EXHIBIT 10.48
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of the Conformed Agreement Date, made by
CAMDEN COGEN L.P., a Delaware limited partnership, having its principal office
at 1600 Smith Street, Suite 5000, 50th Floor, Houston, Texas 77002 (the
"Borrower"), in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, as agent for the Lenders (as defined below) and the issuer of the
Letters of Credit (as defined below), having its principal office at 1600 Summer
Street, Stamford, CONNECTICUT 06927 ("GE Capital" or the "Agent").
W I T N E S S E T H :
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WHEREAS, pursuant to the Construction and Term Loan Agreement, dated
as of the Conformed Agreement Date (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement"), among the Borrower, the
lenders parties thereto (the "Lenders") and the Agent, the Lenders have agreed,
subject to the terms and conditions set forth therein, to make construction
loans and term loans (collectively, the "Loans") to, and GE Capital has agreed
to issue letters of credit (together with any application therefor, the "Letters
of Credit") for the account of, the Borrower in an aggregate principal and
drawable amount not to exceed $149,000,000, such Loans to be evidenced by the
promissory notes of the Borrower issued thereunder (as amended, supplemented or
modified from time to time, together with any substitute therefor or replacement
thereof, the "Notes"); and
WHEREAS, it is a condition precedent to the obligations of the Lenders
to make the Loans and of GE Capital to issue the Letters of Credit under the
Loan Agreement that the Borrower shall have executed and delivered this Security
Agreement to the Agent;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make the Loans and GE Capital to issue the Letters of Credit under
the Loan Agreement, and for other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined in
this Agreement shall have the meanings assigned to them in the Loan Agreement.
Unless the context indicates otherwise, definitions in the Code (as hereinafter
defined) apply to words and phrases in this Security Agreement; if definitions
in the Code conflict, definitions in Article 9 of the Code apply. The following
terms shall have the following meanings:
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"Accounts" shall have the meaning assigned to it in Section 2 of this
Security Agreement.
"Code" shall mean the Uniform Commercial Code as the same may from
time to time be in effect in the State of New York, except that "Code"
shall mean the Uniform Commercial Code as the same may from time to time be
in effect in the State of New Jersey with respect to the provisions hereof
relating to the creation and enforcement of security interests on tangible
personal property of the Borrower located in the State of New Jersey.
"Collateral" shall have the meaning assigned to it in Section 2 of
this Security Agreement.
"Contracts" shall mean the Contracts listed on Schedule 1 hereto and
all Additional Contracts, as any of the same may be amended, supplemented
or otherwise modified from time to time.
"Equipment" shall have the meaning assigned to it in Section 2 of this
Security Agreement.
"Loan Documents shall mean the Loan Agreement, the Notes, the Letters
of Credit, this Security Agreement, any other Collateral Security Documents
and any other agreements and documents contemplated hereby or thereby.
"Obligations" shall mean all the unpaid principal amount of, and
accrued interest on, the Notes and all other obligations and liabilities of
the Borrower to the Agent, GE Capital and the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of or in connection with the
Loan Agreement, the Notes, the Letters of Credit, this Security Agreement
or the other Loan Documents whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to the Agent and
the Lenders) or otherwise.
"Proceeds" shall have the meaning assigned to it in Article 9 of the
Code and, in any event, shall include, but not be limited to, (i) any and
all proceeds of any insurance, judgment, indemnity, warranty or guaranty
payable to the Borrower from time to time with respect to any of the
Collateral; (ii) any and all payments (in any form whatsoever) made or due
and payable to the Borrower from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any Governmental Authority (or any person
acting under color of Governmental Authority); and (iii) any and all other
amounts from time to tine paid
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or payable under or in connection with any of the Collateral.
"Security Agreement" shall mean this Security Agreement, as amended,
supplemented or otherwise modified from time to time.
2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, the Borrower hereby grants,
bargains, sells, transfers and assigns to the Agent for the equal and ratable
benefit of GE Capital and the Lenders, and grants to the Agent for the equal
and ratable benefit of GE Capital and the Lenders, a first security interest in,
all of the Borrower's right, title and interest, whether now owned or at any
time hereafter acquired, in all of the following (all of which being hereinafter
collectively called the "Collateral"):
(a) the Project to be located on the Site more particularly described
in Schedule 2 hereto;
(b) all of the Borrower's inventory, equipment, construction
materials, fixtures, chattels, electronic business machines, machinery,
apparatus, fittings and articles of personal property of every kind and
nature whatsoever, and all appurtenances, accessions and additions thereto
and substitutions or replacements and products thereof, currently owned or
hereafter acquired by the Borrower, including but not limited to, all such
goods now or hereafter attached to, or contained in or used or usable in
any way in connection (though not attached thereto) with any present or
future operation of the Site or the Project or placed on any part thereof,
and all warehouse receipts, bills of lading and other documents of title
now or hereafter covering such goods (hereinafter collectively referred to
as the "Equipment") including, but without limiting the generality of the
foregoing, all Equipment kept at the locations listed on Schedule 3 hereto
and, to the extent not included therein, all screens, awnings, shades,
blinds, curtains, draperies, carpets, rugs, storm doors and windows,
furniture and furnishings, heating, electrical, mechanical, lighting,
switchboards, lifting, plumbing, ventilating, air conditioning and air-
cooling apparatus, boilers, furnaces, oil burners and transformers,
refrigerating, incinerating, escalator, elevator, power, loading and
unloading equipment and systems, stoves, ranges, laundry, cleaning
systems, communication systems, dynamics, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, dynamos,
generators, ducts, controls, belting, heaters, motors, engines, machinery,
pipes, pumps, tanks, fans, conduits, appliances, equipment, fittings and
fixtures, and motor vehicles of every kind and description;
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(c) any and all leases, subleases, underlettings, concession
agreements and licenses of the Equipment, the Site or the Project, or any
part thereof, now existing or hereafter entered into by the Borrower;
(d) all rights of the Borrower under or arising out of the Contracts;
(e) (i) the accounts established and maintained by the Security Agent
pursuant to the Security Deposit Agreement (the "Accounts") and all cash
instruments and securities at any time and from time to time on deposit
therein; (ii) all other monies, deposits, funds and accounts and all
collections, contract rights, instruments, documents, general intangibles
(including trademarks, trade names, symbols used in connection therewith
and trademark licenses), partnership interests, the Plans and
Specifications, patent rights, patents, patent licenses, copyrights,
claims, demands and notes or chattel paper arising from or by virtue of any
transactions related to the foregoing; (iii) all permits, recordings,
registrations, filings, consents, orders, authorizations, waivers,
variances, permissions, declarations, licenses, franchises, approvals,
exemptions, certificates, and other rights and privileges obtained in
connection with the foregoing (including, without limitation, all permits
and licenses listed on Schedules 2 and 5 to the Loan Agreement); and (iv)
all books, records, documents (including, but not limited to, computer
programs, tapes, and related electronic data and processing software) and
instruments of the Borrower relating in whole or in part to any of the
Collateral;
(f) all rents, royalties, issues, profits, revenues, earnings, income
and other benefits, instruments, documents, securities, cash or property
derived from the Collateral or arising from the ownership, operation or
management of the Site, the Project or the Equipment, or from any lease or
agreement pertaining thereto;
(g) all other personal property of the Borrower comprising the Project
being and to be acquired, developed, constructed, installed, completed,
operated and maintained on the Site (including all property acquired by the
Borrower pursuant to the Equipment Supply Contract and all Fuel) and all
other personal property of the Borrower used in or relating to such
acquisition, development, construction, installation, completion, operation
and maintenance;
(h) all extensions, improvements, betterments, renewals, accessions,
substitutes and replacements of, and
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all additions and appurtenances too any and all of the foregoing, hereafter
acquired by or released to the Borrower (other than released by the Agent,
including, without limitation, such releases with respect to the
Modifications, as such term is defined in Section 15 of the Capital
Contribution Agreement) or constructed, assembled or placed by the Borrower
on the Site or the Project, and all conversions of the security constituted
thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be; and
(i) all Proceeds, both cash and noncash, arising from or by virtue of
the sale, lease or other disposition of any and all of the foregoing or any
interest therein and all products of any and all of the foregoing.
3. Borrower's Representations and Warranties. The Borrower hereby
represents and warrants that:.
(a) Title; No Other Liens. Except for the Lien granted to the Agent
pursuant to this Security Agreement and other Permitted Liens, the
Borrower is (or in the case of Collateral acquired after the date hereof,
will be) the sole legal and beneficial owner of each item of the
Collateral, having good and marketable title thereto, free and clear of any
and all Liens.
(b) Other Financing Statements. No security agreement, financing
statement, statement of assignment, chattel mortgage, or equivalent
security or lien instrument or continuation statement covering all or any
part of the Collateral is on file or of record in any public office, except
for those that may have been filed with respect to this Security Agreement
or other Permitted Liens.
(c) Accounts. All books, records and documents relating to the
Collateral are and will be genuine and in all respects what they purport to
be; the amount of each account represented from time to time as owing is
the correct amount actually owing thereunder. No amount payable to the
Borrower under or in connection with any account is evidenced by any
instrument or chattel paper which has not been delivered to the Agent.
Portions of the Collateral may constitute accounts, general intangibles or
contract rights and all records concerning such Collateral are and will be
located at the address of the Borrower specified above.
(d) Place of Business. The Borrower's chief executive office and/or
chief place of business is located at 1600 Smith Street, Suite 5000, 50th
Floor, Houston, Texas 77002.
(e) Location of Equipment. As of the date of this Security Agreement,
no item of Equipment is kept at any location other than the locations
listed on Schedule 3 hereto.
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(f) Contracts. No consent of any party (other than those that have
been duly obtained, made or performed, and are in full force and effect) to
any Project Contract, any Additional Contract set forth in clause (a) (i)
of the definition thereof or any Additional Contract set forth in clause
(a) (ii) of the definition thereof which has a term (including any renewal
terms) of six months or more in existence on the most recent Borrowing Date
is required, or purports to be required, in connection with the execution,
delivery and performance of this Security Agreement. Except as previously
disclosed by the Borrower to the Agent and the Lenders in a writing which
refers specifically to this subsection, to the best knowledge of the
Borrower each of the Project Contracts is in full force and effect and
constitutes a legal, valid and binding obligation of the parties thereto,
and is enforceable against each such party in accordance with its terms
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general principles of
equity. All Governmental Approvals and other consents or approvals required
in connection with the execution, delivery, performance of each of the
Project Contracts by the Borrower, and to the best knowledge of the
Borrower the other parties thereto have been duly obtained or made, are in
full force and effect and are not subject to appeal or judicial,
governmental or other review, except the Governmental Approvals and other
consents and approvals set forth on Schedule 5 of the Loan Agreement, none
of which are obtainable prior to the initial Borrowing Date, but all of.
which are obtainable in the ordinary course of the Borrower's business as
and when required. The Borrower has duly performed and complied in all
material respects with all agreements and conditions required to be
performed or complied with by it as of the date hereof under each Project
Contract. The Borrower has delivered to the Agent a complete and correct
copy of each Contract, including all amendments, supplements and other
modifications thereto. No amount payable to the Borrower under or in
connection with any such Contract is evidenced by any instrument or chattel
paper which has not been delivered to the Agent.
(g) Perfected First Lien on Collateral. This Security Agreement is
effective to create, in favor of the Agent and for the ratable benefit of
GE Capital and the Lenders, legal, valid and enforceable liens on and
security interests in all right, title, estate and interest of the Borrower
in and to all items of Collateral (other than those items of Collateral
which, individually or in the aggregate, are not material) and all
necessary and appropriate filings having been duly effected in all
appropriate public offices so that the liens and security interests created
by this Security Agreement constitute perfected first (other than as to
Permitted Liens) liens on and prior (other than as to Permitted Liens)
perfected security interests in all right,
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title, estate and interest of the Borrower in and to all items of
Collateral (other than any item of Collateral as to which a security
interest cannot be perfected by filing pursuant to the Code) prior and
superior to all other Liens, existing or future, except Permitted Liens.
The filings shown on Schedule 4 are all the filings and other actions
necessary and appropriate in order to establish, protect and perfect
Secured Party's lien on and security interests in all right, title, estate
and interest of the Borrower in and to all items of Collateral (other than
those items of Collateral which, individually or in the aggregate, are not
material).
4. Borrower's Covenants. The Borrower covenants and agrees with the
Agent, GE Capital and the Lenders that from and after the date of this Security
Agreement until the Obligations are paid in full:
(a) Covenants in Mortgage. From and after the date of execution and
delivery of the Mortgage, the Borrower shall observe and perform each of
its covenants contained therein.
(b) Compliance with Laws, etc. The Borrower will comply with all
Requirements of Law applicable to the Collateral or any part thereof.
(c) Taxes and Claims. The Borrower shall pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien upon the property of the Borrower. The Borrower shall have
the right, however, to contest in good faith the validity or amount of any
such tax, assessment, charge, levy or claim by proper proceedings timely
instituted, and may permit the taxes, assessments, charges, levies or
claims so contested to remain unpaid during the period of such contest if:
(a) the Borrower diligently prosecutes such contest, (b) such contested
item (other than any such item which the Borrower, with the consent of the
Required Lenders (not to be unreasonably withheld), deems to be unmerited
and not to require the setting aside of any reserves) is included as an
expense in the Construction Budget and, in the reasonable opinion of the
Required Lenders, after giving affect to such expense, sufficient funds are
projected to be available in the Construction Budget to complete the
Facility in accordance with subsection 7.1 of the Loan Agreement, (c)
during the period of such contest the enforcement of any contested item is
effectively stayed; provided, however, that this clause (c) shall apply to
contested income taxes of a Partner only if the failure to pay such tax may
then become a Lien on the Facility or any of the other Collateral or may
interfere with the timely completion or operation of the Facility and (d)
in the reasonable opinion of the Required Lenders, such
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contest does not involve any substantial danger of the sale, forfeiture or
loss of any part of the Project, title thereto or any interest therein and
does not interfere with the operation of the Facility. The Borrower will
promptly pay or cause to be paid any valid, final judgment enforcing any
such tax, assessment, charge, levy or claim and cause the same to be
satisfied of record.
(d) Mechanics' and Materialmen's Liens. The Borrower shall protect and
defend its interest in, and the Agent's, GE Capital's and the Lenders'
Liens on, the Collateral against any Lien for the performance of work or
the supply of materials filed against the Collateral; provided, that the
Borrower shall have the right to contest in good faith any such Lien by
proper proceedings timely instituted, and may permit such Lien to exist
during the period of such contest if: (a) the Borrower diligently
prosecutes such contest, (b) such contested item (other than any such item
which the Borrower with the consent of the Required Lenders (not to be
unreasonably withheld), deems to be unmerited and not to require the
setting aside of any reserves) is included as an expense in the
Construction Budget and, in the reasonable opinion of the Required Lenders,
after giving effect to such expense, sufficient funds are projected to be
available in the Construction Budget to complete the Facility in accordance
with subsection 7.1 of the Loan Agreement, (c) during the period of such
contest the enforcement of any contested item and the Lien relating thereto
is effectively stayed, and (d) in the reasonable opinion of the Required
Lenders, such contest does not involve any substantial danger of the sale,
forfeiture or loss of any part of the Project, title thereto or any
interest therein and does not interfere with the timely completion or
operation of the Facility. The Borrower will promptly pay or cause to be
paid any valid, final judgment enforcing any such item, cause the Lien
relating thereto to be removed and otherwise cause such item to be
satisfied of record.
(e) Limitation on Liens on Collateral. The Borrower will not create,
or suffer to exist, any Lien on the Collateral, other than the Liens
created hereby and other Permitted Liens.
(f) Maintenance of Equipment. The Borrower will maintain the Facility,
including each item of Equipment in good working order and condition and
make all repairs, replacements and renewals with respect thereto and
additions and betterments thereto which are necessary for the Facility to
operate in compliance with the terms of the Basic Documents, and in
compliance with all Requirements of Law affecting the Project and all
requirements of the appropriate Board of Fire Underwriters or other similar
body acting in and for the locality in which the Project is located, except
to the extent that the failure to comply
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with the terms of the Basic Documents could not reasonably be expected to
have a material adverse effect on the business, properties, operations,
condition (financial or otherwise) or prospects of the Borrower or the
Project or on the ability of the Borrower to perform its obligations under
the Basic Documents to which it is a party.
(g) Maintenance of Insurance. The Borrower will maintain, with
financially sound and reputable companies, the insurance on the Collateral
required to be maintained by it pursuant to subsection 7.5 of the Loan
Agreement.
(h) Information and Inspection. The Borrower shall furnish to the
Agent any information with respect to the collateral, including schedules
further identifying and describing the Collateral, reasonably requested by
the Agent, will allow the Agent to inspect the Collateral at any reasonable
time and wherever located, and will allow the Agent to inspect and copy, or
will furnish the Agent with copies of, all records relating to the
Collateral. The Borrower shall furnish to the Agent such information as the
Agent may request to identify notes receivable, accounts receivable,
chattel paper, general intangibles and contract rights assigned hereunder,
at the times and in the form and substance reasonably requested by the
Agent, and shall permit the Agent to discuss its affairs, finances and
accounts with its officers at such reasonable times and as often as the
Agent may reasonably request.
(i) Additional Documents. At any time and from time to time, upon the
request of the Agent, and at the sole expense of the Borrower, the Borrower
will promptly execute and deliver any and all such further instruments and
documents and will take such further action as the Agent reasonably may
deem necessary or desirable to obtain, maintain and perfect the lien and
security interest granted to the Agent herein, including, without
limitation, the filing of any financing or continuation statements under
the Code in effect in any jurisdiction with respect to the lien and
security interest granted hereby and the Agent is authorized on behalf of
the Borrower as the Borrower's agent and attorney in fact for such purpose,
to complete and sign one or more financing statements or continuation
statements with respect to the lien and security interest granted hereby
and to file the same in any appropriate office or place. If any amount
payable under or in connection with any of the Collateral shall be or
become evidenced by any instrument or chattel paper, such instrument or
chattel paper shall be delivered to the Agent, duly endorsed in a manner
satisfactory to the Agent, to be held as Collateral pursuant to this
Security Agreement.
(j) Performance under Other Agreements. The Borrower shall duly
perform and observe in all material respects all of the covenants,
agreements and conditions on its part to
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be performed and observed under each Project Contract to which it is a
party. The Borrower shall diligently enforce all of its rights under each
Contract except to the extent that the failure to enforce such rights could
not reasonably be expected to (i) have a material adverse effect on the
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower, (ii) materially adversely affect the Borrower's
ability to perform its obligations under the Basic Documents to which it is
a party or (iii) delay Substantial Completion of the Facility beyond
December 31, 1993. The Borrower shall have the right to terminate any
Contract (other than the Project Contracts and the Capital Contribution
Agreement) except to the extent that the exercise of such right could
reasonably be expected to (i) have a material adverse effect on the
business, operations, properties, condition (financial or otherwise) or
prospects of the Borrower, (ii) materially adversely affect the Borrower's
ability to perform its obligations under the Basic Documents to which it is
a party or (iii) delay Substantial Completion of the Facility beyond
December 31, 1993.
(k) Amendment of Contracts. Etc, The Borrower will not, without the
prior written consent of the Required Lenders, agree to (a) the
cancellation, suspension or termination of any Project Contract or any
other contract referred to in subsection 8.19 of the Loan Agreement (except
upon the expiration of the stated term of such contract), (b) the
assignment of the rights or obligations of any party to any Basic Document
or any such other contract except (x) as contemplated by the Loan
Agreement, this Security Agreement or the Assignment relating to such other
contract or (y) as permitted without the consent of the Borrower by the
terms of such Project Contract or such other contract, or (c) any
amendment, supplement or modification of, or waiver with respect to any of
the provisions of, any Project Contract or any such other contract to which
the Borrower is a party or with respect to which the consent of the
Borrower is required.
(1) Books of Account. The Borrower will, at all times, maintain
accurate books and records with respect to the Collateral. Immediately upon
the execution of this Security Agreement, as requested by the Agent, the
Borrower will mark all books and records with an entry showing the
assignment of all notes, accounts, chattel paper and contracts assigned as
security hereunder to the Agent, and the Agent is hereby given the right
to audit the books and records of the Borrower relating to said Collateral
at any time, and from time to time, as the Agent deems proper.
(m) Notices. The Borrower will advise the Agent as soon as
practicable, in reasonable detail, at its address set forth in the Loan
Agreement, (i) of any Lien on, or claim asserted against, any of the
Collateral and (ii) of
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the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the value of any of the Collateral or on
the Liens created hereunder.
(n) Changes in Locations. Name. etc. The Borrower shall not (i) change
the location of its chief executive office or principal place of business
or the office where it keeps its records concerning the Project and all
contracts relating thereto from that specified in subsection (d) of Section
3, unless the Borrower shall have given the Agent at least 30 days' prior
written notice thereof and all action necessary or advisable in the Agent's
opinion to protect and perfect the liens and security interests with
respect to the right, title, estate and interest of the Borrower in and to
the Collateral created by this Security Agreement shall have been taken or
(ii) change its name except on 60 days' prior written notice to the Agent.
(o) Maintenance and Removal. The Borrower shall maintain the
Collateral as provided in the Loan Agreement and the Mortgage. The Borrower
shall not sell, lease, transfer or otherwise dispose of the Collateral or
attempt, offer or contract to do so, except as permitted by the Loan
Agreement and the Mortgage.
(p) Indemnification. The Borrower agrees to pay, and to save the
Agent, GE Capital and each Lender harmless from, any and all liabilities,
costs and expenses (including, without limitation, legal fees and expenses)
(A) with respect to, or resulting from, any delay in paying, any and all
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral, (B) with respect to, or
resulting from, any delay in complying with any law, statute, rule or
regulation or determination of any Governmental Authority applicable to any
of the Collateral or (C) in connection with any of the transactions
contemplated by this Security Agreement. In any suit, proceeding or action
brought by the Agent, GE Capital or any Lender under any account or any
Contract for any sun owing thereunder, or to enforce any provisions of any
account or any Contract, the Borrower will save, indemnify and keep the
Agent, GE Capital and each Lender harmless from and against all expense,
loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction or liability whatsoever of the account debtor or
obligor thereunder, arising out of a breach by the Borrower of any
obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such account debtor or
obligor or its successors from the Borrower.
(q) Equipment. After any item of Equipment that has a fair market
value in excess of $250,000 has been delivered to the Site, the Borrower
shall not permit any such item of
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Equipment to be located at any location other than the locations set forth
on Schedule 3.
5. Remedies of Secured Party Upon Event of Default. (a) If an Event of
Default shall occur and be continuing, the Agent may exercise, in addition to
all other rights and remedies granted to it in this Security Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Agent without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Agent or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in the Borrower, which right or equity is hereby
waived or released. The Borrower further agrees at the Agent's request, to
assemble the Collateral and make it available to the Agent at places which the
Agent shall reasonably select, whether at the Borrower's promises or elsewhere.
The Agent shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Agent hereunder, including, without limitation, reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Agent may elect, in accordance with the
Collateral Agency Agreement, and only after such application and after the
payment by the Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504 (1) (c) of the Code, need the Agent
account for the surplus, if any, to the Borrower. To the extent permitted by
applicable law, the Borrower waives all claims, damages and demands it may
acquire against the Agent arising out of the exercise by it of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Borrower shall
remain liable for any-deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Obligations and the
fees
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and disbursements of any attorneys employed by the Borrower to collect such
deficiency.
(b) The Agent shall have the right (i) to notify or to require the
Borrower to notify persons obligated on any instruments, accounts, or Contracts
which are part of the Collateral to make payment thereof directly to the Agent
or as the Agent shall direct, (ii) to collect and enforce any such accounts and
contracts, and (iii) if an event of default shall have occurred and be
continuing, to compromise, settle or otherwise agree to waive, amend or modify
the obligation of any account debtors or obligors under such accounts and
contracts. Subject to the Security Deposit Agreement, until such time as the
Agent elects to exercise such rights, the Borrower, as the agent of the Agent
shall collect and enforce all such contracts and accounts. The cost of such
collection and enforcement, including attorneys' fees and expenses, shall be
borne by the Borrower, whether the same is incurred by the Agent or the
Borrower.
The foregoing rights and powers of the Agent shall be in addition to, and
not a limitation upon, any rights and powers of the Agent given by law, custom,
elsewhere by this Security Agreement, the Loan Agreement or otherwise.
6. Agent's Appointment as Attorney-in-Fact (a) Powers. The Borrower
hereby irrevocably constitutes and appoints the Agent and any officer or agent
thereof,. with full power of substitution, as its true and lawful attorney-in-
fact with full irrevocable power and authority in the place and stead of the
Borrower and in the name of the Borrower or in its own name, from time to time
in the Agent's discretion, for the purpose of carrying out the terms of this
Security Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement, and, without limiting the
generality of the foregoing, the Borrower hereby gives the Agent the power and
right, on behalf of the Borrower, without notice to or assent by the Borrower,
to do the following:
(i) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Security Agreement and to pay all or any
part of the premiums therefor and the costs thereof; and
(ii) (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Agent or an the Agent shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
14
other documents in connection with any of the Collateral; (D) to commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any thereof
and to enforce any other right in respect of any Collateral; (E) to defend
any suit, action or proceeding brought against the Borrower with respect to
any Collateral; (F) upon the occurrence and during the continuance of any
Event of Default, to settle, compromise or adjust any suit, action or
proceeding described in clause (E) above and, in connection therewith, to
give such discharges or releases as the Agent may deem appropriate; (G)
upon the occurrence and during the continuance of any Event of Default, to
assign any patent or trademark (along with the goodwill of the business to
which any such trademark pertains), throughout the world for such term or
terms on such conditions, and in such manner, as the Agent shall in its
sole discretion determine; and (H) upon the occurrence and during the
continuance of any Event of Default, generally, to sell, transfer, pledge
and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Agent were the absolute
owner thereof for all purposes, and to do, at the Agent's option and the
Borrower's expense, at any time, or from time to time, all acts and things
which the Agent reasonably deems necessary to protect, preserve or realize
upon the Collateral and the Agent's Lions thereon and to effect the intent
of this Security Agreement, all as fully and effectively as the Borrower
might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) Other Powers. The Borrower also authorizes the Agent, at any time
and from time to time, to execute, in connection with the sale provided for in
Section 5 hereof, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on Part of Agent or Lenders. The powers conferred on the
Agent hereunder are solely to protect the Agent's interests in the Collateral
and shall not impose any duty upon the Agent, GE Capital or the Lenders to
exercise any such powers. The Agent, GE Capital and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to the Borrower for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct,
and specifically disclaim any liability for negligence.
7. Performance by Agent of the Borrower's Obligations. If the
Borrower fails to perform or comply with any of its
15
agreements contained herein and the Agent, as provided for by the terms of this
Security Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum equal to the Default Rate, shall be payable
by the Borrower to the Agent on demand and shall constitute obligations secured
hereby.
8. Proceeds. If an Event of Default shall occur and be continuing (a)
all Proceeds received by the Borrower consisting of cash, checks and other near-
cash items shall be paid to the Collateral Agent for application in accordance
with the terms of the Collateral Agency Agreement, and otherwise shall be held
by the Borrower in trust for the Agent, segregated from other funds of the
Borrower, and shall, forthwith upon receipt by the Borrower, be turned over to
the Agent in the exact form received by the Borrower (duly indorsed by the
Borrower to the Agent, if required), and (b) any and all such Proceeds received
by the Agent (whether from the Borrower or otherwise) may, in the sole
discretion of the Agent, be held by the Agent as collateral security for, and/or
then or at anytime thereafter may be applied by the Agent against, the
obligations (whether matured or unmatured), such application to be in such order
an the Agent shall elect in accordance with the Collateral Agency Agreement. Any
balance of such Proceeds remaining after the obligations shall have been paid in
full and the Commitments shall have been terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
9. General. (a) No Waiver. No delay on the part of any of the Agent,
GE Capital or any Lender in exercising any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other power or
right. No waiver by the Agent, GE Capital or any Lender of any right hereunder
or of any default by the Borrower shall be binding upon the Agent, GE Capital
or any Lender unless in writing, and no failure by the Agent or any Lender to
exercise any right hereunder or waiver of any default of the Borrower shall
operate as a waiver of any other or further exercise of such right or of any
further default. A waiver by the Agent, GE Capital or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Agent, GE Capital or any Lender would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
(b) Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this security Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Borrower
and the Agent, Provided that any provision of this Security Agreement may be
waived by the Agent in a written letter or agreement executed by
16
the Agent or by telex or facsimile transmission from the Agent. This Security
Agreement shall be binding upon the successors and assigns of the Borrower and
shall inure to the benefit of the Agent, GE Capital and the Lenders and their
respective successors and assigns.
(c) Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing, by telecopier, or
if available by telex, and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or when deposited
in the mail, first class postage prepaid, or, in the case of transmission by
telecopier, when confirmation of receipt is obtained, or in the case of telex
notice, answerback received, addressed as set forth in subsection 11.2 of the
Loan Agreement.
(d) Financing Statement. The Agent is authorized on behalf of the
Borrower or the Borrower's agent and attorney-in-fact for such purpose, to
complete and sign one or more financing statements, including continuation
statements, or chattel mortgages with respect to any Collateral covered by this
Security Agreement and to file the same in any appropriate office or place. A
carbon, photographic or other reproduction of this Security Agreement or of any
financing statement or chattel mortgage prepared in conjunction herewith is
sufficient as a financing statement.
(e) Limitation on Duties Regarding Preservation of Collateral. The
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the Agent
deals with similar property for its own account. None of the Agent, GE Capital
and any Lender, nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Borrower or otherwise.
(f) Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
(g) Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(h) Paragraph Headings. The paragraph headings used in this Security
Agreement are for convenience of reference only
17
and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.
(i) Governing law. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the law of the State of New York.
(j) Submission to Jurisdiction Waivers. (A) The Borrower hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
Now York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that. such action or proceeding was brought in any inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding say be effected by sailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 9(c)
or at such other address of which the Agent shall have been notified
pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(B) The Borrower and the Agent hereby irrevocably and unconditionally
waive trial by jury in any legal action or proceeding referred to in paragraph A
above.
(k) Limitation of Liability. The Agent, GE Capital and the Lenders
agree that the liability of the Borrower under this Security Agreement, the
Notes and the other Obligations shall be limited to the Collateral (as defined
in the Loan Agreement) and the rights and remedies of the Lenders against the
Collateral (as defined in the Loan Agreement) pursuant to this Security
Agreement and the other Collateral Security Documents, and in no event shall the
Borrower or any Partner or any officer, director, partner or Affiliate thereof
be personally liable or obligated for any such obligations. Nothing herein shall
limit the full recourse of the Agent, GE Capital and the Lenders to the
18
Collateral (as defined in the Loan Agreement) pursuant to this Security
Agreement and the other Collateral Security Documents or be deemed to constitute
a waiver of liability, if any, of any Person for damages for fraud or for any
knowing misrepresentation made by such Person herein or in any other Basic
Document or in any certificate or other document delivered pursuant hereto or
thereto.
(1) Rights of Agent; Limitations on Agent's Obligations. It is
expressly agreed by the Borrower that, anything herein to the contrary
notwithstanding, the Borrower shall remain liable under each Contract to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with and pursuant to the terms and provisions
of each such Contract. The Agent, GE Capital and the Lenders shall have no
obligation or liability under any Contract by reason of or arising out of this
Security Agreement or the assignment to the Agent for the benefit of GE Capital
and the Lenders of any payment relating to any Contract pursuant hereto, nor
shall the Agent, GE Capital or the Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of the Borrower under or
pursuant to any Contract, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any Contract, or to present or file any
claim, or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
(1) Release. If the Borrower shall pay the indebtedness secured hereby
and perform faithfully each of the covenants and agreements contained herein and
in the other Loan Documents, then, and only then, this Security Agreement and
the security interest created hereby shall be null and void and shall be
released in due form, at the Borrower's expense; otherwise, it shall remain in
full force and effect. No release of this Security Agreement, or of the lien,
security interest or assignment created and evidenced hereby, shall be valid
unless executed by the Agent. The Agent, upon the Borrower's request
19
and at the Borrower's expense, shall deliver to the Borrower all documents
evidencing such release.
EXECUTED as of the date and year first above written.
BORROWER:
CAMDEN COGEN L.P.
By Cogen Technologies Camden GP
Limited Partnership,
its general partner
By Cogen Technologies, Camden, Inc.
its general partner
By: /s/ ???
----------------------------------
Title: Vice President
------------------------------
AGENT:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ ???
--------------------------------------
Title: Senior Vice President and Manager
----------------------------------
of Energy Project Financing
AMENDMENT NO. 1
TO SECURITY AGREEMENT
AMENDMENT NO. 1 TO SECURITY AGREEMENT, dated as of April 1, 1993 (this
"Amendment") between CAMDEN COGEN L.P., a Delaware limited partnership (the
"Borrower") and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, as
agent for the Lenders (as defined below) and the issuer of the letters of credit
("GE Capital" or the "Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower and the Agent are parties to that certain
Security Agreement, dated as of February 4, 1992 (as amended, modified or
supplemented from time to time, the "Security Agreement");
WHEREAS, the Borrower and the Agent wish to amend certain provisions
of the Security Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. Unless otherwise defined herein, all terms used
herein which are defined in the Security Agreement shall have their respective
meanings as therein defined.
2. Global Amendment to Security Agreement. The Security Agreement is
hereby amended by deleting the reference to "Collateral Agency Agreement" in
each place it appears and inserting, in lieu thereof, the following term:
"Intercreditor Agreement".
3. Amendment to Section 1 (Definitions). Section 1 of the Security
Agreement is hereby amended by deleting the definition of "Loan Documents" in
its entirety and inserting, in lieu thereof, the following definition:
"'Loan Documents' shall mean the Loan Agreement, the Notes, the
Letters of Credit, this Security Agreement, the Interest Rate Hedging
Agreement, any other Collateral SECURITY DOCUMENTS AND ANY OTHER
agreements and documents contemplated hereby or thereby.'"
4. Amendment to Section 2 (Grant of Security Interest). Section 2 of
the Security Agreement is hereby amended
2
by (i) re-lettering Paragraph "(i)" Paragraph "(j)", (ii) deleting the
"and" at the end of Paragraph (h) and (iii) inserting the following new
Paragraph (i):
"(i) all rights of the Borrower to receive money due and to become due
to it under or in connection with the Interest Rate Hedging Agreement,
all rights of the Borrower to damages arising out of, or for, breach
or default in respect of the Interest Rate Hedging Agreement and all
rights of the Borrower to perform and to exercise all remedies under
the Interest Rate Hedging Agreement."
5. Amendment to Section 8 (Proceeds). Section 8 of the Security
Agreement is hereby amended by deleting the phrase "and the Commitments shall
have been terminated" at the end thereof.
6. Ratification and Confirmation; Governing Law; Counterparts.
Except as or to the extent expressly amended or waived hereby, the Security
Agreement is hereby in all respects ratified and confirmed and remains in full
force and effect. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, and may be executed in any
number of counterparts, all of which counterparts, taken together, shall
constitute one and the same instrument.
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the date first above written.
CAMDEN COGEN L.P.
By: COGEN TECHNOLOGIES CAMDEN GP
LIMITED PARTNERSHIP, its sole
general partner
By: COGEN TECHNOLOGIES CAMDEN,
INC., its sole general
partner
By: /s/ ???
---------------------------------
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By: /s/ ???
------------------------------------------
Title: MANAGER - OPERATIONS
AMENDMENT NO. 2
TO SECURITY AGREEMENT
AMENDMENT No. 2 TO SECURITY AGREEMENT, dated as of December 22, 1993
(this "Amendment") between CAMDEN COGEN L.P., a Delaware limited partnership
(the "Borrower") and THE TORONTO DOMINION BANK TRUST COMPANY, a New York trust
company, as agent for the Lenders (as defined below) and the issuer of the
Borrower Letters of Credit and the Debt Service Reserve Letter of Credit ("TD"
or the "Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower and General Electric Capital Corporation ("GE
Capital"), as agent were parties to that certain Security Agreement, dated as of
February 4, 1992 and as amended by Amendment No. 1 to Security Agreement dated
as of April 1, 1993 (as further amended, modified or supplemented from time to
time, the "Security Agreement");
WHEREAS, pursuant to that certain Successor Agency Agreement, dated as
of the date hereof, among TD, GE Capital, The Bank of Tokyo Trust Company and
the Borrower, GE Capital transferred, granted and conveyed to TD all of its
right, title and interest in and to any and all of the Collateral (as defined in
the Loan Agreement referred to below) and all of its other rights, benefits and
obligations under the Collateral Security Documents (as defined in the Loan
Agreement referred to below);
WHEREAS, the Borrower and the Agent wish to amend certain provisions
of the Security Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. Unless otherwise defined herein, all terms used
herein which are defined in the Security Agreement shall have their respective
meanings as therein defined.
2. Amendment to Section 1 (Definitions). Section 1 of the Security
Agreement is hereby amended by deleting the word "Agent" in the definition of
"Obligations" and inserting, in lieu thereof, the word "Agents".
3. Amendment to Section 3 (g) (Perfected First Lien on Collateral).
Section 3 (g) of the Security Agreement is hereby amended by deleting the phrase
"Secured Party's" and inserting, in lieu thereof, the word "Agent".
2
4. Amendment to Section 5 (Remedies of Secured Party Upon Event of
Default). Section 5 of the Security Agreement is hereby amended by (i) deleting
from the title thereof the phrase "Secured Party" and inserting, in lieu
thereof, the word "Agent" and (ii) deleting the word "Borrower" in the
penultimate line thereof and inserting, in lieu thereof, the word "Agent".
5. Amendment to Section 8 (Proceeds). Section 8 of the Security
Agreement is hereby amended by (i) deleting the phrase "Collateral Agent" and
inserting, in lieu thereof, the word "Agent" and (ii) deleting the phrase
"Collateral Agency Agreement" and inserting, in lieu thereof, the phrase
"Intercreditor Agreement".
6. Agreement of The Toronto-Dominion Bank Trust Company. TD will not
amend the Security Agreement without the consent of GE Capital if such amendment
would have a material adverse effect on the rights of GE Capital under the
Security Agreement.
7. Ratification and Confirmation; Governing Law; Counterparts. Except
as or to the extent expressly amended or waived hereby, the Security Agreement
is hereby in all respects ratified and confirmed and remains in full force and
effect. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, and may be executed in any number of
counterparts, all of which counterparts, taken together, shall constitute one
and the same instrument.
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the date first above written.
CAMDEN COGEN L.P.
By: COGEN TECHNOLOGIES CAMDEN GP
LIMITED PARTNERSHIP, its sole
general partner
By: COGEN TECHNOLOGIES CAMDEN,
INC., its sole general
partner
By: /s/ ???
---------------------------------
Title:
THE TORONTO-DOMINION BANK TRUST COMPANY
By: /s/ ???
---------------------------
Name:
Title:
ACKNOWLEDGED:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ ???
--------------------------
Name:
Title: