Exhibit 10.56
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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
Dated as of August 4, 1998
among
YORK POWER FUNDING (CAYMAN) LIMITED
BROOKLYN NAVY YARD POWER LLC
WARBASSE POWER I LLC
WARBASSE POWER II LLC
NEW WORLD POWER TEXAS RENEWABLE ENERGY LIMITED
PARTNERSHIP
YORK EX INTERNATIONAL SRL
YORK HOLDINGS (BARBADOS) SRL
INNCOGEN, LIMITED
THE BANK OF NEW YORK,
as the Bond Trustee,
THE BANK OF NEW YORK,
as the Depositary Bank,
and
THE BANK OF NEW YORK,
as the Collateral Agent
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS; PRINCIPALS OF CONSTRUCTION
Section 1.1 DEFINED TERMS...............................................................2
Section 1.2 PRINCIPLES OF CONSTRUCTION..................................................4
ARTICLE II
COLLATERAL AGENT; RELATIONS
AMONG SECURED PARTIES
Section 2.1 APPOINTMENT AND DUTIES OF COLLATERAL AGENT..................................4
Section 2.2 RIGHTS OF COLLATERAL AGENT..................................................6
Section 2.3 LACK OF RELIANCE ON THE COLLATERAL AGENT....................................8
Section 2.4 INDEMNIFICATION; BANKRUPTCY.................................................9
Section 2.5 RESIGNATION OR REMOVAL OF THE COLLATERAL AGENT.............................10
Section 2.6 DOCUMENTS..................................................................11
Section 2.7 AUTHORIZATION..............................................................11
Section 2.8 ADDITIONAL COLLATERAL AGENTS...............................................12
Section 2.9 POWER OF ATTORNEY FROM SECURED PARTIES.....................................14
Section 2.10 FUNDING COMPANY AS A SECURED PARTY;
TRINIDAD GUARANTOR AS SECURED PARTY.................................................15
Section 2.11 ASSIGNMENT OF RIGHTS, NO ASSUMPTION OF DUTIES..............................15
Section 2.12 EXPERTS AND ADVISERS.......................................................15
Section 2.13 CONCERNING THE COLLATERAL AGENT,
COLLATERAL AGENTS, AND COLLATERAL HELD BY
COLLATERAL AGENTS...................................................................15
ARTICLE III
ADMINISTRATION OF THE COLLATERAL
Section 3.1 ADMINISTRATION OF THE COLLATERAL...........................................16
Section 3.2 PRIORITY OF SECURITY INTERESTS.............................................17
ARTICLE IV
EVENTS OF DEFAULT; TRIGGER EVENTS
Section 4.1 EXERCISE OF RIGHTS.........................................................17
Section 4.2 ACTIONS UPON A TRIGGER EVENT...............................................18
Section 4.3 EXERCISE OF REMEDIES AND APPLICATION OF PROCEEDS...........................19
Section 4.4 RECEIPT OF MONEY OR PROCEEDS...............................................20
Section 4.5 ADDITIONAL SECURED PARTIES.................................................21
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PAGE
ARTICLE V
MISCELLANEOUS
Section 5.1 AMENDMENTS.................................................................21
Section 5.2 TRANSFERS..................................................................21
Section 5.3 SEVERABILITY...............................................................22
Section 5.4 NOTICES....................................................................22
Section 5.5 SUCCESSORS AND ASSIGNS.....................................................22
Section 5.6 COUNTERPARTS...............................................................22
Section 5.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL..........................................................................22
Section 5.8 NO IMPAIRMENTS OF OTHER RIGHTS.............................................23
Section 5.9 HEADINGS...................................................................23
Section 5.10 TERMINATION................................................................23
Section 5.11 ENTIRE AGREEMENT...........................................................23
Section 5.12 EXECUTION IN LIEU OF AGENT.................................................24
Section 5.13 CONFLICTS WITH OTHER SECURITY DOCUMENTS....................................24
Section 5.14 SCOPE OF DUTIES; LIMITS ON LIABILITY.......................................24
Exhibit A Form of Designation Letter
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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this
"AGREEMENT") dated as of August 4, 1998 among YORK POWER FUNDING (CAYMAN)
LIMITED, a limited liability company incorporated under the laws of the Cayman
Islands ("FUNDING COMPANY"), BROOKLYN NAVY YARD POWER LLC, a Delaware limited
liability company (the "BNY GUARANTOR"), WARBASSE POWER I LLC, a Delaware
limited liability company ("WARBASSE I"), WARBASSE POWER II LLC, a Delaware
limited liability company ("WARBASSE II", and together with Warbasse I, the
"WARBASSE GUARANTOR"), NEW WORLD POWER TEXAS RENEWABLE ENERGY LIMITED
PARTNERSHIP, a Delaware limited partnership (the "BIG SPRINGS GUARANTOR"), YORK
EX INTERNATIONAL SRL, a Barbados exempt society with restricted liability (the
"TRINIDAD PROJECT BORROWER"), YORK HOLDINGS (BARBADOS) SRL, a Barbados society
with restricted liability (the "TRINIDAD GUARANTOR"), INNCOGEN, LIMITED, a
Trinidad limited liability company incorporated under the laws of Trinidad (the
"TRINIDAD OBLIGOR") and together with the BNY Guarantor, the Warbasse Guarantor,
the Big Spring Guarantor, the Trinidad Project Borrower and Trinidad Guarantor,
the "PROJECT OBLIGORS"), THE BANK OF NEW YORK, as bond trustee (in such
capacity, together with its successors in such capacity, the "BOND TRUSTEE")
under the Indenture referred to below, THE BANK OF NEW YORK, as collateral agent
(in such capacity, together with its successors in such capacity, the
"COLLATERAL AGENT") under this Agreement for the benefit of the Secured Parties
and THE BANK OF NEW YORK, as the depositary bank (in such capacity, together
with its successors in such capacity, the "DEPOSITARY BANK") under each
Depositary Agreement.
W I T N E S S E T H:
WHEREAS, Funding Company is a limited liability company
established for the sole purpose of issuing the Securities in its individual
capacity as principal and as agent acting on behalf of the U.S. Guarantors
pursuant to the Indenture and to make loans to the Project Borrowers pursuant to
the Project Loan Agreements;
WHEREAS, Funding Company has simultaneously with the execution
and delivery of this Agreement issued and sold the Initial Securities pursuant
to the Indenture;
WHEREAS, payments of the principal of, premium
(if any), interest on and any other amounts due with
respect to the Initial Securities will be serviced by
repayment of the Project Loans and guaranteed (subject to
certain limitations) by the U.S. Guarantors;
WHEREAS, the Collateral Agent, Funding Company and the Project
Obligors are entering into the Security Documents, pursuant to which the
Collateral Agent, acting on behalf of the Secured Parties, will obtain a
continuing Lien on and perfected security interest in the Collateral;
WHEREAS, Funding Company, the Project Obligors, the Depositary
Bank and the Collateral Agent will enter into the Depositary Agreements in order
to, among other things, appoint the Depositary Bank to hold and administer the
proceeds of certain insurance, revenues generated and loan proceeds received and
distributed to Funding Company and the Project Obligors; and
WHEREAS, the parties hereto desire to enter into this
Agreement to set forth their mutual understanding with respect to (a) the
exercise of certain rights, remedies and options by the respective parties
hereto under the above described documents and (b) the priority of their
respective Security Interests created by the Finance Documents.
NOW, THEREFORE, for and in consideration of the premises and
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, do hereby covenant and agree as
follows:
ARTICLE I
DEFINED TERMS; PRINCIPALS OF CONSTRUCTION
Section 1.1 DEFINED TERMS.
(a) For all purposes of this Agreement, capitalized terms used
but not otherwise defined herein shall have the meaning set forth in APPENDIX A
to the Indenture.
(b) The following terms shall have the following respective
meanings:
"ADDITIONAL COLLATERAL AGENT" shall have the meaning given to
that term in SECTION 2.8(a) (Additional Collateral Agent.)
"AGREEMENT" shall mean this Agreement in its
entirety.
"ARREARAGES" shall have the meaning specified in SECTION 4.4
(Receipt of Money or Proceeds) hereof.
"COLLATERAL AGENT CLAIMS" shall mean all obligations of the
Secured Parties, Funding Company and each Project Obligor now or hereafter
existing, to pay fees, costs and expenses to the Collateral Agent pursuant to
SECTIONS 2.2(e) (Rights of Collateral Agent) and 2.4 (Indemnification;
Bankruptcy) hereof and the other Finance Documents.
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"DAMAGES" shall have the meaning specified in SECTION 2.4(b)
(Indemnification; Bankruptcy) hereof.
"DEBT TERMINATION DATE" shall mean the date on which all
Finance Liabilities, other than contingent liabilities and obligations which are
unasserted at such date, have been paid and satisfied in full and all Finance
Commitments have been terminated. Notwithstanding anything herein to the
contrary, the Debt Termination Date shall be deemed to have occurred if the only
Finance Liability and/or Finance Commitment outstanding as of such date is the
Finance Liability and/or Finance Commitment incurred pursuant to that certain
Equity Cash Flow Participation Agreement, dated as of the Closing Date, among
the U.S. Guarantors, the Trinidad U.S. Parent and The Bank of New York, as agent
thereunder on behalf of the Holders.
"DESIGNATION LETTER" shall mean any letter executed and
delivered pursuant to SECTION 4.5 (Additional Secured Parties) hereof and
substantially in the form of EXHIBIT A hereto.
"EVENT OF DEFAULT" shall mean an "event of default" (or
correlative term) under any Finance Document (or any other similar agreement
entered into by Funding Company or any Project Obligor with respect to the
incurrence of Permitted Indebtedness (other than the Securities)).
"FINANCE COMMITMENT" shall mean any commitment pursuant to any
of the Finance Documents (or any other similar agreement entered into by Funding
Company or any Project Obligor with respect to the incurrence of Permitted
Indebtedness (other than the Securities)) to provide credit to Funding Company
or such Project Obligor.
"FINANCE LIABILITIES" shall mean all Indebtedness, liabilities
and obligations of Funding Company and each Project Obligor (including, but not
limited to, principal, interest, fees, reimbursement obligations, penalties,
indemnities and legal and other expenses, whether due after acceleration or
otherwise) to the Secured Parties (of whatsoever nature and howsoever evidenced)
under or pursuant to the Indenture, the Securities, Project Loan Agreements, the
Project Notes, the Guarantees, and any other Finance Document (or any other
similar agreement entered into by Funding Company or any Project Obligor with
respect to the incurrence of Permitted Indebtedness (other than the
Securities)), to the extent arising on or prior to the Debt Termination Date, in
each case, direct or indirect, primary or secondary, fixed or contingent, now or
hereafter arising out of or relating to any such agreements; and also shall mean
all interest owed to the Secured Parties and accrued following the commencement
of a case (whether voluntary or involuntary) under the Federal Bankruptcy Code
with respect to Funding Company or any Project Obligor; PROVIDED that for
purposes of this Agreement, Subordinated Indebtedness among Trinidad Finance
Parties shall not be deemed a Finance Liability.
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"FOREIGN COLLATERAL" shall have the meaning
specified in SECTION 2.13 hereof.
"FOREIGN COLLATERAL DOCUMENT" shall have the meaning specified
in SECTION 2.13 hereof.
"INDEMNIFIED PARTY" shall have the meaning specified in
SECTION 2.4 (Indemnification; Bankruptcy) hereof.
"REQUIRED SECURED PARTIES" shall mean, at any time, the
required percentage of Holders set forth in SECTION 5.2 (Remedies Upon an
Indenture Event of Default) of the Indenture or SECTION 5.2 (Remedies Upon a
Project Loan Event of Default) of the Project Loan Agreements.
"SECURITY INTEREST" shall mean any perfected and enforceable
Lien on the Collateral granted to the Collateral Agent pursuant to the
requirements of any applicable Finance Document.
"TRIGGER EVENT" shall mean (i) an "Event of Default" under the
Indenture and an acceleration of the Indebtedness issued thereunder, (ii) an
"Event of Default" under the Project Loan Agreements and an acceleration of all
or a portion of Indebtedness incurred thereunder, (iii) an "Event of Default"
under any other Permitted Indebtedness (other than Subordinated Indebtedness)
instrument and an acceleration of the Indebtedness issued thereunder in an
aggregate principal amount in excess of $5,000,000, (iv) certain Guarantee
Events of Default under any Guarantee, and, in each case, the Collateral Agent
shall have, upon the written direction from the Required Secured Parties,
declared such event to be a Trigger Event.
"TRIGGER EVENT DATE" shall have the meaning set forth in
SECTION 4.3 (a) (Exercise of Remedies and Application of Proceeds) hereof.
Section 1.2 PRINCIPLES OF CONSTRUCTION. For all purposes of
this Agreement, the principles of construction set forth in SECTION 1.1
(Definitions; Construction) of the Indenture shall apply.
ARTICLE II
COLLATERAL AGENT; RELATIONS
AMONG SECURED PARTIES
Section 2.1 APPOINTMENT AND DUTIES OF COLLATERAL AGENT. (a)
Each of the Secured Parties hereby designates and appoints The Bank of New York
to act as the
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Collateral Agent under this Agreement and the other Finance Documents to which
the Collateral Agent is a party, and each of the Secured Parties hereby
authorizes the Collateral Agent to take such actions on its behalf under the
provisions of this Agreement and the other Finance Documents to which the
Collateral Agent is a party and to exercise such powers and perform such duties
as are expressly delegated to the Collateral Agent by the terms of this
Agreement and the other Finance Documents to which the Collateral Agent is a
party, 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
2.1 and an agreement to act as Agent on behalf of the Secured Parties.
Notwithstanding any provision to the contrary elsewhere in this Agreement and
the other Finance Documents to which the Collateral Agent is a party, the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth in this Agreement and the other Finance Documents to which
the Collateral Agent is a party, or any fiduciary relationship with any Secured
Party, and no implied covenants, functions or responsibilities shall be read
into this Agreement or any other Finance Document to which the Collateral Agent
is a party or otherwise exist against the Collateral Agent. The Collateral Agent
shall not be obligated to expend or risk its own assets or property in
connection with its administration of this Agreement or its appointment
hereunder.
(b) The Secured Parties hereby authorize the Collateral Agent
to appoint The Bank of New York to act as the Depositary Bank under the
Depositary Agreements. The Secured Parties hereby authorize and empower the
Collateral Agent to remove and replace the Depositary Bank pursuant to the terms
and conditions of SECTION 4.4 (Resignation or Removal) of the Depositary
Agreement and to direct such Depositary Bank according to the terms of this
Agreement and the Depositary Agreements.
(c) Notwithstanding anything to the contrary in this Agreement
or any other Finance Document to which the Collateral Agent is a party, the
Collateral Agent shall not exercise any rights or remedies under this Agreement
(except as set forth in the proviso to SECTION 4.2(b) (Actions Upon a Trigger
Event)) or any other Finance Document to which the Collateral Agent is a party
or give any consent under this Agreement or any other Finance Document to which
the Collateral Agent is a party or enter into any agreement amending, modifying,
supplementing or waiving any provision of this Agreement or any other Finance
Document to which the Collateral Agent is a party unless it shall have been
directed to do so in writing by the Majority Holders; PROVIDED, HOWEVER, that
the Collateral Agent shall consent to the release of Collateral contemplated by
the Finance Documents, and shall enter into any amendments, waivers or
supplements with respect to the Finance Document to which the Collateral Agent
is a party to the extent not inconsistent with the provisions of the other
Finance Documents and which would not result in a Material Adverse Effect (as
evidenced by an Officer's Certificate signed by an Authorized Officer of each
Project Obligor); and PROVIDED FURTHER that the Collateral Agent shall have the
right to amend the Depositary Agreement without having been so
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directed by the Majority Holders solely for the purpose of preserving or
protecting the Lien on and Security Interest in the Depositary Accounts granted
to the Collateral Agent thereunder.
Section 2.2 RIGHTS OF COLLATERAL AGENT. (a) The Collateral
Agent may execute any of its duties under this Agreement or any other Finance
Document to which the Collateral Agent is a party by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.
(b) Neither the Collateral Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall (i) be
liable for any action lawfully taken or omitted to be taken by it under or in
connection with this Agreement or any other Finance Document to which the
Collateral Agent is a party (except for its gross negligence or willful
misconduct) or (ii) be responsible in any manner to any of the Secured Parties
for any recitals, statements, representations or warranties made by Funding
Company or any Project Obligor contained in this Agreement or any other Finance
Document to which the Collateral Agent is a party 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 any other Finance
Document to which the Collateral Agent is a party or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Finance Document to which the Collateral Agent is a party or for any
failure of Funding Company or any Project Obligor to perform its obligations
hereunder or 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 any other Finance Document to which the Collateral Agent is a
party, or to inspect the properties, books or records of Funding Company or any
Project Obligor.
(c) The Collateral Agent and its employees, agents,
attorneys-in-fact, and affiliates shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably 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 or statements of legal counsel
(including, without limitation, counsel to Funding Company), independent
accountants and other experts selected by the Collateral Agent. In connection
with any request of the Majority Holders or Required Secured Parties, the
Collateral Agent shall be fully protected in relying on a certificate of any
Person, signed by an Authorized Officer of such Person, setting forth the amount
owed by Funding Company or any Project Obligor, to such Person as of the date of
such certificate, which certificate shall state that the Person signing such
certificate is an Authorized Officer of such Person and shall state specifically
the Finance Document and provision thereof pursuant to which the Collateral
Agent is being directed to act. The Collateral Agent shall be entitled to rely,
and shall be fully
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protected in relying on such certificate. The Collateral Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Finance Document to which the Collateral Agent is a party (i) if such
action would, in the reasonable opinion of the Collateral Agent, be contrary to
law or the terms of this Agreement or the other Finance Documents, (ii) if such
action is not specifically provided for in this Agreement or such other Finance
Document and it shall not have received any such advice or concurrence of the
Majority Holders or Required Secured Parties (as applicable) as it deems
appropriate or, (iii) if, in connection with the taking of any such action that
would constitute an exercise of remedies under this Agreement or such other
Finance Document, it shall not first be indemnified to its satisfaction by the
Secured Parties (other than the Bond Trustee (in its individual capacity), the
Collateral Agent (in its individual capacity), the Depositary Bank (in its
individual capacity) or any other Agent or trustee under any of the Finance
Documents (in its individual capacity)) 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 or any other Finance
Document to which the Collateral Agent is a party in accordance with a written
request of the Majority Holders or Required Secured Parties, as applicable (to
the extent that the Majority Holders or Required Secured Parties are expressly
authorized to direct the Collateral Agent to take or refrain from taking such
action), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Secured Parties.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect knowledge or notice of the occurrence of any
Event of Default or Trigger Event unless and until an Authorized Officer of the
Collateral Agent has received a written notice or a certificate from the Secured
Parties, Funding Company or any Project Obligor stating that an Event of Default
or Trigger Event has occurred and describing such event. The Collateral Agent
shall have no obligation whatsoever either prior to or after receiving such
notice or certificate to inquire whether an Event of Default or Trigger Event
has in fact occurred and shall be entitled to rely conclusively, and shall be
fully protected in so relying, on any such notice or certificate so furnished to
it. In the event that the Collateral Agent receives such a notice of or
certificate regarding the occurrence of any Trigger Event, the Collateral Agent
shall give notice thereof to the Secured Parties. The Collateral Agent shall
take such action with respect to such Trigger Event as so requested pursuant to
SECTIONS 4.1 (Exercise of Rights), 4.2 (Actions Upon a Trigger Event) and 4.3
(Exercise of Remedies and Application of Proceeds) hereof. The agreements in
this Section shall survive the payment or satisfaction in full of the Finance
Liabilities and the resignation or removal of the Collateral Agent or the
termination of this Agreement.
(e) Funding Company and the Project Obligors shall pay to the
Collateral Agent upon demand the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and expenses of its counsel (and any
local counsel)
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and of any experts, agents (including the Depositary Bank), and
attorneys-in-fact, which the Collateral Agent may incur in connection with (i)
the acceptance or administration of this Agreement and the other Finance
Documents to which the Collateral Agent is a party, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the exercise or enforcement (whether through
negotiations, legal proceedings or otherwise) of any of the rights of the
Collateral Agent or the Secured Parties hereunder or under the other Finance
Documents to which the Collateral Agent is a party or (iv) the failure by
Funding Company or any Project Obligor to perform or observe any of the
provisions hereof or of any of the other Finance Documents to which the
Collateral Agent is a party.
(f) Notwithstanding any other provision of this Agreement to
the contrary, the Collateral Agent shall be under no obligation to take any
action pursuant to any request or direction of any party hereto if it shall
receive conflicting instructions from another party; provided that the
Collateral Agent shall inform such parties of the conflict.
(g) The Collateral Agent shall not be under any obligation to
take any action which is in the discretion of the Collateral Agent pursuant to
this Agreement or in any other Finance Document.
Section 2.3 LACK OF RELIANCE ON THE COLLATERAL AGENT. Each of
the Secured Parties expressly acknowledges that neither the Collateral Agent nor
any of its officers, directors, employees, agents or attorneys-in-fact has made
any representations or warranties to it and that no act by the Collateral Agent
hereinafter taken, including, without limitation, any review of the Projects or
of the affairs of Funding Company or any Project Obligor, shall be deemed to
constitute any representation or warranty by the Collateral Agent to any Secured
Party. Each Secured Party other than the Bond Trustee and the Depositary Bank
represents to the Collateral Agent that it has, independently and without
reliance upon 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 and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Projects and Funding Company and
each Project Obligor. Each Secured Party other than the Bond Trustee and the
Depositary Bank also represents 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 credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Projects and Funding Company and
each Project Obligor. Except for notices, reports and other documents expressly
required to be furnished to the Secured Parties by the Collateral Agent
hereunder, the Collateral Agent shall not have any duty or responsibility to
provide any Secured Party with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of
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the Projects, Funding Company or any Project Obligor which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents or attorneys-in-fact.
Section 2.4 INDEMNIFICATION; BANKRUPTCY. (a) The Secured
Parties other than the Bond Trustee and the Depositary Bank jointly and
severally agree to indemnify the Collateral Agent and its agents and
attorneys-in-fact, including, but not limited to, the Depositary Bank, each in
its capacity as such (to the extent not reimbursed by Funding Company or any
Project Obligor and without limiting the obligation of Funding Company and each
Project Obligor to do so), ratably according to the aggregate amounts of their
respective Finance Liabilities on the date the activities giving rise to the
Collateral Agent's demand for indemnification occurred, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time be imposed on, incurred by or asserted against the Collateral Agent in its
capacity as such in any way relating to or arising out of this Agreement or the
other Finance Documents to which the Collateral Agent is a party, or the
performance of its duties as Collateral Agent hereunder or thereunder or any
action taken or omitted by the Collateral Agent in its capacity as such under or
in connection with any of the foregoing (including, but not limited to, any
claim that the Collateral Agent is the owner or operator of any of the Projects
and liable as such pursuant to any Environmental Laws); PROVIDED that the
Secured Parties shall not be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent that any of the foregoing result
from the Collateral Agent's gross negligence or willful misconduct. The
agreements in this SECTION 2.4(a) shall survive the payment or satisfaction in
full of the Finance Liabilities and the resignation or removal of the Collateral
Agent or the termination of this Agree ment.
(b) Without limiting the obligations of Funding Company and
each Project Obligor under any other Finance Document, Funding Company and each
Project Obligor jointly and severally indemnifies the Collateral Agent (in that
capacity only) and each other Secured Party (in that capacity only) and, in
their capacity as such, their officers, directors, shareholders, controlling
persons, employees, agents and servants (each an "INDEMNIFIED PARTY") from and
against any and all claims, damages, losses, liabilities, obligations,
penalties, actions, causes of action, judgments, suits, costs, expenses or
disbursements (including, without limitation, reasonable attorneys' and
consultants' fees and expenses) (collectively "DAMAGES") of any kind or nature
whatsoever which may at any time be imposed on, incurred by or asserted against
any Indemnified Party (or which may be claimed against any Indemnified Party by
any Person) by reason of, in connection with or in any way relating to or
arising out of any Transaction Document, the Collateral or any other documents
or transactions in connection with or relating thereto (including, without
limitation, Damages in connection with the presence, release or threatened
release of Environmentally Regulated Materials at, on, under, to or from the
9
Projects or any disposal sites to which wastes from the Projects have been
taken), unless due to the gross negligence or willful misconduct of such
Indemnified Party. Funding Company and each Project Obligor further shall, upon
demand by any Indemnified Party, jointly and severally pay to such Indemnified
Party all reasonable costs and expenses incurred by such Indemnified Party in
enforcing any rights under any of the Transaction Docu ments, including
reasonable fees and expenses of counsel (including local counsel). The
agreements in this SECTION 2.4(b) shall survive the payment or satisfaction in
full of the Finance Liabilities and the resignation or removal of the Collateral
Agent or the termination of this Agreement.
(c) The Secured Parties hereby agree that, except upon the
written consent of the Majority Holders, to the extent permitted by Applicable
Law, (i) no Secured Party shall authorize Funding Company or any Project Obligor
to commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to Funding Company or any Project
Obligor or debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect in any jurisdiction or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of Funding Company or
any Project Obligor or to consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against Funding Company or any Project Obligor to make a
general assignment for the benefit of any Secured Party or any other creditor of
Funding Company or any Project Obligor, and (ii) none of the Secured Parties
shall commence or join with any other Person (other than upon the written
consent of the Majority Holders) in commencing any proceeding against Funding
Company or any Project Obligor under any bankruptcy, reorganization, liquidation
or insolvency law or statute now or hereafter in effect in any jurisdiction.
Section 2.5 RESIGNATION OR REMOVAL OF THE COLLATERAL
AGENT. The Collateral Agent may resign as Collateral Agent upon thirty (30)
days' notice to the Secured Parties and may be removed at any time with or
without cause upon thirty (30) days' notice by the Majority Holders, with any
such resignation or removal to become effective only upon the appointment of a
successor Collateral Agent under this SECTION 2.5. If no successor Collateral
Agent shall have been so appointed within thirty (30) days, the resigning
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a new Collateral Agent. If the Collateral Agent shall resign or
be removed as Collateral Agent by the Majority Holders then the Majority Holders
shall (and if no such successor shall have been appointed within thirty (30)
days of the Collateral Agent's resignation or removal, the Collateral Agent may)
appoint a successor Agent for the Secured Parties, which successor Agent shall,
unless an Event of Default has occurred and is continuing, be reasonably
acceptable to Funding Company, whereupon such successor Agent shall succeed to
the rights, powers and duties of the Collateral Agent, and the term "Collateral
Agent" shall mean such successor Agent effective upon its appointment, and
except as provided in SECTION 2.4(a) and (b) (Indemnification; Bankruptcy) the
former Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated,
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without any other or further act or deed on the part of such former Collateral
Agent (except that the resigning Collateral Agent shall deliver all Collateral
then in its possession to the successor Collateral Agent) or any of the other
Secured Parties. After any retiring Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Collateral Agent.
Section 2.6 DOCUMENTS. The Collateral Agent will forward
promptly after the Collateral Agent's receipt thereof (and will use its best
efforts to forward within five (5) Business Days of such receipt) to each
Secured Party (a) a copy of each document furnished to the Collateral Agent for
such Secured Party under the Finance Documents and (b) any notice delivered to
the Collateral Agent pursuant to any Third Party Consent. The Collateral Agent
will forward to each Secured Party, promptly upon such Secured Party's written
request therefor, a copy of any other document furnished to the Collateral Agent
under any Finance Document to which the Collateral Agent is a party.
Section 2.7 AUTHORIZATION. (a) The Collateral Agent is hereby
authorized by each Secured Party, for itself and as a Secured Party (i) to
execute, deliver and perform each of the Finance Documents to which the
Collateral Agent and/or the Secured Parties are or are intended to be a party
and (ii) subject to the terms of the Finance 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 other Secured Parties
agrees to be bound by all the agreements of the Collateral Agent contained in,
and all of the terms and conditions of, the Finance Documents for which the
Collateral Agent is acting as its agent hereunder.
(b) Without the prior written consent of, or direction from,
each of the Secured Parties, the Collateral Agent shall not (i) consent to any
modifi cation, supplement or waiver (other than to cure any ambiguity, defect or
inconsistency, or to make a change which does not materially adversely affect
the legal rights of any Secured Party) under any of the Finance Documents to
which the Collateral Agent is a party, (ii) except as permitted pursuant to
SECTION 2.1(c) (Appointment and Duties of Collateral Agent) hereof, release any
Collateral or otherwise terminate any Lien under any Finance Document (except
that the Collateral Agent may release funds from the Depositary Accounts in
accordance with the terms and provisions of the Depositary Agreement), (iii)
consent to any modification of this SECTION 2.7 or of the definition of Secured
Obligation or Secured Party, (iv) release any letter of credit, guarantee or
other instrument securing the obligations of any Person under any Transaction
Document, (v) consent to any Lien under any Security Document securing
obligations other than Secured Obligations or (iv) consent to any item requiring
the consent of the One Hundred Percent Holders as set forth in SECTION 7.2
(Amendments and Supplements to Indenture With Consent of Holders) of the
Indenture.
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(c) For the avoidance of doubt, nothing in this SECTION 2.7,
of this Agreement or elsewhere in this Agreement (other than SECTION 5.1) or in
any other Finance Document or other Transaction Document shall limit the
obligations of Funding Company or any Project Obligor under any of the
Transaction Documents, including, without limitation, any obligation of Funding
Company or any Project Obligor to obtain any consent or approval of any of the
Secured Parties, obtained or required to be obtained by Funding Company or any
Project Obligor prior to any amendment of, modification or supplement to or
waiver under any Finance Document or other Transaction Document and the
Collateral Agent shall not consent to any amendment of, modification of or
supplement to or waiver under any Finance Document or other Transaction Document
unless and until Funding Company or any Project Obligor shall have first
obtained all such required consents and approvals and provided the Collateral
Agent provides written certification of the same.
Section 2.8 ADDITIONAL COLLATERAL AGENTS. (a) 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, 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 Funding Company, 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 COLLATERAL AGENT"), in any such case with such powers as may be
granted pursuant 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 2.8. The Collateral Agent
may execute, deliver and 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 is expressed to be conveyed or conferred to or upon such
Additional Collateral Agent.
(b) Each 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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(i) 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;
(ii) 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 jointly with 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;
(iii) 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 except jointly with, or with the consent of, the
Collateral Agent unless the Additional Collateral Agent is required to
act independently pursuant to clause (ii) above;
(iv) such 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 any Security Document or
this Agreement unless it has received such written instructions from
the Collateral Agent unless the Additional Collateral Agent is
required to act independently pursuant to clause (ii) of this
SECTION 2.8; and
(v) the Collateral Agent shall not be personally
liable by reason of any act or omission of any Additional Collateral
Agent hereunder (except for its gross negligence of willful
misconduct), nor shall such Additional Collateral Agent be personally
liable by reason of any act or omission of the Collateral Agent or any
other Additional Collateral Agent hereunder.
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
Secured Parties, 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.
(c) 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
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exercise all discretion which it is authorized or permitted to do or exercise,
for and in its behalf and in its name. In case any such Additional Collateral
Agent shall die, become incapable of acting, resign or be removed, all the
assets, property, rights, powers, trusts, duties and obligations of such
Additional Collateral Agent, 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.
(d) 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.
(e) Each Additional Collateral Agent appointed pursuant to
this SECTION 2.8 shall be subject to, and shall have the benefits of, the
provisions of this Agreement insofar as they apply to the Collateral Agent.
Section 2.9 POWER OF ATTORNEY FROM SECURED PARTIES. Each
Secured Party hereby gives a power of attorney, coupled with an interest, to the
Collateral Agent, and appoints, makes, constitutes and designates the Collateral
Agent its true and lawful attorney-in-fact, subject to SECTION 2.7
(Authorization), to consent on its behalf (in its capacity as a Secured Party)
under the Transaction Documents to the extent that the consent of such Secured
Party is required thereunder, and to take such actions on its behalf (in its
capacity as a Secured Party) under the provisions of such Transaction Documents
as are reasonably incidental thereto, to execute and deliver in the name of and
on behalf of such Secured Party, or in its own name, as the case may be, all
documents required to be executed by such Secured Party (in its capacity as
such) in connection therewith and to do, take and perform all and every act and
thing whatsoever requisite, proper or necessary to be done, in the exercise of
any of the rights and powers herein granted, as fully to all intents and
purposes as such Secured Party (in its capacity as such) might or could do, with
full power of substitution or revocation, hereby ratifying and confirming all
that said attorney-in-fact, or its substitute or substitutes, shall lawfully do
or cause to be done by virtue of this power of attorney and the rights and
powers herein granted; PROVIDED that the Collateral Agent shall not so consent
or take such other actions other than in accordance with this Agreement and the
Security Documents. This SECTION 2.9 is to be construed and interpreted as a
general power of attorney coupled with an interest. The enumeration of specific
items, rights, acts or powers herein is not intended to, nor does it limit or
restrict, and is not to be construed or interpreted as limiting or restricting,
the general powers herein granted to said attorney-in-fact. The rights, powers
and authority of said attorney-in-fact herein granted shall commence and be in
full force and effect as of the Closing Date, and such rights, powers and
authority shall remain in full force and effect thereafter until the Debt
Termination Date.
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Section 2.10 FUNDING COMPANY AS A SECURED PARTY; TRINIDAD
GUARANTOR AS SECURED PARTY. (a) Funding Company hereby collaterally assigns,
transfers and conveys all of its rights hereunder, either now existing or
hereafter arising, to the Bond Trustee for the benefit of the Holders, as
security for its obligations under the Finance Documents. The Bond Trustee
shall, subject to the terms of the Indenture, be entitled to vote on all matters
under this Agreement in accordance with the direction of the Holders of the
aggregate principal amount of the Outstanding Securities to take action under
the Indenture.
(b) The Trinidad Guarantor hereby collaterally assigns,
transfers and conveys all of its rights as a Secured Party hereunder, either now
existing or hereafter arising, to the Bond Trustee for the benefit of the
Holders, as security for its obligations under the Finance Documents.
Section 2.11 ASSIGNMENT OF RIGHTS, NO ASSUMPTION OF DUTIES.
Anything herein contained to the contrary notwithstanding, (a) each of Funding
Company and any Project Obligor shall remain liable under each of the
Transaction Documents to which it is a party to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of its rights, remedies or powers hereunder shall neither release Funding
Company nor any Project Obligor from any of its duties or obligations under each
of the Transaction Documents to which it is a party and (c) the Collateral Agent
shall have no obligation or liability under any of the Transaction Documents to
which each of Funding Company and any Project Obligor is a party by reason of or
arising out of this Agreement, nor shall the Collateral Agent be obligated to
perform any of the obligations or duties of Funding Company or any Project
Obligor thereunder or, except as expressly provided herein.
Section 2.12 EXPERTS AND ADVISERS. (a) The Collateral
Agent may employ or retain such counsel, accountants, appraisers or other
experts or advisers as it may reasonably require for the purpose of determining
and discharging its rights and duties hereunder and shall not be responsible for
any misconduct on the part of any such Person.
(b) The Collateral Agent may act and rely and shall be
protected in acting and relying in good faith on the opinion or advice of or
information obtained from any counsel, accountant, appraiser or other expert or
adviser retained or employed by the Collateral Agent in relation to any matter
arising in the administration of the Collateral.
Section 2.13 CONCERNING THE COLLATERAL AGENT, COLLATERAL
AGENTS, AND COLLATERAL HELD BY COLLATERAL AGENTS. The Collateral Agent shall
have no duty to act outside of the United States in respect of any Collateral
located in a jurisdiction other than the United States ("Foreign Collateral")
but shall, at the specific request of the Bond
15
Trustee, appoint a qualified Additional Collateral Agent in each such
jurisdiction. Such qualified Additional Collateral Agent, the Collateral Agent
and the owner of each item of Foreign Collateral shall, when necessary provided
the same are reasonably acceptable to the Collateral Agent, enter into a
collateral assignment, pledge agreement, mortgage debenture, mortgage or other
security agreement purporting to create a Lien or security interest in such item
of Foreign Collateral (each such assignment or agreement, a "Foreign Collateral
Document") pursuant to which such owner shall purport to grant to such qualified
Additional Collateral Agent a Lien or security interest for the benefit of the
Collateral Agent and the equal and ratable benefit of the Notes. The duties and
responsibilities of the Collateral Agent with respect to any Additional
Collateral Agent and any Collateral are limited to those set forth herein.
ARTICLE III
ADMINISTRATION OF THE COLLATERAL
Section 3.1 ADMINISTRATION OF THE COLLATERAL. (a) 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 Finance 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 Finance Documents and shall
apply the balances from time to time held in the Funds in the manner provided in
this Agreement, the Depositary Agreements and the other Finance 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 Finance
Documents and Applicable Law. Except as otherwise expressly provided herein, no
Secured Party and no class or classes thereof 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 sell, exchange or otherwise deal with any property
at any time pledged, assigned or mortgaged to secure the Secured Obligations or
take action with respect to the Collateral independently of the Collateral
Agent.
(b) The Collateral Agent shall have no responsibility with
respect to the recording, rerecording, filing, or refiling under the laws of any
jurisdiction under this Agreement, the other Finance Documents, or any other
document or statement that may be required or permitted to be recorded,
re-recorded, filed or re-filed under any such laws to perfect or protect the
security interests created by or pursuant to the Security Documents, or the
payment of any fees or taxes in connection therewith.
(c) Beyond the exercise of reasonable care in the custody
thereof, the Collateral Agent shall have no duty as to any Collateral in its
possession or control or in
16
the possession or control of any Agent or bailee or any income thereon or as to
preservation of rights against prior parties or any other rights pertaining
thereto. The Collateral Agent shall be deemed to have exercised reasonable care
in the custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property and
shall not be liable or responsible for any loss or diminution in the value of
any of the Collateral, by reason of the act or omission of any carrier,
forwarding agency or other Agent or bailee selected by the Collateral Agent in
good faith.
Section 3.2 PRIORITY OF SECURITY INTERESTS. (a) Each Secured
Party agrees that the Security Interest of each Secured Party in any Collateral
ranks and shall rank equally in priority with the Security Interest of the other
Secured Parties in the same Collateral. Notwithstanding anything to the contrary
herein or in any Security Document, each Secured Party acknowledges and agrees
that the Trinidad Collateral, or any portion thereof, shall in no event be used
to secure the Securities or any obligation of the U.S. Guarantors.
(b) Notwithstanding anything to the contrary in clause (a),
the priorities specified in this Agreement and in the Depositary Agreements with
respect to (i) the Collateral, (ii) all proceeds of the Collateral (including
without limitation all Loss Proceeds to the extent received by the Collateral
Agent after giving effect to the limitations and deductions permitted under the
Indenture and the Depositary Agreements with respect to such proceeds) and (iii)
all amounts and funds retained in accordance with the Depositary Agreements, in
each case are applicable irrespective of any statement to the contrary in any
Finance Document or any other agreement, the time or order or method of
attachment or perfection of Liens, the time or order of filing of financing
statements, or the giving or failure to give notice of the acquisition or
expected acquisition of purchase money or other security interests and to the
extent not provided for in this Agreement, the rights and priorities of the
Secured Parties shall be determined in accordance with Applicable Law.
ARTICLE IV
EVENTS OF DEFAULT; TRIGGER EVENTS
Section 4.1 EXERCISE OF RIGHTS. So long as any Finance
Liabilities remain outstanding, each of the Secured Parties hereby acknowledges
and agrees as follows:
(a) The Collateral Agent shall administer the Collateral in
the manner contemplated by the Security Documents and this Agreement and only
upon the occurrence and continuance of a Trigger Event (subject to the
requirement that the Collateral Agent shall have received written notice
pursuant to ARTICLE 4.2(a) (Actions Upon a
17
Trigger Event) hereof), the Collateral Agent shall exercise, upon the written
instruction of, and on behalf of, the Required Secured Parties in accordance
with the terms and provisions of this ARTICLE 4, such rights and remedies with
respect to the Collateral as are granted to it under this Agreement, the
Security Documents and Applicable Law.
(b) No Secured Party and no class or classes of Secured
Parties shall have any right, other than in accordance with the terms and
provisions of this ARTICLE IV, to (i) sell, exchange, release, not perfect and
otherwise deal with any property at any time pledged, assigned or mortgaged to
secure the Finance Liabilities, (ii) exercise or refrain from exercising any
rights to direct the Collateral Agent to take any action in respect of the
Collateral, or (iii) take any other action with respect to the Collateral (A)
independently of the Collateral Agent or (B) other than to direct the Collateral
Agent to take action in accordance with the terms and provisions of this ARTICLE
IV. Subject to SECTION 2.7 (Authorization) hereof, any of the Secured Parties
may, at any time and from time to time (i) amend in any manner any outstanding
Finance Documents to which they are a party in accordance with the terms
thereof, (ii) release anyone liable in any manner under or in respect of such
Secured Party's Finance Liabilities in accordance with the terms of the Finance
Documents to which they are a party and (iii) apply any sums from time to time
received for payment or satisfaction of such Secured Party's Finance Liabilities
except as otherwise provided in SECTION 4.4 (Receipt of Money or Proceeds)
hereof.
(c) Each Secured Party hereby agrees that upon the request of
the Collateral Agent it will give the Collateral Agent notice of the aggregate
amount of outstanding Indebtedness owed by Funding Company and each Project
Obligor to such Secured Party under the applicable Finance Documents and any
other information that the Collateral Agent may reasonably request.
Section 4.2 ACTIONS UPON A TRIGGER EVENT. So long as any
Finance Liability remains outstanding, the following provisions shall apply:
(a) Each Secured Party hereby agrees to give each other
Secured Party and the Collateral Agent written notice of the occurrence of an
Event of Default under such Secured Party's Finance Documents and of the
occurrence of an acceleration under such Secured Party's Finance Documents
wherein such Secured Party's Finance Liabilities have been declared to be or
have automatically become due and payable earlier than the scheduled maturity
thereof and such notice shall set forth the aggregate amount of Finance
Liabilities that have been so accelerated under such Finance Documents, in each
case as soon as practicable after the occurrence thereof; PROVIDED, HOWEVER,
that the failure to provide such notice shall not limit or impair the rights of
the Secured Parties hereunder or under any of the other Finance Documents.
(b) Funding Company and each Project Obligor hereby agree as
security for the obligations of Funding Company or any Project Obligor under all
or any
18
of the Finance Documents that if a Trigger Event shall have occurred and is
continuing, the Collateral Agent is hereby irrevocably authorized and empowered
to act as the attorney-in-fact for Funding Company and each Project Obligor with
respect to the giving of any instructions or notices under the Depositary
Agreements; PROVIDED, HOWEVER that if a bankruptcy event set forth in the
Indenture or any other Finance Document in respect of Funding Company or any
Project Obligor has caused the Trigger Event, as security for the obligations of
Funding Company or any Project Obligor under all or any of the Finance Documents
the Collateral Agent shall automatically and irrevocably be authorized and
empowered to act as the attorney-in-fact for Funding Company or such Project
Obligor with respect to the giving of such instructions or notices. The
Collateral Agent hereby agrees that, upon the written request of the Required
Secured Parties, it shall give such notices and instructions under the
Depositary Agreements to the Depositary Bank. The Depositary Bank hereby agrees
that it shall accept such notices and instructions from the Collateral Agent.
Section 4.3 EXERCISE OF REMEDIES AND APPLICATION OF PROCEEDS.
Notwithstanding the provisions of ARTICLE III (The Depositary Accounts) of
either Depositary Agreement, so long as any Finance Liability remains
outstanding to more than one Secured Party, the following provisions shall
apply:
(a) If a Trigger Event shall have occurred and be continuing
(subject to the requirement that the Collateral Agent shall have received
written notice pursuant to SECTION 4.2(a) (Actions Upon A Trigger Event)
hereof), upon the written request of the Required Secured Parties, the
Collateral Agent, on behalf of the Secured Parties, shall give the Depositary
Bank a written notice that a Trigger Event has occurred (the date of such
notice, the "TRIGGER EVENT DATE") and direct the Depositary Bank to render an
accounting of the current balance of each Depositary Account and of any other
monies of Funding Company and each Project Obligor administered by such
Depositary Bank. No Secured Party shall be deemed to have knowledge or notice of
the occurrence of any Event of Default until such Secured Party has received a
written notice of such Event of Default from Funding Company or Project Obligor
or any other Person for whom such Secured Party is acting as agent or trustee.
(b) If a Trigger Event shall have occurred and be continuing
(subject to the requirement that the Collateral Agent shall have received
written notice pursuant to SECTION 4.2(a) (Actions Upon A Trigger Event)
hereof), and only in such event, upon the written request of the Required
Secured Parties, the Collateral Agent shall be authorized to take any and all
actions and to exercise any and all rights and remedies and options which it may
have under the Security Documents or which the Required Secured Parties direct
it to take under this Agreement, including realization and foreclosure on the
Collateral; PROVIDED, HOWEVER, that if a bankruptcy event set forth in the
Indenture or any other Finance Document in respect of Funding Company or any
Project Obligor has caused the
19
Trigger Event, the Collateral Agent shall automatically be authorized to take
such action without the written request of the Required Secured Parties.
(c) The proceeds of any sale, disposition or other realization
or foreclosure by the Collateral Agent upon the Collateral or any portion
thereof pursuant to the Security Documents shall be governed by this SECTION
4.3(c). Any non-cash proceeds resulting from such liquidation of the Collateral
shall be held by the Collateral Agent for the benefit of the Secured Parties
until later sold or otherwise converted into cash, at which time the Collateral
Agent shall apply such cash in accordance with the next sentence of this SECTION
4.3(c). The Collateral Agent shall transfer any cash proceeds net of expenses
resulting from liquidation of the Collateral to the applicable Revenue Account
from which such proceeds shall be distributed by the Depositary Bank in
accordance with the terms and provisions of the applicable Depositary Agreement
in the following order of priority:
(i) to the Bond Trustee, the Collateral
Agent, the Depositary Bank, ratably, an amount equal to all administrative fees,
costs, expenses and any other amounts (whether as a result of indemnification or
otherwise) due and owing to such parties under the Finance Documents and this
Agreement;
(ii) to the applicable Secured Parties,
ratably, an amount equal to the unpaid amount of all Permitted Indebtedness
(other than Subordinated Indebtedness) constituting principal, interest,
premium, if any, and fees due and owing to such Secured Parties by Funding
Company or such Project Obligor;
(iii) to the applicable Secured
Parties, ratably, an amount equal to all other unpaid amounts then due and
payable in respect of all Permitted Indebtedness (other than Subordinated
Indebtedness) owed to such Secured Parties;
(iv) to Funding Company (or its successors
or assigns) or to whomever a court of competent jurisdiction may direct, any
surplus remaining after giving effect to clauses (i), (ii) and (iii) above.
(d) The proceeds of any sale, disposition or other realization
with respect to Collateral held for the benefit of some but not all of the
Secured Parties, if applicable, shall be applied to the payment of obligations
owed to the parties for whose benefit the specific Collateral was held.
Section 4.4 RECEIPT OF MONEY OR PROCEEDS. The Secured
Parties and the Depositary Bank hereby agree that if, at any time during the
term of this Agreement, any Secured Party receives any payment or distribution
of assets of Funding Company or any Project Obligor of any kind or character,
whether monies or cash proceeds resulting from liquidation of the Collateral,
other than in accordance with the terms of this Agreement
20
and the Depositary Agreements, the Secured Party shall hold such payment or
distribution in trust for the benefit of the Secured Parties and shall
immediately remit such payment or distribution to the Depositary Bank and the
Depositary Bank shall deposit such monies or proceeds in the applicable Revenue
Account for application or distribution, as the case may be, in accordance with
the terms of the applicable Depositary Agreement. If any Secured Party shall
certify in writing to the Collateral Agent that any Permitted Indebtedness in
respect of which such Secured Party is the trustee or Agent has not been paid
when due and after the giving of any applicable notice or the passage of any
applicable grace period (such amount referred to herein as "ARREARAGES"), then
in any such event, and upon the written request of such Secured Party, the
Collateral Agent shall make demand for payment of such Arrearages where such
demand may be made by the terms thereof.
Section 4.5 ADDITIONAL SECURED PARTIES. Each Person replacing
any of the Secured Parties and each Person (or trustee or Agent thereof)
providing Permitted Indebtedness to Funding Company or any Project Obligor
shall, upon execution of a Designation Letter, become a party to this Agreement,
and any person which executes and delivers a counterpart to this Agreement or is
designated as a Secured Party pursuant to the terms of a Designation Letter,
shall become a party hereto, shall be bound by and subject to the terms and
conditions hereof and the covenants, stipulations and agreements contained
herein.
ARTICLE V
MISCELLANEOUS
Section 5.1 AMENDMENTS. No amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by each of the Secured Parties, Funding Company, each Project
Obligor and all other parties hereto and any such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it is given. No delay on the part of any Secured Party in the exercise
of any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial waiver by any Secured Party of any right, power or remedy
preclude any further exercise thereof or the exercise of any other right, power
or remedy.
Section 5.2 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 imposed on the
assignment, transfer, grant or sale of participation in the Secured Obligations
owing to such Secured Party pursuant to the agreement giving rise to such
Secured Obligations or any other agreement relating thereto.
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Section 5.3 SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected and/or impaired
thereby.
Section 5.4 NOTICES. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
sufficiently given and shall be deemed given when delivered or mailed by
registered certified mail, postage prepaid, or sent by overnight delivery or
telecopy, addressed to Funding Company, the Secured Parties, the Depositary Bank
and the Collateral Agent at their respective addresses specified on SCHEDULE III
to the Indenture or in any Designation Letter, or at such other address as shall
be designated by such Person in a written notice to the other parties hereto.
Section 5.5 SUCCESSORS AND ASSIGNS. All of the covenants,
promises and agreements in this Agreement by or on behalf of the respective
parties hereto shall bind and inure to the benefit of their respective
successors and assigns, regardless of whether so expressed.
Section 5.6 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, all of which, taken together, shall constitute one
and the same instrument and any of the parties hereto may execute this Agreement
by signing any such counterpart.
Section 5.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL. (a) This Agreement is a contract made under the laws of the State
of New York of the United States and shall for all purposes be governed by and
construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
(b) Any legal action or proceeding against Funding Company or
any Project Obligor with respect to this Agreement or any other Finance Document
may be brought in the courts of the State of New York in the County of New York
or of the United States for the Southern District of New York and, by execution
and delivery of this Agreement, Funding Company and each Project Obligor hereby
irrevocably submits and accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Funding
Company and each Project Obligor agree that a judgment, after exhaustion of all
available appeals, in any such action or proceeding shall be conclusive and
binding upon Funding Company and each Project Obligor and may be enforced in any
other jurisdiction, by a suit upon such judgment, a certified copy of which
shall be conclusive evidence of the judgment. Funding Company and each Project
Obligor hereby irrevocably designates, appoints and empowers Corporation Service
Company with offices on the date hereof at βββ ββββββ ββββββ, βββ ββββ, βββ ββββ
βββββ-ββββ, as its
22
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and Agent shall cease to
be available to act as such, each Project Obligor agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Bond Trustee. Funding Company and each
Project Obligor irrevocably consent to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to Funding Company and
each Project Obligor at its address referred to in SECTION 5.4 (Notices) such
service to become effective thirty (30) days after such mailing. Nothing herein
shall affect the right of any Secured Party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
Funding Company or any Project Obligor in any other jurisdiction.
(c) Funding Company and each Project Obligor hereby
irrevocably waive any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement in the courts referred to in clause (b) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(d) WITH REGARD TO THIS AGREEMENT, FUNDING COMPANY, EACH
PROJECT OBLIGOR, EACH SECURED PARTY, THE COLLATERAL AGENT AND THE DEPOSITARY
BANK HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.
Section 5.8 NO IMPAIRMENTS OF OTHER RIGHTS. Nothing in this
Agreement is intended or shall be construed to impair, diminish or otherwise
adversely affect any other rights the Secured Parties may have or may obtain
against Funding Company or any Project Obligor.
Section 5.9 HEADINGS. Headings herein are for convenience
only and shall not be relied upon in interpreting or enforcing this Agreement.
Section 5.10 TERMINATION. This Agreement shall remain in full
force and effect until the Debt Termination Date. Following the Debt Termination
Date, SECTIONS 2.4(a) and (b) (Indemnification; Bankruptcy) shall remain in full
force and effect.
Section 5.11 ENTIRE AGREEMENT. This Agreement, including the
documents referred to herein, embodies the entire agreement and understanding of
the parties hereto and supersedes all prior agreements and understandings of the
parties hereto relating to the subject matter herein contained.
23
Section 5.12 EXECUTION IN LIEU OF AGENT. To the extent that
any of the holders of Permitted Indebtedness incurred subsequent to the date
hereof are not represented by an Agent that is a party to this Agreement, such
holder of such Permitted Indebtedness shall be permitted to execute this
Agreement and the Designation Letter on its own behalf in lieu of any Agent on
its behalf.
Section 5.13 CONFLICTS WITH OTHER SECURITY DOCUMENTS.
Notwithstanding any provision hereof, in the event of any conflict between the
terms of this Agreement and the other Security Documents (other than the
Depositary Agreements), the provisions of this Agreement shall control.
Section 5.14 SCOPE OF DUTIES; LIMITS ON LIABILITY. (a)
Without limiting any other provision hereof, the duties and obligations of the
Collateral Agent shall be determined solely by the express provisions of this
Agreement; the Collateral Agent shall not be liable except for the performance
of such duties and obligations as are specifically set forth herein. 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 lost profits), even if the
Collateral Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(b) Notwithstanding anything to the contrary contained herein,
the obligations of Funding Company hereunder are solely the obligations of
Funding Company and payable from, and recourse solely to, the Funding Company's
interest in the Funding Company Collateral following application of the Funding
Collateral in or towards the discharge of the Secured Obligations and the
obligations of Funding Company under each other Transaction Document. No
recourse shall be had against any Non-Recourse Person subject to the exceptions
set forth in SECTION 11.11 (Limitation of Liability) in the Indenture.
24
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed as a deed by their duly authorized officers, all as of the
date first written above.
YORK POWER FUNDING (CAYMAN) LIMITED
By: /s/ ββββββ βββββ
--------------------------------
Name: ββββββ βββββ
Title: Director
In the presence of:
/s/ ββββββ β. ββββββββ
-----------------------------------
Name: ββββββ β. ββββββββ
BROOKLYN NAVY YARD POWER LLC
By: B-41 ASSOCIATES, L.P.,
its Managing Member
By: B-41 MANAGEMENT CORPORATION
its General Partner
By: /s/ βββββββ ββββββββββββ
--------------------------------
Name: βββββββ ββββββββββββ
Title: Vice President
WARBASSE POWER I LLC
By: COGENERATION TECHNOLOGIES,
INC.
its Managing Member
By: /s/ βββββββ ββββββββββββ
--------------------------------
Name: βββββββ ββββββββββββ
Title: Executive Vice President
25
WARBASSE POWER II LLC
By: YORK COGEN PARTNERS, L.P.
its Managing Member
By: RRR's VENTURES, LTD.
its General Partner
By: /s/ βββββββ ββββββββββββ
--------------------------------
Name: βββββββ ββββββββββββ
Title: Vice President
NEW WORLD POWER TEXAS RENEWABLE
ENERGY LIMITED PARTNERSHIP
By: BIG SPRINGS TEXAS ENERGY
MANAGEMENT, INC.
Managing General Partner
By: /s/ βββββββ ββββββββββββ
--------------------------------
Name: βββββββ ββββββββββββ
Title: Vice President
YORK EX INTERNATIONAL SRL
By: /s/ ββββββ β. ββββββββ
--------------------------------
Name: ββββββ β. ββββββββ
Title: Vice President
YORK HOLDINGS (BARBADOS) SRL
By: /s/ ββββββ β. ββββββββ
--------------------------------
Name: ββββββ β. ββββββββ
Title: Vice President
26
[seal] INNCOGEN, LIMITED
By: /s/ ββββββ β. ββββββββ
--------------------------------
Name: ββββββ β. ββββββββ
Title: President
The Common seal of InnCOGEN,
Limited was hereunto affixed
pursuant to a resolution of its
Board of Directors and in
conformity with its Articles of
Association in the presence of:
/s/ ββββ ββββββ
-----------------------------------
Name: ββββ ββββββ
THE BANK OF NEW YORK,
as Bond Trustee
By: /s/ ββββββ βββββ
--------------------------------
Name: ββββββ βββββ
Title: Vice President
THE BANK OF NEW YORK,
as Collateral Agent
By: /s/ ββββββ βββββ
--------------------------------
Name: ββββββ βββββ
Title: Vice President
THE BANK OF NEW YORK,
as the Depositary Bank
By: /s/ ββββββ βββββ
--------------------------------
Name: ββββββ βββββ
Title: Vice President
27
Exhibit A to the
Intercreditor Agreement
FORM OF DESIGNATION LETTER
[Date]
The Bank of New York
[__________________]
Attention: [__________]
Re: York Power Funding (Cayman) Limited
Ladies and Gentlemen:
Reference is made to (i) the Collateral Agency and
Intercreditor Agreement (the "INTERCREDITOR AGREEMENT") dated as of ___________
among York Power Funding (Cayman) Limited ("FUNDING COMPANY"), Brooklyn Navy
Yard Power LLC, Warbasse Power I LLC, Warbasse Power II LLC, New World Power
Texas Renewable Energy Limited Partnership, York Ex International SRL, York
Holdings (Barbados) SRL, InnCOGEN, Limited, the Collateral Agent, the Bond
Trustee, the Depositary Bank and any trustees or agents under any other Finance
Documents and (ii) [Describe New Credit Documents]. Capitalized terms used
herein and not defined herein shall have the meanings set forth in APPENDIX A to
the Indenture (the "INDENTURE") dated as of _________, 1998 between Funding
Company and the Bond Trustee.
The undersigned is the [Bank/Lender][Agent for the [Banks]
[Lenders]] under the [New Credit Document].
The undersigned is delivering this Designation Letter pursuant
to SECTION 4.5 (Additional Secured Parties) of the Intercreditor Agreement in
order to permit the undersigned [and the [Banks][Lenders] under the New Credit
Document] to become Secured Parties under the Intercreditor Agreement and the
other Finance Documents and to benefit from the Collateral under the Finance
Documents in accordance with the terms of the Intercreditor Agreement and the
other Finance Documents.
The undersigned [on behalf of itself and the [Banks][Lenders]]
accedes to and agrees to be bound by all of the terms and provisions of the
Intercreditor Agreement and the other Finance Documents. In furtherance thereof,
the undersigned [on behalf of itself and the [Banks][Lenders] agrees to execute
a counterpart of the Intercreditor Agreement.
Our address for notices is:
[Insert Information]
Our wire transfer instructions are:
[Insert Information]
We agree that any extensions of credit under the [New Credit
Documents] shall be deposited with the Depositary Bank, to the extent required
by SECTION 3.2 (The Revenue Account) of the applicable Depositary
Agreement.
This Designation Letter may be executed in any number of
counterparts, each executed counterpart constituting an original but all
counterparts together constituting only one instrument.
THIS DESIGNATION LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
[CREDITOR]
By:
-----------------------------------------
Name:
Title:
Consented to by:
THE BANK OF NEW YORK,
as Collateral Agent
By:
----------------------
Name:
Title: