) shall (i) continue to use each Trademark material
to its business in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Trademark and take all necessary steps
to ensure that all licensed users of such Trademark maintain as in the past such
quality, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law and
(iv) not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.
(b) Such Grantor (either itself or through licensees)
shall not do any act, or omit to do any act, whereby any Patent owned by such
Grantor material to its business may become forfeited, abandoned or dedicated to
the public.
(c) Such Grantor (either itself or through licensees) (i)
shall employ each Copyright material to its business and (ii) shall not (and
shall not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby any material portion of such Copyrights may become
invalidated or otherwise impaired. Such Grantor shall not (either itself or
through licensees) knowingly do any act whereby any material portion of such
Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees)
shall not do any act that uses any Material Intellectual Property to infringe,
misappropriate or violate the intellectual property rights of any other person.
(e) Such Grantor (either itself or through licensees)
shall use proper statutory notice in connection with the use of the Material
Intellectual Property.
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(f) Such Grantor shall notify the Collateral Trustee
promptly if it knows, or has reason to know, that any application or
registration relating to any Material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding such Grantor's ownership of, or the validity of, any Material
Intellectual Property or such Grantor's right to register the same or to own and
maintain the same in the case of Owned Intellectual Property.
(g) Promptly upon such Grantor's acquisition or creation
of any invention, trademark or other similar property that is material to the
business of such Grantor, apply for registration thereof with the United States
Patent and Trademark Office and any other appropriate office. Whenever such
Grantor (either by itself or through any agent, employee, licensee or designee)
shall file an application for the registration of any Intellectual Property that
is material to the business of such Grantor with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall report such filing to the
Collateral Trustee within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Collateral Trustee,
such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Trustee may
request to evidence the Secured Parties' security interest in any Patent,
Trademark or other Intellectual Property of such Grantor and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.
Notwithstanding the foregoing, such Grantor shall register with the U.S.
Copyright Office copyrightable works only (i) if reasonably requested by the
Collateral Trustee or (ii) if the Collateral Trustee has been given at least 45
days prior notice and the opportunity to record with the U.S. Copyright Office
an instrument evidencing the Collateral Trustee's security interest in such
copyrighted works.
(h) Such Grantor shall take all reasonable and necessary
steps, including in any proceeding before the United States Patent and Trademark
Office, subject to the last sentence of the preceding paragraph, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of
Intellectual Property material to its business, including the payment of
required fees and taxes, the filing of responses to office actions issued by the
United States Patent and Trademark Office and the United States Copyright
Office, the filing of applications for renewal or extension, the filing of
affidavits of use and affidavits of incontestability, the filing of divisional,
continuation, continuation-in-part, reissue, and renewal applications or
extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings.
(i) Such Grantor (either itself or through licensees)
shall not, without the prior written consent of the Collateral Trustee,
discontinue use of or otherwise abandon any of its Intellectual Property, or
abandon any application or any right to file an application for letters patent,
trademark, or copyright, unless such Grantor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual Property is no
longer desirable in the conduct of such Grantor's business and that the loss
thereof could not reasonably be expected to
43
have a Material Adverse Effect and, in which case, such Grantor shall give
prompt notice of any such abandonment to the Collateral Trustee in accordance
herewith.
(j) In the event that any Owned Intellectual Property
material to its business is infringed, misappropriated or diluted by a third
party, such Grantor shall (i) take such actions as such Grantor shall reasonably
deem appropriate under the circumstances to protect such Intellectual Property
and (ii) if such Intellectual Property is of material economic value, promptly
notify the Collateral Trustee after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
(k) Such Grantor agrees that, should it obtain an
ownership interest in any item of intellectual property which is not, as of the
Closing Date, a part of the Intellectual Property Collateral (the
"After-Acquired Intellectual Property"), (i) the provisions of Section 3 shall
automatically apply thereto, (ii) any such After-Acquired Intellectual Property,
and in the case of trademarks, the goodwill of the business connected therewith
or symbolized thereby, shall automatically become part of the Intellectual
Property Collateral, (iii) it shall give prompt (and, in any event within five
Business Days after the last day of the fiscal quarter in which such Grantor
acquires such ownership interest) written notice thereof to the Collateral
Trustee in accordance herewith and (iv) it shall provide the Collateral Trustee
promptly (and, in any event within five Business Days after the last day of the
fiscal quarter in which such Grantor acquires such ownership interest) with an
amended Schedule 4.11 and take the actions specified in Section 5.11(m).
(l) Such Grantor agrees to execute an Intellectual
Property Security Agreement with respect to its Intellectual Property in
substantially the form of Exhibit D in order to record the security interest
granted herein to the Collateral Trustee for the benefit of the Secured Parties
with the United States Patent and Trademark Office, the United States Copyright
Office and any other applicable Governmental Authority.
(m) Such Grantor agrees to execute an After-Acquired
Intellectual Property Security Agreement with respect to its After-Acquired
Intellectual Property in substantially the form of Exhibit E in order to record
the security interest granted herein to the Collateral Trustee, for the benefit
of Secured Parties, with the United States Patent and Trademark Office, the
United States Copyright Office and any other applicable Governmental Authority.
(n) Such Grantor shall take all steps reasonably
necessary to protect the secrecy of all Trade Secrets material to its business,
including entering into confidentiality agreements with employees and labeling
and restricting access to secret information and documents.
5.12. Commercial Tort Claims. Such Grantor shall advise the
Collateral Trustee promptly of any Commercial Tort Claim held by such Grantor
individually or in the aggregate in excess of $100,000 and shall promptly
execute a supplement to this Agreement in form and substance reasonably
satisfactory to the Collateral Trustee to grant a security interest in such
Commercial Tort Claim to the Collateral Trustee for the benefit of the Secured
Parties.
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5.13. Deposit and Securities Accounts. (a) On or prior to
the Closing Date, each Grantor shall deliver to the Collateral Trustee one or
more Control Agreements (Deposit and Securities Accounts), executed by all
parties thereto, for each Deposit Account and each Securities Account that is
included in the Collateral in which such Grantor has an interest as of the date
hereof (collectively, the "Pledged Accounts"); provided that no Grantor shall be
required at any time to enter into Control Agreements (Deposit and Securities
Accounts) with respect to any Deposit Account or Securities Account solely to
the extent that the same constitutes an Excluded Perfection Asset at such time.
After the Closing Date, each Grantor shall deliver to the Collateral Trustee a
Control Agreement (Deposit and Securities Accounts) for each Deposit Account and
each Securities Account in which such Grantor has an interest after the Closing
Date; provided that no Grantor shall be required at any time to enter into a
Control Agreement with respect to any Deposit Account or Securities Account
solely to the extent that the same constitutes an Excluded Perfection Asset at
such time. Each Grantor agrees that it shall have no Deposit Account or
Securities Accounts other than (i) Deposit Accounts and Securities Accounts with
respect to which Control Agreements (Deposit and Securities Accounts) have been
delivered, (ii) Deposit Accounts and Securities Accounts that constitute
Excluded Perfection Interests and (iii) Deposit Accounts that constitute
Excluded Assets.
(b) Each Grantor irrevocably authorizes the Collateral
Trustee to notify each Depositary Bank of the occurrence of an Actionable
Default. Following the occurrence of an Actionable Default, the Collateral
Trustee may instruct each Depositary Bank to transfer immediately all funds and
investments held in each Deposit Account or Securities Account to an account
designated by the Collateral Trustee; provided, however, that the Collateral
Trustee agrees that it shall deliver such instruction only during the
continuation of an Actionable Default. Each Grantor hereby agrees to irrevocably
direct each Depositary Bank to comply with the instructions of the Collateral
Trustee with respect to the applicable Deposit Account or Securities Account
held by such Depositary Bank without further consent from the Grantor or any
other person.
5.14. Collections. (a) Each Grantor agrees (i) to notify
and direct promptly each Account Debtor and every other person obligated to make
payments on Accounts that are included in the Collateral or in respect of any
Inventory that is included in the Collateral to make all such payments directly
to the Pledged Accounts established in accordance with Section 5.13, (ii) to use
all reasonable efforts to cause each Account Debtor and every other person
identified in clause (i) above to make all payments with respect to Accounts
that are included in the Collateral and Inventory that is included in the
Collateral directly to the Pledged Accounts and (iii) promptly to deposit all
payments received by it on account of Accounts that are included in the
Collateral and Inventory that is included in the Collateral, whether in the form
of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in
the Pledged Accounts in precisely the form in which received (but with any
endorsements of such Grantor necessary for deposit or collection), and until
they are so deposited such payments shall be held in trust by such Grantor for
the benefit and as the property of the Secured Parties.
(b) Without the prior written consent of the Collateral
Trustee, no Grantor shall, in a manner adverse to the Secured Parties, change
the general instructions given to Account Debtors in respect of payment on
Accounts to be deposited in the Pledged Accounts. Until the Collateral Trustee
shall have advised the Grantors to the contrary, each Grantor shall,
45
and the Collateral Trustee hereby authorizes each Grantor to, enforce and
collect all amounts owing on the Inventory and Accounts, for the benefit and on
behalf of the Collateral Trustee and the other Secured Parties; provided,
however, that such privilege may at the option of the Collateral Trustee be
terminated upon the occurrence and during the continuance of any Actionable
Default.
SECTION 6. REMEDIAL PROVISIONS
6.1. Certain Matters Relating to Receivables.
(a) At any time after the occurrence and during the
continuance of an Actionable Default, the Collateral Trustee shall have the
right, but shall in no way be obligated to make test verifications of the
Receivables that are included in the Collateral in any manner and through any
medium that it reasonably considers advisable, and each Grantor shall furnish
all such assistance and information as the Collateral Trustee may require in
connection with such test verifications. At any time and from time to time after
the occurrence and during the continuance of an Actionable Default, upon the
Collateral Trustee's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Collateral Trustee or the Administrative Agent, as agent for the Collateral
Trustee, to furnish to the Collateral Trustee or the Administrative Agent, as
agent for the Collateral Trustee, as the case may be, reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables that are included in the Collateral.
(b) Each Grantor may collect such Grantor's Receivables
that are included in the Collateral, subject to the Collateral Trustee's
direction and control as defined in Section 5.13, and each Grantor hereby agrees
to continue to collect all amounts due or to become due to such Grantor under
the Receivables and any Supporting Obligation, in each case, that are included
in the Collateral and diligently exercise each material right it may have under
any Receivable and any Supporting Obligation, in each case, that are included in
the Collateral at its own expense; provided, however, that the Collateral
Trustee may curtail or terminate said authority at any time after the occurrence
and during the continuance of an Actionable Default as provided in Section 5.13.
If required by the Collateral Trustee at any time after the occurrence and
during the continuance of an Actionable Default, any payments of Receivables
that are included in the Collateral, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Collateral Trustee for the benefit of the Secured Parties if required, in a
Collateral Account maintained under the sole dominion and control of the
Collateral Trustee, subject to withdrawal by the Collateral Trustee for the
account of the Secured Parties only as provided in Section 6.7, and (ii) until
so turned over, shall be held by such Grantor in trust for the Secured Parties,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables that are included in the Collateral shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
(c) At any time after the occurrence and during the
continuance of an Actionable Default, at the Collateral Trustee's request, each
Grantor shall deliver to the Collateral Trustee all original and other documents
evidencing, and relating to, the agreements
46
and transactions which gave rise to the Receivables that are included in the
Collateral, including all original orders, invoices and shipping receipts.
6.2. Communications with Obligors; Grantors Remain Liable.
(a) At any time after the occurrence and during the continuance of an Actionable
Default, the Collateral Trustee in its own name or in the name of others may at
any time communicate with obligors under the Receivables that are included in
the Collateral and parties to the Contracts to verify with them to the
Collateral Trustee's reasonable satisfaction the existence, amount and terms of
any Receivables or Contracts, in each case, that are included in the Collateral.
(b) The Collateral Trustee may at any time notify, or
require any Grantor to so notify, the Account Debtor or counterparty on any
Receivable or Contract that is included in the Collateral of the security
interest of the Collateral Trustee therein. In addition, after the occurrence
and during the continuance of an Actionable Default, the Collateral Trustee may
upon written notice to the applicable Grantor, notify, or require any Grantor to
notify, the Account Debtor or counterparty to make all payments under the
Receivables and/or Contracts that are included in the Collateral directly to the
Collateral Trustee.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts that are
included in the Collateral to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. No Secured Party shall have
any obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract that is included in the Collateral by reason of or arising
out of this Agreement or the receipt by any Secured Party of any payment
relating thereto, nor shall any Secured Party be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract that is included
in the Collateral, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, 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.
6.3. Pledged Securities. (a) Unless an Actionable Default
shall have occurred and be continuing and the Collateral Trustee (subject to the
terms of the Collateral Trust Agreement) shall have given notice to the relevant
Grantor of the Collateral Trustee's intent to exercise its rights pursuant to
Section 6.3(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Equity Interests and all payments made in respect
of the Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
each credit agreement, indenture or comparable document constituting a Secured
Debt Document, and to exercise all voting and corporate rights with respect to
the Pledged Securities; provided, however, that no vote shall be cast or
corporate or other ownership right exercised or other action taken which, in the
Collateral Trustee's reasonable judgment, would materially impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of this Agreement or any Secured Debt Document.
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(b) Each Grantor hereby authorizes and instructs each
Issuer of any Investment Property pledged by such Grantor hereunder to (i)
comply with any instruction received by it from the Collateral Trustee in
writing that (x) states that an Actionable Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Agreement
and the Collateral Trust Agreement, without any other or further instructions
from such Grantor, and each Grantor agrees that each Issuer shall be fully
protected in so complying and (ii) upon delivery of any notice to such effect
pursuant to Section 6.3(a), pay any dividends or other payments with respect to
the Investment Property directly to the Collateral Trustee. In order to permit
the Collateral Trustee to exercise the voting and other consensual rights which
it may be entitled to exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive hereunder each Grantor
shall promptly execute and deliver (or cause to be executed and delivered) to
the Collateral Trustee all proxies, dividend payment orders and other
instruments as the Collateral Trustee may from time to time reasonably request
and each Grantor acknowledges that the Collateral Trustee may utilize the power
of attorney set forth herein.
(c) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Collateral Trustee in writing that
(x) states that an Actionable Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement and the Collateral
Trust Agreement, without any other or further instructions from such Grantor,
and each Grantor agrees that each Issuer shall be fully protected in so
complying, and (ii) upon any such instruction following the occurrence of an
Actionable Default, pay any dividends or other payments with respect to the
Investment Property, including the Pledged Securities, directly to the
Collateral Trustee.
6.4. Intellectual Property; Grant of License. For the
purpose of enabling the Collateral Trustee, after the occurrence and during the
continuance of an Actionable Default, to exercise rights and remedies under this
Section 6 at such time as the Collateral Trustee shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Grantor hereby
grants to the Collateral Trustee an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to such Grantor)
to use, exploit, assign or license, after the occurrence and during the
continuance of an Actionable Default, any of the Intellectual Property now owned
or hereafter acquired by such Grantor, wherever the same may be located, through
any and all media, whether now existing or hereafter developed, throughout the
world, including in such license access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout hereof.
6.5. Intellectual Property Litigation and Protection.
(a) Upon the occurrence and during the continuance of any
Actionable Default (and subject to the terms of the Collateral Trust Agreement),
the Collateral Trustee shall have the right but shall in no way be obligated to
file applications for protection of the Intellectual Property and/or bring suit
in the name of any Grantor, the Collateral Trustee or the Secured Parties to
protect or enforce the Intellectual Property and any Intellectual Property
License. In the event of such suit, each Grantor shall, at the reasonable
request of the Collateral Trustee, do any and all lawful acts and execute any
and all documents reasonably requested by
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the Collateral Trustee in aid of such enforcement and the Grantors shall
promptly reimburse and indemnify the Collateral Trustee for all costs and
expenses incurred by the Collateral Trustee in the exercise of its rights under
this Section 6.5 in accordance with Section 8.4 hereof. In the event that the
Collateral Trustee shall elect not to bring suit to enforce the Intellectual
Property, each Grantor agrees, at the reasonable request of the Collateral
Trustee, to take all commercially reasonable actions necessary, whether by suit,
proceeding or other action, to prevent the infringement, misappropriation,
counterfeiting, unfair competition, dilution, diminution in value of or other
damage to any of the material Intellectual Property owned by such Grantor by
others and for that purpose agrees to diligently maintain any suit, proceeding
or other action against any person so infringing necessary to prevent such
infringement.
(b) If an Actionable Default shall occur and be
continuing, upon written demand from the Collateral Trustee (subject to the
terms of the Collateral Trust Agreement), each Grantor shall grant, assign,
convey or otherwise transfer to the Collateral Trustee or such Collateral
Trustee's designee all of such Grantor's right, title and interest in and to the
Intellectual Property and shall execute and deliver to the Collateral Trustee
such documents as are necessary or appropriate to carry out the intent and
purposes of this Agreement.
6.6. Proceeds to be Turned Over To Collateral Trustee. In
addition to the rights of the Secured Parties specified in Section 6.1 with
respect to payments of Receivables that are included in the Collateral, if an
Actionable Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, cash equivalents, checks and other near-cash items
shall be held by such Grantor in trust for the Secured Parties, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
be turned over to the Collateral Trustee in the exact form received by such
Grantor (duly endorsed by such Grantor to the Collateral Trustee, if required by
the Collateral Trustee). All Proceeds received by the Collateral Trustee
hereunder shall be held by the Collateral Trustee in a Collateral Account
maintained under its sole dominion and control. All Proceeds while held by the
Collateral Trustee in a Collateral Account (or by such Grantor in trust for the
Secured Parties) shall continue to be held as collateral security for all the
Secured Obligations and shall not constitute payment thereof until applied as
provided in Section 6.7.
6.7. Application of Proceeds. At such intervals as may be
agreed upon by each Borrower and the Collateral Trustee, or, if an Actionable
Default shall have occurred and be continuing, at any time at the Collateral
Trustee's election, the Collateral Trustee may apply all or any part of Proceeds
constituting Collateral realized through the exercise by the Collateral Trustee
of its remedies hereunder, whether or not held in any Collateral Account, in
payment of the Secured Obligations in accordance with the provisions of the
Collateral Trust Agreement.
6.8. Code and Other Remedies. (a) If an Actionable Default
shall occur and be continuing, the Collateral Trustee, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies of a
secured party under the New York UCC (whether or not the New York UCC applies to
the affected Collateral) or its rights under any other applicable law or in
equity in each case subject to the terms of the Collateral Trust Agreement.
Without limiting the generality of the foregoing and in each case subject to the
terms of the Collateral Trust Agreement, the Collateral Trustee,
49
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, license,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of the Collateral Trustee or any other Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Trustee and each other Secured
Party shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
days notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Collateral Trustee shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral
Trustee may adjourn any public or private sale from time to time 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. In connection with
any such sale, the Collateral Trustee may sell the Collateral without giving any
warranties as to the Collateral. The Collateral Trustee may specifically
disclaim or modify any warranties of title or the like. This procedure will not
be considered to adversely effect the commercial reasonableness of any sale of
the Collateral. In the exercise of its remedies, each Grantor agrees that it
would not be commercially unreasonable for the Collateral Trustee to dispose of
the Collateral or any portion thereof by using Internet sites that provide for
the auction of assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers of assets.
EACH Grantor hereby waives any claims against the Collateral Trustee arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if the Collateral Trustee accepts the first offer received and
does not offer such Collateral to more than one offeree. Each Grantor further
agrees, at the Collateral Trustee's request, to assemble the Collateral and make
it available to the Collateral Trustee at places which the Collateral Trustee
shall reasonably select, whether at such Grantor's premises or elsewhere. In the
exercise of its remedies, the Collateral Trustee shall have the right to enter
onto the property where any Collateral is located and take possession thereof
with or without judicial process.
(b) The Collateral Trustee shall apply the net proceeds
of any action taken by it pursuant to this Section 6.8, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Secured Parties hereunder,
including reasonable attorneys' fees and disbursements, to the payment in whole
or in part of the Secured
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Obligations in accordance with the Collateral Trust Agreement. If the Collateral
Trustee sells any of the Collateral upon credit, the Grantor will be credited
only with payments actually made by purchaser and received by the Collateral
Trustee and applied to indebtedness of the purchaser. In the event the purchaser
fails to pay for the Collateral, the Collateral Trustee may resell the
Collateral and the Grantor shall be credited with proceeds of the sale. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Collateral Trustee or the other Secured
Parties arising out of the exercise by them of any rights hereunder.
(c) In the event of any disposition of any of the
Intellectual Property, the goodwill of the business connected with and
symbolized by any Trademarks subject to such disposition shall be included, and
the applicable Grantor shall supply the Collateral Trustee or its designee with
such Grantor's know-how and expertise, and with documents and things embodying
the same, relating to the manufacture, distribution, advertising and sale of
products or the provision of services relating to any Intellectual Property
subject to such disposition, and such Grantor's customer lists and other records
and documents relating to such Intellectual Property and to the manufacture,
distribution, advertising and sale of such products and services.
6.9. Registration Rights. (a) If the Collateral Trustee is
directed to exercise its right to sell any or all of the Pledged Equity
Interests or the Pledged Debt Securities pursuant to Section 6.8, and if the
Collateral Trustee is so directed to have the Pledged Equity Interests or the
Pledged Debt Securities, or that portion thereof to be sold, registered under
the provisions of the Securities Act, the relevant Grantor shall cause the
Issuer thereof to (i) execute and deliver, and cause the directors and officers
of such Issuer to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts as the Collateral Trustee determines
to be reasonably necessary or advisable to register the Pledged Equity Interests
or the Pledged Debt Securities, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its commercially reasonable efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Pledged Equity Interests or the Pledged Debt Securities, or that
portion thereof to be sold and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Trustee, are
reasonably necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to use commercially
reasonable efforts to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the Collateral
Trustee shall designate and to make available to its security holders, as soon
as practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Trustee
may be unable to effect a public sale of any or all the Pledged Equity Interests
or the Pledged Debt Securities, by reason of certain prohibitions contained in
the Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such
51
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Collateral Trustee shall be under
no obligation to delay a sale of any of the Pledged Equity Interests or the
Pledged Debt Securities for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would agree to do
so.
(c) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Equity Interests or the Pledged Debt
Securities pursuant to this Section 6.9 valid and binding and in compliance with
any and all other applicable Requirements of Law. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 6.9 will cause
irreparable injury to the Secured Parties, that the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.9 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Actionable Default has occurred.
6.10. Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by any Secured Party to collect such deficiency.
6.11. Separate Liens. The Collateral Trustee may exercise
any or all of the rights and remedies set forth in this Section 6 separately
with respect to each security interest granted hereunder or jointly, as directed
by the relevant Secured Parties in accordance with the Collateral Trust
Agreement.
SECTION 7. THE COLLATERAL TRUSTEE
7.1. Collateral Trustee's Appointment as Attorney-in-Fact,
etc. (a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
Trustee and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Trustee the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name,
or otherwise, take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Trustee for the purpose of collecting any
and all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
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(ii) in the case of any Intellectual Property,
execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Collateral Trustee may request
to evidence the Collateral Trustee's security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or
any part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale
provided for in Section 6.8 or 6.9, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the
Collateral; and
(v) (1) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Collateral Trustee or as
the Collateral Trustee shall direct; (2) ask or demand for, collect,
and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) 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 Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Trustee
may deem appropriate; (7) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Collateral
Trustee shall determine; and (8) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Collateral Trustee
were the absolute owner thereof for all purposes, and do, at the
Collateral Trustee's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Collateral Trustee
deems necessary to protect, preserve or realize upon the Collateral and
the Collateral Trustee's security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary
notwithstanding, the Collateral Trustee agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Actionable Default shall have occurred and be continuing, and in accordance with
the Collateral Trust Agreement.
(b) If any Grantor fails to perform or comply with any of
its agreements contained herein, the Collateral Trustee, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
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(c) The expenses of the Collateral Trustee incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at the rate applicable under Section 2.06 of the Credit
Agreement, from the date of payment by the Collateral Trustee to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Trustee on demand.
(d) Each Grantor hereby ratifies all that said attorneys
set forth in this Section 7.1 shall lawfully do or cause to be done by virtue
hereof. All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
7.2. Duty of Collateral Trustee. The Collateral Trustee's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Trustee
deals with similar property for its own account. Neither the Collateral Trustee,
nor any other Secured Party nor any of their respective officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
Affiliates shall be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Collateral Trustee
and the other Secured Parties hereunder are solely to protect the Secured
Parties' interests in the Collateral and shall not impose any duty upon any
Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
Affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except to the extent that any such act or failure to act is found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from their own gross negligence or willful misconduct.
Notwithstanding anything to the contrary contained in this
Agreement, the rights, privileges, powers, benefits and immunities of the
Collateral Trustee hereunder are subject to the terms, conditions and
limitations set forth in the Collateral Trust Agreement, reference to which is
made for all purposes; provided, however, that any forbearance by the Collateral
Trustee in exercising any right or remedy available to it under the Collateral
Trust Agreement shall not give rise to a defense on the part of the Grantors
with respect to the Collateral Trustee's exercise of any right or remedy
pursuant to this Agreement or as otherwise afforded by applicable law.
7.3. Execution of Financing Statements. Each Grantor
acknowledges that pursuant to Section 9-509(b) of the New York UCC and any other
applicable law, each Grantor authorizes the Collateral Trustee to file or record
financing or continuation statements, and amendments thereto, and other filing
or recording documents or instruments with respect to the Collateral, without
the signature of such Grantor, in such form and in such offices as the
Collateral Trustee reasonably determines appropriate to perfect or maintain the
perfection of the security interests of the Collateral Trustee under this
Agreement. Each Grantor agrees that such financing statements may describe the
collateral in the same manner as described in the Security Documents or as "all
assets" or "all personal property", whether now owned or hereafter existing
54
or acquired or such other description as the Collateral Trustee, in its sole
judgment, determines is necessary or advisable. A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction. Each Grantor hereby ratifies and authorizes the filing by or on
behalf of the Collateral Trustee of any financing statement with respect to the
Collateral made prior to the date hereof.
7.4. Authority of Collateral Trustee. Each Grantor
acknowledges that the rights and responsibilities of the Collateral Trustee
under this Agreement with respect to any action taken by the Collateral Trustee
or the exercise or non-exercise by the Collateral Trustee of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Trustee and the other Secured Parties, be governed by the Collateral Trust
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Trustee and the
Grantors, the Collateral Trustee shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and no Grantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority. Notwithstanding anything to the
contrary contained herein, in taking any action hereunder the Collateral Trustee
shall not be required to act except to the extent that it shall have been
directed in writing to so act by a Secured Debt Representative; provided that
all actions of the Collateral Trustee hereunder shall be taken pursuant to the
terms of the Collateral Trust Agreement and the Collateral Trustee shall act to
the extent directed pursuant to the terms thereof with respect to those matters
specified therein.
7.5. Access to Collateral, Books and Records; Other
Information. Upon reasonable request to any Grantor, representatives of the
Collateral Trustee or any other Secured Party (acting through the applicable
Secured Debt Representative) shall have full and free access to visit and
inspect, as applicable, during normal business hours all of the Collateral of
such Grantor, including all of the books, correspondence and records of such
Grantor relating thereto; provided that no Grantor shall be required to provide
such access more than two times in any fiscal year, unless an Actionable Default
shall have occurred and be continuing. The Collateral Trustee and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and such Grantor agrees to render to the Collateral
Trustee, at such Grantor's cost and expense, such clerical and other assistance
as may be reasonably requested by the Collateral Trustee with regard thereto.
Such Grantor shall, at any and all times, within a reasonable time after written
request by the Collateral Trustee, furnish or cause to be furnished to the
Collateral Trustee, in such manner and in such detail as may be reasonably
requested by the Collateral Trustee, additional information with respect to the
Collateral.
7.6. Appointment of Co-Collateral Agents. At any time or
from time to time, in order to comply with any Requirement of Law, the
Collateral Trustee may appoint another bank or trust company or one of more
other persons, either to act as co-agent or agents on behalf of the Secured
Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and which may be specified in the instrument
of appointment. Each separate trustee or co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Collateral Trustee or
separately, as may be provided therein, subject to all the provisions of the
55
Collateral Trust Agreement and the other Security Documents, specifically
including every provision of such agreements relating to the conduct of,
affecting the liability of, or affording protection to, the Collateral Trustee.
A copy of every such instrument shall be sent to the Collateral Trustee.
SECTION 8. MISCELLANEOUS
8.1. Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 7.1 of the Collateral Trust
Agreement.
8.2. Notices. All notices, requests and demands to or upon
the Collateral Trustee or any Grantor hereunder shall be effected in the manner
provided for in Section 7.5 of the Collateral Trust Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 8.2 or such other
address specified in writing to the Collateral Trustee in accordance with such
Section. Each Grantor agrees to provide a copy of each notice provided by it
hereunder to the Collateral Trustee to each Secured Debt Representative in the
manner provided for in Section 7.1 of the Collateral Trust Agreement.
8.3. No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Collateral Trustee nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Secured Debt Default under any Secured Debt Document.
No failure to exercise, nor any delay in exercising, on the part of the
Collateral Trustee or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Trustee or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which such Secured Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4. Enforcement Expenses; Indemnification. (a) Each
Grantor agrees to pay or reimburse the Collateral Trustee and each Secured Party
for all its costs and expenses incurred in collecting against such Grantor under
the guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the Secured Debt Documents to which such Grantor
is a party, including the fees and disbursements of counsel to the Collateral
Trustee and each Secured Party.
(b) Each Grantor agrees to pay, and to save the
Collateral Trustee and the other Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to, or resulting from any delay in paying, any and all stamp, excise, sales or
other taxes which may be payable or determined to be payable with respect to any
of the Collateral or in connection with any of the transactions contemplated by
this Agreement.
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(c) Each Grantor agrees to pay, and to save the
Collateral Trustee and the other Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent each Credit Agreement Borrower would be required to do
so pursuant to Section 9.05 of the Credit Agreement (whether or not then in
effect), if the Collateral Trustee were acting as the Administrative Agent under
the Credit Agreement.
(d) The agreements in this Section shall survive
repayment of the Secured Obligations and all other amounts payable under the
Secured Debt Documents.
8.5. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Collateral Trustee and the other Secured Parties and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Trustee, and any attempted assignment without
such consent shall be null and void.
8.6. Set-Off. Each Grantor hereby irrevocably authorizes
each Secured Party at any time and from time to time, without notice to such
Grantor or any other Grantor, any such notice being expressly waived by each
Grantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by each Secured Party to or for the credit or the account of such Grantor,
or any part thereof in such amounts as each Secured Party may elect, against and
on account of the obligations and liabilities of such Grantor to each Secured
Party hereunder and claims of every nature and description of each Secured Party
against such Grantor, in any currency, whether arising hereunder, under any
other Secured Debt Document or otherwise, as each Secured Party may elect,
whether or not each Secured Party has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured,
provided that each such set-off and appropriation by any Secured Party shall be
held by it and applied in accordance with the terms of the Collateral Trust
Agreement. The applicable Secured Party shall notify such Grantor promptly of
any such set-off and the application made by each Secured Party of the proceeds
thereof, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Secured Party under
this Section are in addition to other rights and remedies (including other
rights of set-off) which each Secured Party may have.
8.7. Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by facsimile), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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8.9. Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10. Integration. This Agreement and each of the other
Secured Debt Documents represent the agreement of the Grantors, the Collateral
Trustee and the other Secured Parties with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by any Secured Party relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in any of the other Secured
Debt Documents.
8.11. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
8.12. Submission to Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Secured
Debt Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of New York, the courts
of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Collateral Trustee and the Secured
Debt Representatives shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive
or consequential damages.
8.13. Acknowledgments. Each Grantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Secured Debt Documents to
which it is a party;
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(b) no Secured Party has any fiduciary relationship with
or duty to any Grantor arising out of or in connection with this Agreement or
any of the other Secured Debt Documents, and the relationship between the
Grantors, on the one hand, and the Collateral Trustee and the other Secured
Parties, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and
(c) no joint venture is created hereby or by the Secured
Debt Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.
8.14. Additional Grantors. Each Subsidiary of the Company
that is required to become a party to this Agreement pursuant to any Secured
Debt Document shall become a Grantor and a Guarantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1.
8.15. Releases. (a) All or any portion of the Collateral
shall be released from the Liens created hereby, and the Guarantee of any
Guarantor under this Agreement shall terminate, in each case as provided in
Section 4.1 of the Collateral Trust Agreement.
(b) In the event of any sale or other disposition of all
of the Equity Interests in any Guarantor to a person that is not (either before
or after giving effect to such transactions) the Company or a Subsidiary, then
such Guarantor will be released and relieved of any obligations under its
Guarantee; provided that the proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of all applicable Secured
Debt Documents. Upon delivery by the Company to each applicable Guaranteed
Secured Debt Representative of an officer's certificate and an opinion of
counsel to the effect that such sale or other disposition was made by the
Company or any applicable Subsidiary in accordance with the provisions of all of
the applicable Secured Debt Documents, such Guaranteed Secured Debt
Representative will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Guarantee.
(c) In addition to the foregoing, the Guarantee of any
Guarantor under this Agreement with respect to any Series of Guaranteed Secured
Debt shall terminate to the extent such termination is provided for in the
applicable Secured Debt Documents governing such Series of Guaranteed Secured
Debt.
8.16. Conflicts. In the case of any conflicts between this
Agreement and the Collateral Trust Agreement, the provisions of the Collateral
Trust Agreement shall govern and control.
8.17. WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER SECURED DEBT DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
8.18. Additional Guaranteed Secured Debt Representatives.
Each Guaranteed Secured Debt Representative that becomes entitled to the
benefits of the Collateral Trust
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Agreement after the date hereof in accordance with the terms thereof shall
become a party to this Agreement for purposes of Section 2.
8.19. Rights and Immunities of Secured Debt
Representatives. The Administrative Agent shall be entitled to all of the
rights, protections, immunities and indemnities set forth in the Credit
Agreement, the Trustee shall be entitled to all of the rights, protections,
immunities and indemnities set forth in the Indenture and any future Secured
Debt Representative shall be entitled to all of the rights, protections,
immunities and indemnities set forth in the credit agreement, indenture or other
agreement governing the applicable Secured Debt with respect to which such
person shall act as representative, in each case as if specifically set forth
herein. In no event shall any Secured Debt Representative be liable for any act
or omission on the part of the Grantors or the Collateral Trustee hereunder.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
NRG ENERGY, INC.
By:_________________________________________________
Name:
Title:
NRG POWER MARKETING INC.
By:_________________________________________________
Name:
Title:
[SUBSIDIARY GUARANTORS]
By:_________________________________________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Trustee
By:_________________________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch
By:_________________________________________________
Name:
Title:
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By:_________________________________________________
Name:
Title:
LAW DEBENTURE TRUST COMPANY OF
NEW YORK, not in its individual capacity, but
solely as Trustee under the Indenture,
By:_________________________________________________
Name:
Title: