Exhibit 4.5
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STOCK PLEDGE AGREEMENT
by and among
SOUTHERN STAR CENTRAL CORP.,
as Pledgor
DEUTSCHE BANK TRUST COMPANY AMERICAS,
a New York banking corporation,
as Trustee and Collateral Agent
for the benefit of the Secured Parties
Dated as of August 8, 2003
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TABLE OF CONTENTS
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1. DEFINITIONS..............................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Rules of Interpretation........................................................................13
2. SECURITY FOR OBLIGATIONS; PRIORITY......................................................................14
2.1 Senior Secured Obligations.....................................................................14
2.2 Additional Junior Obligations..................................................................14
2.3 Rights in Collateral...........................................................................14
3. PLEDGE OF PLEDGED STOCK, ETC............................................................................14
3.1 Senior Pledge..................................................................................14
3.2 Junior Pledge..................................................................................15
3.3 Additional Collateral..........................................................................15
3.4 Transfer Taxes.................................................................................16
3.5 Certain Representations and Warranties Regarding the Collateral................................16
4. APPOINTMENT OF SUBAGENTS; ENDORSEMENTS, ETC.............................................................16
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT.................................................................16
6. DIVIDENDS AND OTHER DISTRIBUTIONS.......................................................................16
7. REMEDIES IN CASE OF EVENT OF DEFAULT....................................................................17
7.1 Certain Remedies...............................................................................17
7.2 Decisions Relating to Exercise of Remedies.....................................................18
7.3 Limitation on Exercise of Remedies.............................................................19
8. REMEDIES, ETC., CUMULATIVE..............................................................................19
9. APPLICATION OF PROCEEDS.................................................................................19
10. PURCHASERS OF COLLATERAL................................................................................20
11. CERTAIN LIMITATIONS.....................................................................................20
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY...................................................................20
13. TRANSFER BY THE PLEDGOR.................................................................................21
14. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR................................................21
15. JURISDICTION OF ORGANIZATION; NAME......................................................................23
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16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC.....................................................................23
17. REGISTRATION, ETC.......................................................................................23
18. TERMINATION; RELEASE....................................................................................25
18.1 General........................................................................................25
18.2 Release of the Collateral......................................................................25
18.3 Release of Collateral with Respect to Existing Secured Debt and New Secured Debt...............25
19. NOTICES, ETC............................................................................................26
20. WAIVER; AMENDMENT.......................................................................................26
20.1 General........................................................................................26
20.2 Amendment Adverse to the Senior Secured Debt Holders...........................................27
20.3 Amendment Adverse to the New Junior Secured Debt Holders.......................................27
20.4 Amendment to Cure Defect, Etc..................................................................27
21. NEW SECURED DEBT........................................................................................27
22. COLLATERAL AGENT........................................................................................28
22.1 Appointment....................................................................................28
22.2 Exculpatory Provisions.........................................................................28
22.3 Reliance by Collateral Agent...................................................................28
22.4 Notice of Default..............................................................................29
22.5 Fees and Expenses..............................................................................29
22.6 Indemnification................................................................................29
22.7 Successor Collateral Agent.....................................................................30
22.8 Miscellaneous..................................................................................30
23. MISCELLANEOUS...........................................................................................31
24. GOVERNING LAW...........................................................................................31
25. WAIVER OF JURY TRIAL....................................................................................31
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ANNEXES
Annex A - List Of Pledged Stock
Annex B Pledgor Information
EXHIBITS
Exhibit 1 - Pledge Agreement Acknowledgment
Exhibit 2 - New Secured Debt Notification
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STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT (as amended, restated, supplemented, or otherwise
modified from time to time, this "Agreement"), dated as of August 8, 2003, among
SOUTHERN STAR CENTRAL CORP., a Delaware corporation (the "Pledgor"), DEUTSCHE
BANK TRUST COMPANY AMERICAS, a New York banking corporation (the "Trustee"),
acting in its capacity as Trustee for the Noteholders (as hereinafter defined)
and DEUTSCHE BANK TRUST COMPANY AMERICAS (the "Collateral Agent"), as Collateral
Agent for the benefit of and on behalf of the Noteholders (as hereinafter
defined) and the Additional Debt Holders (as hereinafter defined, and together
with the Noteholders, the "Secured Parties").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Indenture dated as of the date hereof
(including all annexes, exhibits and schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified from time to time, the
"Indenture") by and among the Pledgor, as Issuer, and the Trustee for the
holders of the Existing Secured Debt under the Indenture (collectively, the
"Noteholders"), the Pledgor will issue to the Noteholders 8.50% Senior Secured
Notes due 2010 in an aggregate principal amount of $180,000,000 (such notes, as
the same may be amended, exchanged, extended, renewed, restated, supplemented or
otherwise modified from time to time, together with any Additional Notes (as
defined below) issued pursuant to the Indenture, being herein collectively
referred to as the "Notes");
WHEREAS, it is contemplated that, from time to time to the extent permitted
by the Indenture, the Pledgor may, from time to time, issue or guaranty certain
New Senior Secured Debt (as hereinafter defined) and/or New Junior Secured Debt
(as hereinafter defined);
WHEREAS, the Pledgor is the record and beneficial owner of all the issued
and outstanding common stock of Southern Star Central Gas Pipeline, Inc., a
Delaware corporation; and
WHEREAS, the Pledgor wishes to pledge and grant security interests in the
Collateral (as hereinafter defined) in favor of the Collateral Agent, for the
benefit of the Noteholders and the holders of any New Senior Secured Debt (the
"New Senior Secured Debt Holders"; and together with the Noteholders, the
"Senior Secured Parties"), and for the benefit of the holders of any New Junior
Secured Debt (the "New Junior Secured Debt Holders"; and together with the New
Senior Secured Debt Holders, the "Additional Debt Holders");
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements hereinafter contained, the Pledgor hereby agrees with the Collateral
Agent, for the benefit of the Secured Parties, as follows:
1. DEFINITIONS.
1.1 Defined Terms. (a) Unless otherwise defined herein, all capitalized
terms used herein and defined in the Indenture shall be used herein as therein
defined.
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(b) The following capitalized terms used herein shall have the definitions
specified below:
"Additional Debt Holders" shall have the meaning set forth in the
fourth recital hereto.
"Additional Notes" shall mean any notes (other than the Initial Notes
and the Exchange Notes), if any, issued under the Indenture in accordance
with Sections 2.02, 2.14 and 4.09 thereof.
"Additional Secured Obligations" shall mean, collectively, the New
Senior Secured Obligations and the New Junior Secured Obligations.
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control," as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of Voting Stock, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person shall
be deemed to be control. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have
correlative meanings.
"Agent Related Person" shall have the meaning set forth in Section
22.6 hereof.
"Agreement" has the meaning set forth in the first paragraph hereof.
"Board of Directors" shall mean: (1) with respect to a corporation,
the board of directors of the corporation; (2) with respect to a
partnership, the board of directors of the general partner of the
partnership; and (3) with respect to any other Person, the board or
committee of such Person serving a similar function.
"Capital Lease Obligation" shall mean, at the time any determination
is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" shall mean: (1) in the case of a corporation,
corporate stock; (2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock; (3) in the case of a partnership
or limited liability company, partnership or membership interests (whether
general or limited); and (4) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
"Collateral" shall have the meaning set forth in Section 3.1 hereof.
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"Debt Documents" shall mean, collectively, the Note Documents, the New
Senior Secured Debt Documents and the New Junior Secured Debt Documents.
"Default" shall mean any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Environmental Laws" shall mean any and all Laws, now or hereafter in
effect, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to the environment, human health or safety, or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or toxic or hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, groundwater, or
land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or toxic or hazardous substances or wastes.
"Equity Interests" shall mean Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"Event of Default" shall mean (1) an "Event of Default" as defined in
Section 6.01 of the Indenture; (2) any "Event of Default" (or similarly
defined event or condition) under any New Senior Secured Debt Document; and
(3) any "Event of Default" (or similarly defined event or condition) as
defined in any New Junior Secured Debt Document.
"Exchange Notes" shall mean (i) the 8.50% Senior Secured Notes due
2010, registered under the Securities Act, issued pursuant to the Indenture
in connection with an Exchange Offer (as defined in the Indenture) pursuant
to the Registration Rights Agreement (as defined in the Indenture) and (ii)
additional notes, if any, issued pursuant to a registration statement filed
with the Securities and Exchange Commission under the Securities Act.
"Existing Secured Debt" shall mean, collectively, (i) the Initial
Notes, (ii) the Additional Notes (to the extent such Additional Notes are
issued in accordance with the Indenture and the Lien securing such
Additional Notes is a "Permitted Lien" under clause (3) of the definition
thereof) and (iii) the Exchange Notes issued in exchange for the Initial
Notes and such Additional Notes.
"Existing Secured Obligations" shall mean, collectively, (1) the
Indebtedness, debts, liabilities, and obligations, howsoever arising, owed
by the Pledgor under the Indenture and the other Note Documents in respect
of the Initial Notes, Additional Notes (to the extent such Additional Notes
are issued in accordance with the Indenture and the Lien securing such
Additional Notes is a "Permitted Lien" under clause (3) of the definition
thereof) and the Exchange Notes issued in exchange for the Initial Notes
and such Additional Notes, whether direct or indirect, absolute or
contingent, due or to
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become due, now existing or hereafter arising and howsoever evidenced, and
the due performance and compliance by the Pledgor with the terms thereof;
(2) any and all sums advanced by the Trustee or any Noteholder pursuant to
the terms of such Note Documents reasonably necessary in order to preserve
the Collateral or preserve its security interest in the Collateral; and (3)
the reasonable expenses of retaking, holding, preparing for sale, selling
or otherwise disposing of or realizing on the Collateral, or of any
exercise by the Collateral Agent, the Trustee or any Noteholder of its
rights under this Agreement, together with reasonable attorneys' fees and
court costs.
"Foreign Subsidiary" shall mean any Restricted Subsidiary of the
Pledgor that was not formed under the laws of the United States or any
State of the Unites States or the District of Columbia.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect on the Issue
Date.
"Governmental Approval" shall mean any authorization, consent,
approval, license, ruling, permit, tariff, rate, certification, exemption,
filing, variance, claim, order, judgment, decree, publication, notice to,
declaration of or with, or registration by or with, any Governmental
Authority.
"Governmental Authority" shall mean any government, governmental
department, commission, board, bureau, agency, regulatory authority,
instrumentality, judicial or administrative body, domestic or foreign,
federal, state or local having jurisdiction over the matter or matters in
question.
"Guarantee" shall mean a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, of all or any part of any Indebtedness in any manner
including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof.
"Hedging Obligations" shall mean, with respect to any specified
Person, the obligations of such Person incurred under: (1) interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements; (2) foreign exchange contracts and currency protection
agreements; (3) any commodity futures contract, commodity option or other
similar agreement or arrangement; and (4) other similar agreements or
arrangements.
"Indebtedness" shall mean with respect to any specified Person, any
indebtedness of such Person, whether or not contingent: (1) in respect of
borrowed money; (2) evidenced by bonds, notes, debentures or similar
instruments; (3) in respect of
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banker's acceptances or letters of credit (or reimbursement agreements in
respect thereof) or similar instruments; (4) representing Capital Lease
Obligations; (5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable; or (6) representing the net obligations
of such Person under any Hedging Obligations (the amount of any such
obligations to be equal at any time to the termination value of the
agreement or arrangement giving rise to such obligation that would be
payable by such Person at such time); if and to the extent any of the
preceding items (other than letters of credit or Hedging Obligations) would
appear as a liability upon a balance sheet of the specified Person prepared
in accordance with GAAP. In addition, the term "Indebtedness" includes all
Indebtedness of others to the extent secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the
specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person. The amount
of any Indebtedness outstanding as of any date will be: (1) the accreted
value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount; and (2) the principal amount of the Indebtedness,
together with any interest thereon that is more than 30 days past due, in
the case of any other Indebtedness.
"Indemnified Liabilities" shall mean any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, charges, expenses or disbursements (including reasonable legal fees
and expenses and reasonable fees and expenses of consultants) of any kind
or nature whatsoever which may at any time (including any Unmatured
Surviving Obligations) be imposed on, incurred by or asserted against any
Indemnified Person in any way relating to or arising out of this Agreement
or any other Debt Document and any other document or instrument
contemplated by or referred to herein or therein, or the transactions
contemplated hereby and thereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with
respect to the exercise by any Secured Debt Representative, the Collateral
Agent and any Secured Party of any of its respective rights or remedies
under any of the Debt Documents, and any investigation, litigation or
proceeding (including any bankruptcy, insolvency, reorganization or other
similar proceeding or appellate proceeding) related to this Agreement or
any other Debt Document or the Secured Debt, or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto;
provided, that the Pledgor shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person as
determined by a final judgment of a court of competent jurisdiction.
"Indemnified Person" shall mean each of the Secured Debt
Representatives, the Collateral Agent and each Secured Party and each of
their respective officers, directors, employees, counsel, agents and
attorneys-in-fact and Affiliates.
"Indenture" shall have the meaning set forth in the first recital
hereto.
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"Initial Notes" shall mean $180,000,000 in aggregate principal amount
of 8.50% Senior Secured Notes due 2010 issued under the Indenture on the
Issue Date.
"Issue Date" shall mean August 8, 2003.
"Issuers" shall be a collective reference to each issuer of Pledged
Stock.
"Law" shall mean, with respect to any Person (1) any statute, law,
regulation, ordinance, rule, judgment, order, decree, permit, concession,
grant, franchise, license, agreement or other governmental restriction or
any interpretation or administration of any of the foregoing by any
Governmental Authority (including, without limitation, Governmental
Approvals) applicable to such Person and (2) any directive, guideline,
policy, requirement or any similar form of decision of or determination by
any Governmental Authority which is binding on such Person, in each case,
whether now or hereafter in effect (including, without limitation, in each
case, any Environmental Law).
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in such asset and any filing of, or
agreement or authorization to file, any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
rating agency.
"New Debt Documents" shall mean, collectively, the New Senior Secured
Debt Documents and the New Junior Secured Debt Documents.
"New Junior Secured Debt" shall be a collective reference to all
Indebtedness of the Pledgor incurred in accordance with Section 4.09 of the
Indenture (1) that is permitted to be secured under clause (20) of the
definition of "Permitted Liens" and the New Senior Secured Debt Documents
(if applicable) to share in the security interests granted under this
Agreement pursuant to Section 3.2 hereof; (2) that is designated as "New
Junior Secured Debt" by the Pledgor to each of the Collateral Agent and the
Trustee in a writing substantially in the form of Exhibit 2 attached hereto
and (3) with respect to which, the provisions of Sections 2.2 and 21 have
been satisfied.
"New Junior Secured Debt Documents" shall mean this Agreement and all
indentures, debentures, notes, guaranties and other documents executed by
the Pledgor in connection with the issuance of any New Junior Secured Debt.
"New Junior Secured Debt Holders" shall have the meaning set forth in
the fourth recital hereto.
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"New Junior Secured Debt Representative" shall mean any trustee,
administrative agent or like representative of the holders of any New
Junior Secured Debt.
"New Junior Secured Obligations" shall mean, collectively, (1) all
Indebtedness, loans, advances, debts, liabilities, and obligations,
howsoever arising, owed by the Pledgor under a New Junior Secured Debt
Document to the New Junior Secured Debt Representative or any New Junior
Secured Debt Holder or its Affiliates of every kind and description
(whether or not evidenced by any note or instrument and whether or not for
the payment of money), direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, including all interest,
fees, charges, expenses, attorneys' fees and consultants' fees chargeable
to the Pledgor; (2) any and all sums advanced by the New Junior Secured
Debt Representative or any New Junior Secured Debt Holder pursuant to the
provisions of the New Junior Secured Debt Documents reasonably necessary in
order to preserve the Collateral or preserve its security interest in the
Collateral; and (3) the reasonable expenses of retaking, holding, preparing
for sale, selling or otherwise disposing of or realizing on the Collateral,
or of any exercise by the Collateral Agent, the New Junior Secured Debt
Representative or any New Junior Secured Debt Holder of its rights under
this Agreement, together with reasonable attorneys' fees and court costs.
"New Secured Debt" shall mean, collectively, the New Senior Secured
Debt and the New Junior Secured Debt.
"New Senior Secured Debt" shall be a collective reference to all
Indebtedness of the Pledgor issued in accordance with Section 4.09 of the
Indenture (1) that is permitted to be secured under clauses (1) and (3) of
the definition of "Permitted Lien" to share in the security interests
granted under this Agreement pursuant to Section 3.1 hereof; (2) that is
designated as "New Senior Secured Debt" by the Pledgor to each of the
Collateral Agent and the Trustee in a writing substantially in the form of
Exhibit 2 attached hereto and (3) with respect to which, the provisions of
Sections 2.1 and 21 have been satisfied.
"New Senior Secured Debt Documents" shall mean this Agreement and all
indentures, debentures, notes, guaranties and other documents executed by
the Pledgor in connection with the issuance of any New Senior Secured Debt.
"New Senior Secured Debt Holders" shall have the meaning set forth in
the fourth recital hereto.
"New Senior Secured Debt Representative" shall mean any trustee,
administrative agent or like representative of the holders of any New
Senior Secured Debt.
"New Senior Secured Obligations" shall mean, collectively, (1) all
Indebtedness, loans, advances, debts, liabilities, and obligations,
howsoever arising, owed by the Pledgor under a New Senior Secured Debt
Document to the New Senior Secured Debt Representative or any New Senior
Secured Debt Holder or its Affiliates of every kind and description
(whether or not evidenced by any note or instrument and whether or not for
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the payment of money), direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, including all interest,
fees, charges, expenses, attorneys' fees and consultants' fees chargeable
to the Pledgor; (2) any and all sums advanced by the New Senior Secured
Debt Representative or any New Senior Secured Debt Holder pursuant to the
provisions of the New Senior Secured Debt Documents reasonably necessary in
order to preserve the Collateral or preserve its security interest in the
Collateral; and (3) the reasonable expenses of retaking, holding, preparing
for sale or lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Collateral Agent, the New Senior
Secured Debt Representative or any New Senior Secured Debt Holder of its
rights under this Agreement, together with reasonable attorneys' fees and
court costs.
"Non-Recourse Debt" shall mean Indebtedness: (1) as to which neither
the Pledgor nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) is the lender; (2) no default with
respect to which (including any rights that the holders of the Indebtedness
may have to take enforcement action against an Unrestricted Subsidiary)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness (other than the Notes) of the Pledgor or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity;
and (3) as to which the lenders or other credit providers have been
notified in writing that they will not have any recourse to the stock or
assets of the Pledgor or any of its Restricted Subsidiaries.
Notwithstanding the foregoing, for purposes of clauses (1) and (3)
above, Indebtedness of an Unrestricted Subsidiary secured by a pledge by
the Pledgor of the Capital Stock of such Unrestricted Subsidiary, to the
extent of the value of such Capital Stock, shall be deemed to be
Non-Recourse Debt.
"Note Documents" shall mean the Indenture, this Agreement and the
documentation executed in connection with the issuance of the Additional
Notes, if any.
"Noteholders" shall have the meaning set forth in the first recital
hereof.
"Officer" shall mean, with respect to any Person, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary or any Vice-President of such
Person.
"Officer's Certificate" shall mean a certificate signed on behalf of
the Pledgor by one Officer of the Pledgor that meets the requirements of
Section 12.05 of the Indenture and that, to the extent required by the
Trust Indenture Act, such certificate shall be signed by the principal
executive officer, the principal financial officer or the principal
accounting officer of the Pledgor.
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"Permitted Lien" shall mean: (1) Liens securing Indebtedness and other
obligations under any Credit Facility permitted to be incurred under the
Indenture; (2) Liens securing the Initial Notes and Exchange Notes issued
in exchange for Initial Notes; (3) Liens to secure additional senior
Indebtedness (including the Additional Notes) of the Pledgor by the
Collateral on a pari passu basis with the Initial Notes and the Exchange
Notes issued in exchange for the Initial Notes; provided that such
Indebtedness shall not exceed 15.0% of Consolidated Net Tangible Assets of
the Pledgor; (4) Liens existing on the Issue Date; (5) Liens in favor of
the Pledgor; (6) Liens to secure Indebtedness of any Restricted
Subsidiaries; provided that the Indebtedness is permitted by the terms of
the Indenture to be incurred; (7) Liens on property of a Person existing at
the time such Person is merged with or into or consolidated with the
Pledgor or any Restricted Subsidiary of the Pledgor or otherwise becomes a
Restricted Subsidiary of the Pledgor; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation or
such Person becoming a Restricted Subsidiary of the Pledgor and do not
extend to any assets other than those of such Person; (8) Liens on property
existing at the time of acquisition of the property by the Pledgor or any
Restricted Subsidiary of the Pledgor; provided that such Liens were in
existence prior to the contemplation of such acquisition and do not extend
to any assets other than such acquired property; (9) Liens to secure
Indebtedness (including Capital Lease Obligations) permitted by clause
(b)(iv) of Section 4.09 of the Indenture covering only the assets acquired
with such Indebtedness; (10) Liens securing Permitted Refinancing
Indebtedness incurred to refinance Indebtedness that was previously so
secured; provided that any such Lien is limited to all or part of the same
property or assets (plus improvements, accessions, proceeds or
distributions in respect thereof) that secured or, under the written
arrangements under which the original Lien arose, could secure the
Indebtedness being refinanced; (11) Liens on assets or Capital Stock of
Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted
Subsidiaries; (12) Liens securing Hedging Obligations so long as the
related Indebtedness is, and is permitted to be under the Indenture,
secured by a Lien on the same property securing such Hedging Obligation;
(13) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (14) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; provided that, any reserve or
other appropriate provision as is required in conformity with GAAP has been
made therefor; (15) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar legislation, or
good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which such Person is a party,
or deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import or customs duties or for the payment of rent, in
each case incurred in the ordinary course of business; (16) Liens imposed
by law, including carriers', warehousemen's and mechanics' Liens, in each
case for sums not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted;
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provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor; (17) Liens arising solely by
virtue of any statutory or common law provisions relating to banker's
Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depositary institution; provided
that (a) such deposit account is not a dedicated cash collateral account
and is not subject to restrictions against access by the Pledgor in excess
of those set forth by regulations promulgated by the Federal Reserve Board
and (b) such deposit account is not intended by the Pledgor or any
Restricted Subsidiary to provide collateral to the depositary institution;
(18) easements, rights-of-way, minor survey exceptions, zoning and similar
restrictions and other similar encumbrances or title defects incurred or
imposed which do not materially detract from the value of the property
subject thereto (as such property is used by the Pledgor or its
Subsidiaries) or interfere with the ordinary conduct of the Pledgor's
business or the business of its Subsidiaries; provided that any such Liens
are not incurred in connection with any borrowing of money or any
commitment to loan any money or to extend any credit; (19) judgment Liens
not giving rise to an Event of Default so long as such Liens are adequately
bonded and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment have not been finally terminated
or the period within which such proceedings may be initiated has not
expired and (20) Liens incurred in the ordinary course of business of the
Pledgor or any Restricted Subsidiary of the Pledgor with respect to
obligations that do not exceed $5,000,000 at any one time outstanding.
Notwithstanding the foregoing, "Permitted Liens" will not include any Lien
described in clause (7), (8) or (9) above to the extent such Lien applies
to any Additional Assets acquired directly or indirectly from Net Proceeds
pursuant to Section 4.10 of the Indenture. For purposes of this definition,
the term "Indebtedness" will be deemed to include interest on such
Indebtedness.
"Permitted Refinancing Indebtedness" shall mean any Indebtedness of
the Pledgor or any of its Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Pledgor or any of its Subsidiaries (other
than intercompany Indebtedness); provided that: (1) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness extended, refinanced, renewed, replaced,
defeased or refunded (plus all accrued interest on the Indebtedness and the
amount of all expenses and premiums incurred in connection therewith); (2)
such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Permitted Refinancing Indebtedness is incurred either by the
Pledgor or by the Subsidiary
11
that is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity.
"Pledged Stock" shall mean the shares of Capital Stock of each Issuer
described on Annex A hereto, and any shares of Capital Stock of such Issuer
at any time issued in respect of the Capital Stock described on Annex A
hereto.
"Pledgor" shall have the meaning set forth in the first paragraph
hereof.
"Proceeds" shall have the meaning given such term in Article 9 of the
UCC.
"Required Secured Parties" shall mean, for the purposes of directing
the Collateral Agent with respect to actions taken pursuant to this
Agreement, (1) until the indefeasible payment in full in cash of all Senior
Secured Obligations, the Secured Parties holding (a) more than 50% of the
aggregate amount of the outstanding principal amount of the Existing
Secured Debt, if any, (b) more than 50% of the aggregate amount of the
outstanding principal amount of any class or issuance of New Senior Secured
Debt which the Pledgor has designated, in a written notice to the
Collateral Agent at the time of the incurrence of such New Senior Secured
Debt, as being entitled to the benefits of this clause (b), if any, and (c)
more than 50% of the aggregate amount of the aggregate outstanding
principal amount of all other New Senior Secured Debt, if any, in each
case, voting separately as a class, and (2) thereafter, for the purposes of
directing the Collateral Agent with respect to actions taken pursuant to
this Agreement, the Secured Parties holding more than 50% of the aggregate
outstanding principal amount of the New Junior Secured Debt, if any. For
the avoidance of doubt, unless and until all Senior Secured Obligations
have been indefeasibly paid in full, no New Junior Secured Debt Holder
shall have any voting rights with respect to Section 7 hereof.
"Restricted Subsidiary" shall mean any Subsidiary of the Pledgor that
is not an Unrestricted Subsidiary.
"SEC" shall mean the Securities and Exchange Commission.
"Secured Debt" shall mean, collectively, the Initial Notes, Additional
Notes (to the extent such Additional Notes are issued in accordance with
the Indenture and the Lien securing such Additional Notes is a "Permitted
Lien" under clause (3) of the definition thereof), the Exchange Notes
issued in exchange for the Initial Notes and such Additional Notes, the New
Senior Secured Debt and the New Junior Secured Debt.
"Secured Debt Representatives" shall mean, collectively, each of the
Trustee, each New Senior Secured Debt Representative and each New Junior
Secured Debt Representative.
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"Secured Obligations" shall mean, collectively, the Existing Secured
Obligations and the Additional Secured Obligations.
"Secured Parties" shall have the meaning set forth in the first
paragraph hereof.
"Senior Secured Parties" shall have the meaning set forth
in the fourth recital hereof.
"Senior Secured Obligations" shall mean, collectively, the Existing
Secured Obligations and the New Senior Secured Obligations.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and as in effect from time to time.
"Standard & Poor's" shall mean Standard & Poor's Rating Service, a
division of the ▇▇▇▇▇▇-▇▇▇▇ Company, Inc., a New York corporation, or any
successor rating agency.
"State" shall mean the District of Columbia or any state of the United
States of America.
"Subsidiary" shall mean, with respect to any specified Person: (1) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees of the corporation, association or other business
entity is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (2) any partnership (a) the sole general partner
or the managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person or
one or more Subsidiaries of that Person (or any combination thereof).
"Trustee" shall have the meaning set forth in the first paragraph
hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which the
Indenture is qualified under the Trust Indenture Act.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York from time to time.
"Unmatured Surviving Obligations" shall mean any obligation which is
contingent and unliquidated and not due and owing and which pursuant to the
provisions of the relevant Debt Document survives termination of such Debt
Document.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Pledgor
that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a board resolution, but only to the extent that such
Subsidiary: (1) has no Indebtedness other than
13
Non-Recourse Debt; (2) is not party to any agreement, contract, arrangement
or understanding with the Pledgor or any Restricted Subsidiary of the
Pledgor unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Pledgor or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Pledgor; (3) is a Person with respect to which
neither the Pledgor nor any of its Restricted Subsidiaries has any direct
or indirect obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels of operating results; and (4)
has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Pledgor or any of its Restricted
Subsidiaries. Any such designation by the Board of Directors of a
Subsidiary of the Pledgor as an Unrestricted Subsidiary will be evidenced
to the Trustee by filing with the Trustee a certified copy of a resolution
of the Board of Directors giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
preceding conditions and was permitted pursuant to Sections 4.07 and 4.20
of the Indenture. If, at any time, any Unrestricted Subsidiary would fail
to meet the preceding requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture and any Indebtedness of such Subsidiary shall be deemed to be
incurred by a Restricted Subsidiary of the Pledgor as of such date (and, if
such Indebtedness is not permitted to be incurred as of such date under
Section 4.09 of the Indenture, the Pledgor will be in default of such
covenant). The Board of Directors of the Pledgor may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that
such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Pledgor of any outstanding Indebtedness of
such Unrestricted Subsidiary and such designation will only be permitted if
(1) such Indebtedness is permitted under Section 4.09 of the Indenture,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event
of Default would be in existence following such designation.
"Voting Stock" of any Person as of any date shall mean the Capital
Stock of such Person that is at the time entitled to vote in the election
of the Board of Directors of such Person.
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (1) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of
such Indebtedness by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by (2) the then outstanding principal amount of such Indebtedness.
1.2 Rules of Interpretation. Unless the context otherwise requires: (a) a
term has the meaning assigned to it; (b) an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP; (c) "or" is not
exclusive; (d) words in the singular include the plural, and in the plural
include the singular; (e) provisions apply to successive events
14
and transactions; and (f) references to sections of, or rules under, the
Securities Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
2. SECURITY FOR OBLIGATIONS; PRIORITY.
2.1 Senior Secured Obligations. This Agreement is made by the Pledgor for
the benefit of the Collateral Agent, acting for the benefit of the Senior
Secured Parties to secure the full and prompt payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all Senior Secured
Obligations; provided, however, that the pledge made and security interest
granted in Section 3.1 and any other provisions of this Agreement shall be
effective as to any obligations in respect of any New Senior Secured Debt only
if the New Senior Secured Debt Holders or the New Senior Secured Debt
Representative shall have executed and delivered to the Collateral Agent a
counterpart of this Agreement or an acknowledgment to this Agreement
acknowledged by the Collateral Agent in the form attached hereto as Exhibit 1.
2.2 Additional Junior Obligations. This Agreement is made by the Pledgor
for the benefit of the Collateral Agent, acting for the benefit of the New
Junior Secured Debt Holders, if any, to secure the full and prompt payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all New Junior Secured Obligations; provided, however, that the pledge made
and security interest granted in Section 3.2 and any other provisions of this
Agreement shall be effective as to any obligations in respect of any New Junior
Secured Debt only if the New Junior Secured Debt Holders or the New Junior
Secured Debt Representative shall have executed and delivered to the Collateral
Agent a counterpart of this Agreement or an acknowledgment to this Agreement
acknowledged by the Collateral Agent in the form attached hereto as Exhibit 1.
2.3 Rights in Collateral. Notwithstanding anything to the contrary
contained in any Debt Document, and irrespective of: (a) the time, order or
method of attachment or perfection of the security interests created hereby; (b)
the time or order of filing or recording of financing statements or other
documents filed or recorded to perfect security interests in any Collateral; and
(c) the rules for determining priority under the UCC or any other Law or rule
governing the relative priorities of secured creditors, (i) any security
interest in any Collateral heretofore or hereafter granted to secure any Senior
Secured Obligation shall be secured on an equal and ratable basis and (ii) any
security interest in any Collateral heretofore or hereafter granted to secure
any Senior Secured Obligation has and shall have priority, to the extent of any
unpaid Senior Secured Obligations, over any security interest in such Collateral
granted to secure the New Junior Secured Obligation.
3. PLEDGE OF PLEDGED STOCK, ETC.
3.1 Senior Pledge. The Pledgor hereby transfers, pledges and assigns to the
Collateral Agent, and grants to the Collateral Agent for the ratable benefit of
the Senior Secured Parties, a first priority security interest in, all of the
right, title and interest of the Pledgor in and
15
to the following, whether now existing or hereafter from time to time acquired
by the Pledgor (collectively, the "Collateral"):
(i) the Pledged Stock;
(ii) all other property hereafter delivered in substitution for any of
the Pledged Stock, all certificates and instruments representing or
evidencing such other property and all cash, securities, interest,
dividends, distributions, rights and other property at any time and from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
(iii) all Proceeds of any and all of the foregoing.
3.2 Junior Pledge. The Pledgor hereby transfers, pledges and assigns to the
Collateral Agent, and grants to the Collateral Agent for the ratable benefit of
the New Junior Secured Debt Holders, if any, a second priority security interest
in the Collateral.
3.3 Additional Collateral. (a) To the extent that the Pledgor owns,
acquires or obtains (by purchase, dividend or similar distribution or
otherwise) any right, title or interest in any Collateral, at any time
or from time to time on or after the date hereof, such Collateral shall
automatically (and without the taking of any action by the Pledgor) be
pledged pursuant to Sections 3.1 and 3.2 of this Agreement and, in addition
thereto, the Pledgor shall (as promptly as practicable and, in any event,
within ten Business Days after it obtains such Collateral) (i) deliver to
the Collateral Agent any stock certificates evidencing such Collateral, duly
endorsed in blank and supplements to Annex A and Annex B hereto as are
reasonably necessary to cause such annexes to be complete and accurate
at such time, (ii) take such other actions as the Collateral Agent shall
reasonably request to perfect the Collateral Agent's security interest in
such Collateral and (iii) concurrently with the delivery of the stock
certificates and supplements required pursuant to clause (i) above, deliver
to the Collateral Agent a certificate executed by an Officer of the Pledgor
certifying that the representations and warranties with respect to such
additional Collateral set forth in Sections 3.5 and 14(a) (as amended by any
supplements to Annex A or Annex B) are true and correct on such date.
(b) To the extent that the Pledgor at any time or from time to time creates
or acquires after the Issue Date any new Restricted Subsidiary (which, for the
purposes of this paragraph (b), shall include any existing Subsidiary that
ceases to be an Unrestricted Subsidiary), the Pledgor shall (as promptly as
practicable and, in any event, within ten Business Days after it obtains,
creates or acquires such Restricted Subsidiary) (i) deliver to the Collateral
Agent any stock certificates evidencing the Capital Stock of such Restricted
Subsidiary, duly endorsed in blank and supplements to Annex A and Annex B hereto
as are reasonably necessary to cause such annexes to be complete and accurate at
such time; provided, however, if such Restricted Subsidiary is a Foreign
Subsidiary, the Pledgor shall be required to pledge, and deliver a stock
certificate representing 65% of the Capital Stock of such Foreign Subsidiary,
(ii) if requested by the Collateral Agent, deliver to the Collateral Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Collateral
Agent, (iii) take such other actions as the Collateral Agent shall
16
reasonably request to perfect the Collateral Agent's security interest in such
Collateral and (iv) concurrently with the delivery of the stock certificates and
supplements required pursuant to clause (i) above, deliver to the Collateral
Agent a certificate executed by an Officer of the Pledgor certifying that the
representations and warranties with respect to such additional Collateral set
forth in Sections 3.5 and 14(a) (as amended by any supplements to Annex A and
Annex B) are true and correct on such date.
(c) In addition to the actions required to be taken pursuant to Section
3.3(a) and 3.3(b) hereof, the Pledgor shall from time to time, at the sole
expense of the Pledgor, cause appropriate financing statements (on Form UCC-1 or
other appropriate form) under the Uniform Commercial Code as in effect in the
various relevant States, in form covering all Collateral hereunder (with the
form of such financing statements to be reasonably satisfactory to the
Collateral Agent), to be filed in the relevant filing offices so that at all
times the Collateral Agent has a security interest in all Collateral which is
perfected by the filing of such financing statements (in each case to the
maximum extent perfection by filing may be obtained under the laws of any
relevant State).
3.4 Transfer Taxes. Each pledge of Collateral under Sections 3.1 and 3.2
hereof shall be accompanied by any transfer tax stamps required in connection
with the pledge of such Collateral.
3.5 Certain Representations and Warranties Regarding the Collateral. The
Pledgor represents and warrants that on the date hereof (i) the Pledged Stock
consists of the number and type of shares described in Annex A hereto and (ii)
the Pledged Stock constitutes that percentage of the issued and outstanding
common stock of each Issuer as is set forth in Annex A hereto.
4. APPOINTMENT OF SUBAGENTS; ENDORSEMENTS, ETC.
If and to the extent necessary to enable the Collateral Agent to perfect
its security interest in any of the Collateral or to exercise any of its
remedies hereunder, the Collateral Agent shall have the right to appoint (with
due care) one or more subagents for the purpose of retaining physical possession
of the Collateral, which may be held in the name of the Pledgor, endorsed or
assigned in blank or in favor of the Collateral Agent or any nominee or nominees
of the Collateral Agent or a subagent appointed by the Collateral Agent.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT.
Unless and until there shall have occurred and be continuing an Event of
Default, the Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral owned by it, and to give
consents, waivers or ratifications in respect thereof.
6. DIVIDENDS AND OTHER DISTRIBUTIONS.
All cash dividends, cash distributions, cash Proceeds and other cash
amounts payable in respect of the Collateral (other than proceeds of any
foreclosure in respect of the Collateral pursuant to Section 7 hereof, which
proceeds shall be distributed and applied as
17
provided in Section 9 hereof) shall be received (a) by the Pledgor, if no Event
of Default shall have occurred and be continuing and (b) by the Collateral
Agent, if any Event of Default shall have occurred and be continuing for
application toward the payment of the Secured Obligations as provided for in
Section 9. The Collateral Agent shall also be entitled to receive directly, and
to retain as part of the Collateral:
(i) all other or additional capital stock or other property
(including, but not limited to, cash dividends other than as set forth
above) paid or distributed by way of dividend or otherwise in respect of
the Collateral;
(ii) all other or additional capital stock or other property paid or
distributed in respect of the Collateral by way of split, spin-off,
split-up, reclassification, combination or similar rearrangement; and
(iii) all other or additional capital stock or other property
(including, but not limited to, cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange, conveyance of
assets, liquidation or similar reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Collateral Agent's right to have pledged to it Proceeds of the Collateral in any
form in accordance with Section 3 of this Agreement. All dividends,
distributions or other payments which are received by the Pledgor contrary to
the provisions of this Section 6 and Section 7 hereof shall be received in trust
for the benefit of the Collateral Agent, shall be segregated from other property
or funds of the Pledgor and shall be forthwith paid over to the Collateral Agent
as Collateral in the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT.
7.1 Certain Remedies. Subject to Sections 7.2 and 7.3, if there shall have
occurred and be continuing an Event of Default, the Collateral Agent shall be
entitled to exercise all of the rights, powers and remedies (whether vested in
it by this Agreement, any other Debt Document or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Collateral Agent
shall be entitled to exercise all the rights and remedies of a secured party
under the Uniform Commercial Code as in effect in any relevant jurisdiction
applicable to the Collateral and also shall be entitled, without limitation, to
exercise the following rights:
(a) to receive all amounts payable in respect of the Collateral;
(b) upon receipt of all requisite Governmental Approvals (the expense of
obtaining such Governmental Approvals shall be payable from Proceeds), to
transfer all or any part of the Collateral into the Collateral Agent's name or
the name of its nominee or nominees;
(c) upon receipt of all requisite Governmental Approvals (the expense of
obtaining such Governmental Approvals shall be payable from Proceeds), to vote
all or any part of the Collateral (whether or not transferred into the name of
the Collateral Agent) and give all consents, waivers and ratifications in
respect of the Collateral and otherwise act with respect
18
thereto as though it were the outright owner thereof and to exercise any and all
of the rights or powers of the Pledgor in its capacity as a stockholder of any
Issuer;
(d) in accordance with all applicable Law, at any time and from time to
time to sell, assign and deliver, or grant options to purchase, all or any part
of the Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to sell or
of the time or place of sale or adjournment thereof or to redeem or otherwise
(all of which are hereby waived by the Pledgor to the extent permitted by
applicable Law), for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Collateral Agent in its absolute discretion may
determine, in each case, to the extent permitted by applicable Law. The
Collateral Agent shall not be obligated to make any such sale of Collateral
regardless of whether any notice of sale has theretofore been given. The Pledgor
hereby waives and releases to the fullest extent permitted by Law any right or
equity of redemption with respect to the Collateral, whether before or after
sale hereunder (other than the right to pay the Secured Obligations in full),
and all rights, if any, of marshalling the Collateral and any other security for
the Secured Obligations or otherwise. At any such sale, to the extent permitted
by applicable Law, the Collateral Agent may bid for and purchase all or any part
of the Collateral so sold free from any such right or equity of redemption. The
Collateral Agent shall not be liable for failure to collect or realize upon any
or all of the Collateral or for any delay in so doing nor shall any of them be
under any obligation to take any action whatsoever with regard thereto. The
Collateral Agent shall incur no liability as a result of the sale of the
Collateral or any part thereof at any sale pursuant to this Section 7.1
conducted in a commercially reasonable manner. Each of the Pledgor, the Secured
Debt Representatives and the Secured Parties hereby waives any claims against
the Collateral Agent arising by reason of the fact that the price at which the
Collateral may have been sold at such sale was less than the price that might
have been obtained; and
(e) to set off any and all Collateral against any and all Secured
Obligations and to apply such Collateral to the payment of any and all Secured
Obligations.
If, pursuant to applicable Law, prior notice of any of the foregoing
actions is required to be given to the Pledgor, the Pledgor hereby acknowledges
that the minimum time required by such applicable Law, or if no minimum is
specified, ten days, shall be deemed a reasonable notice period.
7.2 Decisions Relating to Exercise of Remedies. (a) If there shall have
occurred and be continuing an Event of Default, the Collateral Agent agrees to
make such demands and give such notices under this Agreement as the appropriate
Secured Debt Representative or Secured Debt Representatives, as the case may be,
acting on behalf of the Required Secured Parties, may request in writing, and to
take such action to enforce this Agreement and to foreclose upon, collect and
dispose of the Collateral or any portion thereof as may be directed in writing
by the appropriate Secured Debt Representative or Secured Debt Representatives,
as the case may be, acting on behalf of the Required Secured Parties.
(b) Each Secured Party executing this Agreement or an acknowledgment hereto
agrees that (i) the Collateral Agent may act as directed by the Required Secured
Parties
19
(regardless of whether any Secured Party or any holder represented thereby
agrees, disagrees or abstains with respect to such direction), (ii) the
Collateral Agent shall have no liability for acting in accordance with such
request and (iii) no Secured Party or any holder represented thereby shall have
any liability to any other Secured Party or any holder represented thereby for
any such request. The Collateral Agent shall give prompt notice to each Secured
Debt Representative of actions taken pursuant to the instructions of the
Required Secured Parties; provided, however, that the failure to give any such
notice shall not impair the right of the Collateral Agent to take any such
action or the validity or enforceability under this Agreement of the action so
taken.
(c) Each Secured Party agrees that unless and until such Secured Party is
entitled to give direction to the Collateral Agent pursuant to Section 7.2(a),
the only rights of such Secured Party under this Agreement shall be to be
secured by the Collateral and to receive payments provided for in Section 9
hereof.
7.3 Limitation on Exercise of Remedies. Notwithstanding anything in this
Agreement to the contrary, the Collateral Agent shall not exercise any remedy
provided for in this Section 7 for the purpose of realizing value on the
Collateral to be applied to the payment of the New Junior Secured Obligations
unless (a) such remedy is concurrently being exercised for the purpose of
realizing value on the Collateral to be applied to the payment in full of all
Senior Secured Obligations or (b) all the Senior Secured Obligations (other than
Unmatured Surviving Obligations) shall have been indefeasibly paid in full.
8. REMEDIES, ETC., CUMULATIVE.
Each and every right, power and remedy of the Collateral Agent provided for
in this Agreement or in any other Debt Document, or now or hereafter existing at
law or in equity or by statute shall be cumulative and concurrent and shall be
in addition to every other such right, power or remedy. The exercise or
beginning of the exercise by the Collateral Agent of any one or more of the
rights, powers or remedies provided for in this Agreement or any other Debt
Document or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the
Collateral Agent of all such other rights, powers or remedies, and no failure or
delay on the part of the Collateral Agent to exercise any such right, power or
remedy shall operate as a waiver thereof. No notice to or demand on the Pledgor
in any case shall entitle it to any other or further notice or demand in similar
or other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand.
9. APPLICATION OF PROCEEDS.
All monies collected by the Collateral Agent upon any sale or other
disposition of the Collateral pursuant to the terms of this Agreement, together
with all other monies received by the Collateral Agent hereunder, shall be
applied for satisfaction of the Secured Obligations as follows:
First , to the payment of the costs and expenses of such sale,
collection or other realization on the Collateral, including reasonable
compensation to the Collateral Agent
20
and its agents, contractors, advisors and counsel, and all fees, expenses,
liabilities and advances made or incurred by the Collateral Agent in
connection therewith;
Second , to the payment in full of all outstanding Senior Secured
Obligations to the Senior Secured Parties, if any;
Third , only after the payment in full of all Senior Secured
Obligations (other than Unmatured Surviving Obligations), to the
payment in full of all outstanding New Junior Secured Obligations
to the New Junior Secured Debt Holders, if any; and
Fourth , after the payment in full of all Secured Obligations
(other than Unmatured Surviving Obligations), to the Pledgor, or its
successors or assigns, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Collateral Agent hereunder (whether by virtue of the power of sale herein
granted, pursuant to judicial process or otherwise), the receipt given by the
Collateral Agent or the officer making the sale shall be a sufficient discharge
to the purchaser or purchasers of the Collateral so sold, free of the security
interests granted hereunder with respect to such Collateral, and such purchaser
or purchasers shall not be obligated to see to the application of any part of
the purchase money paid over to the Collateral Agent or such officer or be
answerable in any way for the misapplication or nonapplication thereof.
11. CERTAIN LIMITATIONS.
(a) The Collateral Agent shall not be obligated to perform or discharge any
obligation of the Pledgor as a result of the pledge hereby effected.
(b) The acceptance by the Collateral Agent of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Collateral Agent to appear in or defend any action or
proceeding relating to the Collateral to which it is not a party, or to take any
action hereunder or thereunder, or to expend any money or incur any expenses or
perform or discharge any obligation, duty or liability with respect to the
Collateral.
(c) Nothing in this Agreement shall obligate the Pledgor to sell or
otherwise dispose of the Pledged Stock during the continuance of an Event of
Default or otherwise.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY.
(a) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver any and all such further instruments and
documents and take such further action as the Collateral Agent reasonably may
deem appropriate in order to perfect and preserve the Collateral Agent's
security interest in the Collateral and in order for the Collateral Agent to
obtain the full benefits of this Agreement and of the rights and powers herein
granted, including,
21
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction applicable to the
Collateral and the filing of any other equivalent or similar statement or
document under any other applicable Law with any other applicable Governmental
Authority with respect to the security interests granted hereby. The Pledgor
also hereby authorizes the Collateral Agent to file any such financing or
continuation statement without the signature of the Pledgor to the extent
permitted by applicable Law. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any promissory note or
other instrument, such note or instrument shall be delivered as soon as
practicable to the Collateral Agent and pledged to the Collateral Agent
hereunder, duly endorsed, to the extent necessary, to the Collateral Agent.
(b) The Pledgor hereby irrevocably appoints the Collateral Agent such
Pledgor's attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, to act from time to time,
solely after the occurrence and during the continuance of an Event of Default,
in the Collateral Agent's reasonable discretion to take any action and to
execute any instrument which the Collateral Agent may deem reasonably necessary
or advisable to accomplish the purposes of this Agreement.
13. TRANSFER BY THE PLEDGOR.
The Pledgor will not sell or otherwise dispose of, grant any option with
respect to, or mortgage, pledge or otherwise encumber any of the Collateral or
any interest therein (except as may be permitted in accordance with the terms of
the Debt Documents) and upon any such permitted disposition, the Liens on such
Collateral shall be released in accordance with Section 18.3(a).
14. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.
(a) The Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has good
and valid title to, the Pledged Stock and it has all rights in the
Collateral necessary for the security interest purported to be created
hereunder to attach (subject, in each case, to no pledge, lien, security
interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement);
(ii) it has full power, authority and legal right to pledge
all the Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except to the extent that the enforceability hereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in
equity or at law);
22
(iv) except to the extent already obtained or made, no consent
of any other party (including, without limitation, any stockholder or
creditor of the Pledgor or any Issuer) and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any Governmental Authority is
required to be obtained by the Pledgor in connection with (A) the
execution, delivery or performance of this Agreement, (B) the validity
or enforceability of this Agreement, (C) the perfection or enforceability
of the Collateral Agent's security interest in the Collateral or
(D) except for compliance with or as may be required by applicable
securities laws, the exercise by the Collateral Agent of any of its
rights or remedies provided herein; provided, that any Person acquiring
or proposing to acquire the voting securities of any Issuer may require
prior approval from one or more Governmental Authorities having
jurisdiction over natural gas companies.
(v) the execution, delivery and performance of this Agreement
will not violate any provision of any applicable Law or regulation or of
any order, judgment, writ, award or decree of any court, arbitrator or
Governmental Authority, domestic or foreign, applicable to the Pledgor,
or of the certificate of incorporation, operating agreement, limited
liability company agreement, partnership agreement or by-laws of the
Pledgor or any Issuer or of any securities or other interests issued by
the Pledgor or any Issuer, or of any mortgage, deed of trust, indenture,
lease, loan agreement, credit agreement or other material contract,
agreement or instrument or undertaking to which the Pledgor or any Issuer
is a party or by which any of its assets may be bound and will not result
in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance on any of the assets of the Pledgor
or any Issuer except as contemplated by this Agreement;
(vi) the Pledged Stock has been duly and validly issued and
acquired, is fully paid and non-assessable and is subject to no options
to purchase or similar rights; and
(vii) the pledge and collateral assignment to the Collateral
Agent of the Pledged Stock, together with continued possession by the
Collateral Agent of any certificates, instruments, documents or other
writings evidencing the Pledged Stock and/or the making of relevant
filings or recordings and/or any other action required to be taken in
accordance with Section 3.3 (all of which have been made or taken, as
the case may be), creates in favor of the Collateral Agent a valid and
perfected first and second priority security interest in such Collateral,
subject to no prior Lien or encumbrance (other than any Permitted
Lien) or to any agreement purporting to grant to any third party a Lien
or encumbrance (other than any Permitted Lien) on the property or assets
of the Pledgor which would include the Pledged Stock and the Collateral
Agent is entitled to all the rights, priorities and benefits afforded by
the Uniform Commercial Code or other relevant Law as enacted in any
relevant jurisdiction to perfected security interests in respect of
such Collateral.
(b) The Pledgor covenants and agrees that it will defend the Collateral
Agent's right, title and security interest in and to the Collateral against the
claims and demands of all
23
persons whomsoever; and the Pledgor covenants and agrees that it will have like
title to and right to pledge any other property at any time hereafter pledged to
the Collateral Agent as Collateral hereunder and will likewise defend the right
thereto and security interest therein of the Collateral Agent.
15. JURISDICTION OF ORGANIZATION; NAME.
The Pledgor's name, jurisdiction of organization and identification number
are set forth in Annex B hereto. The Pledgor will not change its name or its
jurisdiction of organization, except upon fifteen days' prior written notice to
the Collateral Agent and delivery to the Collateral Agent of all additional
executed financing statements and other documents reasonably requested by the
Collateral Agent to maintain the validity, perfection and priority of the
security interests provided for herein.
16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC.
The obligations of the Pledgor under this Agreement shall be absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever (except as provided under Section
18), including, without limitation: (i) any renewal, extension, amendment or
modification of or addition or supplement to or deletion from any Debt Document
or any other instrument or agreement referred to therein, or any assignment or
transfer of any thereof; (ii) any waiver, consent, extension, indulgence or
other action or inaction under or in respect of any Debt Document or other
agreement or instrument referred to therein including, without limitation, this
Agreement; (iii) any furnishing of any additional security to the Collateral
Agent or its assignee or any acceptance thereof or any release of any security
by the Collateral Agent or its assignee (except as provided under Section 18);
(iv) any limitation on any party's liability or obligations under any Debt
Document or other instrument or agreement referred to therein or any invalidity
or unenforceability, in whole or in part, of any Debt Document or other
instrument or agreement referred to therein or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Pledgor or any Issuer, or
any action taken with respect to this Agreement by any trustee or receiver, or
by any court, in any such proceeding, whether or not the Pledgor shall have
notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC.
(a) If there shall have occurred and be continuing an Event of Default,
then upon receipt by the Pledgor from the Collateral Agent of a written request
or requests that the Pledgor cause any registration, qualification or compliance
under any Federal or state securities law or laws to be effected with respect to
all or any part of the Collateral consisting of Pledged Stock, the Pledgor as
soon as practicable and at its expense will use its commercially reasonable
efforts to cause such registration to be effective (and be kept effective) and
will use its commercially reasonable efforts to cause such qualification and
compliance to be declared effective (and be kept effective) as may be so
requested if such registration, qualification or compliance is necessary to
permit or facilitate the sale and distribution of such Collateral,
24
including, without limitation, registration under the Securities Act, as then in
effect (or any similar statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with any other government requirements, provided, (i) that the Collateral Agent
shall furnish to the Pledgor such information regarding the Collateral Agent as
the Pledgor may reasonably request in writing and as shall be required in
connection with any such registration, qualification or compliance, (ii) the
Pledgor shall not be required to file or cause such registration statement,
qualification or to become effective if such registration statement or
qualification is not permissible under applicable law or SEC policy or the
Pledgor is not able to comply, after exercising its commercially reasonable
efforts, with the requirements of the Securities Act or SEC policy with respect
to such registration statement, and (iii) the Pledgor shall not be required to
register or qualify as a foreign corporation, in each case, if that would
subject it to the service of process in suits or to taxation in any jurisdiction
where it is not now so subject. The Pledgor will cause the Collateral Agent to
be kept advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Collateral Agent such number of prospectuses, offering circulars or other
documents incident thereto as the Collateral Agent from time to time may
reasonably request, and will indemnify the Collateral Agent and all others
participating in the distribution of such Collateral against all claims, losses,
damages and liabilities caused by any untrue statement (or alleged untrue
statement) of a material fact contained therein (or in any related registration
statement, notification or the like) or by any omission (or alleged omission) to
state therein (or in any related registration statement, notification or the
like) a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same may have been
caused by an untrue statement or omission based upon information furnished in
writing to the Pledgor by the Collateral Agent expressly for use therein.
(b) If at any time when the Collateral Agent shall determine to exercise
its right to sell all or any part of the Collateral consisting of Pledged Stock
pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act, as then in effect, the Collateral Agent may sell such Collateral
or part thereof, as the case may be, by private sale in such manner and under
such circumstances as the Collateral Agent may deem necessary or reasonably
advisable in order that such sale may legally be effected without such
registration. Without limiting the generality of the foregoing, in any event the
Collateral Agent (i) may proceed to make such private sale notwithstanding that
a registration statement for the purpose of registering such Collateral or part
thereof shall not have been filed under such Securities Act, (ii) may approach
and negotiate with a single possible purchaser to effect such sale, and (iii)
may restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Collateral or part thereof. In the event of
any such sale, the Collateral Agent shall incur no responsibility or liability,
except to the extent incurred by reason of its gross negligence, bad faith or
willful misconduct, for selling all or any part of the Collateral at a price
which the Collateral Agent, in its sole and absolute discretion, deems
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid.
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18. TERMINATION; RELEASE.
18.1 General. After payment in full of the Secured Obligations (other than
Unmatured Surviving Obligations) and the termination of all commitments to make
any extensions of credit under the Debt Documents, this Agreement and the
security interest created hereby shall terminate, and the Collateral Agent, at
the written request and expense of the Pledgor, will execute and deliver to the
Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to the
Pledgor (without recourse and without any representation or warranty) such of
the Collateral as has not theretofore been sold or otherwise applied or released
pursuant to this Agreement, together with any monies at the time held by the
Collateral Agent or any of its sub-agents hereunder.
18.2 Release of the Collateral. (a) The security interest created hereby
for the benefit of the Noteholders shall be released in whole, (i) upon payment
in full of the principal of, accrued and unpaid interest and premium and
Additional Interest, if any, on the Existing Secured Debt and payment in full of
all other obligations related thereto due and payable at or prior to the time
such principal, accrued and unpaid interest and premium and Additional Interest,
if any, are paid and (ii) upon satisfaction and discharge of the Indenture or
(iii) upon a legal defeasance or covenant defeasance as set forth in Sections
8.02 or 8.03 of the Indenture, respectively.
(b) The security interest created hereby for the benefit of the Additional
Debt Holders shall be released, in whole, as provided for in the relevant New
Senior Secured Debt Document or New Junior Secured Debt Document, as the case
may be.
18.3 Release of Collateral with Respect to Existing Secured Debt and New
Secured Debt. The security interest created hereby for the benefit of the
Secured Parties shall be released (a) in part, as to any property constituting
Collateral that is sold or otherwise disposed of by the Pledgor in a transaction
permitted by the Indenture, this Agreement and the then existing New Debt
Documents, if any, at the time of such sale or disposition, to the extent of the
interest sold or disposed of; (b) with respect to all or substantially all of
the Collateral, with the consent of at least (i) 66-2/3% in aggregate principal
amount of the Existing Secured Debt then outstanding, voting as a single class,
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Existing Secured Debt), (ii)
the required amount of the New Senior Secured Debt, if any, as provided for in
the relevant New Senior Debt Documents and (iii) the required amount of the New
Junior Secured Debt, if any, as provided for in the relevant New Junior Secured
Debt Documents, in each case, voting separately as a class; or (c) with respect
to less than all or substantially all of the Collateral, (i) with the consent of
at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Notes), (ii) the required
amount of the New Senior Secured Debt, if any, as provided for in the relevant
New Senior Secured Debt Documents and (iii) the required amount of the New
Junior Secured Debt, if any, as provided for in the relevant New Junior Secured
Debt Documents, in each case, voting separately as a class. For the avoidance of
doubt, the release of the security interest with respect to each class of
Secured Debt, as provided for in
26
the foregoing clauses (b) and (c), shall require only the consent of the holders
of that class of Secured Debt with respect to which such security interest is
being released.
19. NOTICES, ETC.
All notices, requests, demands or other communications hereunder shall be
in writing and faxed, mailed or delivered, if to the Pledgor or the Collateral
Agent, at its respective facsimile number or address set forth below or, if to
any other Person, at the address or facsimile number specified for such Person
in the applicable Debt Document (or to such other facsimile number or address
for any party as indicated in any notice given by that party to the other
parties). All such notices and communications shall be effective (i) when sent
by an overnight courier service of recognized standing, on the second Business
Day following the deposit with such service; (ii) when mailed, first class
postage prepaid and addressed as aforesaid through the United States Postal
Service, upon receipt; (iii) when delivered by hand, upon delivery; and (iv)
when faxed, upon confirmation of receipt:
(a) If to the Pledgor, at:
Southern Star Central Corp.
c/o AIG Highstar Capital, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Trustee or Collateral Agent, at:
Deutsche Bank Trust Company Americas
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇ NYC ▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Corporate Trust and Agency Services
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
20. WAIVER; AMENDMENT.
20.1 General. None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by the Pledgor and the Collateral Agent.
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20.2 Amendment Adverse to the Senior Secured Debt Holders. Any amendment
to, or waiver of, the provisions of this Agreement in any manner (a) that
adversely affects the rights of the Senior Secured Parties, if any, or (b) that
releases any of the Collateral from the Liens under this Agreement (in each
case, other than in accordance with the terms hereof) shall require the consent
of (i) the Noteholders of at least 66-2/3% of the aggregate principal amount of
Existing Secured Debt then outstanding, if any, and (ii) the New Senior Secured
Debt Holders, if any, holding the required amount of the New Senior Secured Debt
as provided for in the relevant New Senior Secured Debt Documents, in each case,
voting separately as a class; provided, however, that such consent shall not be
required if the Senior Secured Obligations (other than Unmatured Surviving
Obligations) have been indefeasibly paid in full.
20.3 Amendment Adverse to the New Junior Secured Debt Holders. In addition
to any requirements set forth in this Section 20, any amendment to, or waiver
of, the provisions of this Agreement in any manner (a) that adversely affects
the rights of the Junior Secured Debt Holders, if any, or (b) that releases any
of the Collateral from the Liens under this Agreement (in each case, other than
in accordance with the terms hereof) shall require, the consent of the New
Junior Secured Debt Holders, if any, holding the required amount of the New
Junior Secured Debt as provided for in the relevant New Junior Secured Debt
Documents; provided, however, that such consent shall not be required if the New
Junior Secured Obligations (other than Unmatured Surviving Obligations) have
been indefeasibly paid in full.
20.4 Amendment to Cure Defect, Etc. Notwithstanding the requirements set
forth in Sections 20.2 and 20.3, the Pledgor and the Collateral Agent may amend
or supplement this Agreement without the consent of any Noteholder or any
Additional Debt Holder: (i) to cure any ambiguity, defect or inconsistency; (ii)
to provide for the assumption of the Pledgor's obligations to the Noteholders
and the Additional Debt Holders, as the case may be, in the case of a merger or
consolidation or sale of all or substantially all of the Pledgor's assets; (iii)
to make any change that would provide any additional rights or benefits to the
Secured Parties or that does not adversely affect the legal rights under the
Indenture, any New Senior Debt Document or any New Junior Debt Document, as the
case may be, of any such Secured Party; or (iv) to comply with requirements of
any applicable Law or of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
21. NEW SECURED DEBT.
At any time when the Pledgor desires to secure any Indebtedness that is
permitted by the Indenture to share in the security interest granted under this
Agreement, the Pledgor shall execute and deliver (or cause to be executed and
delivered) (a) all such documents (including, without limitation, any amendments
or supplements to this Agreement) as the Collateral Agent and the Pledgor shall
reasonably agree are necessary to appoint the Collateral Agent as collateral
agent hereunder with respect to such additional Indebtedness and otherwise to
effectuate the inclusion of the relevant additional Indebtedness as New Secured
Debt hereunder (which documents shall include, without limitation, a
notification to the Collateral Agent and the Trustee in respect of such New
Secured Debt substantially in the form attached hereto as Exhibit 2) and (b) all
other documents that the holder of such additional Indebtedness shall deem
necessary or
28
desirable in connection with the creation and perfection of such security
interests, provided that such documentation is reasonably acceptable to the
Collateral Agent and the Pledgor.
22. COLLATERAL AGENT.
22.1 Appointment. Each Secured Party hereby appoints, designates and
authorizes the Collateral Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement, together with
such powers as are reasonably incidental thereto. Each Secured Party authorizes
the Collateral Agent to execute, deliver and perform this Agreement and such
Secured Party agrees to be bound by all of the agreements of the Collateral
Agent contained in this Agreement. Notwithstanding any provision to the contrary
contained in this Agreement, the Collateral Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement, and the
Collateral Agent does not have or shall not be deemed to have any fiduciary
relationship with any Secured Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the Debt
Documents or otherwise exist against the Collateral Agent. Without limiting the
generality of the foregoing sentence, the use of the term "Collateral Agent," in
this Agreement with reference to the Collateral Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only a relationship between
independent contracting parties.
22.2 Exculpatory Provisions. Neither the Collateral Agent nor any of its
officers, directors, employees or agents shall (i) be liable for any action
taken or omitted to be taken by it under or in connection with this Agreement or
the transactions contemplated thereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Secured
Parties or any other Person for any recital, statement, representation or
warranty made by the Pledgor or any Affiliate of the Pledgor, or any officer
thereof, contained in this Agreement, or in any certificate, report, statement
or other document referred to or provided for in, or received by the Collateral
Agent under or in connection with, this Agreement, or for the value of or title
to any Collateral, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, or for any failure of the Pledgor or any other
party to this Agreement to perform its obligations thereunder. The Collateral
Agent shall not be under any obligation to any Secured Party to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the books or records of the
Pledgor or any Affiliate of the Pledgor. Anything in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to loss of profits).
22.3 Reliance by Collateral Agent. The Collateral Agent shall be entitled
to rely conclusively, and shall be fully protected in so relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel,
29
independent accountants and other experts selected by the Collateral Agent. The
Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement (i) if such action would, in the opinion of the
Collateral Agent (upon consultation with counsel), be contrary to applicable Law
or the terms of this Agreement, (ii) if such action is not specifically provided
for in this Agreement and it shall not have received such written advice or
concurrence of the Required Secured Parties, in each case as the Collateral
Agent deems appropriate, (iii) unless, if it so requests, such Collateral Agent
shall first be indemnified to its satisfaction by the Secured Parties against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a written request or written consent of the
Required Secured Parties, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Secured Parties.
22.4 Notice of Default. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Collateral Agent shall have received written notice from a Secured Party or
the Pledgor referring to the relevant Debt Document, describing such Default or
Event of Default and stating that such notice is a "Notice of Default." If the
Collateral Agent receives any such notice of the occurrence of a Default or an
Event of Default, it shall give notice thereof to each Secured Debt
Representative. The Collateral Agent shall take such action with respect to such
Default or Event of Default as may be requested in writing by the Required
Secured Parties; provided, however, that unless and until the Collateral Agent
has received any such request, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default under this Agreement as it shall deem
advisable or in the best interest of the Secured Parties.
22.5 Fees and Expenses. The Pledgor covenants and agrees to pay to the
Collateral Agent from time to time, and the Collateral Agent shall be entitled
to, the fees and expenses agreed in writing between Pledgor and the Collateral
Agent, and will further pay or reimburse the Collateral Agent upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with the provisions hereof or any other documents
executed in connection herewith (including the reasonable compensation and the
reasonable expenses and disbursements of its counsel and all persons not
regularly in its employ). The obligations of the Pledgor under this Section 22.5
to compensate the Collateral Agent and to pay or reimburse the Collateral Agent
for the reasonable expenses, disbursements and advances shall survive the
satisfaction and discharge of this Agreement or the resignation or removal of
the Collateral Agent.
22.6 Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Secured Parties shall indemnify upon demand the Collateral
Agent, its officers, directors, employees, counsel, agents and attorneys-in-fact
("Agent Related Person") (to the extent not reimbursed by or on behalf of the
Pledgor within ninety days of the Collateral Agent's request to the Pledgor for
payment and without limiting the obligation of the Pledgor to do so), pro rata
in accordance with the aggregate principal amount of the Secured Debt held by
such Secured Parties (as determined by the Secured Debt Representatives), from
and against any and all Indemnified Liabilities; provided, however, that no
Secured Party shall be liable for the
30
payment to the Collateral Agent or the Agent Related Persons of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Secured Party shall reimburse the Collateral Agent upon demand as provided above
for any costs or out-of-pocket expenses incurred by such Collateral Agent or
Agent Related Person (to the extent not reimbursed by or on behalf of the
Pledgor within ninety days of the Collateral Agent's request to the Pledgor for
payment and without limiting the obligation of the Pledgor to do so) in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any document contemplated by or
referred to therein, pro rata in accordance with the aggregate principal amount
of the Secured Debt held by such Secured Parties (as determined by the Secured
Debt Representatives). The provisions of this section shall survive termination
of this Agreement or resignation or removal of the Collateral Agent.
Notwithstanding anything herein to the contrary, the Collateral Agent shall
be entitled to set off from any Collateral or Proceeds thereof any amounts due
and owing to it pursuant to this Section 22.6 solely to the extent such amounts
are not paid by the Pledgor or the Secured Parties as provided in this Agreement
and such amounts remain unpaid by the Secured Parties for a period of thirty
days after demand therefor.
22.7 Successor Collateral Agent. Subject to the appointment and acceptance
of a successor as provided below, the Collateral Agent may resign at any time by
giving notice thereof to the Secured Parties and the Pledgor, and the Collateral
Agent may be removed at any time with or without cause by the Required Secured
Parties upon thirty days prior written notice. Upon any such resignation or
removal, the Required Secured Parties shall have the right to appoint a
successor to the Collateral Agent. If no successor Collateral Agent shall have
been appointed by the Required Secured Parties, and shall have accepted such
appointment within thirty days after the resigning Collateral Agent's giving of
notice of resignation or the giving of any notice of removal of such Collateral
Agent, then the resigning Collateral Agent or Collateral Agent being removed, as
the case may be, may at the Pledgor's expense, appoint a successor to such
Collateral Agent or petition a court of competent jurisdiction for a successor.
If the Collateral Agent shall resign or be removed pursuant to the foregoing
provisions, upon the acceptance of appointment by a successor Collateral Agent
hereunder, the former Collateral Agent shall deliver all Collateral then in its
possession to the successor Collateral Agent. Upon the acceptance of its
appointment as a successor Collateral Agent hereunder, such successor Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of such resigning or removed Collateral Agent, and such
resigning Collateral Agent or removed Collateral Agent shall be discharged from
its duties and obligations under this Agreement.
22.8 Miscellaneous. (a) None of the provisions of this Agreement shall
require the Collateral Agent to expend or risk its own funds or otherwise to
incur any liability, financial or otherwise, in the performance of any of its
duties thereunder, or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.
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(b) The Collateral Agent may execute any of the trusts or powers or perform
any duties under this Agreement either directly or by or through agents,
attorneys, custodians or nominees appointed with due care, and shall not be
responsible for any willful misconduct or negligence on the part of any agent,
attorney, custodian or nominee so appointed.
(c) Any corporation into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation succeeding to the business of the Collateral
Agent shall be the successor of the Collateral Agent under this Agreement
without the execution or filing of any paper with any party to this Agreement or
any further act on the part of any of the parties to this Agreement except where
an instrument of transfer or assignment is required by Law to effect such
succession, anything herein to the contrary notwithstanding.
(d) The Collateral Agent shall not take any instructions with respect to
this Agreement from any entity that is not a Secured Party hereunder.
23. MISCELLANEOUS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of and be
enforceable by each of the parties hereto and its successors and assigns;
provided that the Pledgor may not assign any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent. The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement which shall remain binding
on all parties hereto.
24. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
25. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE NOTEHOLDERS TO PURCHASE THE EXISTING
SECURED DEBT, THE
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ADDITIONAL DEBT HOLDERS, IF ANY, TO ISSUE ANY NEW SECURED DEBT AND THE
COLLATERAL AGENT TO ENTER INTO THIS AGREEMENT AND ANY OTHER RELEVANT DEBT
DOCUMENT TO WHICH IT IS A PARTY.
IN WITNESS WHEREOF, the Pledgor, the Trustee and the Collateral Agent have
caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
PLEDGOR
SOUTHERN STAR CENTRAL CORP.
By
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Name:
Title:
TRUSTEE AND COLLATERAL AGENT
DEUTSCHE BANK TRUST COMPANY AMERICAS
By
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Name:
Title:
[Signature page to Stock Pledge Agreement]