EXHIBIT 4.6
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COLLATERAL AGENCY AGREEMENT
dated as of October 23, 2001
among
▇▇▇▇▇▇ ENERGY LLC,
THE SECURED PARTIES NAMED HEREIN,
and
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Administrative Agent, Collateral Agent
and Intercreditor Agent
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Table of Contents
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Page
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ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION....................... 1
1.1 Definitions................................................... 1
1.2 Principles of Construction.................................... 2
ARTICLE II COLLATERAL AGENT; RELATIONS AMONG SECURED PARTIES............. 2
2.1 Appointment of Collateral Agent; Powers and Immunities........ 2
2.2 Reliance by Collateral Agent.................................. 3
2.3 Events of Default............................................. 4
2.4 Duties, Immunities and Liabilities of Collateral Agent........ 5
2.5 Documents..................................................... 5
2.6 Non-Reliance on Collateral Agent and Other Secured Parties.... 6
2.7 Resignation or Removal of Collateral Agent.................... 6
2.8 Authorization................................................. 7
2.9 Additional Collateral Agents.................................. 8
ARTICLE III ADMINISTRATION OF THE COLLATERAL.............................. 11
ARTICLE IV APPLICATION OF PROCEEDS....................................... 11
ARTICLE V MISCELLANEOUS................................................. 13
5.1 Amendments.................................................... 13
5.2 Successors and Assigns........................................ 13
5.3 Transfers..................................................... 13
5.4 Delay and Waiver.............................................. 13
5.5 Costs and Expenses; Indemnity................................. 14
5.6 Collateral Agency Fee......................................... 14
5.7 Notices....................................................... 14
5.8 Headings...................................................... 14
5.9 Counterparts.................................................. 14
5.10 Governing Law................................................. 14
5.11 Consent to Jurisdiction....................................... 14
5.12 Waiver of Jury Trial.......................................... 15
5.13 Entire Agreement.............................................. 15
5.14 Severability.................................................. 15
5.15 References to Collateral Agency Agreement..................... 15
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COLLATERAL AGENCY AGREEMENT
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This COLLATERAL AGENCY AGREEMENT, dated as of October 23, 2001 (this
"Agreement"), is by and among ▇▇▇▇▇▇ ENERGY LLC, a Delaware limited liability
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company (the "Issuer"), each of the other Persons listed on the signature pages
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hereto under the caption "Secured Parties", each other Senior Secured Party that
becomes a party hereto pursuant to Section 5.17, and BANK ONE TRUST COMPANY,
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NATIONAL ASSOCIATION, as the Administrative Agent, the Collateral Agent and the
Intercreditor Agent.
RECITALS
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WHEREAS, the Issuer was formed for the purpose of developing,
constructing, operating, maintaining, owning and financing a 1,409 MW gas-fired
electric generating peaking facility to be located in Elwood, Illinois;
WHEREAS, the Issuer has determined to issue $402,000,000 aggregate
principal amount of its 8.159% Senior Secured Bonds due July 5, 2026 (the
"Bonds") pursuant to the Trust Indenture, dated as of the date hereof (the
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"Indenture"), between the Issuer and Bank One Trust Company, National
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Association, as trustee (the "Trustee"); and
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WHEREAS, the Issuer will use the proceeds of the Bonds for (i) working
capital; (ii) financing, legal and consulting fees and expenses associated with
the offering of the Bonds; (iii) required funding of the Major Maintenance
Account; (iv) payments for residual construction costs under contracts with GE;
and (v) repayment in full of Indebtedness outstanding under existing
intercompany loans provided by the Members and partial reimbursement of the
Sponsors and Members for advances or capital contributions to the Issuer that
the Issuer has used to pay the costs of developing, constructing and financing
the Project, and for no other purpose.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
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1.1 Definitions. Except as otherwise expressly provided herein,
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capitalized terms used in this Agreement shall have the meanings given in the
Indenture. The following terms have the following respective meanings when used
herein:
"Default" shall have the meaning ascribed thereto in the Intercreditor
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Agreement.
"Event of Default" shall have the meaning ascribed thereto in the
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Intercreditor Agreement.
"Subject Claims" shall have the meaning ascribed thereto in the
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Intercreditor Agreement.
1.2 Principles of Construction. Except as otherwise expressly provided
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herein, the principles of construction set forth in the Indenture shall apply to
this Agreement.
ARTICLE II
COLLATERAL AGENT; RELATIONS AMONG SECURED PARTIES
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2.1 Appointment of Collateral Agent; Powers and Immunities. (a) Subject
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to Section 2.7 hereof, each of the Secured Parties, on the terms and conditions
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hereof, hereby irrevocably appoints and authorizes Bank One Trust Company,
National Association (together with its successors and assigns in such capacity,
the "Collateral Agent") to act as their agent hereunder, under the Security
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Documents and all other Transaction Documents to which the Collateral Agent is a
party, with such powers as are expressly delegated to the Collateral Agent by
the terms of this Agreement, the Security Documents and the other Transaction
Documents, together with such other powers as are reasonably incidental thereto.
The execution of this Agreement by the Collateral Agent shall be deemed an
acceptance by the Collateral Agent of the appointment made under this Section
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2.1 and an agreement to act as agent on behalf of each of the other Secured
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Parties. The Collateral Agent (which term, when used in this sentence and, in
the next sentence of this Section 2.1 and in Section 2.2 and Section 2.4 and in
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Section 7.16 and Section 7.17 of the Intercreditor Agreement, shall include
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reference to its Affiliates and to its own and its Affiliates' officers,
directors, employees and agents) shall not have any duties or responsibilities
except those expressly set forth in this Agreement, the Security Documents and
the other Transaction Documents to which the Collateral Agent is a party, or be
a trustee for or have any fiduciary obligation to any Secured Party. The
Collateral Agent shall be entitled to advice of counsel concerning all matters
pertaining to its duties.
(b) Notwithstanding anything to the contrary contained herein, the
Collateral Agent shall not be required to take any action (i) which is contrary
to this Agreement, the Security Documents or any other Transaction Document to
which the Collateral Agent is a party, (ii) which is contrary to applicable law
or (iii) if the Collateral Agent has not received an indemnity or other
undertaking from all or a portion of the Secured Parties with respect to any
Subject Claims arising out of such action, which undertaking is satisfactory to
the Collateral Agent in its sole discretion. The Collateral Agent shall be
entitled to cease taking any action, once it has commenced taking action, if it
no longer deems any indemnity or undertaking from the Secured Parties to be
sufficient. The Collateral Agent agrees not to resign solely as a result of the
occurrence and continuance of a Default or an Event of Default.
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(c) None of the Collateral Agent or any other Secured Party, or any of
their respective Affiliates, shall be responsible to any other Secured Party for
(i) any recitals, statements, representations or warranties made by the Issuer
or any Member (each, an "Obligor," and collectively, the "Obligors") contained
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in this Agreement, the Security Documents or any other Transaction Documents or
in any certificate or other document referred to or provided for in, or received
by any Secured Party under, this Agreement, the Security Documents or any other
Transaction Documents, (ii) the value, validity, effectiveness, genuineness,
enforce ability or sufficiency of the Collateral, this Agreement, the Security
Documents or any other Transaction Documents or any other documents referred to
or provided for hereunder or thereunder or (iii) any failure by any Obligor to
perform its respective obligations hereunder or thereunder; provided, however,
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that nothing in this Section 2.1 shall be deemed or construed as limiting the
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rights of the Collateral Agent or any Secured Party or the obligations of the
Obligors, in each case as is set forth in the applicable Financing Documents.
(d) The Collateral Agent shall be entitled to advice of counsel and
other professionals concerning all matters of trust and its duty hereunder, but
the Collateral Agent shall not be answerable for the professional malpractice of
any attorney-at-law or certified public accountant or for the acts or omissions
of any other professional in connection with the rendering of professional
advice in accordance with the terms of this Agreement, if such attorney-at-law,
certified public accountant or other professional was selected by the Collateral
Agent with due care. The Collateral Agent may employ agents and attorneys-in-
fact and shall not be responsible for the acts or omissions of any of such
agents or attorneys-in-fact selected by it in good faith.
(e) The Collateral Agent shall not be responsible for any action taken
or omitted to be taken by it hereunder, under any Security Document or under any
other Transaction Document to which the Collateral Agent is a party or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct. Except as otherwise provided under this Agreement, the Security
Documents and the other Transaction Documents to which the Collateral Agent is a
party, the Collateral Agent shall take such action with respect to the Security
Documents and the other Transaction Documents to which it is a party as it shall
be directed to take by the Intercreditor Agent (acting pursuant to the
Intercreditor Agreement).
2.2 Reliance by Collateral Agent. The Collateral Agent shall be entitled
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to rely upon any certificate, notice or other document (including any cable,
telegram, telecopy or telex) reasonably believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons
and need not investigate any fact or matter stated in any such document. The
Collateral Agent shall be entitled to rely upon any judicial order or judgment,
upon any advice or statements of legal counsel, independent consultants and
other experts selected by it in good faith or upon any certification,
instruction, notice or other writing delivered
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to it by the Issuer in compliance with the provisions of this Agreement without
being required to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of service thereof. The Collateral
Agent may act in reliance upon any such instrument comporting with the
provisions of this Agreement or any signature reasonably believed by it to be
genuine and may assume that any person purporting to give notice or receipt or
advice or make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so. As to any matters not
expressly provided for by this Agreement, the Security Documents or the other
Transaction Documents to which the Collateral Agent is a party, the Collateral
Agent shall not be required to take any action or exercise any discretion, but
shall be required to act or to refrain from acting upon instructions of the
Intercreditor Agent (acting pursuant to the Intercreditor Agreement) and shall
in all such cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the Security Documents or any other Transaction
Documents to which the Collateral Agent is a party in accordance with such
instructions of the Intercreditor Agent (acting pursuant to the Intercreditor
Agreement), and any action taken or failure to act pursuant thereto shall be
binding on all of the Secured Parties.
2.3 Events of Default. (a) Unless a Responsible Officer of the Collateral
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Agent shall otherwise have obtained actual knowledge of the occurrence of a
Default or an Event of Default, the Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or an Event of Default unless
a Responsible Officer of the Collateral Agent has received notice from a Secured
Party or an Obligor referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "Notice of Default."
(b) In the event that any Responsible Officer of the Collateral Agent
receives a notice from a Secured Party or an Obligor of the occurrence of a
Default or an Event of Default, the Collateral Agent shall give notice thereof
to each of the other Secured Parties.
(c) In the event that any Responsible Officer of the Collateral Agent
otherwise obtains actual knowledge of the occurrence of a Default or an Event of
Default, the Collateral Agent shall give notice thereof to the other Secured
Parties; provided, however, that, subject to the standard of conduct of the
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Collateral Agent set forth in Section 2.1(e) hereof, the Collateral Agent shall
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not incur any liability to any Obligor or any other Secured Party on account of
any failure to provide such notice.
(d) The Collateral Agent shall take such action with respect to such
Default or Event of Default as so directed pursuant to Article 3 hereof;
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provided that, unless and until the Collateral Agent shall have received such
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directions, the Collateral Agent may (but shall not be obligated to) take, or
refrain from taking, such action with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Secured Parties.
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2.4 Duties, Immunities and Liabilities of Collateral Agent. At all times
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the Collateral Agent shall be required to perform such duties and only such
duties as are expressly and specifically set forth in the Security Documents and
no implied duties or obligations whatsoever shall be read into this Agreement
against the Collateral Agent.
No provision in this Agreement shall require the Collateral Agent to risk
or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or powers or rights hereunder unless the Issuer
or any Secured Party, jointly or severally, has offered and provided to the
Collateral Agent security or indemnity, which the Collateral Agent, in its sole
subjective discretion, deems adequate for such fees, expenses and liabilities
that the Collateral Agent may incur. The Collateral Agent shall be entitled to
interest (calculated on a per annum basis) on all amounts advanced by it
hereunder in its discretion at the rate of the prime commercial lending rate
published in the Eastern Edition of The Wall Street Journal plus one percent
(1%).
The Collateral Agent shall not be responsible for the recording or filing
of any document relating to the Security Documents or of financing statements
(or continuation statements in connection therewith) or of any supplemental
instruments or documents of further assurance as may be required by law in order
to perfect the security interests or Lien on the Site. The Collateral Agent
shall not be deemed to have made representations as to the Site or the
Collateral or as to the validity or sufficiency of any such document relating
thereto.
The Collateral Agent shall not be accountable for the use or application by
the Issuer or any other party of any funds which the Collateral Agent has
released under this Agreement or any other Financing Document.
2.5 Documents. The Collateral Agent will forward promptly after the
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Collateral Agent's receipt thereof (and will use its best efforts to forward
within five (5) Banking Days of such receipt) (a) to each Secured Party a copy
of each document furnished to the Collateral Agent for such Secured Party under
the Security Documents and (b) to the Administrative Agent, the Intercreditor
Agent and the Trustee any notice delivered to the Collateral Agent pursuant to
any Consent. The Collateral Agent will forward to each Secured Party, promptly
upon such Secured Party's request therefor, a copy of any other document
furnished to the Collateral Agent under the Security Documents or any other
Transaction Document to which the Collateral Agent is a party.
2.6 Non-Reliance on Collateral Agent and Other Secured Parties. (a) Each
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Secured Party represents that it has, independently and without reliance on the
Collateral Agent or any other Secured Party, and based on such documents and
information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of the Obligors and its own decision to enter
into this Agreement, the Security Documents and the other Transaction Documents
to which
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it is a party and agrees that it will, independently and without reliance upon
the Collateral Agent or any other Secured Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement,
the Security Documents and the other Transaction Documents to which it is a
party.
(b) Neither the Collateral Agent nor any Secured Party shall be
required to keep informed as to the performance or observance by the Obligors
under this Agreement or any other document referred to or provided for herein or
to make inquiry of, or to inspect the properties or books of, the Obligors.
(c) Except for notices, reports and other documents and information
expressly required to be furnished to the Secured Parties by the Collateral
Agent hereunder and under the Security Documents and the other Transaction
Documents to which the Collateral Agent is a party, the Collateral Agent shall
not have any duty or responsibility to provide any Secured Party with any credit
or other information concerning any Obligor which may come into the possession
of the Collateral Agent or any of its Affiliates.
(d) Notwithstanding the generality of the foregoing, nothing in this
Section 2.6 shall be deemed or construed as limiting the rights of the
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Collateral Agent or any Secured Party or the obligations of the Obligors, in
each case as set forth in the applicable Financing Documents.
2.7 Resignation or Removal of Collateral Agent. Subject to the
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appointment and acceptance of a successor Collateral Agent as provided below,
(i) the Collateral Agent may resign at any time by giving not less than thirty
(30) days notice thereof to the Administrative Agent, the Intercreditor Agent,
the Trustee and the Issuer and (ii) the Collateral Agent may be removed at any
time with or without cause by the Intercreditor Agent (acting pursuant to the
Intercreditor Agreement). Upon any such resignation or removal referred to in
clauses (i) and (ii) of the preceding sentence, the Intercreditor Agent (acting
pursuant to the Intercreditor Agreement) shall have the right to appoint a
successor Collateral Agent, which Collateral Agent shall be reasonably
acceptable to the Issuer unless an Event of Default shall have occurred and be
continuing. If no successor Collateral Agent shall have been so appointed by the
Intercreditor Agent (acting pursuant to the Intercreditor Agreement) and shall
have accepted such appointment within thirty (30) days after the retiring
Collateral Agent's giving of notice of resignation or the Intercreditor Agent
(acting pursuant to the Intercreditor Agreement) removal of the retiring
Collateral Agent, then the retiring Collateral Agent may, on behalf of the
Intercreditor Agent (acting pursuant to the Intercreditor Agreement) and the
other Secured Parties, petition a court of competent jurisdiction for a
successor or it may appoint a successor Collateral Agent, which shall be a bank
or trust company (a) acceptable to the Intercreditor Agent (acting pursuant to
the Intercreditor Agreement), (b) having a combined capital and surplus of at
least $50,000,000, (c) having offices in New York, New York, (d) having a long-
term credit rating of not less than "BBB-" from
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S&P and "Baa3" from ▇▇▇▇▇'▇, provided that any such bank with long-term credit
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ratings of "BBB-" and "Baa3" shall not cease to be a Collateral Agent upon a
downward change in either such rating of no more than one category or grade of
such rating, as the case may be, and (e) unless an Event of Default has occurred
and is continuing, reasonably acceptable to the Issuer. Upon the acceptance of
any appointment as Collateral Agent hereunder by a successor Collateral Agent,
(i) such successor Collateral Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent, and the retiring Collateral Agent shall be discharged from its duties and
obligations hereunder, and (ii) the retiring Collateral Agent shall promptly
transfer all Collateral within its possession or control to the possession or
control of the successor Collateral Agent and shall execute and deliver such
notices, instructions and assignments as may be necessary or desirable to
transfer the rights of the Collateral Agent in respect of the Collateral to the
successor Collateral Agent. After any retiring Collateral Agent's resignation,
removal or replacement hereunder as Collateral Agent, the provisions of this
Article 2 shall continue in effect for its benefit in respect of any actions
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taken or omitted to be taken by it while it was acting as Collateral Agent.
2.8 Authorization. (a) The Collateral Agent is hereby authorized by each
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of the other Secured Parties to execute, deliver and perform each of the
Security Documents to which the Collateral Agent is or is intended to be a
party, each of the Consents and each other Transaction Document to which the
Collateral Agent is or is intended to be a party and, subject to the terms of
the Security Documents and the other Transaction Documents, to draw on, or
otherwise act under, any letter of credit or guarantee delivered to the
Collateral Agent for the benefit of the Secured Parties, and each of the Secured
Parties agrees to be bound by all of the agreements of the Collateral Agent
contained in, and all of the other terms and conditions of, the Security
Documents, each of the Consents and each other Transaction Document to which the
Collateral Agent is or is intended to be a party.
(b) Without the prior written consent of, or direction from, the
Intercreditor Agent (acting pursuant to the Intercreditor Agreement), the
Collateral Agent shall not consent to any modification, supplement or waiver
under any of the Security Documents or under any other Transaction Document to
which the Collateral Agent (in its capacity as such) is a party and shall not
(i) release any Collateral or otherwise terminate any Lien under any Security
Document, (ii) consent to any modification of this Section 2.8 or of the
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definition of "Senior Secured Obligations" or "Secured Parties", (iv) release
any letter of credit or other instrument securing the obligations of any Person
under any Transaction Document or (v) consent to any Lien under any Security
Document securing obligations other than the Secured Obligations; provided,
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however, that, notwithstanding any provision contained herein or in any other
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Financing Document to the contrary, but subject in all respects to Section 5.1
of the Indenture, the Collateral Agent shall release, or cause the release of
the Lien of the Secured Parties or the portion of any other Senior Collateral
that the Issuer is entitled to transfer pursuant to Section 5.1(g) of the
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Indenture upon receipt of an officer's certificate of the Issuer, signed by an
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Authorized Officer, requesting such release and certifying that such release
complies with Section 5.1(g) of the Indenture.
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(c) For the avoidance of doubt, nothing in this Section 2.8, in
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Section 2.1 of this Agreement or elsewhere in this Agreement or in any other
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Security Document or Transaction Document shall limit the obligations of the
Obligors under any Security Document or other Transaction Document, including,
without limitation, any obligation of any of the Obligors to obtain any consent
or approval of any of the Secured Parties obtained or required to be obtained by
the Obligors prior to any amendment of, modification or supplement to or waiver
under any Security Document or other Transaction Document.
2.9 Additional Collateral Agents.
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2.9.1 Whenever the Collateral Agent shall deem it necessary or
prudent in order either to conform to any law of any jurisdiction in which all
or any part of the Collateral shall be situated or to make any claim or bring
any suit with respect to the Collateral, or the Collateral Agent shall have been
advised by counsel that it is so necessary or prudent in the interests of the
Secured Parties, or in the event that the Collateral Agent shall have been
requested to do so by the Intercreditor Agent (acting pursuant to the
Intercreditor Agreement), or as otherwise expressly provided herein, the
Collateral Agent shall take such action (including, to the extent required, the
execution and delivery of an agreement supplemental hereto and such other
instruments and agreements) as may be necessary or proper to constitute another
bank or trust company, or one or more Persons approved by the Collateral Agent
and, unless an Event of Default has occurred and is continuing, reasonably
acceptable to the Issuer, either to act as an additional collateral agent of all
or any part of the Collateral, jointly with the Collateral Agent, or to act as a
separate collateral agent or trustee of all or any part of the Collateral (any
such additional or separate agent or trustee being herein called an "Additional
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Collateral Agent"), in any such case with such powers as may be granted pursuant
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to such action, and to vest in such bank, trust company or Person as an
Additional Collateral Agent any property, title, right or power of the
Collateral Agent deemed necessary or advisable by the Collateral Agent, subject
to the remaining provisions of this Section 2.9. The Collateral Agent shall
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provide prompt written notice to the Administrative Agent, the Intercreditor
Agent, the Trustee and the Issuer upon the appointment of an Additional
Collateral Agent pursuant to this Section 2.9. The Collateral Agent may, at the
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expense of the Issuer, execute, deliver or perform any deed, conveyance,
assignment or other instrument in writing as may be required by any Additional
Collateral Agent for more fully and certainly vesting in and confirming to it,
him or her any property, title, right or power which by the terms of such
agreement supplemental hereto are expressed to be conveyed or conferred to or
upon such Additional Collateral Agent.
2.9.2 Every Additional Collateral Agent shall, to the extent
permitted by law, be appointed and act, and the Collateral Agent shall act,
subject to the following provisions and conditions:
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(a) all powers, duties, obligations and rights conferred or
imposed upon the Collateral Agent in respect of the receipt, custody,
investment and payment of moneys shall be exercised solely by the
Collateral Agent;
(b) all other rights, powers, duties and obligations conferred
or imposed upon the Collateral Agent may be conferred or imposed upon and
exercised or performed by the Additional Collateral Agent and the
Collateral Agent, except to the extent that, under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Collateral Agent shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including
the holding of title to any part of the Collateral in any such
jurisdiction) shall be exercised and performed by such Additional
Collateral Agent;
(c) no power hereby given to, or with respect to which it is
hereby provided may be exercised by, any such Additional Collateral Agent
shall be exercised hereunder by such Additional Collateral Agent unless
such power is exercised jointly with, or with the consent of, the
Collateral Agent;
(d) the Additional Collateral Agent shall act only upon and to
the extent of written instructions from the Collateral Agent and no other
party, and the Additional Collateral Agent shall not be required to take
and shall not be responsible for taking any action as Additional Collateral
Agent under this Agreement, any Security Document or any other Transaction
Document unless it has received such written instructions from the
Collateral Agent; and
(e) the Collateral Agent shall not be personally liable by
reason of any act or omission of any Additional Collateral Agent hereunder,
nor shall any Additional Collateral Agent be personally liable by reason of
any act or omission of the Collateral Agent or any other Additional
Collateral Agent hereunder; provided, however, that nothing in this
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Agreement shall excuse the liability of the Collateral Agent or any
Additional Collateral Agent for its own respective gross negligence or
willful misconduct.
2.9.3 If at any time the Collateral Agent shall deem it no longer
necessary or prudent in order to conform to any such law or take any such action
or shall be advised by counsel that it is no longer so necessary or prudent in
the interest of the Secured Parties, or in the event that the Collateral Agent
shall have been requested to do so in writing by the Intercreditor Agent (acting
pursuant to the Intercreditor Agreement), the Collateral Agent shall execute and
deliver an agreement supplemental hereto and all other instruments and
agreements necessary or proper to remove any Additional Collateral Agent.
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2.9.4 Any Additional Collateral Agent may at any time by an
instrument in writing constitute the Collateral Agent its agent or attorney-in-
fact, with full power and authority, to the extent which may be authorized by
law, to do all acts and things and exercise all discretion which it is
authorized or permitted to do or exercise, for and on its behalf and in its
name. In case any such Additional Collateral Agent shall become incapable of
acting, resign or be removed, all of the assets, property, rights, powers,
trusts, duties and obligations of such Additional Collateral Agent under this
Agreement, so far as permitted by law, shall vest in and be exercised by the
Collateral Agent, without the appointment of a new successor to such Additional
Collateral Agent unless and until a successor is appointed in the manner
hereinbefore provided.
2.9.5 Any request, approval or consent in writing by the Collateral
Agent to any Additional Collateral Agent shall be sufficient warrant to such
Additional Collateral Agent to take such action as may be so requested, approved
or consented.
2.9.6 Each Additional Collateral Agent appointed pursuant to this
Section 2.9 shall be subject to, and shall have the benefits of, the provisions
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of this Agreement insofar as they apply to the Collateral Agent.
ARTICLE III
ADMINISTRATION OF THE COLLATERAL
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The Collateral Agent shall hold the Collateral and any Lien thereon for the
benefit of the Secured Parties pursuant to the terms of this Agreement, the
Security Documents and any other Transaction Document to which the Collateral
Agent is a party. The Collateral Agent shall administer the Collateral in the
manner contemplated by the Security Documents and the other Transaction
Documents. The Collateral Agent shall exercise such rights and remedies with
respect to the Collateral as are granted to it under the Security Documents, the
other Transaction Documents and applicable law and, except as otherwise
expressly provided in the Security Documents and such other Transaction
Documents, as it shall be directed by the Intercreditor Agent (acting pursuant
to the Intercreditor Agreement). No Secured Party or class or classes thereof
(other than the Intercreditor Agent (acting pursuant to the Intercreditor
Agreement)) shall have any right to direct the Collateral Agent to take any
action in respect of the Collateral and no Secured Party shall have any right to
take action with respect to the Collateral independently of the Collateral
Agent. Unless otherwise directed by the Intercreditor Agent (acting pursuant to
the Intercreditor Agreement), the Collateral Agent shall retain possession of,
or cause possession thereof to be retained by its designee, all membership
interest certificates pledged to the Collateral Agent (on behalf of the Secured
Parties) pursuant to the Permitted Subsidiary Pledge Agreement, the Dominion
▇▇▇▇▇▇ Pledge Agreement and the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Pledge Agreement.
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ARTICLE IV
APPLICATION OF PROCEEDS
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Following the occurrence of an Event of Default (as defined in the
Intercreditor Agreement), the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant to the Security
Documents and any other cash at the time of such collection, sale or other
realization held by the Collateral Agent under the Security Documents or this
Article 4, shall be applied by the Collateral Agent in the following order or
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priority and, with the exception of Clause (1) below, shall be based upon
information furnished to the Collateral Agent by the appropriate Secured Party:
(1) first, to the payment of (a) all reasonable costs and expenses
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relating to the sale of the Senior Collateral and the collection of all
amounts owing hereunder, including attorneys' fees and disbursements and
the reasonable compensation of the Collateral Agent, the Administrative
Agent and the Intercreditor Agent for services rendered in connection
therewith or in connection with any proceeding to sell if a sale is not
completed, in each case, whether arising hereunder or under the other
Senior Security Documents or other Financing Documents, (b) all charges,
expenses and advances incurred or made by the Collateral Agent, the
Administrative Agent and the Intercreditor Agent in order to protect the
Liens of the Senior Security Documents or the security afforded thereby,
and (c) all liabilities (including those specified in clauses (a) and (b)
immediately above) incurred by the Collateral Agent, the Administrative
Agent and the Intercreditor Agent, regardless of whether such liabilities
arise out of the sale of Senior Collateral or the collection of amounts
owing hereunder, which are covered by the indemnity provisions of this
Agreement or the other Senior Security Documents or other Financing
Documents, together with interest thereon at the rate per annum equal the
Post Default Rate, computed on the basis of the actual number of days
elapsed and a year of 360 days;
(2) second, to the payment of accrued and unpaid interest on interest
------
that became overdue on the Senior Secured Obligations, ratably, in an
amount necessary to make the respective Senior Secured Parties current on
interest on overdue interest due under the respective Financing Documents
to the same proportionate extent as the other respective Senior Secured
Parties are then current on interest on overdue interest due under the
respective Financing Documents;
(3) third, to the payment of accrued and unpaid interest on principal
-----
of the Senior Secured Obligations, ratably, in an amount necessary to make
the respective Senior Secured Parties current on interest on overdue
principal due under the respective Financing Documents to the same
proportionate extent as the other respective Senior Secured Parties are
then
11
current on interest on overdue principal due under the respective Financing
Documents;
(4) fourth, to the payment to each of the Senior Secured Parties of
------
any accrued but unpaid commitment fees or other fees owed to such Person,
pro rata in accordance with the respective amounts owed to such Person;
--- ----
(5) fifth, to the payment to each of the Senior Secured Parties of the
-----
remaining principal, premium (if any), interest and other Senior Secured
Obligations owed to such Person hereunder or under any other Transaction
Document, pro rata in accordance with the respective principal amount of
--- ----
Senior Secured Obligations owed to such Person, to be applied by each such
Person in accordance with the respective Financing Documents pursuant to
which such Senior Secured Obligations were incurred; and
(6) finally, to the payment to the Issuer, or its successors or
-------
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.
As used in this Article 4, "proceeds" of Collateral shall mean cash, securities
--------- --------
and other property realized in respect of, and distributions in kind of,
Collateral, including, without limitation, any cash, securities and other
property received under any reorganization, liquidation or adjustment of
Indebtedness of the Issuer or any other issuer of or obligor on any of the
Collateral.
ARTICLE V
MISCELLANEOUS
-------------
5.1 Amendments. Neither this Agreement nor any terms or conditions hereof
----------
may be amended, changed, waived, discharged, terminated or otherwise modified
unless such amendment, change, waiver, discharge, termination or modification is
in writing, is in accordance with the terms of the Financing Documents and is
executed by each of the Issuer and the Collateral Agent (acting upon
instructions from the Intercreditor Agent (acting pursuant to the Intercreditor
Agreement)).
5.2 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. The Issuer may not assign or otherwise
transfer any of its rights or obligations under this Agreement.
5.3 Transfers. Any Secured Party may at any time assign, transfer, grant
---------
or sell participations in its rights and interests under the Security Documents,
subject, however, to the restrictions, if any, imposed on the assignment,
transfer, grant or sale of participations in the Secured Obligations owing to
such Secured Party pursuant to
12
the Financing Documents, and provided that any such assignee, transferee or
participant becomes bound by the terms hereof.
5.4 Delay and Waiver. No failure on the part of any Secured Party or any
----------------
of their nominees or representatives to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall impair any such right, power or remedy of the Secured Parties or their
nominees or representatives nor shall it operate as a waiver thereof; nor shall
any single or partial exercise by any Secured Party or any of their nominees or
representatives of any right, power or remedy hereunder preclude any other or
future exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
5.5 Costs and Expenses; Indemnity. The Issuer shall pay the costs and
-----------------------------
expenses of, and shall indemnify, defend and hold harmless, the Collateral Agent
and each of the other Secured Parties as provided in Sections 7.16 and 7.17 of
------------- ----
the Intercreditor Agreement, which Sections 7.16 and 7.17 are incorporated
------------- ----
herein by this reference, mutatis mutandis, as if set forth in full herein.
----------------
5.6 Collateral Agency Fee. On the Closing Date, and on each anniversary
---------------------
thereof occurring during the period commencing on the Closing Date and
continuing to and including the date upon which all obligations of the Obligors
under the Financing Documents have been indefeasibly paid in full, the Issuer
shall pay to the Collateral Agent an annual collateral agency fee as described
in the letter agreement between the Collateral Agent and the Issuer.
5.7 Notices. Unless otherwise specifically herein provided, all notices
-------
required or permitted under the terms and provisions hereof shall be in writing
and any such notice shall become effective if given in accordance with the
provisions of Section 7.1 of the Intercreditor Agreement.
-----------
5.8 Headings. Paragraph headings have been inserted in this Agreement as
--------
a matter of convenience for reference only and it is agreed that such paragraph
headings are not part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.
5.9 Counterparts. This Agreement may be executed in one or more duplicate
------------
counterparts and when signed by all of the parties listed below shall constitute
a single binding agreement.
5.10 Governing Law. This Agreement shall be governed by the laws of the
-------------
State of New York of the United States of America and shall for all purposes be
governed by and construed in accordance with the laws of such state without
regard to the conflict of law rules thereof other than Section 5-1401 of the New
York General Obligations Law.
13
5.11 Consent to Jurisdiction. Any legal action or proceeding by or against
-----------------------
the Issuer with respect to or arising out of this Agreement may be brought in or
removed to the courts of the State of New York, in and for the County of New
York, or of the United States of America for the Southern District of New York.
By execution and delivery of this Agreement, the Issuer accepts, for itself and
in respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts for legal proceedings arising out of or in connection with
this Agreement and irrevocably consents to the appointment of CT Corporation
System, with offices on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ as its agent to receive service of process in New York, New York. If for
any reason such agent shall cease to be available to act as such, the Issuer
agrees to appoint a new agent on the terms and for the purposes of this
provision. Nothing herein shall affect the right to serve process in any other
manner permitted by law or any right to bring legal action or proceedings in any
other competent jurisdiction, including judicial or non-judicial foreclosure of
real property interests which are part of the Collateral. The Issuer further
agrees that the aforesaid courts of the State of New York and of the United
States of America for the Southern District of New York shall have exclusive
jurisdiction with respect to any claim or counterclaim of the Issuer based upon
the assertion that the rate of interest charged by or under this Agreement or
under the other Financing Documents is usurious. The Issuer hereby waives any
right to stay or dismiss any action or proceeding under or in connection with
the Project, this Agreement or any other Transaction Document brought before the
foregoing courts on the basis of forum non-conveniens or improper venue.
--------------------
5.12 Waiver of Jury Trial. EACH PARTY HERETO HEREBY KNOWINGLY,
--------------------
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, 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 THE OTHER PARTIES HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT, THE
ADMINISTRATIVE AGENT, THE INTERCREDITOR AGENT AND THE OTHER SECURED PARTIES TO
ENTER INTO THIS AGREEMENT.
5.13 Entire Agreement. This Agreement and any agreement, document or
----------------
instrument attached hereto or referred to herein integrate all the terms and
conditions mentioned herein or incidental hereto and supersede all oral
negotiations and prior writings in respect to the subject matter hereof. In the
event of any conflict between the terms, conditions and provisions of this
Agreement and any such agreement, document or instrument, the terms, conditions
and provisions of this Agreement shall prevail.
5.14 Severability. In case any one or more of the provisions contained in
------------
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way
14
be affected or impaired thereby, and the parties hereto shall enter into good
faith negotiations to replace the invalid, illegal or unenforceable provision
with a view to obtaining the same commercial effect as this Agreement would have
had if such provision had been legal, valid and enforceable.
5.15 References to Collateral Agency Agreement. On and after the date
-----------------------------------------
hereof, each reference in any of the Transaction Documents to the "Collateral
Agency Agreement" shall mean the Collateral Agency Agreement as amended and
restated hereby.
5.16 Additional Senior Secured Parties. Each of the parties to this
---------------------------------
Agreement agrees that any Person which becomes a Secured Party after the Closing
Date shall become a party to this Agreement upon execution and delivery by such
Person of a counterpart to this Agreement. Any Person that becomes a party to
this Agreement pursuant to this Section 5.16 shall be bound by and subject to
------------
the terms and conditions hereof and the covenants, stipulations and agreements
contained herein.
15
IN WITNESS WHEREOF, the parties hereto have caused this Collateral Agency
Agreement to be executed by their respective officers or representatives
hereunto duly authorized as of the day and year first above written.
▇▇▇▇▇▇ ENERGY LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Representative
16
SECURED PARTIES:
---------------
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
in its capacity as the Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Account Executive
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION,
in its capacity as the Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Account Executive
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION,
in its capacity as the Intercreditor Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Account Executive
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION,
in its capacity as the Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Account Executive