Exhibit 10.20
EXECUTION COPY
Canadian Guarantors Stock Pledge
FIRST AMENDMENT PLEDGE AGREEMENT
THIS FIRST AMENDMENT PLEDGE AGREEMENT (this "Pledge Agreement"), dated
as of July 16, 2003, made by Quintana Minerals (USA), Inc., a Delaware
corporation, JOQ Canada, Inc., a Delaware corporation, and Quintana Canada
Holdings, LLC, a Delaware limited liability company (each a "Pledgor" and
collectively, the "Pledgors") in favor of The Bank of New York, as Collateral
Trustee (together with any successor(s) thereto in such capacity, the
"Collateral Trustee") for the benefit of the Secured Parties.
W I T N E S S E T H
WHEREAS, Calpine Corporation (the "Company") intends to enter
into an Amended and Restated Credit Agreement dated as of July 16, 2003 (as
amended, modified, renewed, restated or replaced from time to time, the "Credit
Agreement") among, inter alia, the Company, the Lenders referred to therein and
The Bank of Nova Scotia, as Administrative Agent (the "Credit Agreement Agent"),
relating to a $500,000,000 senior secured credit facility to be made available
in the form of revolving loans and term loans, including letters of credit to be
issued thereunder;
WHEREAS, the Company intends to (a) issue $500,000,000 in
aggregate principal amount of Second Priority Senior Secured Floating Rate Notes
due 2007 (the "2007 Notes") pursuant to the Indenture dated as of July 16, 2003
(the "2007 Indenture") between the Company and Wilmington Trust Company, as
Trustee (together with its successors in such capacity, the "2007 Trustee"), (b)
issue $1,150,000,000 in aggregate principal amount of 8.50% Second Priority
Senior Secured Notes due 2010 (the "2010 Notes") pursuant to the Indenture dated
as of July 16, 2003 (the "2010 Indenture") between the Company and Wilmington
Trust Company, as Trustee (together with its successors in such capacity, the
"2010 Trustee"), (c) issue $900,000,000 in aggregate principal amount of 8.75%
Second Priority Senior Secured Notes due 2013 (the "2013 Notes") pursuant to the
Indenture dated as of July 16, 2003 (the "2013 Indenture") between the Company
and Wilmington Trust Company, as Trustee (together with its successors in such
capacity, the "2013 Trustee"), and (d) borrow $750,000,000 in Term Loans (the
"Term Loans") pursuant to a Term Loan Agreement dated as of July 16, 2003 (the
"Term Loan Agreement") between the Company and Goldman Sachs Credit Partners
L.P., as Administrative Agent (together with its successors in such capacity,
the "Term Loan Administrative Agent");
WHEREAS, the Pledgors intend to guarantee the Secured
Obligations of the Company on a limited basis and to secure their respective
Secured Obligations under such limited guarantees, including their respective
obligations under the Credit Agreement and any future Priority Lien Debt, on a
priority basis, and, subject to such priority, their respective obligations
under the 2007 Notes, 2010 Notes, 2013 Notes and Term Loans and any future
Parity Lien Debt equally and ratably, with security interests in, and pledge of,
among other things, all present and future Pledged Collateral (as defined
below);
WHEREAS, the Company and the Pledgors have entered into a
Collateral Trust Agreement dated as of July 16, 2003 (the "Collateral Trust
Agreement") among, inter alia, the Company, the Pledgors and the Collateral
Trustee which sets forth the terms on which the Company and the Pledgors have
appointed the Collateral Trustee as trustee for the present and future holders
of the Secured Obligations to receive, hold, maintain, administer, enforce and
distribute the Existing Security Documents and all other Security Documents,
including this Pledge Agreement, at any time delivered to the Collateral Trustee
and all interests, rights, powers and remedies of the Collateral Trustee
thereunder and the proceeds thereof;
WHEREAS, the Company and the Pledgors will derive substantial
direct and indirect benefit from the making of the extensions of credit under
each of the Credit Agreement and the Term Loan Agreement and the offering of
each of the 2007 Notes, 2010 Notes and 2013 Notes;
WHEREAS, it is a condition precedent to the obligation of the
lenders to make their respective extensions of credit to the Company under each
of the Credit Agreement and the Term Loan Agreement, and condition precedent to
the obligation of the purchasers to purchase each of the 2007 Notes, the 2010
Notes and the 2013 Notes, that the Pledgors shall have executed and delivered
this Pledge Agreement to the Collateral Trustee for the benefit of the Secured
Parties; and
WHEREAS, this Pledge Agreement amends and restates in its
entirety the Pledge Agreement dated as of March 8, 2002 made by the Pledgors in
favor of The Bank of Nova Scotia, as agent;
NOW, THEREFORE, in consideration of the premises contained herein and
for good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Collateral Trustee" is defined in the preamble.
"Collateral Trust Agreement" is defined in the recitals.
"Company" is defined in the preamble.
"Distributions" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Pledged Collateral, but shall not include Dividends.
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"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"Pledge Agreement" is defined in the preamble.
"Pledged Collateral" is defined in Section 2.1.
"Pledged Property" means all Pledged Shares and all other pledged
shares of capital stock, all other securities, all assignments of any amounts
due or to become due, all other instruments which are now being delivered by the
Pledgors to the Collateral Trustee or may from time to time hereafter be
delivered by the Pledgors to the Collateral Trustee for the purpose of pledge
under this Pledge Agreement or any other Secured Debt Document, and all proceeds
of any of the foregoing.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.
"Pledged Shares" means all shares of capital stock of any Pledged Share
Issuer which are delivered by a Pledgor to the Collateral Trustee as Pledged
Property hereunder.
"Secured Parity Lien Parties" means any Person who is holding a Parity
Lien Obligation (including any Parity Debt Representative), at any time.
"Secured Parties" means any Person who is holding a Secured Obligation
(including any Secured Debt Representative), at any time.
"Secured Priority Lien Parties" means any Person who is holding a
Priority Lien Obligation (including any Priority Lien Agent), at any time.
"Securities Act" is defined in Section 6.2.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
New York.
SECTION 1.2. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Collateral Trust
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein
or the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Each Pledgor hereby (i)
pledges, hypothecates, assigns, charges, mortgages, delivers, and transfers to
the Collateral Trustee, for its benefit and the benefit of the Secured Priority
Lien Parties, and hereby grants to the Collateral
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Trustee, for its benefit and the benefit of the Secured Priority Lien Parties, a
continuing first priority security interest in, all of the following property
(the "Pledged Collateral") and (ii) pledges, hypothecates, assigns, charges,
mortgages, delivers, and transfers to the Collateral Trustee, for its benefit
and the benefit of the Secured Parity Lien Parties, and hereby grants to the
Collateral Trustee, for its benefit and the benefit of the Secured Parity Lien
Parties, a continuing second priority security interest in, all of the Pledged
Collateral:
(a) all issued and outstanding shares of capital stock
identified on Attachment 1 hereto of each Pledged Share Issuer
identified on Attachment 1 hereto;
(b) and the certificates representing the Pledged Shares
and all dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(c) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by any Pledgor in any manner,
and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares;
(d) all proceeds of any of the foregoing;
provided, however, that in no event shall the Pledged Collateral constitute or
give rise to any rights or interests in excess of a 65% ownership interest in
the Pledged Share Issuer.
SECTION 2.2. Security for Obligations; Separate Liens. This Pledge
Agreement and the security interests and Liens granted and created herein
secures the payment and performance of all Secured Obligations of the Pledgors
now or hereafter, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest (including any
interest accruing at the then applicable rate provided in any applicable Secured
Debt Document after the maturity of the loans and reimbursement obligations
therein and interest accruing at the then applicable rate provided in any
applicable Secured Debt Document after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Company, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), fees, premiums, penalties,
indemnifications, expenses or otherwise, and including all amounts that
constitute part of the Secured Obligations and would be owed by the Pledgors but
for the fact that they are unenforceable or not allowed due to a pending
Bankruptcy Case or Insolvency Proceeding. Without limiting the generality of the
foregoing, it is the intent of the parties that (i) the Liens securing the
Parity Lien Obligations are subject and subordinate to the Liens securing the
Priority Lien Obligations up to the Priority Lien Cap and (ii) this Pledge
Agreement creates two separate and distinct Liens: the first Lien securing the
payment and performance of the Priority Lien Obligations and the second Lien
securing the payment and performance of the Parity Lien Obligations.
SECTION 2.3. Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Pledged Collateral, including all
Pledged Shares, shall be delivered to and held by or on behalf of the Collateral
Trustee pursuant hereto, shall be in
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suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.
SECTION 2.4. Intentionally Omitted.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and, subject to Section 4.1 of the Collateral Trust Agreement and the
other Secured Debt Documents, shall
(a) remain in full force and effect until payment in full
of all Secured Obligations and the termination or expiration of all
commitments to extend credit under all Credit Facilities, the
Indebtedness under which constitutes Priority Lien Debt,
(b) be binding upon each Pledgor and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Collateral Trustee hereunder, to the benefit of the Collateral Trustee
and each other Secured Party.
Without limiting the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any right or obligation under the
Secured Debt Documents to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Secured Party under any Secured Debt Document (including
this Pledge Agreement) or otherwise, subject, however, to any contrary
provisions in such assignment or transfer, and to the applicable provisions of
each of the Secured Debt Documents. Upon the payment in full and discharge of
all Secured Obligations that are then outstanding, due and payable and the
termination or expiration of all commitments to extend credit under all Credit
Facilities, the Indebtedness under which constitutes Priority Lien Debt, the
security interest granted herein shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgors. Upon any such termination or any
release of the Lien provided for hereunder in accordance with the Secured Debt
Documents, the Collateral Trustee will, at the Pledgors' sole expense, deliver
to the Pledgors, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, together with all other Pledged Collateral held by the
Collateral Trustee hereunder, and execute and deliver to each Pledgor such
documents as the Pledgors shall reasonably request to evidence such termination
or release.
SECTION 2.6. Security Interest Absolute. All rights of the
Collateral Trustee and the security interests granted to the Collateral Trustee
hereunder, and all obligations of the Pledgors hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of any of the
Secured Debt Documents,
(b) the failure of any Secured Party or any holder of any
Secured Obligation
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(i) to assert any claim or demand or to enforce
any right or remedy against the Company, any other Obligor or
any other Person under the provisions of any of the Secured
Debt Documents or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations of the Company or any other Obligor,
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations or
any other extension, compromise or renewal of any Secured Obligation of
the Company or any other Obligor,
(d) any reduction, limitation, impairment or termination
of any Secured Obligations of the Company or any other Obligor for any
reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and the Pledgors hereby
waive any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Secured Obligations
of the Company, any other Obligor or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
any of the Secured Debt Documents,
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Pledged Collateral), or
any amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations, or
(g) any other circumstances which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Company, any other Obligor, any surety or any guarantor.
SECTION 2.7. [Intentionally Omitted.]
SECTION 2.8. Waiver of Subrogation. Until such time as the Secured
Obligations have been paid in full and discharged, and all commitments to extend
credit under all Credit Facilities, the Indebtedness under which constitutes
Priority Lien Debt shall have been permanently terminated or expired, each
Pledgor hereby irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Company or any other Obligor that arise from the
existence, payment, performance or enforcement of the Pledgors' obligations
under this Pledge Agreement or any other Secured Debt Document, including any
right of subrogation, reimbursement, exoneration, or indemnification, any right
to participate in any claim or remedy of the Collateral Trustee against the
Company or any other Obligor or any collateral which the Collateral Trustee now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including the right to take or
receive from the Company or any other Obligor, directly or indirectly, in cash
or other property or by set-off or in any manner, payment or security on account
of such claim or other rights. If any
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amount shall be paid to any Pledgor in violation of the preceding sentence and
the Secured Obligations shall not have been indefeasibly paid in full, in cash,
and all commitments to extend credit under all Credit Facilities the
Indebtedness under which constitutes Priority Lien Debt shall have not been
permanently terminated or expired, such amount shall be deemed to have been paid
to such Pledgor for the benefit of, and held in trust for, the Collateral
Trustee, and shall forthwith be paid to the Collateral Trustee to be credited
and applied upon the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Collateral Trust Agreement. Each Pledgor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Secured Debt Documents and that the
waiver set forth in this Section is knowingly made in contemplation of such
benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. Each Pledgor represents and warrants
unto the Collateral Trustee and each Secured Party, as at the date of each
pledge and delivery hereunder (including each pledge and delivery of Pledged
Shares) by such Pledgor to the Collateral Trustee of any Pledged Collateral, as
set forth in this Article.
SECTION 3.1.1 Organization, etc. Each Pledgor is a corporation
validly organized and existing and in good standing under the laws of the State
of its organization, is duly qualified to do business and is in good standing as
a foreign organization in each jurisdiction where the nature of its business
requires such qualification and where the failure to so qualify would have a
material adverse effect on such Pledgor's ability to perform its obligations
under this Pledge Agreement or the other Secured Debt Documents to which it is a
party, and has full power and authority and holds all requisite governmental
licenses, permits and other approvals to enter into and perform its Secured
Obligations under this Pledge Agreement and each other Secured Debt Document to
which it is a party and to own or hold under lease its property and to conduct
its business substantially as currently conducted by it.
SECTION 3.1.2 Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by any Pledgor of this Pledge Agreement and
each other Secured Debt Document executed or to be executed by it are within
such Pledgor's corporate powers, have been duly authorized by all necessary
corporate action, and do not
(a) contravene such Pledgor's organizational documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting such Pledgor; or
(c) result in, or require the creation or imposition of,
any Lien (other than the lien created hereunder) on any of such
Pledgor's properties.
SECTION 3.1.3 Regulation, etc. Each Pledgor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
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SECTION 3.1.4 Validity, etc. This Pledge Agreement constitutes, and
each other Secured Debt Document executed by each Pledgor will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of each Pledgor enforceable in accordance with their respective
terms except as enforceability may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
affecting the rights of creditors or (ii) general principles of equity,
including the possible unavailability of specific performance or injunctive
relief.
SECTION 3.1.5 Ownership, No Liens, etc. Each Pledgor is the legal
and beneficial owner of, and has good and marketable title to (and has full
right and authority to pledge and assign) the Pledged Collateral, free and clear
of all liens, security interests, options, or other charges or encumbrances,
except any lien or security interest granted pursuant hereto in favor of the
Collateral Trustee.
SECTION 3.1.6 Valid Security Interest. The delivery of such Pledged
Collateral to the Collateral Trustee is effective to create a valid, perfected,
first priority or second priority, as the case may be, security interest in such
Pledged Collateral and all proceeds thereof, securing the Secured Obligations.
No filing or other action will be necessary to perfect or protect such security
interest.
SECTION 3.1.7 As to Pledged Shares. All of the Pledged Shares are
duly authorized and validly issued, fully paid, and non-assessable, and
constitute sixty-five percent (65%) of all of the issued and outstanding shares
of capital stock entitled to vote in the election of the Board of Directors of
the Pledged Share Issuer.
SECTION 3.1.8 Authorization, Approval, etc. No authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
(a) for the pledge by any Pledgor of any Pledged
Collateral pursuant to this Pledge Agreement or for the execution,
delivery, and performance of this Pledge Agreement by any Pledgor, or
(b) for the exercise by the Collateral Trustee of the
voting or other rights provided for in this Pledge Agreement, or,
except with respect to any Pledged Shares, as may be required in
connection with a disposition of such Pledged Shares by laws affecting
the offering and sale of securities generally, the remedies in respect
of the Pledged Collateral pursuant to this Pledge Agreement.
SECTION 3.1.9 Compliance with Laws. Each Pledgor is in compliance
with the requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every governmental authority, the non-compliance with which might materially
adversely affect the business, properties, assets, operations, condition
(financial or otherwise) or prospects of any Pledgor or the value of the Pledged
Collateral or the worth of the Pledged Collateral as collateral security.
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ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. Except
as otherwise permitted under the Secured Debt Documents, no Pledgor will sell,
assign, transfer, pledge or encumber in any other manner the Pledged Collateral
(except in favor of the Collateral Trustee hereunder) and each Pledgor will
warrant and defend the right and title herein granted unto the Collateral
Trustee in and to the Pledged Collateral (and all right, title, and interest
represented by the Pledged Collateral) against the claims and demands of all
Persons whomsoever. Each Pledgor agrees that at any time, and from time to time,
at the expense of the Pledgors, the Pledgors will promptly execute and deliver
all further instruments, and take all further action, that may be necessary or
desirable, or that the Collateral Trustee or any Secured Debt Representative may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.
SECTION 4.2. Stock Powers, etc. The Pledgors agree that all
Pledged Shares (and all other shares of capital stock constituting Pledged
Collateral) delivered by the Pledgors pursuant to this Pledge Agreement will be
accompanied by duly executed undated blank stock powers, or other equivalent
instruments of transfer acceptable to the Collateral Trustee. The Pledgors will,
from time to time upon the request of the Collateral Trustee or any Secured Debt
Representative, promptly deliver to the Collateral Trustee such stock powers,
instruments, and similar documents, satisfactory in form and substance to the
Collateral Trustee, with respect to the Pledged Collateral as the Collateral
Trustee may reasonably request and will, from time to time upon the request of
the Collateral Trustee or any Secured Debt Representative after the occurrence
of any Actionable Default, promptly transfer any Pledged Shares or other shares
of common stock constituting Pledged Collateral into the name of any nominee
designated by the Collateral Trustee.
SECTION 4.3. Continuous Pledge. Subject to Section 2.5, the
Pledgors will, at all times, keep pledged to the Collateral Trustee pursuant
hereto all shares of capital stock constituting Pledged Collateral, all
Dividends and Distributions with respect thereto, and all other Pledged
Collateral and other securities, instruments, proceeds, and rights from time to
time received by or distributable to any Pledgor in respect of any Pledged
Collateral.
SECTION 4.4. Voting Rights. The Pledgors agree after any
Actionable Default shall have occurred and be continuing and the Collateral
Trustee has notified the Pledgors of the Collateral Trustee's intention to
exercise its voting power under this Section 4.4
(i) the Collateral Trustee may exercise (to the
exclusion of the Pledgors) the voting power and all other
incidental rights of ownership with respect to any Pledged
Shares or other shares of capital stock constituting Pledged
Collateral and each Pledgor hereby grants the Collateral
Trustee an irrevocable proxy, exercisable under such
circumstances, to vote the Pledged Shares and such other
Pledged Collateral; and
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(ii) promptly to deliver to the Collateral
Trustee such additional proxies and other documents as may be
necessary to allow the Collateral Trustee to exercise such
voting power.
The Collateral Trustee agrees that unless an Actionable Default shall have
occurred and be continuing and the Collateral Trustee shall have given the
notice referred to in Section 4.4(b), the Pledgors shall have the exclusive
voting power with respect to any shares of capital stock (including any of the
Pledged Shares) constituting Pledged Collateral and the Collateral Trustee
shall, upon the written request of the Pledgors, promptly deliver such proxies
and other documents, if any, as shall be reasonably requested by the Pledgors
which are necessary to allow the Pledgors to exercise voting power with respect
to any such share of capital stock (including any of the Pledged Shares)
constituting Pledged Collateral; provided, however, that no vote shall be cast,
or consent, waiver, or ratification given, or action taken by the Pledgors that
would materially impair any Pledged Collateral or be inconsistent with or
violate any material provision of any of the Secured Debt Document (including
this Pledge Agreement).
SECTION 4.5. Additional Undertakings. The Pledgors will not take
or omit to take any action the taking or the omission of which would result in
any impairment or alteration of any material obligation of the maker of any
instrument constituting Pledged Collateral.
ARTICLE V
THE COLLATERAL TRUSTEE
SECTION 5.1. Collateral Trustee Appointed Attorney-in-Fact. The
Pledgors hereby irrevocably appoint the Collateral Trustee the Pledgors'
attorney-in-fact, with full authority in the place and stead of each Pledgor and
in the name of each Pledgor or otherwise, from time to time in the Collateral
Trustee's discretion, to take any action and to execute any instrument which the
Collateral Trustee may deem necessary or advisable to accomplish the purposes of
this Pledge Agreement, including without limitation:
(a) after the occurrence and continuance of an Actionable
Default, to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
(c) after the occurrence and continuance of an Actionable
Default, to file any claims or take any action or institute any
proceedings which the Collateral Trustee may deem necessary or
desirable for the collection of any of the Pledged Collateral or
otherwise to enforce the rights of the Collateral Trustee with respect
to any of the Pledged Collateral.
Each Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Trustee May Perform. If any Pledgor fails
to perform any agreement contained herein, the Collateral Trustee may itself
perform, or cause performance of,
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such agreement, and the expenses of the Collateral Trustee incurred in
connection therewith shall be payable by the Pledgors pursuant to Section 6.4.
SECTION 5.3 Collateral Trustee's Rights and Duties Subject to
Collateral Trust Agreement. Notwithstanding anything to the contrary contained
in this Pledge Agreement, in acting under and by virtue of this Pledge
Agreement, the Collateral Trustee shall be entitled to all of the rights,
privileges and immunities provided to it in the Collateral Trust Agreement, and
the rights and duties of the Collateral Trustee hereunder are subject in all
respects to the terms, conditions and limitations set forth in the Collateral
Trust Agreement (including, without limitation the provisions of Article 5
thereof), reference to which is made for all purposes; provided, however, that
any forbearance by the Collateral Trustee in exercising any right or remedy
available to it under the Collateral Trust Agreement shall not give rise to a
defense on the part of the Pledgors with respect to the Collateral Trustee's
exercise of any right or remedy pursuant to this Pledge Agreement or as
otherwise afforded by applicable law.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If an Actionable Default shall have
occurred and be continuing:
(a) The Collateral Trustee may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Pledged Collateral) and also may, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
of the Collateral Trustee's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral
Trustee may deem commercially reasonable in each case subject to the
terms and provisions of the Collateral Trust Agreement. The Pledgors
agree that, to the extent notice of sale shall be required by law, at
least ten days' prior notice to the Pledgors of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Collateral Trustee shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Collateral Trustee may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) The Collateral Trustee may, in each case subject to
the terms and provisions of the Collateral Trust Agreement,
(i) transfer all or any part of the Pledged
Collateral into the name of the Collateral Trustee or its
nominee, with or without disclosing that such Pledged
Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the
Pledged Collateral to make payment to the Collateral Trustee
of any amount due or to become due thereunder,
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(iii) enforce collection of any of the Pledged
Collateral by suit or otherwise, and surrender, release or
exchange all or any part thereof, or compromise or extend or
renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with
respect thereto,
(iv) endorse any checks, drafts, or other
writings in any Pledgor's name to allow collection of the
Pledged Collateral,
(v) take control of any proceeds of the Pledged
Collateral, and
(vi) execute (in the name, place and stead of the
Pledgors) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Pledged Collateral.
SECTION 6.2. Securities Laws. If the Collateral Trustee shall
determine to exercise its right to sell all or any of the Pledged Collateral
pursuant to Section 6.1, the Pledgors agree that, upon request of the Collateral
Trustee, the Pledgors will, at their own expense:
(a) execute and deliver, and cause each issuer of the
Pledged Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things,
as may be necessary or advisable to register such Pledged Collateral
under the provisions of the Securities Act of 1933, as from time to
time amended (the "Securities Act"), and to cause the registration
statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related
prospectus which are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Pledged
Collateral under the state securities or "Blue Sky" laws and to obtain
all necessary governmental approvals for the sale of the Pledged
Collateral;
(c) cause each such issuer to make available to its
security holders, as soon as practicable, an earnings statement that
will satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things
as may be necessary to make such sale of the Pledged Collateral or any
part thereof valid and binding and in compliance with applicable law.
SECTION 6.3. Compliance with Restrictions. The Pledgors agree that
in any sale of any of the Pledged Collateral whenever an Actionable Default
shall have occurred and be continuing, the Collateral Trustee is hereby
authorized to comply with any limitation or restriction in connection with such
sale as it may be advised by counsel is necessary in order to avoid any
violation of applicable law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to
12
persons who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of such
Pledged Collateral), or in order to obtain any required approval of the sale or
of the purchaser by any governmental regulatory authority or official, and the
Pledgors further agree that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Collateral Trustee be liable nor accountable to the Pledgors for
any discount allowed by the reason of the fact that such Pledged Collateral is
sold in compliance with any such limitation or restriction.
SECTION 6.4. Application of Proceeds. All cash proceeds received
by the Collateral Trustee in respect of any sale of, collection from, or other
realization upon, all or any part of the Pledged Collateral shall thereafter be
applied in accordance with Section 3.4 of the Collateral Trust Agreement.
SECTION 6.5. Indemnity and Expenses. The Pledgors hereby indemnify
and holds harmless the Collateral Trustee from and against any and all claims,
losses, and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Collateral Trustee's gross negligence or willful
misconduct. Upon demand, the Pledgors will pay to the Collateral Trustee the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Collateral
Trustee may incur in connection with:
(a) the administration of this Pledge Agreement and each
other Secured Debt Document;
(b) the custody, preservation, use, or operation of, or
the sale of, collection from, or other realization upon, any of the
Pledged Collateral;
(c) the exercise or enforcement of any of the rights of
the Collateral Trustee hereunder; or
(d) the failure by the Pledgors to perform or observe any
of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Security Document. This Pledge Agreement is a
Security Document executed pursuant to the Collateral Trust Agreement and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgors
herefrom shall in any event be effective unless the same shall be in writing and
signed by the Collateral Trustee in accordance with Section 7.1 of the
Collateral Trust Agreement, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it is
given.
13
SECTION 7.3. Protection of Collateral. The Collateral Trustee may
from time to time, at its option, perform any act which the Pledgors agree
hereunder to perform and which the Pledgors shall fail to perform after being
requested in writing so to perform (it being understood that no such request
need be given after the occurrence and during the continuance of an Actionable
Default) and the Collateral Trustee may from time to time take any other action
which the Collateral Trustee or any Secured Debt Representative reasonably deems
necessary for the maintenance, preservation or protection of any of the Pledged
Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and shall be effected in the manner provided for in Section 7.5
of the Collateral Trust Agreement.
SECTION 7.5. Section Captions. Section captions used in this
Pledge Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of
this Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.7. Governing Law, Entire Agreement, etc. THIS PLEDGE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE OTHER SECURITY
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
SECTION 7.8. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
PLEDGE AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL TRUSTEE OR THE PLEDGORS
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PLEDGED
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL TRUSTEE'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH PLEDGED COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE
14
STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH PLEDGOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, SUCH PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
SECTION 7.9. Waiver of Jury Trial. THE COLLATERAL TRUSTEE AND THE
PLEDGORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE COLLATERAL TRUSTEE OR THE PLEDGORS. THE PLEDGORS ACKNOWLEDGE AND
AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER SECURED DEBT DOCUMENT TO WHICH
IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED
PARTIES ENTERING INTO EACH SUCH SECURED DEBT DOCUMENT.
15
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
QUINTANA CANADA HOLDINGS, LLC
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
Address: 50 West San Fernando Street
San Jose, CA 95113
Facsimile No.:
Attention:
QUINTANA MINERALS (USA), INC.
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
Address: 50 West San Fernando Street
San Jose, CA 95113
Facsimile No.:
Attention:
JOQ CANADA, INC.
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
Address: 50 West San Fernando Street
San Jose, CA 95113
Facsimile No.:
Attention:
16
THE BANK OF NEW YORK, not in its individual
capacity, but solely as Collateral Trustee
By: /s/ Michael Pitfick
-----------------------------------------
Name: Michael Pitfick
Title: Assistant Vice President
17
EXECUTION COPY
Canadian Guarantors Stock Pledge
ATTACHMENT 1
to
Pledge Agreement
Pledged Shares
Pledged Share Issuer Class A Common Stock
Authorized Outstanding % of Shares
Shares Shares Pledged
---------- ----------- -----------
Calpine Canada Energy Ltd. 1,000,000,000 35,100 65%
(3,391 Class A shares pledged by Quintana Minerals (USA), Inc.)
(16,034 Class A shares pledged by Quintana Canada Holdings, LLC)
(3,390 Class A shares pledged by JOQ Canada, Inc.)