Exhibit 10.33
EXECUTION COPY
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NON-SHARED SECURITY AGREEMENT
Dated April 1, 2003
From
The Grantors referred to herein
as Grantors
to
Bank One, NA
as Collateral Agent
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T A B L E O F C O N T E N T S
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Section Page
Section 1. Definitions; Other Interpretive Provisions........................................................ 2
Section 2. Grant of Security................................................................................. 9
Section 3. Security for Obligations.......................................................................... 13
Section 4. Grantors Remain Liable............................................................................ 13
Section 5. Delivery and Control of Security Collateral....................................................... 13
Section 6. Maintaining the Account Collateral................................................................ 15
Section 7. Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights and Giving
Notice of Commercial Tort Claims.............................................................. 16
Section 8. Representations and Warranties.................................................................... 17
Section 9. Further Assurances................................................................................ 19
Section 10. Post-Closing Changes; Bailees; Collections on Receivables and Related Contracts................... 20
Section 11. As to Intellectual Property Collateral............................................................ 21
Section 12. Voting Rights; Dividends; Etc..................................................................... 22
Section 13. As to Letter-of-Credit Rights..................................................................... 23
Section 14. Transfers and Other Liens; Additional Shares...................................................... 24
Section 15. Collateral Agent Appointed Attorney-in-Fact....................................................... 24
Section 16. Collateral Agent May Perform...................................................................... 24
Section 17. The Collateral Agent's Duties..................................................................... 24
Section 18. Remedies.......................................................................................... 25
Section 19. Indemnity and Expenses............................................................................ 27
Section 20. Amendments; Waivers; Additional Grantors; Etc..................................................... 28
Section 21. Notices, Etc...................................................................................... 29
Section 22. Continuing Security Interest; Assignments under the Credit Agreement.............................. 30
Section 23. Release; Termination.............................................................................. 30
Section 24. Security Interest Absolute........................................................................ 31
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Section 25. Execution in Counterparts......................................................................... 32
Section 26. The Non-Shared Mortgages.......................................................................... 32
Section 27. Collateral in the State of Louisiana.............................................................. 32
Section 28. Governing Law..................................................................................... 33
Section 29. Submission to Jurisdiction and Waiver............................................................. 33
Exhibits
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Exhibit A - Form of Non-Shared Security Agreement Supplement
Exhibit B - Form of Account Control Agreement (Deposit
Account/Securities Account)
Exhibit C - Form of Securities Account Control Agreement
Exhibit D - Form of Commodity Account Control Agreement
Exhibit E - Form of Intellectual Property Non-Shared Security
Agreement
Exhibit F - Form of Intellectual Property Non-Shared Security
Agreement Supplement
Exhibit G - Form of Consent to Assignment of Letter of Credit
Rights
NON-SHARED SECURITY AGREEMENT
NON-SHARED SECURITY AGREEMENT dated April 1, 2003 (this "Non-Shared
Security Agreement") made by Dynegy Inc., an Illinois corporation (the "Parent
Guarantor"), the other Persons listed on the signature pages hereof (the
"Initial Grantors") and the Additional Grantors (as defined in Section 20) (the
Parent Guarantor, Initial Grantors and the Additional Grantors being,
collectively, the "Grantors"), to Bank One, NA (main office Chicago), as
collateral agent (in such capacity, together with any successor collateral agent
appointed pursuant to Article IX of the Credit Agreement (as hereinafter
defined), the "Collateral Agent") for the Non-Shared Secured Parties (as defined
in the Credit Agreement).
PRELIMINARY STATEMENTS.
(1) Dynegy Holdings Inc., a Delaware corporation (the "Borrower") has
entered into a Credit Agreement dated as of April 1, 2003 with the Parent
Guarantor, the other guarantor parties thereto, Citibank, N.A. and Bank of
America, N.A., as administrative agents, the other lender parties thereto,
Citibank, N.A., as payment agent, Bank One, NA (main office Chicago), as L/C
Issuer, Bank One, NA (main office Chicago), as the Collateral Agent, Salomon
Smith Barney, Inc., Banc of America Securities LLC and Bank One, NA (main office
Chicago), as co-lead arrangers, and Salomon Smith Barney, Inc. and Banc of
America Securities LLC, as book running managers (said Agreement, as it may
hereafter be amended, amended and restated, supplemented, replaced or otherwise
modified from time to time, being the "Credit Agreement").
(2) Pursuant to the Credit Agreement, the Grantors are entering into
this Non-Shared Security Agreement in order to grant to the Collateral Agent for
the ratable benefit of the Non-Shared Secured Parties a security interest in the
Non-Shared Collateral.
(3) Each Grantor is the owner of the Initial Pledged Equity set forth
opposite such Grantor's name on and as otherwise described in Part I of Schedule
II hereto and issued by the Persons named therein and of the Initial Pledged
Debt set forth (to the extent the same is evidenced by instruments) opposite
such Grantor's name on and as otherwise described in Part II of Schedule II
hereto and issued by the Obligors named therein.
(4) Each Grantor has Pledged Security Entitlements with respect to all
the Pledged Financial Assets credited from time to time to such Grantor, as set
forth opposite such Grantor's name on and as otherwise described in Part III of
Schedule II hereto.
(5) Each Grantor has rights in and to the Pledged Commodity Contracts
carried from time to time in such Grantor's Commodities Accounts, set forth
opposite such Grantor's name on and as otherwise described in Part IV of
Schedule II hereto.
(6) Each Grantor has opened Other Deposit Accounts with banks, in the
name of such Grantor and subject to the terms of this Non-Shared Security
Agreement, as described in Schedule IV hereto.
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(7) It is a condition precedent to the making of Borrowings and the
issuance of Letters of Credit by the Lenders under the Credit Agreement that the
Grantors shall have granted the assignment and security interest and made the
pledge and assignment contemplated by this Non-Shared Security Agreement.
(8) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Borrowings and issue Letters of Credit under the
Credit Agreement, each Grantor hereby agrees with the Collateral Agent for the
ratable benefit of the Representatives and the Non-Shared Secured Parties as
follows:
Section 1. Definitions; Other Interpretive Provisions. The
interpretive provisions set forth in Section 1.02 of the Credit Agreement are
incorporated by reference herein. Terms defined in the Credit Agreement and not
otherwise defined in this Non-Shared Security Agreement are used in this
Non-Shared Security Agreement as defined in the Credit Agreement. Further,
unless otherwise defined in this Non-Shared Security Agreement or the Credit
Agreement, terms defined in Article 8 or 9 of the UCC and/or in the Federal Book
Entry Regulations are used in this Non-Shared Security Agreement as such terms
are defined in such Article 8 or 9 and/or the Federal Book Entry Regulations. As
used in this Non-Shared Security Agreement the following terms shall have the
meanings set forth below:
"Account Collateral" means, collectively, the following:
(a) the Other Deposit Accounts and all funds and financial assets
from time to time credited thereto (including, without limitation, all
Cash Equivalents), all interest, dividends, distributions, 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 funds and financial assets, and all certificates and
instruments, if any, from time to time representing or evidencing the
Cash Collateral Accounts and the Other Deposit Accounts;
(b) all promissory notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time delivered to
or otherwise possessed by the Collateral Agent for or on behalf of any
Grantor, including, without limitation, those delivered or possessed
in substitution for or in addition to any or all of the then existing
Account Collateral; and
(c) all interest, dividends, distributions, 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 then
existing Account Collateral.
"Account Control Agreement" has the meaning specified in Section 6(a).
"Additional Grantor" has the meaning specified in Section 20(b).
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"Additional Provisions" has the meaning specified in the definition of
"Federal Book Entry Regulations" set forth herein.
"After-Acquired Intellectual Property" has the meaning specified in
Section 11(b).
"Agreement Collateral" means the Assigned Agreements, including,
without limitation, (a) all rights of any Grantor to receive moneys due and
to become due under or pursuant to the Assigned Agreements, (b) any rights
of such Grantor to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the Assigned Agreements, (c) claims of any
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (d) the right of any Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder.
"Assigned Agreements" means, collectively, each of the contracts and
agreements to which any Grantor is now or may hereafter become a party, in
each case as such contracts and agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time, to the
extent permitted by the Credit Agreement.
"Borrower" has the meaning specified in Preliminary Statement (1).
"Collateral Agent" has the meaning specified in the recital of the
parties hereto.
"Commercial Tort Claims Collateral" means all commercial tort claims
described in Schedule VI hereto, provided, however, that any commercial
tort claim shall not be included in the "Commercial Tort Claims Collateral"
to the extent, but only to the extent, that the assignment thereof or grant
of a security interest therein would violate any effective or enforceable
provision of applicable law.
"Commodity Account Control Agreement" has the meaning specified in
Section 5(d).
"Commodity Accounts" means those commodities accounts of each Grantor
as described in Part IV of Schedule II hereto.
"Computer Software" means all computer software, programs and
databases (including, without limitation, source code, object code and all
related applications and data files), firmware and documentation and
materials relating thereto, together with any and all maintenance rights,
service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any
substitutions, replacements, improvements, error corrections, updates and
new versions of any of the foregoing.
"Consent to Assignment of Letter of Credit Rights" means an agreement
in substantially the form of the Consent to Assignment of Letter of Credit
Rights attached hereto as Exhibit G or otherwise in form and substance
reasonably satisfactory to the Collateral Agent.
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"Copyrights" means (all copyrights, including, without limitation,
copyrights in Computer Software (as hereinafter defined), internet web
sites and the content thereof, whether registered or unregistered.
"Credit Agreement" has the meaning specified in Preliminary Statement
(1).
"Designated Accounts" means any Account Collateral that constitutes:
(a) any deposit accounts listed in Schedule IV hereto and the funds
credited to any such deposit accounts, and (b) any securities accounts and
any financial assets that are credited to any such securities accounts.
"Equipment" means all equipment in all of its forms, including,
without limitation, all machinery, tools, motor vehicles, vessels,
aircraft, furniture and fixtures, and all parts thereof and all accessions
thereto and all software related thereto, including, without limitation,
software that is embedded in and is part of the equipment.
"Excluded Agreements" has the meaning specified in paragraph (ii) in
the "notwithstanding" clause at the end of Section 2.
"Excluded Authorizations" has the meaning specified in paragraph (iii)
of the "notwithstanding" clause at the end of Section 2.
"Excluded Equity" has the meaning specified in paragraph (v) of the
"notwithstanding" clause at the end of Section 2.
"Excluded Non-Shared Collateral" means any Non-Shared Collateral that,
under the provisions of paragraph (i) of the "notwithstanding" clause at
the end of Section 2, is to be excluded from the lien and security interest
granted by any Grantor under clauses (a) through (j) of Section 2.
"Federal Book Entry Regulations" means (a) the federal regulations
contained in Subpart B ("Treasury/Reserve Automated Debt Entry System
(TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R.
Part 357, 31 C.F.R. (S) 357.2, (S) 357.10 through (S) 357.14 and (S) 357.41
through (S) 357.44 and (b) to the extent substantially identical to the
federal regulations referred to in clause (a) above (as in effect from time
to time), the federal regulations governing other book-entry securities.
"First Preferred Fleet Mortgage" means the First Preferred Fleet
Mortgage dated as of April 1, 2003 by Midstream Barge Company, L.L.C., in
favor of Wilmington Trust Company, as Corporate Trustee and John M. Beeson,
Jr., as Individual Trustee, as the same may be amended, amended and
restated, supplemented, replaced or otherwise modified from time to time in
accordance with the Loan Documents.
"Grantors" has the meaning specified in the recital of the parties
hereto.
"Indemnified Party" has the meaning specified in Section 19.
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"Initial Grantors" has the meaning specified in the recital of the
parties hereto.
"Initial Pledged Debt" means the indebtedness described in Part II of
Schedule II hereto.
"Initial Pledged Equity" means the shares of stock or other Equity
Interests as described in Part I of Schedule II hereto.
"Intellectual Property Collateral" means, collectively, the following:
(a) all Patents; (b) all Trademarks; (c) all Copyrights; (d) all Computer
Software; (e) all Trade Secrets and all other intellectual, industrial and
intangible property of any type, including, without limitation, industrial
designs and mask works; (f) all registrations and applications for
registration for any of the foregoing, together with all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations thereof; (g) all tangible embodiments of the foregoing, all
rights in the foregoing provided by international treaties or conventions,
all rights corresponding thereto throughout the world and all other rights
of any kind whatsoever of any Grantor accruing thereunder or pertaining
thereto; (h) all agreements, permits, consents, orders and franchises
relating to the license, development, use or disclosure of any of the
foregoing to which any Grantor, now or hereafter, is a party or a
beneficiary ("IP Agreements"); and (i) any and all claims for damages and
injunctive relief for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to any of the
foregoing, with the right, but not the obligation, to sue for and collect,
or otherwise recover, such damages.
"Intellectual Property Non-Shared Security Agreement" has the meaning
specified in Section 11(a).
"Inventory" means all inventory in all of its forms, including,
without limitation, (a) all raw materials, work in process, finished goods
and materials used or consumed in the manufacture, production, preparation
or shipping thereof, (b) goods in which any Grantor has an interest in mass
or a joint or other interest or right of any kind, and (c) goods that are
returned to or repossessed or stopped in transit by any Grantor), and all
accessions thereto and products thereof and documents therefor, and all
software related thereto, including, without limitation, software that is
embedded in and is part of the inventory, provided, however, that goods in
which any Grantor has an interest or right as consignee shall be excluded
from the definition of "Inventory".
"IP Agreements" has the meaning specified in the definition of the
term "Intellectual Property Collateral" herein.
"IP Non-Shared Security Agreement Supplement" has the meaning
specified in Section 11(b).
"Knowledge" means, in the case of the knowledge of a Grantor, the best
knowledge of such Grantor's executive officers after due inquiry and
investigation.
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"Non-Shared Collateral" has the meaning specified in the first
paragraph of Section 2.
"Non-Shared Secured Obligations" has the meaning set forth in Section
1.01 of the Credit Agreement.
"Non-Shared Security Agreement" has the meaning specified in the
recital of the parties hereto.
"Non-Shared Security Agreement Supplement" has the meaning specified
in Section 20(b).
"Obligors" means any Person obligated on an account, chattel paper,
instrument, or general intangible.
"Other Deposit Accounts" means those deposit accounts with banks
opened by each Grantor, as described in Schedule IV and Schedule V hereto.
"Parent Guarantor" has the meaning specified in the recital of the
parties hereto.
"Patents" means all patents, patent applications, utility models and
statutory invention registrations, all inventions claimed or disclosed
therein and all improvements thereto.
"Permitted Collateral" means any of the following property: (a)
Receivables (together with all general intangibles, and payment intangibles
related thereto or arising therefrom and all proceeds and products of any
of the foregoing), (b) cash and short-term investments, and (c) all
dividends, interest, distributions, and other proceeds from time to time
received, receivable or otherwise distributed in respect of, or in exchange
for, any or all of the foregoing.
"Pledged Account Banks" has the meaning specified in Section 6(a).
"Pledged Commodity Contracts" means the commodity contracts carried
from time to time in each Grantor's Commodity Account.
"Pledged Debt" has the meaning specified in the definition of the term
"Security Collateral" herein.
"Pledged Equity" has the meaning specified in the definition of the
term "Security Collateral" herein.
"Pledged Financial Assets" means the financial assets credited from
time to time to each Grantor's Securities Accounts.
"Pledged Security Entitlements" means each Grantor's security
entitlements with respect to the Pledged Financial Assets credited from
time to time to such Grantor's Securities Accounts.
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"Receivables" means, to the extent the same are not referred to in
Sections 2(d), 2(e) and 2(f) herein, all accounts (including, without
limitation, receivables under Permitted Contracts or Netting Agreements),
chattel paper (including, without limitation, tangible chattel paper and
electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services and whether or
not earned by performance, and all rights now or hereafter existing in and
to all supporting obligations and in and to all security agreements,
mortgages, Liens, leases, letters of credit and other contracts securing or
otherwise relating to the foregoing property (any and all such supporting
obligations, security agreements, mortgages, Liens, leases, letters of
credit and other contracts being referred to herein as the "Related
Contracts").
"Related Contracts" has the meaning specified in the definition of the
term "Receivables" herein.
"Required Term B Lenders" means, as of any date of determination,
Lenders having more than 50% of the sum of (a) the aggregate Outstanding
Amount of all Term B Loans and (b) the aggregate unused Term B Commitments;
provided that the unused Term B Commitment of, and the portion of the
Outstanding Amount of all Term B Loans held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination
of Required Term B Lenders.
"Securities Account Control Agreement" has the meaning specified in
Section 5(c).
"Securities Accounts" means those securities accounts of each Grantor
as described in Part III of Schedule II hereto.
"Security Collateral" means, collectively, the following:
(a) the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends,
distributions, return of capital, 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 Initial Pledged Equity
and all subscription warrants, rights or options issued thereon or
with respect thereto;
(b) the Initial Pledged Debt and the instruments, if any,
evidencing the Initial Pledged Debt, and all interest, 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 Initial Pledged Debt;
(c) all additional shares of stock and other Equity Interests of
or in any issuer of the Initial Pledged Equity or any successor entity
from time to time acquired by any Grantor in any manner and all
additional shares of stock or Equity Interests of or in any new direct
Subsidiary of any Grantor formed or
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acquired by any Grantor in any manner after the date of this
Non-Shared Security Agreement (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the "Pledged Equity"),
and the certificates, if any, representing such additional shares or
other Equity Interests, and all dividends, distributions, return of
capital, 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 or other Equity Interests and
all subscription warrants, rights or options issued thereon or with
respect thereto;
(d) all additional indebtedness from time to time owed to any
Grantor (such indebtedness, together with the Initial Pledged Debt,
being the "Pledged Debt") and the instruments, if any, evidencing such
indebtedness, and all interest, 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 indebtedness;
(e) the Securities Account, all Pledged Security Entitlements
with respect to all Pledged Financial Assets from time to time
credited to the Securities Account, and all Pledged Financial Assets,
and all dividends, distributions, return of capital, interest, 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 Pledged Security Entitlements or such Pledged Financial Assets
and all subscription warrants, rights or options issued thereon or
with respect thereto;
(f) the Commodities Account, all Pledged Commodity Contracts from
time to time carried in the Commodities Account, and all value, 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 Pledged Commodity Contracts; and
(g) all other investment property (including, without limitation,
all (i) securities, whether certificated or uncertificated, (ii)
security entitlements, (iii) securities accounts, (iv) commodity
contracts and (v) commodity accounts) in which any Grantor has now, or
acquires from time to time hereafter, any right, title or interest in
any manner, and the certificates or instruments, if any, representing
or evidencing such investment property, and all dividends,
distributions, return of capital, interest, distributions, value,
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 investment property and all subscription warrants,
rights or options issued thereon or with respect thereto.
"Security Control Agreements" has the meaning specified in Section
5(d).
"Subagent" has the meaning specified in Section 17(b).
"Trademarks" means all trademarks, service marks, domain names, trade
dress, logos, designs, slogans, trade names, business names, corporate names and
other source
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identifiers, whether registered or unregistered (provided that no security
interest shall be granted in United States intent-to-use trademark
applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark applications under
applicable federal law), together, in each case, with the goodwill
symbolized thereby.
"Trade Secrets" means all confidential and proprietary information,
including, without limitation, know-how, trade secrets, manufacturing and
production processes and techniques, inventions, research and development
information, databases and data, including, without limitation, technical
data, financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and
information.
"UCC" means the Uniform Commercial Code as in effect, from time to
time, in the State of New York; provided that, if perfection or the effect
of perfection or non-perfection or the priority of any security interest in
any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction
for purposes of the provisions hereof relating to such perfection, effect
of perfection or non-perfection or priority.
"UETA" means the Uniform Electronic Transactions Act, as in effect in
any relevant jurisdiction.
Section 2. Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Non-Shared Secured Parties, a
security interest in, such Grantor's right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Grantor, wherever located, and whether
now or hereafter existing or arising (collectively, the "Non-Shared
Collateral"):
(a) all Equipment;
(b) all Inventory;
(c) all Receivables and all Related Contracts;
(d) the Security Collateral;
(e) the Agreement Collateral;
(f) the Account Collateral;
(g) the Intellectual Property Collateral;
(h) all Commercial Tort Claims Collateral;
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(i) all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and
records) of such Grantor pertaining to any of the Non-Shared Collateral;
and
(j) all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Non-Shared Collateral
(including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in clauses (a)
through (i) of this Section 2 and this clause (j)) and, to the extent not
otherwise included, all (A) payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Non-Shared Collateral, (B) tort claims, including,
without limitation, all commercial tort claims and (C) cash.
Notwithstanding anything to the contrary contained in this Section 2,
the following property shall be excluded from the lien and security interest
granted hereunder (and shall, as applicable, not be included as "Non-Shared
Collateral", "Equipment", "Inventory", "Receivables", "Related Contracts",
"Security Collateral", "Agreement Collateral", "Account Collateral",
"Intellectual Property Collateral", "Commercial Tort Claims Collateral",
"Assigned Agreements", "Pledged Equity" or "Pledged Debt" for the purposes
hereof):
(i) any Non-Shared Collateral constituting property that is the
subject of or relating to any contract, agreement or other document to
which any Grantor is a party on the date hereof or any similar contract,
agreement or other document entered into by such Grantor after the date
hereof shall, in each case, be excluded from the lien and security interest
created by such Grantor under this Section 2 to the extent (but only to the
extent) that the assignment thereof, or the creation of a lien and security
interest therein, would constitute a breach of the terms of such contract,
agreement or other document, or would cause a default or event of default
under the terms of such contract, agreement or other document, or would
permit any party to such contract, agreement or other document to terminate
any material contract right arising under any such contract agreement or
other document or to exercise any put, call, right of refusal, purchase
option or other similar right, or would permit any party to such contract,
agreement or other document to terminate such contract, agreement or other
document; provided, however, that any of the Excluded Non-Shared Collateral
shall automatically cease to be excluded from this Section 2 at such time
as (x) the prohibition of assignment or of the creation of a lien and
security interest in such Excluded Non-Shared Collateral is no longer in
effect or is rendered ineffective as a matter of law or (y) the applicable
Grantor has obtained the consent of the other parties to such agreement to
the assignment of, or creation of a lien and security interest in, such
Excluded Non-Shared Collateral (which consent such Grantor shall not be
required to obtain hereunder, except upon a request of the Collateral Agent
after the occurrence and during the continuance of an Event of Default) or
(z) the breach, default, event of default or any other conditions otherwise
giving rise to the exclusion of such property under this clause (i) shall
cease to exist;
(ii) any contract, agreement or other document (and any contract
rights arising thereunder) to which any of the Grantors is a party on the
date hereof and any similar
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contract or agreement entered into by any Grantor after the date hereof, in
each case, shall be excluded from the lien and security interest granted by
such Grantor under this Section 2 to the extent (but only to the extent)
that the assignment thereof, or the creation of a lien and security
interest therein, would constitute a breach of the terms of such contract,
agreement or other document to which any of the Grantors may now or
hereafter be a party or to which any Grantor may now or hereafter be
subject, or would cause a default or event of default under the terms of
such contract, agreement or other document, or would permit any party to
such contract, agreement or other document to terminate any material
contract right arising under any such contract agreement or other document
or to exercise any put, call, right of refusal, purchase option or other
similar right, or would permit any party to such contract, agreement or
other document to terminate such contract, agreement or other document (all
such contracts, agreements and other documents being the "Excluded
Agreements"); provided, however, that (x) except as set forth in clause
(iv) below, the exclusion from the lien and security interest granted by
such Grantor hereunder of any contract rights of any of the Grantors under
one or more of the Excluded Agreements shall not limit, restrict or impair
the grant by such Grantor of the lien and security interest in any accounts
or receivables arising under any such Excluded Agreement or any payments
due or to become due thereunder, and (y) any of the Excluded Agreements
shall automatically cease to be excluded from this Section 2 at such time
as, (A) the prohibition of assignment or of the creation of a lien and
security interest in such agreement is no longer in effect or is rendered
ineffective as a matter of law or (B) the applicable Grantor has obtained
the consent of the other parties to such agreement to the assignment of, or
creation of a lien and security interest in, the contract rights of such
Grantor thereunder (which consent such Grantor shall not be required to
obtain hereunder, except upon a request of the Collateral Agent after the
occurrence and during the continuance of an Event of Default);
(iii) any license, permit or authorization from any Governmental
Authority in favor of any Grantor shall be excluded from the lien and
security interest granted by such Grantor under this Section 2 to the
extent (but only to the extent) that the assignment thereof or the creation
of a lien and security interest therein would constitute a breach of or a
default or event of default under the terms of such license, permit or
authorization or would require any separate license, permit or
authorization or would otherwise terminate such license, permit or
authorization (all of the licenses, permits and authorizations referred to
herein being the "Excluded Authorizations"); provided, however, that any of
the Excluded Authorizations shall cease to be excluded from this Section 2
at such time as (x) the prohibition of assignment or of the creation of a
lien and security interest in such license, permit or authorization is no
longer in effect or is rendered ineffective as a matter of law or (y) the
applicable Grantor has obtained the consent of the applicable Governmental
Authority to the assignment of, or creation of a lien and security interest
in, such license, permit or authorization of such Grantor (which consent
such Grantor shall not be required to obtain hereunder, except upon a
request of the Collateral Agent after the occurrence and during the
continuance of an Event of Default);
(iv) any Permitted Collateral of any Grantor from time to time
pledged, assigned, conveyed or transferred, or against which any right of
set-off is granted or in which a Lien or security interest is granted, by
such Grantor under any Permitted
12
Contract or Netting Agreement shall be excluded from the lien and security
interest granted by such Grantor under this Section 2. To the extent any
such lien and security interest is deemed to be granted pursuant to this
Agreement in such Permitted Collateral hereunder notwithstanding the
exclusion contemplated hereby, such lien and security interest shall ipso
facto immediately and automatically terminate, without any further action
by any Person, upon any such pledge, assignment, conveyance, transfer,
grant of such right of set-off or grant of such Lien and security interest
, provided, however, that any such Permitted Collateral shall cease to be
excluded from this Section 2 at such time as (x) the Permitted Contract or
Netting Agreement, as the case may be, related thereto is terminated and
the setoff rights, Lien and security interest granted in such Permitted
Collateral are terminated or (y) the applicable Grantor has obtained the
consent of the applicable Counterparty to such Permitted Contracts or
Netting Agreements to the assignment of, or creation of a lien and security
interest in such Permitted Collateral hereunder (which consent such Grantor
shall not be required to obtain hereunder, except upon a request of the
Collateral Agent after the occurrence and during the continuance of an
Event of Default);
(v) as to each Grantor, any outstanding voting stock of any entity
that is a controlled foreign corporation under Section 957 of the Internal
Revenue Code (or any successor provision thereto), except for voting stock
consisting of no more than 66% of the outstanding stock of such entity (any
such stock being the "Excluded Equity"); and
(vi) any property or accounts (including without limitation, coal,
power, energy, other energy related products, natural gas, natural gas
liquids, condensate, and sulfur, and including any other products resulting
from generating, gas gathering, processing, fractionating and refining
marketed by any Grantor on behalf of third parties and the proceeds derived
therefrom pursuant to processing agreements and/or marketing arrangements),
to the extent (but only to the extent) that any Grantor manages, maintains
or markets such property on behalf of a third party, including, without
limitation, any Non-Shared Collateral maintained, managed or marketed by
any Grantor for a joint venture in which third parties participate or on
behalf of third parties;
(vii) any policy of insurance, provided, however, that proceeds of
insurance shall be included as Non-Shared Collateral to the extent the
security interest granted hereby in the goods covered by such insurance
would continue in accordance with Section 9-315 of the UCC; and
(viii) the shares of stock or such other Equity Interests owned by and
set forth opposite any relevant Grantor's name on Schedule II-A hereto;
provided, however, that any proceeds received by any Grantor from the
Disposition of Excluded Non-Shared Collateral, Excluded Authorizations, Excluded
Receivables, Excluded Equity and any other property excluded under clauses (i)
through (viii) above shall constitute Non-Shared Collateral unless any assets or
property constituting such proceeds are themselves subject to the exclusions set
forth in clauses (i) through (viii) above.
13
Section 3. Security for Obligations. This Non-Shared Security
Agreement secures, in the case of each Grantor, the payment of all Non-Shared
Secured Obligations, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or
otherwise. Without limiting the generality of the foregoing, this Non-Shared
Security Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Non-Shared Secured Obligations and would be owed by such
Grantor to any Non-Shared Secured Party but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.
Section 4. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Non-Shared Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Non-Shared Security Agreement had not been executed, (b)
the exercise by the Collateral Agent of any of the rights hereunder shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Non-Shared Collateral and (c) no Non-Shared
Secured Party shall have any obligation or liability under the contracts and
agreements included in the Non-Shared Collateral by reason of this Non-Shared
Security Agreement or any other Loan Document, nor shall any Non-Shared Secured
Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder or thereunder.
Section 5. Delivery and Control of Security Collateral. (a) With
respect to any certificates or instruments representing or evidencing Security
Collateral (other than instruments representing or evidencing Investments
permitted by Section 7.02(b) of the Credit Agreement), to the extent that any
relevant Grantor has Knowledge of the existence of such certificates and
instruments, such certificates and instruments shall be delivered to and held by
or on behalf of the Collateral Agent pursuant to this Non-Shared Security
Agreement and the Collateral Trust Agreement and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Collateral Agent. After the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the right,
at any time in their discretion and with notice to the Borrower, to transfer to
or to register in the name of the Collateral Agent or any of its nominees any or
all of the Security Collateral, subject only to the revocable rights specified
in Section 13(a), provided, however, that the failure to deliver any such notice
to the Borrower shall not affect the validity of such actions of the Collateral
Agent. In addition, after the occurrence and during the continuance of an Event
of Default, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Security Collateral for
certificates or instruments of smaller or larger denominations.
(b) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes an uncertificated security, to
the extent that such Grantor has Knowledge of the existence of such
uncertificated securities, such Grantor will cause the issuer thereof either (at
such Grantor's election) (i) to register the Collateral Agent as the registered
owner of such security or (ii) to agree in an authenticated record with such
Grantor and the Collateral Agent that such issuer will comply with instructions
with respect to such security
14
originated by the Collateral Agent without further consent of such Grantor, such
authenticated record to be in form and substance reasonably satisfactory to the
Collateral Agent provided, however, that the Collateral Agent agrees that it
will not deliver any such instructions to such issuer except upon the occurrence
and during the continuance of an Event of Default. With respect to any Security
Collateral in which any Grantor has any right, title or interest and that is not
an uncertificated security, upon the request of the Collateral Agent after the
occurrence and during the continuance of an Event of Default, such Grantor will
notify each such issuer of Pledged Equity that such Pledged Equity is subject to
the security interest granted hereunder.
(c) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a security entitlement in
which the Collateral Agent is not the entitlement holder, to the extent that
such Grantor has Knowledge of the existence of such security entitlements, such
Grantor will cause the securities intermediary with respect to such security
entitlement either (at such Grantor's election) (i) to identify in its records
the Collateral Agent as the entitlement holder of such security entitlement
against such securities intermediary or (ii) to agree in an authenticated record
with such Grantor and the Collateral Agent that such securities intermediary
will comply with entitlement orders (that is, notifications communicated to such
securities intermediary directing transfer or redemption of the financial asset
to which such Grantor has a security entitlement) originated by the Collateral
Agent without further consent of such Grantor, such authenticated record to be
in substantially the form of Exhibit C hereto or otherwise in form and substance
reasonably satisfactory to the Collateral Agent (such agreement being a
"Securities Account Control Agreement").
(d) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a commodity contract, to the
extent that such Grantor has Knowledge of the existence of such commodity
contracts, such Grantor shall cause the commodity intermediary with respect to
such commodity contract to agree in an authenticated record with such Grantor
and the Collateral Agent that such commodity intermediary will apply any value
distributed on account of such commodity contract as directed by the Collateral
Agent without further consent of such Grantor, such authenticated record to be
in substantially the form of Exhibit D hereto or otherwise in form and substance
reasonably satisfactory to the Collateral Agent (such agreement being a
"Commodity Account Control Agreement", and all such authenticated records,
together with all Securities Account Control Agreements being, collectively,
"Security Control Agreements").
(e) No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Non-Shared Collateral is credited or carried, or
change or add any such securities account or commodity account, in each case
without first complying with the above provisions of this Section 5 in order to
perfect the security interest granted hereunder in such Non-Shared Collateral.
For the avoidance of doubt, the provisions of this Section 5(e) shall not apply
to any securities account or commodity account that any Grantor manages or
maintains on behalf of third parties, such as securities accounts and commodity
accounts maintained or managed by any Grantor for a joint venture in which third
parties participate.
(f) Upon the request of the Collateral Agent upon the occurrence and
during the continuance of an Event of Default, such Grantor will notify each
such issuer of Pledged Debt that such Pledged Debt is subject to the security
interest granted hereunder.
(g) To the extent that any of the Non-Shared Collateral constituting
money or any of the Account Collateral or any Security Collateral is subject to
a Permitted Lien and such Permitted Lien has been perfected through control (as
such term is used in Sections 9-104 and 9-106 of the UCC) or possession,
perfection through possession or control of the security interest created
hereunder shall not be required.
Section 6. Maintaining the Account Collateral. So long as any
Non-Shared Secured Obligations (other than indemnification obligations that are
not yet due and payable) which are accrued and payable shall remain unpaid and
unsatisfied, or any Letter of Credit (with respect to which any reimbursement
obligation related thereto constitutes a Non-Shared Secured Obligation) shall
remain outstanding:
(a) Each Grantor will maintain all Designated Accounts only with the
Collateral Agent or with banks (the "Pledged Account Banks") that have
agreed, in a record authenticated by the Grantor, the Collateral Agent and
the Pledged Account Banks, to (i) comply with instructions originated by
the Collateral Agent (as set forth in the Account Control Agreement)
directing the disposition of funds in the Designated Accounts without the
further consent of the Grantor and (ii) waive or subordinate (other than as
agreed between any Pledged Account Bank and the Collateral Agent) in favor
of the Collateral Agent all claims of the Pledged Account Banks (including,
without limitation, claims by way of a security interest, lien or right of
setoff or right of recoupment) to the Account Collateral, which
authenticated record shall be substantially in the form of Exhibit B
hereto, or shall otherwise be in form and substance reasonably satisfactory
to the Collateral Agent (the "Account Control Agreement"); provided,
however, this Section 6(a) shall not apply to Other Deposit Accounts listed
in Schedule V hereto, as such Schedule may be updated from time to time.
(b) Subject in all respects to the provisions of Section 5(g) hereof,
each Grantor agrees that it will not add any bank that maintains a deposit
account for such Grantor or open any new deposit account with any then
existing Pledged Account Bank unless (i) the Collateral Agent shall have
received at least 10 days' prior written notice of such additional bank or
such new deposit account and (ii) the Collateral Agent shall have received,
in the case of a bank or Pledged Account Bank that is not the Collateral
Agent, an Account Control Agreement authenticated by such new bank and such
Grantor, or a supplement to an existing Account Control Agreement with such
then existing Pledged Account Bank, covering such new deposit account (and,
upon the receipt by the Collateral Agent of such Account Control Agreement
or supplement, Schedule IV hereto shall be automatically amended to include
such Other Deposit Account). Each Grantor may terminate any bank as a
Pledged Account Bank or terminate any Designated Account, if it gives the
Collateral Agent at least 10 days' prior written notice of such termination
(and, upon such termination, Schedule IV hereto shall be automatically
amended to delete such Pledged Account Bank and Other Deposit Account
without any additional formal actions or agreements). For the avoidance of
doubt, the provisions of
16
this Section 6(b) shall not apply to any deposit account that any Grantor
manages or maintains on behalf of third parties, such as deposit accounts
maintained or managed by any Grantor for a joint venture in which third
parties participate.
(c) Subject in all respects to the provisions of Section 5(g) hereof,
upon any termination by a Grantor of any Other Deposit Account by such
Grantor, or any Pledged Account Bank with respect thereto, such Grantor
will promptly (i) either (at such Grantor's election), (A) comply with the
provisions regarding the opening of new deposit accounts as set forth in
the first sentence of Section 6(b) or (B) subject to the restrictions set
forth in Section 6(f), transfer all funds and property held in such
terminated Other Deposit Account to another Other Deposit Account listed in
Schedule IV and (ii) notify all Obligors that were making payments to such
Other Deposit Account to make all future payments to another Other Deposit
Account listed in Schedule IV hereto, in each case so that the Collateral
Agent shall have a continuously perfected security interest in such
Designated Accounts. Subject in all respects to the provisions of Section
5(g) hereof, after the occurrence and during the continuance of an Event of
Default, each Grantor agrees to terminate any or all Account Collateral and
Account Control Agreements upon request by the Collateral Agent.
(d) Upon the earlier of (x) the day on which all Obligations under the
Credit Agreement have been declared due and payable prior to the state
maturity thereof and (y) the 15/th/ day after any Event of Default shall
have occurred and be continuing under the Credit Agreement, the Collateral
Agent shall have sole right to direct the disposition of funds with respect
to each of the Designated Accounts.
(e) The Collateral Agent may, at any time after notice to the Borrower
(provided, however, that the failure to give any such notice to the
Borrower shall not affect the validity of any action taken by the
Collateral Agent pursuant to the provisions of this Section 6(e)), but
without consent from the Grantor, (i) transfer, or direct the transfer of,
funds from the Designated Accounts to satisfy the Grantor's obligations
under the Loan Documents if (i) (A) a payment default in respect of
principal under such Loan Documents shall have occurred and be continuing
for a period greater than or equal to three Business Days, or (B) a payment
default in respect of any amount other than principle due under such Loan
Document shall have occurred and be continuing for a period greater than or
equal to five Business Days, or (ii) an acceleration of the Facilities
shall have occurred and be continuing.
(f) Each of the Grantors agrees that at no time shall the aggregate
amount on deposit in the Other Deposit Accounts Listed in Schedule V hereto
(other than any Other Deposit Account that is subject to a Permitted Lien)
exceed $20,000,000.
Section 7. Maintaining Electronic Chattel Paper, Transferable Records
and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims. So long
as any Non-Shared Secured Obligations (other than indemnification obligations
that are not yet due and payable) which are accrued and payable shall remain
unsatisfied, or any Letter of Credit (with respect to which any reimbursement
obligation related thereto constitutes a Non-Shared Secured Obligation) shall
remain outstanding:
17
(a) Each Grantor will maintain all (i) electronic chattel paper
(to the extent that such Grantor has Knowledge of the existence of such
electronic chattel paper) so that the Collateral Agent has control of the
electronic chattel paper in the manner specified in Section 9-105 of the
UCC and (ii) all transferable records (to the extent that such Grantor has
Knowledge of the existence of such transferable records) so that the
Collateral Agent has control of the transferable records in the manner
specified in Section 16 of the UETA; and
(b) Each Grantor will immediately give notice to the Collateral
Agent of any material commercial tort claim that may arise in the future
and will immediately execute or otherwise authenticate a supplement to this
Non-Shared Security Agreement, and otherwise take all necessary action, to
subject such material commercial tort claim to the first priority security
interest, as applicable, created under this Non-Shared Security Agreement
provided, however, that any commercial tort claim shall not be covered by
the provisions of this Section 7(b) to the extent, but only to the extent,
that the assignment thereof or grant of a security interest therein would
violate any effective or enforceable provision of applicable law.
Section 8. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) As of the date hereof, such Grantor's exact legal name, which
is sufficient in accordance with Section 9-503(a) of the UCC, is correctly
set forth in Schedule I hereto. With respect to each Grantor that is not a
"registered organization" as such term is defined in Section 9-102 of the
UCC, such Grantor has its chief executive office in the state or
jurisdiction set forth in Schedule I hereto. Within the five years
preceding the execution of this Non-Shared Security Agreement, the
information set forth in Schedule I hereto with respect to such Grantor is
true and accurate in all respects, except to the extent that failure of
such information to be true and accurate could not reasonably be expected
to result in a Material Adverse Effect. To the Knowledge of such Grantor,
such Grantor has not previously changed its name, the location of its chief
executive office, type of organization, jurisdiction of organization or
organizational identification number (if such Grantor, now or has been
organized in a jurisdiction that requires the organizational number of a
debtor to be identified on the relevant financing statement in order to
create a perfected first priority security interest) from those set forth
in Schedule I hereto except as disclosed in Schedule III hereto.
(b) All Security Collateral consisting of certificated securities
and instruments (other than those representing or evidencing Investments
permitted by Section 7.02(b) of the Credit Agreement) have to the Knowledge
of the relevant Grantor been delivered to the Collateral Agent. To the
Knowledge of the relevant Grantor, none of the Receivables or Agreement
Collateral is evidenced by a promissory note or other instrument that has
not been delivered to the Collateral Agent.
(c) Such Grantor is the legal and beneficial owner of the
Non-Shared Collateral of such Grantor free and clear of any Lien, claim,
option or right of others, except for Permitted Liens or the security
interest created under this Non-Shared Security
18
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Non-Shared Collateral or listing
such Grantor or any trade name of such Grantor as debtor is on file in any
recording office, except such as may have been filed in favor of the
Collateral Agent relating to the Loan Documents or as otherwise permitted
under the Credit Agreement.
(d) With respect to the Pledged Equity that is an uncertificated
security, to the extent that such Grantor has Knowledge of the existence of
any such uncertificated securities, such Grantor has caused the issuer
thereof either (at such Grantor's election) (i) to register the Collateral
Agent as the registered owner of such security or (ii) to agree in an
authenticated record with such Grantor and the Collateral Agent that such
issuer will comply with instructions with respect to such security
originated by the Collateral Agent without further consent of such Grantor
provided, however, that the Collateral Agent agrees that it will not
deliver any such instructions to such issuer except upon the occurrence and
during the continuance of an Event of Default. If such Grantor is an issuer
of Pledged Equity, such Grantor confirms that it has received notice of
such security interest. With respect to all Security Collateral consisting
of certificated securities and instruments, to the extent that the relevant
Grantor has Knowledge of the existence of such certificated securities and
instruments, all such certificated securities and instruments have been
delivered to the Collateral Agent.
(e) The Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers
thereof indicated on Schedule II hereto.
(f) Subject in all respects to the provisions of Section 5(g) hereof,
to the Knowledge of the relevant Grantor, such Grantor has no deposit
accounts, other than the Account Collateral listed on Schedule IV hereto,
as such Schedule IV may be amended from time to time pursuant to Section
6(b), and to the Knowledge of the relevant Grantor, legal, binding and
enforceable Account Control Agreements are in effect for each deposit
account that constitutes Account Collateral, except to the extent such
Account Control Agreements are not required by Sections 5(g) or 6(a). For
the avoidance of doubt, the representations and warranties in this Section
8(f) do not apply with respect to any deposit account that any Grantor
manages or maintains on behalf of third parties, such as deposit accounts
maintained or managed by any Grantor for a joint venture in which third
parties participate.
(g) Subject in all respects to the provisions of Section 5(g) hereof,
to the Knowledge of the relevant Grantor, all filings and other actions
(including without limitation, (A) actions necessary to obtain control of
Non-Shared Collateral as provided in Sections 9-104, 9-105 and 9-106 of the
UCC and Section 16 of UETA and (B) actions necessary to perfect the
Collateral Agent's security interest with respect to Non-Shared Collateral
constituting certificated securities or instruments) necessary to perfect
the security interest in the Non-Shared Collateral of such Grantor created
under this Non-Shared Security Agreement have been duly made or taken and
are in full force and effect, and this Non-Shared Security Agreement
creates in favor of the Collateral Agent for the benefit of the Non-Shared
Secured Parties a valid and, together with such filings
19
and other actions, perfected security interest in the Non-Shared Collateral
of such Grantor, securing the payment of the Non-Shared Secured Obligations
except, in each case, (i) as is otherwise permitted pursuant to the express
provisions of this Non-Shared Security Agreement and (ii) for Permitted
Liens.
(h) To the Knowledge of the relevant Grantor, the Grantor has no
commercial tort claims other than those listed in Schedule VI hereto.
Section 9. Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that (to the Knowledge of such Grantor) may be
necessary, or that the Collateral Agent reasonably may request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted by such Grantor hereunder or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Non-Shared Collateral of such Grantor. Without limiting the generality of
the foregoing, each Grantor will promptly with respect to Non-Shared Collateral
of such Grantor: (i) if any such Non-Shared Collateral shall be evidenced by a
promissory note or other instrument or chattel paper and if such Grantor has
Knowledge of the existence of any such promissory notes, instruments, or chattel
paper, deliver and pledge to the Collateral Agent hereunder such note or
instrument or chattel paper duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Collateral Agent; (ii) execute or authenticate and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary, or as the Collateral Agent
reasonably may request, in order to perfect and preserve the security interest
granted or purported to be granted by such Grantor hereunder; (iii) with respect
to any certificates representing Security Collateral that constitutes
certificated securities, to the extent that the relevant Grantor has Knowledge
of the existence of such certificates, deliver and pledge to the Collateral
Agent for ratable benefit of the Non-Shared Secured Parties certificates
representing Security Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; (iv) subject in
all respects to the provisions of Section 5(g) hereof, with respect to any
Non-Shared Collateral consisting of deposit accounts, electronic chattel paper,
investment property or transferable records, to the extent that the relevant
Grantor has Knowledge of the existence of such deposit accounts, electronic
chattel paper, investment property or transferable records, take all action
necessary to ensure that the Collateral Agent has control of Non-Shared
Collateral consisting of deposit accounts, electronic chattel paper, investment
property and transferable records as provided in Sections 9-104, 9-105 and 9-106
of the UCC and in Section 16 of UETA; (v) upon the occurrence and during the
continuance of an Event of Default, at the request of the Collateral Agent, take
all action to ensure that the Collateral Agent's security interest is noted on
any certificate of title related to any Non-Shared Collateral evidenced by a
certificate of title; and (vi) deliver to the Collateral Agent evidence that all
other action that the Collateral Agent may deem reasonably necessary in order to
perfect and protect the security interest created by such Grantor under this
Non-Shared Security Agreement has been taken.
(b) Each Grantor hereby authorizes the Collateral Agent to file one or
more financing and continuation statements, and amendments thereto, relating to
all or any part of the Non-Shared Collateral of such Grantor without the
signature of such Grantor where permitted by
20
law, which shall be filed by the Collateral Agent. A photocopy or other
reproduction of this Non-Shared Security Agreement or any financing statement
covering the Non-Shared Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. Each Grantor ratifies its
authorization for the Collateral Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.
(c) Each Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Non-Shared
Collateral of such Grantor and such other reports in connection with such
Non-Shared Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
Section 10. Post-Closing Changes; Bailees; Collections on Receivables
and Related Contracts. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
(if such Grantor is organized in a jurisdiction that requires the organizational
number of a debtor to be identified on a financing statement in order to create
a perfected first priority security interest) or location of its chief executive
office (in the case only of a Grantor that is not a "registered organization",
as such term is defined in Section 9-102 of the UCC) from those set forth in
Section 8(a) of this Non-Shared Security Agreement without first giving at least
30 days' prior written notice to the Collateral Agent and taking all action
required by the Collateral Agent for the purpose of perfecting or protecting the
security interest granted by this Non-Shared Security Agreement. Except with
respect to security agreements related to Permitted Liens, no Grantor will
become bound by a security agreement authenticated by another Person (determined
as provided in Section 9-203(d) of the UCC) without giving the Collateral Agent
30 days' prior written notice thereof and taking all action required by the
Collateral Agent to ensure that the perfection and first priority nature of the
Collateral Agent's security interest in the Non-Shared Collateral will be
maintained. If any Grantor that is organized in a jurisdiction that requires the
organizational number of a debtor to be identified on a relevant financing
statement in order to create a perfected first priority security interest does
not have an organizational identification number and later obtains one, it will
forthwith notify the Collateral Agent of such organizational identification
number.
(b) If any Non-Shared Collateral constituting goods of any Grantor is,
to the Knowledge of such Grantor, at any time in the possession or control of a
warehouseman, bailee or agent, or if the Collateral Agent so requests such
Grantor will (i) notify such warehouseman, bailee or agent of the security
interest created hereunder, (ii) instruct such warehouseman, bailee or agent to
hold all such Non-Shared Collateral solely for the Collateral Agent's account
subject only to the Collateral Agent's instructions (which shall permit such
Non-Shared Collateral to be removed by such Grantor in the ordinary course of
business until the Collateral Agent notifies such warehouseman, bailee or agent
that an Event of Default has occurred and is continuing), (iii) use commercially
reasonable efforts, to cause such warehouseman, bailee or agent to authenticate
a record acknowledging that it holds possession of such Non-Shared Collateral
for the Collateral Agent's benefit and shall act solely on the instructions of
the Collateral Agent without the further consent of the Grantor or any other
Person provided, however, that the Collateral Agent agrees that it will not
deliver any such instructions to such issuer except upon the occurrence and
during the continuance of an Event of Default, and (iv) make such authenticated
record available to the Collateral Agent.
21
(c) Except as otherwise provided in this subsection (c), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, such Grantor may take (and, at the
Collateral Agent's direction given after the occurrence and during the
continuance of an Event of Default, will take) such action as such Grantor or
the Collateral Agent may deem necessary to enforce collection of the Assigned
Agreements, Receivables and Related Contracts; provided, however, that the
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default and upon written notice to such
Grantor of its intention to do so, to notify the Obligors under any Receivables
and Related Contracts of the assignment of such Receivables and Related
Contracts to the Collateral Agent and to direct such Obligors to make payment of
all amounts due or to become due to such Grantor thereunder directly to the
Collateral Agent and, upon such notification and at the expense of such Grantor,
to enforce collection of any such Receivables and Related Contracts, to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done, and to otherwise exercise all
rights with respect to such Receivables and Related Contracts, including,
without limitation, those set forth set forth in Section 9-607 of the UCC. After
receipt by any Grantor of the notice from the Collateral Agent referred to in
the proviso to the preceding sentence, (i) all amounts and proceeds (including,
without limitation, instruments) received by such Grantor in respect of the
Receivables and Related Contracts of such Grantor shall be received in trust for
the benefit of the Collateral Agent hereunder, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent
in the same form as so received (with any necessary indorsement) to be applied
as provided in Section 18(b) and (ii) such Grantor will not adjust, settle or
compromise the amount or payment of any Receivable or amount due on any Related
Contract, release wholly or partly any Obligor thereof, or allow any credit or
discount thereon except in the ordinary course of such Grantor's business. For
the avoidance of doubt, none of the provisions of this Section 10(c) shall apply
with respect to any Property that is excluded from the lien and security
interest granted hereunder pursuant to the provisions of paragraphs (i), (ii),
(iii), (iv), (v), (vi), (vii) or (viii) of the "notwithstanding" clause at the
end of Section 2, including, but not limited to, Excluded Non-Shared Collateral,
Excluded Authorizations, Permitted Collateral or Excluded Equity.
Section 11. As to Intellectual Property Collateral. (a) With respect
to its material Intellectual Property Collateral, each Grantor agrees, upon the
request of the Collateral Agent, to execute or otherwise authenticate an
agreement in substantially the form set forth in Exhibit E hereto or otherwise
in form and substance reasonably satisfactory to the Collateral Agent (an
"Intellectual Property Non-Shared Security Agreement"), for recording the
security interest granted hereunder to the Collateral Agent in such Intellectual
Property Collateral with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authorities necessary to perfect the
security interest hereunder in such material Intellectual Property Collateral.
(b) Each Grantor agrees that should it obtain an ownership interest in
any item of the type set forth in Section 2(g) that is not on the date hereof a
part of the Intellectual Property Collateral ("After-Acquired Intellectual
Property") (i) the provisions of this Non-Shared Security Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall
22
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Non-Shared Security Agreement with respect thereto.
At the end of each fiscal quarter of the Borrower, each Grantor shall give
written notice to the Collateral Agent identifying any material After-Acquired
Intellectual Property acquired during such fiscal quarter, and upon the request
of the Collateral Agent, such Grantor shall execute and deliver to the
Collateral Agent with such written notice, or otherwise authenticate, an
agreement substantially in the form of Exhibit F hereto or otherwise in form and
substance reasonably satisfactory to the Collateral Agent (an "IP Non-Shared
Security Agreement Supplement") covering such material After-Acquired
Intellectual Property which IP Non-Shared Security Agreement Supplement shall be
recorded with the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authorities necessary to perfect the security
interest hereunder in such material After-Acquired Intellectual Property.
Section 12. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Security Collateral of such
Grantor or any part thereof for any purpose; provided however, that such
Grantor will not exercise or refrain from exercising any such right if such
action could reasonably be expected to result in a Material Adverse Effect.
(ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if and to the extent that the payment thereof is
not otherwise prohibited by the terms of the Loan Documents; provided,
however, that any and all dividends, interest and other distributions paid
or payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Security Collateral shall be, and shall be forthwith
delivered to the Collateral Agent to hold as, Security Collateral and
shall, if received by such Grantor, be received in trust for the benefit of
the Collateral Agent, be segregated from the other property or funds of
such Grantor and be forthwith delivered to the Collateral Agent as Security
Collateral in the same form as so received (with any necessary
indorsement).
(iii) The Collateral Agent will execute and deliver (or cause to be
executed and delivered) to each Grantor all such proxies and other
instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default and notice to the Borrower (provided that the failure to give any
such notice shall not affect the validity of any of the following actions
taken by the Collateral Agent):
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant
23
to Section 12(a)(i) shall, upon notice to such Grantor by the Collateral
Agent, cease and (y) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain
pursuant to Section 12(a)(ii) shall automatically cease, and all such
rights shall thereupon become vested in the Collateral Agent, who shall
thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as Security
Collateral such dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by any Grantor contrary to the provisions of paragraph (i) of this
Section 12(b) shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent as Security Collateral in the
same form as so received (with any necessary indorsement).
(iii) The Collateral Agent shall be authorized to send to each
Securities Intermediary or Commodity Intermediary as defined in and under
any Security Control Agreement a Notice of Exclusive Control as defined in
and under such Security Control Agreement.
Section 13. As to Letter-of-Credit Rights. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights to the Collateral Agent, intends to (and hereby does) assign to the
Collateral Agent its rights (including its contingent rights) to the proceeds of
all Related Contracts consisting of letters of credit of which it is or
hereafter becomes a beneficiary or assignee. Upon the request of the Collateral
Agent after the occurrence and during the continuance of an Event of Default,
each Grantor will promptly use its commercially reasonable efforts to cause the
issuer of each letter of credit and each nominated person (if any) with respect
thereto to consent to such assignment of the proceeds thereof in a Consent to
Assignment of Letter of Credit Rights.
(b) Upon the occurrence and during the continuance of an Event of
Default, each Grantor will, promptly upon request by the Collateral Agent, (i)
notify (and such Grantor hereby authorizes the Collateral Agent to notify) the
issuer and each nominated person with respect to each of the Related Contracts
consisting of letters of credit that the proceeds thereof have been assigned to
the Collateral Agent hereunder and any payments due or to become due in respect
thereof are to be made directly to the Collateral Agent or its designee.
(c) With respect to any Securities Account Control Agreement,
Commodity Accounts Control Agreement, Account Control Agreement or Consent to
Assignment of Letter of Credit Rights, the Collateral Agent agrees that it will
not issue any entitlement orders or other directions, instructions or
notifications thereunder with respect to the disposition or transfer of any
Non-Shared Collateral therein addressed or blocking any Grantor's ability to
deal with any such Non-Shared Collateral, except upon the earlier of (x) the day
on which all Credit Agreement Obligations under the Credit Agreement have been
declared due and payable prior to the state maturity thereof and (y) the 15th
day after any Event of Default shall have occurred and be continuing under the
Credit Agreement. The Collateral Agent further agrees that, upon its issuance of
any such entitlement orders, directions, instructions or notifications, it will
promptly provide a copy thereof to the relevant Grantor.
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Section 14. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Non-Shared Collateral, other than
sales, assignments and other dispositions of Non-Shared Collateral, and options
relating to Non-Shared Collateral, permitted under the terms of the Credit
Agreement, or (ii) create or suffer to exist any Lien upon or with respect to
any of the Non-Shared Collateral of such Grantor except for the pledge,
assignment and security interest created under this Non-Shared Security
Agreement and Liens permitted under the Credit Agreement.
(b) Each Grantor agrees that it will pledge hereunder, promptly upon
its acquisition (directly or indirectly) thereof, any and all additional Equity
Interests or other securities that are issued by any Grantor and are Pledged
Equity.
Section 15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default, in the Collateral Agent's
discretion, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Non-Shared Security Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Agent pursuant to the provisions of the Credit Agreement,
(b) to ask for, 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 Non-Shared Collateral,
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above,
and
(d) to file any claims or take any action or institute any proceedings
that the Collateral Agent may deem necessary or desirable for the
collection of any of the Non-Shared Collateral or otherwise to enforce
compliance with the terms and conditions of any Assigned Agreement or the
rights of the Collateral Agent with respect to any of the Non-Shared
Collateral.
Section 16. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, but without
any obligation to do so and without notice, itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by such Grantor under Section 19.
Section 17. The Collateral Agent's Duties. (a) The powers conferred on
the Collateral Agent hereunder are solely to protect the Non-Shared Secured
Parties' interest in the Non-Shared Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Non-Shared Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Collateral Agent shall have no duty as to any Non-
25
Shared Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Non-Shared Collateral, whether or not any Non-Shared Secured Party has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Non-Shared Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Non-Shared
Collateral in its possession if such Non-Shared Collateral is accorded treatment
substantially equal to that which it accords its own property.
(b) Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time, when the Collateral Agent deems it to be
necessary, appoint one or more subagents (each a "Subagent") for the Collateral
Agent hereunder with respect to all or any part of the Non-Shared Collateral. In
the event that the Collateral Agent so appoints any Subagent with respect to any
Non-Shared Collateral, (i) the assignment and pledge of such Non-Shared
Collateral and the security interest granted in such Non-Shared Collateral by
each Grantor hereunder shall be deemed for purposes of this Non-Shared Security
Agreement to have been made to such Subagent, in addition to the Collateral
Agent, for the ratable benefit of the Non-Shared Secured Parties, as security
for the Non-Shared Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Non-Shared Collateral, and (iii) the term "Collateral
Agent," when used herein in relation to any rights, powers, privileges,
interests and remedies of the Collateral Agent with respect to such Non-Shared
Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Non-Shared Collateral unless and except to the extent expressly authorized in
writing by the Collateral Agent.
Section 18. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Collateral Agent may exercise in respect of the Non-Shared
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
upon default under the UCC (whether or not the UCC applies to the affected
Non-Shared Collateral) and also may: (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Non-Shared
Collateral as directed by the Collateral Agent and make it available to the
Collateral Agent at a place and time to be designated by the Collateral
Agent that is reasonably convenient to all parties; (ii) without notice
except as specified below, sell the Non-Shared Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) to the fullest extent permitted by
applicable law and by contracts with third parties, and subject to any
applicable safety requirements at any such premises, occupy any premises
owned or leased by any of the Grantors where the Non-Shared Collateral or
any part thereof is assembled or located for a reasonable period in order
to effectuate their rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise
any and all rights and remedies
26
of any of the Grantors under or in connection with the Non-Shared Collateral, or
otherwise in respect of the Non-Shared Collateral, including, without
limitation, (A) any and all rights of such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of, the
Assigned Agreements, the Receivables, the Related Contracts and the other
Non-Shared Collateral, (B) withdraw, or cause or direct the withdrawal, of all
funds with respect to the Account Collateral and (C) exercise all other rights
and remedies with respect to the Assigned Agreements, the Receivables, the
Related Contracts and the other Non-Shared Collateral, including, without
limitation, those set forth in Section 9-607 of the UCC. Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten days'
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Non-Shared Collateral regardless of notice of sale having been given. The
Collateral Agent 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) Any cash held by or on behalf of the Collateral Agent and all cash
proceeds received by or on behalf of the Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Non-Shared
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 19) in whole or in part by the Collateral Agent for the ratable
benefit of the Non-Shared Secured Parties against, all or any part of the
Non-Shared Secured Obligations, in the following manner:
(i) first, paid to the Agents for any amounts then owing to the Agents
pursuant to Section 11.04 of the Credit Agreement or otherwise under the
Loan Documents, ratably in accordance with such respective amounts then
owing to the Agents;
(ii) second, ratably to the Term B Lenders for application to Obligations
of the Loan Parties in respect of the Term B Facility under the Loan
Documents until all such Obligations have been paid in full; and
(iii) third, ratably to the Term A Lenders, the Revolving Credit Lenders
and the Reallocated Facility Lenders for application to obligations of the
Loan Parties in respect of the Term A Facility, the Revolving Credit
Facility and the Reallocated Facility and all ACH Obligations of the Loan
Parties until all such obligations have been paid in full.
Any surplus remaining after the payment in full in cash of the
Non-Shared Secured Obligations shall be paid to the applicable Grantor, its
successors or assigns, or to whomsoever may be lawfully entitled to receive
the same, or as a court of competent jurisdiction may direct.
27
(c) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Non-Shared Collateral
shall be received in trust for the benefit of the Collateral Agent, shall
be segregated from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any
necessary endorsement).
(d) The Collateral Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Non-Shared Secured Obligations
against any funds held with respect to the Account Collateral or in any
other deposit account.
(e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill symbolized by
any Trademarks subject to such sale or other disposition shall be included
therein, and such Grantor shall supply to the Collateral Agent or its
designee such Grantor's know-how and expertise, and documents and things
relating to any Intellectual Property Collateral subject to such sale or
other disposition, and such Grantor's customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services of
such Grantor.
(f) Notwithstanding anything to the Credit Agreement or any other Loan
Document to the contrary, upon (i) the occurrence and during the
continuance of an Event of Default, (ii) all of the Obligations under the
Credit Agreement being declared due and payable prior to the stated
maturity thereof or (iii) the commencement by the Required Section 8.01
Lenders of the exercise of their rights and remedies under any of the
Shared Collateral Documents, the Collateral Agent shall follow the
directions of the Required Term B Lenders in connection with the exercise
of rights and remedies under the Non-Shared Security Agreement and each
other Lender agrees that upon such event the Required Term B Lenders shall
have the sole right to direct the Collateral Agent with respect to the
Non-Shared Collateral.
Section 19. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless the Collateral Agent and each
Non-Shared Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or
resulting from this Non-Shared Security Agreement (including, without
limitation, enforcement of this Non-Shared Security Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. The
provisions of this Section 19(a) shall survive termination of this Agreement.
(b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of their counsel and of any experts and agents,
that the Collateral Agent may incur in connection
28
with (i) the administration of this Non-Shared Security Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Non-Shared Collateral of such Grantor, (iii)
the exercise or enforcement of any of the rights of the Collateral Agent, the
Representatives or the other Non-Shared Secured Parties hereunder or (iv) the
failure by such Grantor to perform or observe any of the provisions hereof.
(c) EACH GRANTOR ACKNOWLEDGES THAT THIS NON-SHARED SECURITY AGREEMENT
AND OTHER TRANSACTION DOCUMENTS CONTAIN PROVISIONS RELEASING EACH INDEMNIFIED
PARTY FROM LIABILITY AND/OR INDEMNIFYING AND HOLDING HARMLESS EACH INDEMNIFIED
PARTY FOR, AMONG OTHER THINGS, INDEMNIFIED PARTY'S OWN NEGLIGENCE. EACH GRANTOR
AGREES THAT THE RELEASE AND/OR INDEMNITY PROVISIONS CONTAINED IN THESE DOCUMENTS
ARE CAPTIONED TO CLEARLY IDENTIFY THE RELEASE AND/OR INDEMNITY PROVISIONS AND,
THEREFORE, ARE SO CONSPICUOUS THAT EACH GRANTOR HAS FAIR NOTICE OF THE EXISTENCE
AND CONTENTS OF SUCH PROVISIONS. EACH GRANTOR HEREBY WAIVES ANY DEFENSES IT
MIGHT ASSERT AGAINST EACH INDEMNIFIED PARTY BASED ON THE HOLDING OF THE TEXAS
SUPREME COURT IN ETHYL CORP. v. DANIEL CONST. CO., 725 S.W.2d 705 (Tex. 1987),
PAGE PETROLEUM, INC., et al. V. DRESSER INDUSTRIES, INC., et al., 853 S.W.2d 505
(Tex. 1993), AND QUORUM HEALTH RESOURCES, L.L.C. v. MAVERICK COUNTY HOSPITAL
DISTRICT et al., 308 F.3rd 451 (5th Cir. 2002) AND ANY RELATED CASE LAW
HOLDINGS.
Section 20. Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment or waiver of any provision of this Non-Shared Security Agreement, and
no consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Collateral Agent
and the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on
the part of the Collateral Agent or any other Non-Shared Secured Party to
exercise, and no delay in exercising any right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.
(b) Upon the execution and delivery, or authentication, by any Person
of a security agreement supplement in substantially the form of Exhibit A hereto
(each a "Non-Shared Security Agreement Supplement"), (i) such Person shall be
referred to as an "Additional Grantor" and shall be and become a Grantor
hereunder, and each reference in this Non-Shared Security Agreement and the
other Loan Documents to "Grantor" shall also mean and be a reference to such
Additional Grantor, and each reference in this Non-Shared Security Agreement and
the other Loan Documents to "Non-Shared Collateral" shall also mean and be a
reference to the Non-Shared Collateral of such Additional Grantor, and (ii) the
supplemental schedules I-VI attached to each Non-Shared Security Agreement
Supplement shall be incorporated into and become a part of and supplement
Schedules I-VI, respectively, hereto, and the Collateral Agent may attach such
supplemental schedules to such Schedules; and each reference to such Schedules
shall mean and be a reference to such Schedules as supplemented pursuant to each
Non-Shared Security Agreement Supplement.
29
Section 21. Notices, Etc. (a) Unless otherwise expressly provided
herein, all notices and other communications provided for hereunder or any other
Non-Shared Collateral Document shall be in writing (including by facsimile
transmission). All such written notices shall be mailed, faxed or delivered to
the applicable address, facsimile number or (subject to Section 21(c))
electronic mail address, as follows:
(i) as to the Collateral Agent, addressed to it at its address
specified in the Credit Agreement;
(ii) as to the Borrower, addressed to it at its address specified in
the Credit Agreement;
(iii) as to any Grantor, addressed to it at its address shown on
Schedule I hereto; and
(iv) as to any party, at such other address as shall be designated by
such party in a written notice to the other parties.
All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of Section
21(c)), when delivered. In no event shall a voicemail message be effective as a
notice, communication or confirmation hereunder.
(b) Any amendment or waiver of any provision of this Non-Shared
Security Agreement or of any Non-Shared Security Agreement Supplement or
Schedule hereto may be transmitted and/or signed by facsimile. The effectiveness
of any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually signed originals and shall be binding on all
parties thereto. The Collateral Agent may also require that any such documents
and signatures be confirmed by a manually signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
(c) Electronic mail and Internet and intranet websites may be used
only to distribute routine communications and to distribute Non-Shared
Collateral Documents for execution by the parties thereto, and may not be used
for any other purpose.
(d) The Collateral Agent shall be entitled to rely and act upon any
notices purportedly given by or on behalf of any Grantor even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. Each Grantor shall indemnify the Collateral Agent from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Grantor. All telephonic
notices to and other communications with
30
the Collateral Agent may be recorded by the Collateral Agent, and each of the
parties hereto hereby consents to such recording.
Section 22. Continuing Security Interest; Assignments under the Credit
Agreement. This Non-Shared Security Agreement shall create a continuing security
interest in the Non-Shared Collateral and shall (a) remain in full force and
effect until the later of (i) the release of all of the Non-Shared Collateral
and (ii) the termination of the Aggregate Commitments and payment in full of all
Non-Shared Secured Obligations (other than contingent indemnification
obligations not yet accrued and payable) and the expiration or termination of
all Letters of Credit, (b) be binding upon each Grantor, its successors and
assigns and (c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Non-Shared Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes, if any, held by it) to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as provided in
Section 11.07 of the Credit Agreement.
Section 23. Release; Termination. (a) Upon any sale, lease, transfer
or other Disposition of any item of Non-Shared Collateral of any Grantor in
accordance with the terms of the Credit Agreement, (i) so long as the Collateral
Agent shall not be required to execute a release or release possession with
respect thereto, the security interest in such Non-Shared Collateral shall be
released automatically, and without further action, and (ii) under any other
circumstance, (x) upon the delivery to the Collateral Agent of a certificate of
the Parent Guarantor to the effect that such sale, lease, transfer or other
Disposition is in accordance with the terms of the Credit Agreement and (y)
within five (5) Business Days after notice to the Administrative Agents of the
receipt by the Collateral Agent of such a certificate, if prior to the end of
such period the Collateral Agent has not received a written objection from the
Administrative Agents, the security interest in such Non-Shared Collateral shall
be released and the Collateral Agent will, at such Grantor's expense, execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence the release of such item of Non-Shared Collateral from the
assignment and security interest granted hereby; provided, however, that if such
sale, lease, transfer or other Disposition would result in a prepayment under
Section 2.05(b)(i)of the Credit Agreement, then a Responsible Officer of the
Parent Guarantor shall be required to deliver a notice at least five Business
Days prior to the date of such Disposition which notice shall (i) specify the
Non-Shared Collateral to be so sold or otherwise disposed of and (ii) certify
that the proceeds of such Non-Shared Collateral will be applied in accordance
with the Credit Agreement and this Agreement, and the Grantors are not, and
after giving effect to such release, would not be, in Default under the Credit
Agreement; provided further, however, that if prior to the time that the
Collateral Agent delivers documents evidencing a release under this Section
23(a), the Collateral Agent shall have received a Collateral Trust Agreement
Default Notice (as defined in the Collateral Trust Agreement) that shall not
have been withdrawn prior to such time and the Administrative Agents on behalf
of the Required Section 8.01 Lenders shall not have directed the Collateral
Agent to deliver such a release, than the Collateral Agent shall so notify the
Grantors and shall not sign any release or releases in connection with such
Disposition.
31
(b) Upon the occurrence of the Shared Collateral Termination Date (as
defined in the Collateral Trust Agreement), the pledge and security interest
granted hereby shall terminate and all rights to the Non-Shared Collateral shall
revert to the applicable Grantor. Upon any such termination, the Collateral
Agent will, at the applicable Grantor's expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such
termination.
Section 24. Security Interest Absolute. The obligations of each
Grantor under this Non-Shared Security Agreement are independent of the
Non-Shared Secured Obligations or any other Obligations of any other Loan Party
under or in respect of the Loan Documents, and a separate action or actions may
be brought and prosecuted against each Grantor to enforce this Non-Shared
Security Agreement, irrespective of whether any action is brought against such
Grantor or any other Loan Party or whether such Grantor or any other Loan Party
is joined in any such action or actions. All rights of the Collateral Agent and
the other Non-Shared Secured Parties and the pledge, assignment and security
interest hereunder, and all obligations of each Grantor hereunder, shall to the
fullest extent permitted under applicable law, be irrevocable, absolute and
unconditional irrespective of, and to the fullest extent permitted under
applicable law, each Grantor hereby irrevocably waives (to the maximum extent
permitted by applicable law) any defenses it may now have or may hereafter
acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Non-Shared Secured Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents or any other amendment or waiver of or any consent to any
departure from any Loan Document, including, without limitation, any
increase in the Non-Shared Secured Obligations resulting from the extension
of additional credit to any Loan Party or any of its Subsidiaries or
otherwise;
(c) any taking, exchange, release or non-perfection of any Non-Shared
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Non-Shared Secured Obligations;
(d) any manner of application of any Non-Shared Collateral or any
other collateral, or proceeds thereof, to all or any of the Non-Shared
Secured Obligations, or any manner of sale or other disposition of any
Non-Shared Collateral or any other collateral for all or any of the
Non-Shared Secured Obligations or any other Obligations of any other Loan
Party under or in respect of the Loan Documents or any other assets of any
Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
32
(f) any failure of any Non-Shared Secured Party to disclose to any
Loan Party any information relating to the business, condition (financial
or otherwise), operations, performance, assets, nature of assets,
liabilities or prospects of any other Loan Party now or hereafter known to
such Non-Shared Secured Party (each Grantor waiving any duty on the part of
the Non-Shared Secured Parties to disclose such information);
(g) the failure of any other Person to execute this Non-Shared
Security Agreement or any other Collateral Document with respect to the
Non-Shared Secured Obligations, guaranty or agreement or the release or
reduction of liability of any Grantor or other grantor or surety with
respect to the Non-Shared Secured Obligations; or
(h) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
any Non-Shared Secured Party that might otherwise constitute a defense
available to, or a discharge of, such Grantor or any other Grantor or a
third party grantor of a security interest.
To the fullest extent permitted under applicable law, this Non-Shared Security
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Non-Shared Secured Obligations is
rescinded or must otherwise be returned by the Collateral Agent or any
Non-Shared Secured Party or by any other Person upon the insolvency, bankruptcy
or reorganization of any Loan Party or otherwise, all as though such payment had
not been made.
Section 25. Execution in Counterparts. This Non-Shared Security
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Non-Shared Security Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this Non-Shared
Security Agreement.
Section 26. The Non-Shared Mortgages. In the event that any of the
Non-Shared Collateral hereunder is also subject to a valid and enforceable Lien
under the terms of any Non-Shared Mortgage or the First Preferred Fleet Mortgage
and the terms of such Non-Shared Mortgage or First Preferred Fleet Mortgage are
inconsistent with the terms of this Non-Shared Security Agreement, then with
respect to such Non-Shared Collateral, the terms of such Non-Shared Mortgage or
such First Preferred Fleet Mortgage shall be controlling in the case of fixtures
and real estate leases, letting and licenses of, and contracts and agreements
relating to the lease of, real property, and the terms of this Non-Shared
Security Agreement shall be controlling in the case of all other Non-Shared
Collateral.
Section 27. Collateral in the State of Louisiana. (a) As to all
Non-Shared Collateral now or hereafter located in the State of Louisiana, or as
to which the laws of the State of Louisiana may now be or hereafter become
applicable, each Grantor hereby acknowledges the Non-Shared Secured Obligations,
whether now existing or to arise hereafter, and confesses judgment thereon if
the Non-Shared Secured Obligations are not paid at maturity, and does by these
presents consent, agree and stipulate that if any portion of the Non-Shared
Secured Obligations is not promptly and fully paid when due, the Non-Shared
Secured Obligations shall, at the option of the Collateral Agent, become
immediately due and payable and it shall be lawful
33
for the Collateral Agent, without making a demand and without notice or putting
in default, the same being hereby expressly waived, to cause all and singular
e Non-Shared Collateral to be seized and sold by executory process, without
appraisement (appraisement being hereby expressly waived), either in its
entirety or in lots or parcels, as the Collateral Agent may determine, to the
highest bidder for cash, or on such terms as plaintiff in such proceedings may
direct.
(b) To the fullest extent permitted under applicable law, each Grantor
hereby expressly waives: (a) the benefit of appraisement, as provided in
Articles 2332, 2336, 2723 and 2724, Louisiana Code of Civil Procedure, and all
other laws conferring the same; (b) the demand and three (3) days delay accorded
by Articles 2639 and 2721, Louisiana Code of Civil Procedure; (c) the notice of
seizure required by Articles 2293 and 2721, Louisiana Code of Civil Procedure;
(d) the three (3) days delay provided by Articles 2331 and 2722, Louisiana Code
of Civil Procedure; and (e) the benefit of the other provisions of Articles
2331, 2722 and 2723, Louisiana Code of Civil Procedure, and the benefit of any
other Articles or laws relating to rights of appraisement, notice, or delay not
specifically mentioned above; and, to the fullest extent permitted under
applicable law, each Grantor expressly agrees to the immediate seizure of the
Non-Shared Collateral in the event of suit hereon.
(c) Each Grantor acknowledges that the Collateral Agent shall have all
rights to appointment of a keeper in connection with any action to foreclose the
lien hereof, all in accordance with La. R.S. 9:5136 et seq. The Court before
which the proceedings are pending shall determine the keeper's fees, and the
payment of such fees shall constitute a portion of the Non-Shared Secured
Obligations secured by the lien hereof.
(d) This Section 27 shall in no way affect or be deemed a waiver of
the provisions of Section 28 or Section 29.
Section 28. Governing Law. This Non-Shared Security Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Section 29. Submission to Jurisdiction and Waiver. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Non-Shared Security Agreement and the other Loan Documents to which it is or is
to be a party, or for recognition or enforcement of any judgment, and each
Grantor hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in any such New
York State court or, to the extent permitted by law, in such federal court. Each
Grantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Non-Shared Security
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Non-Shared Security Agreement in the
courts of any jurisdiction.
(b) Each Grantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying
34
of venue of any suit, action or proceeding arising out of or relating to this
Non-Shared Security Agreement to which it is or is to be a party in any New York
State or federal court. Each Grantor hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such suit, action or proceeding in any such court.
(c) EACH GRANTOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS NON-SHARED SECURITY AGREEMENT, THE LOANS OR THE ACTIONS OF ANY
BANKS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
35
IN WITNESS WHEREOF, each Grantor has caused this Non-Shared Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
DYNEGY INC.
By: /s/ Charles C. Cook
-------------------------------
Name: Charles C. Cook
Title: Vice President
ILLINOVA CORPORATION
By: /s/ Robert T. Ray
-------------------------------
Name: Robert T. Ray
Title: Sr. Vice President--Treasurer
[NAME OF GRANTOR]
36
Acknowledged on the date hereof by:
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Collateral Agent
By: /s/ Richard P. Broussard
------------------------------------
Name: Richard P. Broussard
Title: First Vice President
CITIBANK, N.A.,
as Administrative Agent
By: /s/ Susan McManigal
------------------------------------
Name: Susan McManigal
Title: Senior Vice President
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Clara Yang Strand
------------------------------------
Name: Clara Yang Strand
Title: Managing Director
Exhibit A to the
Non-Shared Security Agreement
FORM OF NON-SHARED SECURITY AGREEMENT SUPPLEMENT
[Date of Non-Shared Security Agreement Supplement]
Bank One, NA (main office Chicago), as Collateral Agent
for the Non-Shared Secured Parties referred to in the
Non-Shared Security Agreement referred to below
_________________________
_________________________
Attn: ___________________
Dynegy Inc.
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement dated as of April 1, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Dynegy Holdings Inc., a Delaware
corporation, as the Borrower, the Lenders party thereto, Bank One, NA (main
office Chicago), as Collateral Agent, Citibank, N.A. and Bank of America, N.A.,
as Administrative Agents (in such capacity, the "Agents") and (ii) the
Non-Shared Security Agreement dated April 1, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Non-Shared
Security Agreement") made by the Grantors from time to time party thereto in
favor of the Collateral Agent, for the Non-Shared Secured Parties. Terms defined
in the Credit Agreement or the Non-Shared Security Agreement and not otherwise
defined herein are used herein as defined in the Credit Agreement or the
Non-Shared Security Agreement.
SECTION 1. Grant of Security. The undersigned hereby grants to the
Collateral Agent, for the ratable benefit of the Non-Shared Secured Parties, a
security interest in, all of its right, title and interest in and to all of the
Non-Shared Collateral of the undersigned, whether now owned or hereafter
acquired by the undersigned, wherever located and whether now or hereafter
existing or arising, including, without limitation, the property and assets of
the undersigned set forth on the attached supplemental schedules to the
Schedules to the Non-Shared Security Agreement.
SECTION 2. Security for Obligations. The grant of a security interest
in, the Non-Shared Collateral by the undersigned under this Non-Shared Security
Agreement Supplement and the Non-Shared Security Agreement secures the payment
of all Non-Shared Secured Obligations, whether direct or indirect, absolute or
contingent, and whether for
2
principal, reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 3. Supplements to Non-Shared Security Agreement Schedules. The
undersigned has attached hereto supplemental Schedules I through VI to Schedules
I through VI, respectively, to the Non-Shared Security Agreement, and the
undersigned hereby certifies, as of the date first above written, that such
supplemental schedules have been prepared by the undersigned in substantially
the form of the equivalent Schedules to the Non-Shared Security Agreement and
are complete and correct in all material respects.
SECTION 4. Representations and Warranties. The undersigned hereby makes
each representation and warranty set forth in Section 8 of the Non-Shared
Security Agreement (as supplemented by the attached supplemental schedules) to
the same extent as each other Grantor.
SECTION 5. Obligations Under the Non-Shared Security Agreement. The
undersigned hereby agrees, as of the date first above written, to be bound as a
Grantor by all of the terms and provisions of the Non-Shared Security Agreement
to the same extent as each of the other Grantors. The undersigned further
agrees, as of the date first above written, that each reference in the
Non-Shared Security Agreement to an "Additional Grantor" or a "Grantor" shall
also mean and be a reference to the undersigned.
SECTION 6. Governing Law. This Non-Shared Security Agreement Supplement
shall be governed by, and construed in accordance with, the laws of the State of
New York.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By ________________________
Title:
Address for notices:
______________________
______________________
______________________
Exhibit B to the
Non-Shared Security Agreement
FORM OF ACCOUNT CONTROL AGREEMENT
(Deposit Account/Securities Account)
ACCOUNT CONTROL AGREEMENT (this "Agreement") dated as of ________,
____, among____________, a ___________ (the "Grantor"), Bank One, NA (main
office Chicago), as Collateral Agent (the "Secured Party"), and _________, a
_________ ("____________"), as securities intermediary and depository bank (the
"Account Holder").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest
(the "Security Interest") in the following accounts maintained by the Account
Holder for the Grantor (each, an "Account" and collectively, the "Accounts"):
[Insert account numbers and other identifying information.]
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. Uniform Commercial Code") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. The Accounts. The Grantor and Account Holder represent and
warrant to, and agrees with, the Secured Party that:
(a) The Account Holder maintains each Account for the Grantor, and
all property (including, without limitation, all funds and financial assets)
held by the Account Holder for the account of the Grantor are, and will
continue to be, credited to an Account in accordance with instructions given
by the Grantor (unless otherwise provided herein).
(b) To the extent that funds are credited to any Account, such
Account is a deposit account; and to the extent that financial assets are
credited to any Account, such Account is a securities account. The Account
Holder is (i) the bank with which each Account that is a deposit account is
maintained and (ii) the securities intermediary with respect to financial
assets held in any Account that is a securities account. The Grantor is (x)
the Account Holder's customer with respect to the Accounts and (y) the
entitlement holder with respect to financial assets credited from time to
time to any Account.
(c) Notwithstanding any other agreement to the contrary, the Account
Holder's jurisdiction with respect to each Account for purposes of the N.Y.
Uniform
2
Commercial Code is, and will continue to be for so long as the Security
Interest shall be in effect, the State of New York.
(d) The Grantor and Account Holder do not know of any claim to or
interest in any Account or any property (including, without limitation, funds
and financial assets) credited to any Account, except for claims and
interests of the parties referred to in this Agreement.
SECTION 2. Control by Secured Party. The Account Holder will comply with
(i) all instructions directing disposition of the funds in any and all of the
Accounts, (ii) all notifications and entitlement orders that the Account Holder
receives directing it to transfer or redeem any financial asset in any and all
of the Accounts, and (iii) all other directions concerning any and all of the
Accounts, including, without limitation, directions to distribute to the Secured
Party proceeds of any such transfer or redemption or interest or dividends on
property in any and all of the Accounts (any such instruction, notification or
direction referred to in clause (i), (ii) or (iii) above being an "Account
Direction"), in each case of clauses (i), (ii) and (iii) above originated by the
Secured Party without further consent by the Grantor or any other Person.
SECTION 3. Grantor's Rights in Accounts. (a) Except as otherwise
provided in this Section 3, the Account Holder will comply with Account
Directions and other directions concerning each Account originated by the
Grantor without further consent by the Secured Party.
(b) Until the Account Holder receives a notice from the Secured Party
that the Secured Party will exercise exclusive control over any Account (a
"Notice of Exclusive Control" with respect to such Account), the Account Holder
comply with Account Directions from the Grantor.
(c) If the Account Holder receives from the Secured Party a Notice of
Exclusive Control with respect to any Account, the Account Holder will comply
only with Account Directions originated by the Secured Party and will cease:
(i) complying with Account Directions or other directions concerning
such Account originated by the Grantor and
(ii) distributing to the Grantor interest and dividends on property
(including, without limitation, funds and financial assets) in such Account.
SECTION 4. Priority of Secured Party's Security Interest. (a) The
Account Holder (i) subordinates to the Security Interest and in favor of the
Secured Party any security interest, lien, or right of recoupment or setoff that
the Account Holder may have, now or in the future, against any Account or
property (including, without limitation, any funds and financial assets)
credited to any Account, and (ii) agrees that it will not exercise any right in
respect of any such security interest or lien or any such right of recoupment or
setoff until the Security Interest is terminated, except that the Account Holder
(A) will retain its prior security interest and lien on property credited to any
Account, (B) may exercise any right in respect of such security interest or
lien, and (C) may exercise any right of recoupment or setoff against any
Account, in the case of clauses (A), (B) and (C) above, to secure or to satisfy,
and only to secure or to satisfy, payment (x) for such property, (y) for its
customary fees and expenses for the routine
3
maintenance and operation of such Account, and (z) if such Account is a deposit
account, for the face amount of any items that have been credited to such
Account but are subsequently returned unpaid because of uncollected or
insufficient funds.
(b) The Account Holder will not enter into any other agreement with
any Person relating to Account Directions or other directions with respect to
any Account.
SECTION 5. Statements, Confirmations, and Notices of Adverse Claims.
(a) The Account Holder will send copies of all statements and confirmations for
each Account simultaneously to the Secured Party and the Grantor.
(b) When the Account Holder knows of any claim or interest in any
Account or any property (including, without limitation, funds and financial
assets) credited to any Account other than the claims and interests of the
parties referred to in this Agreement, the Account Holder will promptly notify
the Secured Party and the Grantor of such claim or interest.
SECTION 6. The Account Holder's Responsibility. (a) Except for
permitting a withdrawal, delivery, or payment in violation of Section 3, the
Account Holder will not be liable to the Secured Party for complying with
Account Directions or other directions concerning any Account from the Grantor
that are received by the Account Holder before the Account Holder receives and
has a reasonable opportunity to act on a Notice of Exclusive Control.
(b) The Account Holder will not be liable to the Grantor or the
Secured Party for complying with a Notice of Exclusive Control or with an
Account Direction or other direction concerning any Account originated by the
Secured Party, even if the Grantor notifies the Account Holder that the Secured
Party is not legally entitled to issue the Notice of Exclusive Control or
Account Direction or such other direction unless the Account Holder takes the
action after it is served with an injunction, restraining order, or other legal
process enjoining it from doing so, issued by a court of competent jurisdiction,
and had a reasonable opportunity to act on the injunction, restraining order or
other legal process.
(c) This Agreement does not create any obligation of the Account
Holder except for those expressly set forth in this Agreement and, in the case
of any Account that is a securities account, in Part 5 of Article 8 of the N.Y.
Uniform Commercial Code and, in the case of any Account that is a deposit
account, in Article 4 of the N.Y. Uniform Commercial Code. In particular, the
Account Holder need not investigate whether the Secured Party is entitled under
the Secured Party's agreements with the Grantor to give an Account Direction or
other direction concerning any Account or a Notice of Exclusive Control. The
Account Holder may rely on notices and communications it believes given by the
appropriate party.
SECTION 7. Indemnity. The Grantor will indemnify the Account Holder,
its officers, directors, employees and agents against claims, liabilities and
expenses arising out of this Agreement (including, without limitation,
reasonable attorney's fees and disbursements), except to the extent the claims,
liabilities or expenses are caused by the Account Holder's gross negligence or
willful misconduct as found by a court of competent jurisdiction in a final,
non-appealable judgment.
4
SECTION 8. Termination; Survival. (a) The Secured Party may terminate
this Agreement by notice to the Account Holder and the Grantor. If the Secured
Party notifies the Account Holder that the Security Interest has terminated,
this Agreement will immediately terminate.
(b) The Account Holder may terminate this Agreement on 60 days' prior
notice to the Secured Party and the Grantor, provided that before such
termination the Account Holder and the Grantor shall make arrangements to
transfer the property (including, without limitation, all funds and financial
assets) credited to each Account to another Account Holder that shall have
executed, together with the Grantor, a control agreement in favor of the Secured
Party in respect of such property in substantially the form of this Agreement or
otherwise in form and substance satisfactory to the Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
SECTION 9. Governing Law. This Agreement and each Account will be
governed by the law of the State of New York. The Account Holder and the Grantor
may not change the law governing any Account without the Secured Party's express
prior written agreement.
SECTION 10. Entire Agreement. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter.
SECTION 11. Amendments. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.
SECTION 12. Financial Assets. The Account Holder agrees with the
Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property (other than funds) credited from time to time to
any Account will be treated as financial assets under Article 8 of the N.Y.
Uniform Commercial Code.
SECTION 13. Notices. A notice or other communication to a party under
this Agreement will be in writing (except that Account Directions may be given
orally), will be sent to the party's address set forth under its name below or
to such other address as the party may notify the other parties and will be
effective on receipt.
SECTION 14. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Grantor, the Secured Party and the Account
Holder, and thereafter shall be binding upon and inure to the benefit of the
Grantor, the Secured Party and the Account Holder and their respective
successors and assigns.
SECTION 15. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
[NAME OF GRANTOR]
By
_______________________________
Name:
Title:
Address:
__________________________________
__________________________________
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Collateral Agent
By
_______________________________
Name:
Title:
Address:
__________________________________
__________________________________
[NAME OF ACCOUNT HOLDER]
By
_______________________________
Name:
Title:
Address:
__________________________________
__________________________________
Exhibit C to the
Non-Shared Security Agreement
FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT
CONTROL AGREEMENT dated as of ________, ____, among____________, a
___________ (the "Grantor"), Bank One, NA (main office Chicago), as Collateral
Agent (the "Secured Party"), [___________, a ___________, as Control Agent (the
"Control Agent")] and _________, a _________ ("____________"), as securities
intermediary (the "Securities Intermediary").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest (the
"Security Interest") in account no. _______________ maintained by the Securities
Intermediary for the Grantor (the "Account").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. Uniform Commercial Code") are used in
this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. The Account. The Grantor and Securities Intermediary
represent and warrant to, and agree with, the Grantor and the Secured Party
that:
(a) The Securities Intermediary maintains the Account for the Grantor,
and all property held by the Securities Intermediary for the account of the
Grantor is, and will continue to be, credited to the Account.
(b) The Account is a securities account. The Securities Intermediary
is the securities intermediary with respect to the property credited from
time to time to the Account. The Grantor is the entitlement holder with
respect to the property credited from time to time to the Account.
(c) The State of New York is, and will continue to be, the Securities
Intermediary's jurisdiction of organization for purposes of Section 8-110(e)
of the UCC so long as the Security Interest shall remain in effect.
(d) Exhibit A attached hereto is a statement of the property credited
to the Account on the date hereof.
(e) The Grantor and Securities Intermediary do not know of any claim
to or interest in the Account or any property credited to the Account,
except for claims and interests of the parties referred to in this
Agreement.
2
SECTION 2. Control by [Secured Party][Control Agent]. [a] The Securities
Intermediary will comply with all notifications it receives directing it to
transfer or redeem any property in the Account (each an "Entitlement Order") or
other directions concerning the Account (including, without limitation,
directions to distribute to the Secured Party proceeds of any such transfer or
redemption or interest or dividends on property in the Account) originated by
the [Secured Party] [Control Agent] without further consent by the Grantor or
any other person.
[(b) The Control Agent hereby acknowledges that is shall maintain and
exercise control of the Account on behalf of the Secured Party.]
SECTION 3. Grantor's Rights in Account. (a) Except as otherwise provided
in this Section 3, the Securities Intermediary will comply with Entitlement
Orders originated by the Grantor without further consent by the [Secured Party]
[Control Agent].
(b) Until the Securities Intermediary receives a notice from the
[Secured Party] [Control Agent] that the [Secured Party] [Control Agent] will
exercise exclusive control over the Account (a "Notice of Exclusive Control"),
the Securities Intermediary may comply with Entitlement Orders originated by the
Grantor.
(c) If the Securities Intermediary receives from the [Secured Party]
[Control Agent] a Notice of Exclusive Control, the Securities Intermediary will
cease:
(i) complying with Entitlement Orders or other directions concerning
the Account originated by the Grantor and
(ii) distributing to the Grantor interest and dividends on property in
the Account.
SECTION 4. Priority of Secured Party's Security Interest. (a) The
Securities Intermediary subordinates in favor of the Secured Party any security
interest, lien, or right of setoff it may have, now or in the future, against
the Account or property in the Account, except that the Securities Intermediary
will retain its prior lien on property in the Account to secure payment for
property purchased for the Account and normal commissions and fees for the
Account.
(b) The Securities Intermediary will not agree with any Person not
party to this Agreement that the Securities Intermediary will comply with
Entitlement Orders originated by such Person.
SECTION 5. Statements, Confirmations, and Notices of Adverse Claims.
(a) The Securities Intermediary will send copies of all statements and
confirmations for the Account simultaneously to the Grantor[, the Control Agent]
and the Secured Party.
(b) When the Securities Intermediary knows of any claim or interest in
the Account or any property credited to the Account other than the claims and
interests of the parties referred to in this Agreement, the Securities
Intermediary will promptly notify [the Control Agent,] the Secured Party and the
Grantor of such claim or interest.
3
SECTION 6. The Securities Intermediary's Responsibility. (a) Except for
permitting a withdrawal, delivery, or payment in violation of Section 3, the
Securities Intermediary will not be liable to [the Control Agent or] the Secured
Party for complying with Entitlement Orders or other directions concerning the
Account from the Grantor that are received by the Securities Intermediary before
the Securities Intermediary receives and has a reasonable opportunity to act on
a Notice of Exclusive Control.
(b) The Securities Intermediary will not be liable to the Grantor or
the Secured Party for complying with a Notice of Exclusive Control or with an
Entitlement Order or other direction concerning the Account originated by the
[Secured Party] [Control Agent], even if the Grantor notifies the Securities
Intermediary that the [Secured Party] [Control Agent] is not legally entitled to
issue the Notice of Exclusive Control or Entitlement Order or such other
direction unless the Securities Intermediary takes the action after it is served
with an injunction, restraining order, or other legal process enjoining it from
doing so, issued by a court of competent jurisdiction, and had a reasonable
opportunity to act on the injunction, restraining order or other legal process.
(c) This Agreement does not create any obligation of the Securities
Intermediary except for those expressly set forth in this Agreement and in Part
5 of Article 8 of the N.Y. Uniform Commercial Code. In particular, the
Securities Intermediary need not investigate whether the [Secured Party]
[Control Agent] is entitled under the [Secured Party's] [Control Agent's]
agreements with the Grantor [or Secured Party] to give an Entitlement Order or
other direction concerning the Account or a Notice of Exclusive Control. The
Securities Intermediary may rely on notices and communications it believes given
by the appropriate party.
SECTION 7. Indemnity. The Grantor will indemnify the Securities
Intermediary, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the extent
the claims, liabilities or expenses are caused by the Securities Intermediary's
gross negligence or willful misconduct as found by a court of competent
jurisdiction in a final, non-appealable judgment.
SECTION 8. Termination; Survival. (a) The Secured Party may terminate
this Agreement by notice to [the Control Agent,] the Securities Intermediary and
the Grantor. If the Secured Party notifies the Securities Intermediary that the
Security Interest has terminated, this Agreement will immediately terminate.
(b) The Securities Intermediary may terminate this Agreement on 60
days' prior notice to [the Control Agent,] the Secured Party and the Grantor,
provided that before such termination the Securities Intermediary and the
Grantor shall make arrangements to transfer the property in the Account to
another securities intermediary that shall have executed, together with [the
Control Agent and] the Grantor, a control agreement in favor of [the Control
Agent and] the Secured Party in respect of such property in substantially the
form of this Agreement or otherwise in form and substance satisfactory to the
Secured Party.
[(c) The Control Agent may terminate this Agreement on 60 days' prior
notice to the Securities Intermediary, the Secured Party and the Grantor,
provided that before such
4
termination, the Securities Intermediary, the Secured Party and the Grantor
shall make arrangements for another Person to assume the rights and obligations
of the Control Agent hereunder, and such Person shall have executed, together
with the Securities Intermediary, the Secured Party and the Grantor, a control
agreement in favor of such Person and the Secured Party in substantially the
form of this Agreement or otherwise in form and substance satisfactory to the
Secured Party.]
[(c)][(d)] Sections 6 and 7 will survive termination of this Agreement.
SECTION 9. Governing Law. This Agreement and the Account will be
governed by the law of the State of New York. [The] [None of the] Securities
Intermediary [, the Control Agent, nor] [and] the Grantor may [not] change the
law governing the Account without the Secured Party's express prior written
agreement.
SECTION 10. Entire Agreement. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter.
SECTION 11. Amendments. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.
SECTION 12. Financial Assets. The Securities Intermediary agrees with
[the Control Agent,] the Secured Party and the Grantor that, to the fullest
extent permitted by applicable law, all property credited from time to time to
the Account will be treated as financial assets under Article 8 of the N.Y.
Uniform Commercial Code.
SECTION 13. Notices. A notice or other communication to a party under
this Agreement will be in writing (except that Entitlement Orders may be given
orally), will be sent to the party's address set forth under its name below or
to such other address as the party may notify the other parties and will be
effective on receipt.
SECTION 14. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Grantor, the Secured Party[, the Control
Agent] and the Securities Intermediary, and thereafter shall be binding upon and
inure to the benefit of the Grantor, the Secured Party[, the Control Agent] and
the Securities Intermediary and their respective successors and assigns.
SECTION 15. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
5
[NAME OF GRANTOR]
By
________________________________
Title:
Address:
___________________________________
___________________________________
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Collateral Agent
By
________________________________
Name:
Title:
Address:
___________________________________
___________________________________
[NAME OF CONTROL AGENT], as
Control Agent
By
________________________________
Title:
Address:
___________________________________
___________________________________
[NAME OF SECURITIES INTERMEDIARY]
By
________________________________
Title:
Address:
___________________________________
___________________________________
Exhibit D to the
Non-Shared Security Agreement
FORM OF COMMODITY ACCOUNT CONTROL AGREEMENT
CONTROL AGREEMENT dated as of ________, ____, among____________, a
___________ (the "Grantor"), Bank One, NA (main office Chicago), as Collateral
Agent (the "Secured Party"), and _________, a _________ ("____________"), as
commodity intermediary (the "Commodity Intermediary").
PRELIMINARY STATEMENTS:
(1) The Grantor has granted the Secured Party a security interest
(the "Security Interest") in account no. _______________ maintained by the
Commodity Intermediary for the Grantor (the "Account").
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code
in effect in the State of New York ("N.Y. Uniform Commercial Code") are
used in this Agreement as such terms are defined in such Article 8 or 9.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. The Account. The Grantor and the Commodity Intermediary
represent and warrant to, and agree with, the Grantor and the Secured Party
that:
(a) The Commodity Intermediary maintains the Account for the
Grantor, and all commodity contracts held by the Commodity Intermediary for
the account of the Grantor is, and will continue to be, carried in the
Account.
(b) The Account is a commodity account. The Commodity Intermediary
is the commodity intermediary with respect to the commodity contracts
carried from time to time in the Account. The Grantor is the commodity
customer with respect to the commodity contracts carried from time to time
in the Account.
(c) The State of New York is, and will continue to be, the
Commodity Intermediary's jurisdiction of organization for purposes of
Section 9-305(b) of the UCC so long as the Security Interest shall remain
in effect.
(d) Exhibit A attached hereto is a statement of the commodity
contracts carried in the Account on the date hereof.
(e) The Grantor and Commodity Intermediary do not know of any
claim to or interest in the Account or any commodity contract carried in
the Account, except for claims and interests of the parties referred to in
this Agreement.
2
SECTION 2. Control by Secured Party. The Commodity Intermediary
will comply with all notifications it receives directing it to apply any value
distributed on account of any commodity contract or contracts carried in the
Account (each an "Entitlement Order") or other directions concerning the Account
originated by the Secured Party without further consent by the Grantor or any
other person.
SECTION 3. Grantor's Rights in Account.
(a) Except as otherwise provided in this Section 3, the Commodity
Intermediary will comply with Entitlement Orders originated by the Grantor
without further consent by the Secured Party.
(b) Until the Commodity Intermediary receives a notice from the
Secured Party that the Secured Party will exercise exclusive control over the
Account (a "Notice of Exclusive Control"), the Commodity Intermediary may act on
any Entitlement Orders or other directions originated by the Grantor concerning
the Account.
(c) If the Commodity Intermediary receives from the Secured Party
a Notice of Exclusive Control, the Commodity Intermediary will cease:
(i) complying with Entitlement Orders or other directions
concerning the Account originated by the Grantor and
(ii) distributing to the Grantor any value distributed on account
of any commodity contract carried in the Account.
SECTION 4. Priority of Secured Party's Security Interest. (a) The
Commodity Intermediary subordinates in favor of the Secured Party any security
interest, lien, or right of setoff it may have, now or in the future, against
the Account or commodity contracts carried in the Account, except that the
Commodity Intermediary will retain its prior lien on commodity contracts in the
Account to secure payment for commodity contracts purchased for the Account and
normal commissions and fees for the Account.
(b) The Commodity Intermediary will not agree with any third party
that the Commodity Intermediary will comply with Entitlement Orders originated
by the third party.
SECTION 5. Statements, Confirmations, and Notices of Adverse
Claims. (a) The Commodity Intermediary will send copies of all statements and
confirmations for the Account simultaneously to the Grantor and the Secured
Party.
(b) When the Commodity Intermediary knows of any claim or interest
in the Account or any commodity contracts carried in the Account other than the
claims and interests of the parties referred to in this Agreement, the Commodity
Intermediary will promptly notify the Secured Party and the Grantor of such
claim or interest.
SECTION 6. The Commodity Intermediary's Responsibility. (a) The
Commodity Intermediary will not be liable to the Secured Party for complying
with Entitlement Orders or other directions concerning the Account from the
Grantor that are received by the
3
Commodity Intermediary before the Commodity Intermediary receives and has a
reasonable opportunity to act on a Notice of Exclusive Control.
(b) The Commodity Intermediary will not be liable to the Grantor
for complying with a Notice of Exclusive Control or with an Entitlement Order or
other direction concerning the Account originated by the Secured Party, even if
the Grantor notifies the Commodity Intermediary that the Secured Party is not
legally entitled to issue the Notice of Exclusive Control or Entitlement Order
or such other direction unless the Commodity Intermediary takes the action after
it is served with an injunction, restraining order, or other legal process
enjoining it from doing so, issued by a court of competent jurisdiction, and had
a reasonable opportunity to act on the injunction, restraining order or other
legal process.
(c) This Agreement does not create any obligation of the Commodity
Intermediary except for those expressly set forth in this Agreement. In
particular, the Commodity Intermediary need not investigate whether the Secured
Party is entitled under the Secured Party's agreements with the Grantor to give
an Entitlement Order or other direction concerning the Account or a Notice of
Exclusive Control. The Commodity Intermediary may rely on notices and
communications it believes given by the appropriate party.
SECTION 7. Indemnity. The Grantor will indemnify the Commodity
Intermediary, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the extent
the claims, liabilities or expenses are caused by the Commodity Intermediary's
gross negligence or willful misconduct as found by a court of competent
jurisdiction in a final non-appealable judgment.
SECTION 8. Termination; Survival. (a) The Secured Party may
terminate this Agreement by notice to the Commodity Intermediary and the
Grantor. If the Secured Party notifies the Commodity Intermediary that the
Security Interest has terminated, this Agreement will immediately terminate.
(b) The Commodity Intermediary may terminate this Agreement on 60
days' prior notice to the Secured Party and the Grantor, provided that before
such termination the Commodity Intermediary and the Grantor shall make
arrangements to transfer the commodity contracts carried in the Account to
another commodity intermediary that shall have executed, together with the
Grantor, a control agreement in favor of the Secured Party in respect of such
commodity contracts in substantially the form of this Agreement or otherwise in
form and substance satisfactory to the Secured Party.
(c) Sections 6 and 7 will survive termination of this Agreement.
SECTION 9. Governing Law. This Agreement and the Account will be
governed by the law of the State of New York. The Commodity Intermediary and the
Grantor may not change the law governing the Account without the Secured Party's
express prior written agreement.
4
SECTION 10. Entire Agreement. This Agreement is the entire
agreement, and supersedes any prior agreements, and contemporaneous oral
agreements, of the parties concerning its subject matter.
SECTION 11. Amendments. No amendment of, or waiver of a right
under, this Agreement will be binding unless it is in writing and signed by the
party to be charged.
SECTION 12. Commodity Contracts. The Commodity Intermediary agrees
with the Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property carried from time to time in the Account will be
treated as commodity contracts under Article 8 of the N.Y. Uniform Commercial
Code.
SECTION 13. Notices. A notice or other communication to a party
under this Agreement will be in writing (except that Entitlement Orders may be
given orally), will be sent to the party's address set forth under its name
below or to such other address as the party may notify the other parties and
will be effective on receipt.
SECTION 14. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Grantor, the Secured Party and the
Commodity Intermediary, and thereafter shall be binding upon and inure to the
benefit of the Grantor, the Secured Party and the Commodity Intermediary and
their respective successors and assigns.
SECTION 15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
[NAME OF GRANTOR]
By
------------------------------
Title:
Address:
----------------------------------
----------------------------------
5
BANK ONE, NA (MAIN OFFICE
CHICAGO), as Collateral Agent
By:
--------------------------------
Name:
Title:
Address:
------------------------------------
------------------------------------
[NAME OF COMMODITY
INTERMEDIARY]
By
--------------------------------
Title:
Address:
------------------------------------
------------------------------------
Exhibit E to the
Non-Shared Security Agreement
FORM OF INTELLECTUAL PROPERTY NON-SHARED SECURITY AGREEMENT
This INTELLECTUAL PROPERTY NON-SHARED SECURITY AGREEMENT (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "IP Non-Shared Security Agreement") dated ________, ____, is made by
the Persons listed on the signature pages hereof (collectively, the "Grantors")
in favor of Bank One, NA (main office Chicago), as Collateral Agent (the
"Collateral Agent") for the Non-Shared Secured Parties (as defined in the Credit
Agreement).
WHEREAS, Dynegy Holdings Inc., a Delaware corporation, has entered
into a Credit Agreement dated as of April 1, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with Citibank, N.A. and Bank of America, N.A., as Administrative
Agents, the Collateral Agent, and the Lenders party thereto. Terms defined in
the Credit Agreement and not otherwise defined herein are used herein as defined
in the Credit Agreement.
WHEREAS, as a condition precedent to the making of Borrowings and
the issuance of Letters of Credit by the Lenders under the Credit Agreement,
each Grantor has executed and delivered that certain Non-Shared Security
Agreement dated April 1, 2003 made by the Grantors to the Collateral Agent (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Non-Shared Security Agreement").
WHEREAS, under the terms of the Non-Shared Security Agreement, the
Grantors have granted to the Collateral Agent, for the ratable benefit of the
Representatives and the Non-Shared Secured Parties, a security interest in,
among other property, certain intellectual property of the Grantors, and have
agreed as a condition thereof to execute this IP Non-Shared Security Agreement
for recording with the U.S. Patent and Trademark Office, the United States
Copyright Office and other governmental authorities.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each Grantor agrees as
follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent for the ratable benefit of the Non-Shared Secured Parties a
security interest in all of such Grantor's right, title and interest in and to
the following (the "Collateral"):
(i) the patents and patent applications set forth in Schedule A
hereto (the "Patents");
(ii) the trademark and service mark registrations and applications
set forth in Schedule B hereto (provided that no security interest shall be
granted in United States intent-to-use trademark applications to the extent
that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law),
together with the goodwill symbolized thereby (the "Trademarks");
2
(iii) all copyrights, whether registered or unregistered, now owned or
hereafter acquired by such Grantor, including, without limitation, the
copyright registrations and applications and exclusive copyright licenses
set forth in Schedule C hereto (the "Copyrights");
(iv) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing, all rights
in the foregoing provided by international treaties or conventions, all
rights corresponding thereto throughout the world and all other rights of
any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto;
(v) any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the right, but
not the obligation, to sue for and collect, or otherwise recover, such
damages; and
(vi) any and all proceeds of, collateral for, income, royalties and
other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral of or
arising from any of the foregoing.
SECTION 2. Security for Obligations. The grant of a security interest
in, the Collateral by each Grantor under this IP Non-Shared Security Agreement
secures the payment of all Non-Shared Secured Obligations, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise.
SECTION 3. Recordation. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner for Patents and the Commissioner for
Trademarks and any other applicable government officer record this IP Non-Shared
Security Agreement.
SECTION 4. Execution in Counterparts. This IP Non-Shared Security
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 5. Grants, Rights and Remedies. This IP Non-Shared Security
Agreement has been entered into in conjunction with the provisions of the
Non-Shared Security Agreement. Each Grantor does hereby acknowledge and confirm
that the grant of the security interest hereunder to, and the rights and
remedies of, the Collateral Agent with respect to the Collateral are more fully
set forth in the Non-Shared Security Agreement, the terms and provisions of
which are incorporated herein by reference as if fully set forth herein.
SECTION 6. Governing Law. This IP Non-Shared Security Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York.
3
IN WITNESS WHEREOF, each Grantor has caused this IP Non-Shared
Security Agreement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
DYNEGY INC.
By ________________________________
Name:
Title:
Address for Notices:
___________________________________
___________________________________
___________________________________
[NAME OF GRANTOR]
By ________________________________
Name:
Title:
Address for Notices:
___________________________________
___________________________________
___________________________________
[NAME OF GRANTOR]
By ________________________________
Name:
Title:
Address for Notices:
___________________________________
___________________________________
___________________________________
[ETC.]
Exhibit F to the
Non-Shared Security Agreement
FORM OF INTELLECTUAL PROPERTY NON-SHARED SECURITY AGREEMENT SUPPLEMENT
This INTELLECTUAL PROPERTY NON-SHARED SECURITY AGREEMENT SUPPLEMENT
(this "IP Non-Shared Security Agreement Supplement") dated ________, ____, is
made by the Person listed on the signature page hereof (the "Grantor") in favor
of Bank One, NA (main office Chicago), as Collateral Agent (the "Collateral
Agent") for the Non-Shared Secured Parties (as defined in the Credit Agreement).
WHEREAS, DYNEGY HOLDINGS INC., a Delaware corporation, has entered
into a Credit Agreement dated as of April 1, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with Citibank, N.A. and Bank of America, N.A., as Administrative
Agents, the Collateral Agent, and the Lenders party thereto. Terms defined in
the Credit Agreement and not otherwise defined herein are used herein as defined
in the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons have executed and delivered that certain Non-Shared Security
Agreement dated April 1, 2003 made by the Grantor and such other Persons to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Non-Shared Security Agreement") and that
certain Intellectual Property Non-Shared Security Agreement dated ______ __, (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "IP Non-Shared Security Agreement").
WHEREAS, under the terms of the Non-Shared Security Agreement, the
Grantor has granted to the Collateral Agent, for the ratable benefit of the
Non-Shared Secured Parties, a security interest in the Supplementary Collateral
(as defined in Section 1 below) of the Grantor and has agreed as a condition
thereof to execute this IP Non-Shared Security Agreement Supplement for
recording with the U.S. Patent and Trademark Office, the United States Copyright
Office and other governmental authorities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Non-Shared Secured Parties, a
security interest in all of such Grantor's right, title and interest in and to
the following (the "Supplementary Collateral"):
(i) the patents and patent applications set forth in Schedule A
hereto (the "Patents");
(ii) the trademark and service mark registrations and applications set
forth in Schedule B hereto (provided that no security interest shall be
granted in United States intent-to-use trademark applications to the extent
that, and solely during the period in
2
which, the grant of a security interest therein would impair the validity
or enforceability of such intent-to-use trademark applications under
applicable federal law), together with the goodwill symbolized thereby (the
"Trademarks");
(iii) the copyright registrations and applications and exclusive
copyright licenses set forth in Schedule C hereto (the "Copyrights");
(iv) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing, all rights
in the foregoing provided by international treaties or conventions, all
rights corresponding thereto throughout the world and all other rights of
any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto;
(v) all any and all claims for damages and injunctive relief for
past, present and future infringement, dilution, misappropriation,
violation, misuse or breach with respect to any of the foregoing, with the
right, but not the obligation, to sue for and collect, or otherwise
recover, such damages; and
(vi) any and all proceeds of, collateral for, income, royalties and
other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the foregoing or arising
from any of the foregoing.
SECTION 2. Security for Obligations. The grant of a security interest
in the Supplementary Collateral by the Grantor under this IP Non-Shared Security
Agreement Supplement secures the payment of all Non-Shared Secured Obligations,
whether direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 3. Recordation. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner for Patents and the Commissioner for
Trademarks and any other applicable government officer to record this IP
Non-Shared Security Agreement Supplement.
SECTION 4. Grants, Rights and Remedies. This IP Non-Shared Security
Agreement Supplement has been entered into in conjunction with the provisions of
the Non-Shared Security Agreement. The Grantor does hereby acknowledge and
confirm that the grant of the security interest hereunder to, and the rights and
remedies of, the Collateral Agent with respect to the Supplementary Collateral
are more fully set forth in the Non-Shared Security Agreement, the terms and
provisions of which are incorporated herein by reference as if fully set forth
herein.
SECTION 5. Governing Law. This IP Non-Shared Security Agreement
Supplement shall be governed by, and construed in accordance with, the laws of
the State of New York.
3
IN WITNESS WHEREOF, the Grantor has caused this IP Non-Shared Security
Agreement Supplement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
[NAME OF GRANTOR]
By ___________________________
Name:
Title:
Address for Notices:
______________________________
______________________________
______________________________
Exhibit G to the
Non-Shared Security Agreement
FORM OF CONSENT TO ASSIGNMENT OF LETTER OF CREDIT RIGHTS
To: [________], as Collateral Agent
[____________________]
[____________________]
[____________________]
[INSERT NAME OF BENEFICIARY], as Beneficiary
[____________________]
[____________________]
[____________________]
We refer to the [INSERT ALL IDENTIFYING INFORMATION WITH RESPECT TO
RELEVANT LETTER OF CREDIT] (as it may be amended, supplemented or otherwise
modified from time to time, the "Letter of Credit")[, a true copy of which is
attached hereto]. The Letter of Credit has been established in favor of [INSERT
NAME OF BENEFICIARY], as beneficiary (the "Beneficiary"), and we are the
[issuing bank (the "Issuing Bank")][nominated person (the "Nominated Person")]
required to give value thereunder pursuant to one [or more] drawing[s] upon the
satisfaction of the conditions stated in the Letter of Credit. The liability of
the [Issuing Bank][Nominated Person] for action or omissions under the Letter of
Credit is governed by the laws of [INSERT RELEVANT JURISDICTION], as chosen by
agreement in the Letter of Credit. [To the best knowledge of the undersigned,]
the signatories to this consent letter are the only persons obligated to give
value under the Letter of Credit.
We hereby confirm that there is no term in the Letter of Credit or
other restriction which prohibits, restricts or requires any person's consent to
the Beneficiary's assignment of or creation of a security interest in the rights
to payment or performance under the Letter of Credit. We hereby consent to and
acknowledge the assignment by the Beneficiary of all proceeds of and rights to
payment and performance under the Letter of Credit in favor of Bank One, NA
(main office Chicago), as Collateral Agent (the "Collateral Agent") pursuant to
the Non-Shared Security Agreement dated as of April 1, 2003 executed by the
Beneficiary and other parties thereto, as Grantor, in favor of the Collateral
Agent, as such agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time (the "Non-Shared Security Agreement").
2
We hereby agree to pay, irrespective of, and without deduction for,
any counterclaim, defense, recoupment or set-off, all proceeds of the Letter of
Credit that would otherwise be paid to the Beneficiary directly to the
Collateral Agent to the following account:
[____________________]
[____________________]
[____________________]
[____________________]
We hereby confirm and agree that the Letter of Credit is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects and that the Collateral Agent shall have no liability or obligation
under or with respect to the Letter of Credit or any document related thereto as
a result of this consent letter, the Non-Shared Security Agreement or otherwise.
This consent letter may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same consent letter. Delivery of an executed
counterpart of a signature page to this consent letter by telecopier shall be
effective as delivery of an original executed counterpart of this consent
letter.
This consent letter shall be governed by, and construed in accordance
with, the laws of the State of New York.
[NAME OF ISSUING BANK]
By:___________________________
Name:
Title:
[NAME OF NOMINATED PERSON]
By:___________________________
Name:
Title:
3
The above is acknowledged and agreed to:
[NAME OF GRANTOR/BENEFICIARY]
By _____________________________________
Name:___________________________________
Title:__________________________________
Address for Notices:
________________________________________
________________________________________
________________________________________