EXHIBIT 10.1
EXECUTION COPY
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of October 28, 2002
among
ORION POWER NEW YORK, L.P.,
as Borrower,
BANC OF AMERICA SECURITIES LLC,
as a Lead Arranger and as a Joint Book Runner,
BNP PARIBAS,
as a Lead Arranger and as a Joint Book Runner,
THE FINANCIAL INSTITUTIONS INITIALLY
SIGNATORIES HERETO, TOGETHER WITH THOSE
ASSIGNEES PURSUANT TO SECTION 9.06 HEREOF,
as Lenders,
BANK OF AMERICA, N.A.,
as Issuing Bank,
BANK OF AMERICA, N.A.,
as Administrative Agent,
BNP PARIBAS,
as Syndication Agent,
and
Union Bank of California, N.A.,
CoBank, ACB and,
Deutsche Bank AG, New York
and/or Cayman Island Branch,
as Documentation Agents
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..................................................................................... 1
SECTION 1.01 DEFINITIONS.......................................................................... 1
SECTION 1.02 ACCOUNTING TERMS..................................................................... 41
SECTION 1.03 COMPUTATION OF TIME PERIODS.......................................................... 41
SECTION 1.04 RULES OF CONSTRUCTION................................................................ 41
ARTICLE II CREDIT FACILITIES.............................................................................. 41
SECTION 2.01 ACQUISITION LOANS.................................................................... 41
SECTION 2.02 WORKING CAPITAL LOANS................................................................ 42
SECTION 2.03 BORROWINGS........................................................................... 44
SECTION 2.04 ELECTION OF INTEREST RATES........................................................... 45
SECTION 2.05 FEES................................................................................. 47
SECTION 2.06 INTEREST............................................................................. 47
SECTION 2.07 MANDATORY PREPAYMENTS................................................................ 48
SECTION 2.08 VOLUNTARY PREPAYMENT; TERMINATION OF COMMITMENTS; WORKING CAPITAL
COMMITMENT REDUCTIONS .......................................................... 49
SECTION 2.09 INCREASED COSTS; CAPITAL ADEQUACY; FUNDING BREAKAGE COSTS............................ 50
SECTION 2.10 ILLEGALITY........................................................................... 51
SECTION 2.11 PAYMENTS AND COMPUTATIONS............................................................ 51
SECTION 2.12 TAXES................................................................................ 53
SECTION 2.13 SHARING OF PAYMENTS.................................................................. 55
SECTION 2.14 CHANGE OF APPLICABLE LENDING OFFICE.................................................. 56
SECTION 2.15 REPLACEMENT OF LENDERS............................................................... 56
SECTION 2.16 CONED LETTER OF CREDIT............................................................... 57
SECTION 2.17 OPERATIONAL LETTERS OF CREDIT........................................................ 60
ARTICLE III CONDITIONS PRECEDENT.......................................................................... 65
SECTION 3.01 CONDITIONS PRECEDENT TO THE RESTRUCTURING EFFECTIVE DATE............................. 65
SECTION 3.02 CONDITIONS PRECEDENT TO WORKING CAPITAL LOANS AND OPERATIONAL LETTERS OF CREDIT...... 71
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................. 71
SECTION 4.01 EXISTENCE; DUE QUALIFICATION; COMPLIANCE WITH LAW.................................... 71
SECTION 4.02 POWER; AUTHORITY; NO VIOLATION; BINDING EFFECT....................................... 72
SECTION 4.03 OWNERSHIP OF PROPERTY................................................................ 72
SECTION 4.04 GOVERNMENTAL APPROVALS............................................................... 72
SECTION 4.05 LEGAL PROCEEDINGS.................................................................... 73
SECTION 4.06 FINANCIAL STATEMENTS................................................................. 73
SECTION 4.07 INDEBTEDNESS......................................................................... 73
SECTION 4.08 NO DEFAULT........................................................................... 73
SECTION 4.09 TAXES................................................................................ 73
SECTION 4.10 USE OF PROCEEDS...................................................................... 73
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SECTION 4.11 COMPLIANCE WITH ERISA................................................................ 74
SECTION 4.12 MATERIAL LIABILITIES................................................................. 74
SECTION 4.13 REGULATION OF PARTIES................................................................ 74
SECTION 4.14 SECURITY DOCUMENTS................................................................... 75
SECTION 4.15 ACCURACY AND COMPLETENESS OF INFORMATION............................................. 75
SECTION 4.16 PROJECT CONTRACTS.................................................................... 76
SECTION 4.17 PROPERTY RIGHTS, UTILITIES, ETC...................................................... 76
SECTION 4.18 PRINCIPAL PLACE OF BUSINESS.......................................................... 76
SECTION 4.19 PATENTS; LICENSES; FRANCHISES AND FORMULAS........................................... 77
SECTION 4.20 ENVIRONMENTAL MATTERS................................................................ 77
SECTION 4.21 EQUITY INTERESTS..................................................................... 79
SECTION 4.22 INSURANCE............................................................................ 79
SECTION 4.23 TRANSACTIONS WITH AFFILIATES......................................................... 79
SECTION 4.24 [INTENTIONALLY OMITTED.]............................................................. 79
SECTION 4.25 ORGANIZATIONAL STRUCTURE............................................................. 79
SECTION 4.26 PROJECTIONS.......................................................................... 80
SECTION 4.27 ENVIRONMENTAL INSURANCE.............................................................. 80
SECTION 4.28 ALLOWANCES........................................................................... 80
ARTICLE V AFFIRMATIVE COVENANTS........................................................................... 80
SECTION 5.01 CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE........................................ 81
SECTION 5.02 GOVERNMENTAL APPROVALS............................................................... 81
SECTION 5.03 PAYMENT OF INDEBTEDNESS.............................................................. 81
SECTION 5.04 ACCOUNTS............................................................................. 81
SECTION 5.05 PERFORMANCE OF COVENANTS, ETC........................................................ 81
SECTION 5.06 INSURANCE REQUIREMENTS............................................................... 81
SECTION 5.07 BOOKS AND RECORDS.................................................................... 82
SECTION 5.08 VISITATION, INSPECTION, ETC.......................................................... 82
SECTION 5.09 REQUIREMENTS OF LAW.................................................................. 82
SECTION 5.10 REPORTING REQUIREMENTS............................................................... 82
SECTION 5.11 OPERATING BUDGET..................................................................... 83
SECTION 5.12 PAYMENT OF TAXES AND CLAIMS.......................................................... 85
SECTION 5.13 MAINTENANCE AND OPERATION OF PORTFOLIO ASSETS; REPAIR AND REPLACEMENT OF
PORTFOLIO ASSETS ................................................................ 86
SECTION 5.14 REAL AND PERSONAL PROPERTY........................................................... 86
SECTION 5.15 ERISA................................................................................ 86
SECTION 5.16 INTEREST HEDGE CONTRACTS............................................................. 87
SECTION 5.17 NOTICES.............................................................................. 87
SECTION 5.18 PRESERVATION OF SECURITY INTERESTS; FURTHER ASSURANCES............................... 88
SECTION 5.19 USE OF PROCEEDS...................................................................... 89
SECTION 5.20 EXTRAORDINARY PROCEEDS............................................................... 89
SECTION 5.21 [INTENTIONALLY OMITTED.]............................................................. 89
SECTION 5.22 [INTENTIONALLY OMITTED.]............................................................. 89
SECTION 5.23 ENVIRONMENTAL COMPLIANCE............................................................. 89
SECTION 5.24 ADDITIONAL CONTRACTS AND APPROVED AGREEMENTS......................................... 90
SECTION 5.25 OTHER INFORMATION.................................................................... 91
SECTION 5.26 FUEL PROCUREMENT AND O&M ARRANGEMENTS................................................ 91
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SECTION 5.27 POWER MARKETING AND TRANSMISSION ARRANGEMENTS........................................ 92
SECTION 5.28 ASTORIA SUPPLEMENTAL MORTGAGE........................................................ 93
SECTION 5.29 AIR EMISSIONS CONTROL AND ALLOWANCE PURCHASE ARRANGEMENTS............................ 94
SECTION 5.30 CERTAIN OPERATIONAL COVENANTS........................................................ 95
SECTION 5.31 REQUIRED PRINCIPAL REDUCTION......................................................... 95
ARTICLE VI NEGATIVE COVENANTS............................................................................. 96
SECTION 6.01 LIMITATION ON MERGERS................................................................ 96
SECTION 6.02 LIMITATION ON INDEBTEDNESS........................................................... 96
SECTION 6.03 LIMITATION ON LIENS.................................................................. 96
SECTION 6.04 NATURE OF BUSINESS................................................................... 96
SECTION 6.05 PROJECT CONTRACTS; WAIVER; MODIFICATION; AMENDMENT................................... 97
SECTION 6.06 PARTNERSHIPS; SUBSIDIARIES........................................................... 97
SECTION 6.07 LOANS, ADVANCES OR INVESTMENTS....................................................... 97
SECTION 6.08 LIMITATION ON CAPITAL EXPENDITURES................................................... 99
SECTION 6.09 AFFILIATE TRANSACTIONS............................................................... 99
SECTION 6.10 DISTRIBUTIONS........................................................................ 99
SECTION 6.11 LIMITATION ON DISPOSITION OF ASSETS.................................................. 99
SECTION 6.12 OPERATING BUDGET..................................................................... 100
SECTION 6.13 [INTENTIONALLY OMITTED............................................................... 100
SECTION 6.14 ENVIRONMENTAL INSURANCE.............................................................. 100
SECTION 6.15 SPECULATIVE TRADING.................................................................. 100
ARTICLE VII EVENTS OF DEFAULT............................................................................. 100
SECTION 7.01 PAYMENTS............................................................................. 100
SECTION 7.02 COVENANTS............................................................................ 101
SECTION 7.03 REPRESENTATIONS...................................................................... 102
SECTION 7.04 DEFAULTS OF OTHER INDEBTEDNESS....................................................... 102
SECTION 7.05 SECURITY DOCUMENTS................................................................... 102
SECTION 7.06 TRANSACTION DOCUMENTS................................................................ 102
SECTION 7.07 BANKRUPTCY........................................................................... 103
SECTION 7.08 GOVERNMENTAL APPROVALS............................................................... 103
SECTION 7.09 OWNERSHIP............................................................................ 104
SECTION 7.10 JUDGMENT............................................................................. 104
SECTION 7.11 DESTRUCTION OF PORTFOLIO ASSETS...................................................... 104
SECTION 7.12 ERISA................................................................................ 104
SECTION 7.13 REGULATORY STATUS.................................................................... 105
SECTION 7.14 [INTENTIONALLY OMITTED.]............................................................. 105
SECTION 7.15 NEGATIVE PLEDGE...................................................................... 105
SECTION 7.16 ABANDONMENT.......................................................................... 105
SECTION 7.17 SPONSOR INDEBTEDNESS................................................................. 105
ARTICLE VIII THE AGENTS, LEAD ARRANGERS AND ISSUING BANK.................................................. 106
SECTION 8.01 APPOINTMENT OF AGENTS, POWERS AND IMMUNITIES......................................... 106
SECTION 8.02 RELIANCE BY AGENTS................................................................... 107
SECTION 8.03 DEFAULTS............................................................................. 107
SECTION 8.04 RIGHTS AS LENDERS.................................................................... 107
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SECTION 8.05 INDEMNIFICATION...................................................................... 107
SECTION 8.06 DOCUMENTS............................................................................ 108
SECTION 8.07 NON-RELIANCE ON AGENTS AND OTHER LENDERS............................................. 108
SECTION 8.08 RESIGNATION.......................................................................... 108
SECTION 8.09 AUTHORIZATION........................................................................ 109
SECTION 8.10 DOCUMENTATION AGENTS; SYNDICATION AGENT.............................................. 109
ARTICLE IX MISCELLANEOUS.................................................................................. 109
SECTION 9.01 NOTICES.............................................................................. 109
SECTION 9.02 AMENDMENTS, ETC...................................................................... 110
SECTION 9.03 NO WAIVER; REMEDIES CUMULATIVE....................................................... 111
SECTION 9.04 PAYMENT OF EXPENSES AND INDEMNIFICATION.............................................. 111
SECTION 9.05 RIGHT OF SETOFF...................................................................... 112
SECTION 9.06 BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS................................. 113
SECTION 9.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER OF DAMAGES... 115
SECTION 9.08 NONLIABILITY OF ADMINISTRATIVE AGENT AND LENDERS..................................... 117
SECTION 9.09 MARSHALLING; RECAPTURE............................................................... 117
SECTION 9.10 INDEPENDENT NATURE OF LENDERS' RIGHTS................................................ 117
SECTION 9.11 COUNTERPARTS......................................................................... 117
SECTION 9.12 EFFECTIVENESS........................................................................ 117
SECTION 9.13 SURVIVAL OF INDEMNITIES AND REPRESENTATIONS AND WARRANTIES........................... 118
SECTION 9.14 SEVERABILITY......................................................................... 118
SECTION 9.15 HEADINGS DESCRIPTIVE................................................................. 118
SECTION 9.16 LIMITATION OF RECOURSE............................................................... 118
SECTION 9.17 CONFIDENTIALITY...................................................................... 119
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ANNEXES:
Annex I - Commitments
Annex II - Notice Provisions
SCHEDULES:
Schedule 1.01(a)- Astoria Bundle; Carr Street Generating Station; Erie Boulevard
Schedule 1.01(b)- Known Conditions List
Schedule 1.01(c)- Existing Surety Bonds
Schedule 2.07 - Principal Amortization
Schedule 3.01(b)- Existing Contracts; Material Approved Agreements
Schedule 4.04 - Governmental Approvals
Schedule 4.05 - Material Litigation
Schedule 4.12 - Material Liabilities
Schedule 4.14 - Filing Offices
Schedule 4.19 - Patents; Licenses; Franchises and Formulas
Schedule 4.20 - Environmental Matters
Schedule 4.25 - Organizational Structure
Schedule 5.06 - Insurance Requirements
Schedule 5.18 - Consents
Schedule 5.29(b)- Allowance Requirements
Schedule 5.30 - Certain Operational Plan Covenants
EXHIBITS:
Exhibit A - Form of Acquisition Loan Note
Exhibit B - Form of Working Capital Loan Note
Exhibit C - [Intentionally Omitted.]
Exhibit D - Form of Notice of Working Capital Borrowing
Exhibit E - Form of Notice of Conversion
Exhibit F - Form of Deposit Account Agreement
Exhibit G-1 - Form of Securities Account Control Agreement
Exhibit G-2 - Form of Holdco Securities Account Control Agreement
Exhibit H-1 - Form of Borrower Security Agreement
Exhibit H-2 - Form of OPMW Second Lien Security Agreement
Exhibit H-3 - Form of Twelvepole Second Lien Security Agreement
Exhibit I-1 - Form of OPH Membership Interest Pledge Agreement
Exhibit I-2 - Form of Holdco NY Stock Pledge Agreement
Exhibit I-3 - Form of Holdco NY Second Lien Stock Pledge Agreement
Exhibit J-1 - Form of GP Partnership Interest Pledge Agreement
Exhibit J-2 Form of Borrower Partnership Interest Pledge Agreement
Exhibit J-3 Form of LP Partnership Interest Pledge Agreement
Exhibit J-4 - Form of OPMW Second Lien Twelvepole Membership Interest
Pledge Agreement
Exhibit J-5 - Form of OPMW Second Lien GP Partnership Interest
Pledge Agreement
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Exhibit J-6 - Form of OPMW Second Lien LP Partnership Interest
Pledge Agreement
Exhibit K-1 - Form of Intercompany Acquisition Note
Exhibit K-2 - Form of Intercompany Working Capital Note
Exhibit L-1 - Form of Subsidiary Guarantee
Exhibit L-2 - Form of OPMW Guarantee
Exhibit L-3 - Form of Holdco Guarantee
Exhibit L-4 - Form of GP/LP Guarantee
Exhibit L-5 - Form of OPMW Indemnity, Subrogation and Contribution Agreement
Exhibit L-6 - Form of Holdco Indemnity and Subrogation Agreement
Exhibit M - Form of Subsidiary Security Agreement
Exhibit N-1-A - Form of Astoria First Mortgage
Exhibit N-1-B - Form of Astoria Supplemental Mortgage
Exhibit N-2 - Form of OPMW Second Lien Mortgage
Exhibit N-3 - Form of Twelvepole Second Lien Mortgage
Exhibit O - Form of Assignment and Acceptance
Exhibit P - Form of Restructuring Effective Date Letter Agreement
Exhibit Q - [Intentionally Omitted.]
Exhibit R - [Intentionally Omitted.]
Exhibit S - Form of Intercompany Working Capital Agreement
Exhibit T - Form of ConEd Letter of Credit
Exhibit U - Form of Permitted Affiliate Loan Agreement
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THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
October 28, 2002 (this "Agreement"), among ORION POWER NEW YORK, L.P., a
Delaware limited partnership (the "Borrower"), BANC OF AMERICA SECURITIES LLC
and BNP PARIBAS, as lead arrangers (collectively, the "Lead Arrangers"), the
financial institutions signatories hereto and each other financial institution
which may hereafter become an assignee pursuant to Section 9.06 (each a
"Lender", and collectively the "Lenders"), BANK OF AMERICA, N.A., as issuer of
the Letters of Credit (the "Issuing Bank"), BANK OF AMERICA, N.A., as
administrative agent for the Lenders (in such capacity, together with any
successors and assigns, the "Administrative Agent"), BNP PARIBAS, as syndication
agent (the "Syndication Agent"), and Union Bank of California, N.A., CoBank, ACB
and Deutsche Bank AG New York and/or Cayman Island Branch, as documentation
agents (each a "Documentation Agent" and collectively, the "Documentation
Agents").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders, and the Lenders have
agreed, subject to the terms and conditions set forth herein, to renew, modify
and extend a credit facility evidenced and created by a Credit Agreement, dated
as of July 28, 1999, among the Borrower, the Lead Arrangers, the Administrative
Agent, the Issuing Bank and the financial institutions party thereto (as amended
prior to the date hereof, the "Original Credit Agreement") that was issued to
the Borrower to finance the purchase by Subsidiaries of the Borrower of the
Portfolio Assets (defined below) and to provide working capital advances to the
Borrower from time to time;
WHEREAS, as a result of the merger among Reliant Resources, Inc., a
Delaware corporation ("Reliant"), Reliant Energy Power Generation Merger Sub,
Inc. and the Sponsor, the Borrower became a wholly-owned indirect subsidiary of
Reliant; and
WHEREAS, the Borrower, the Lead Arrangers, the Administrative Agent,
the Syndication Agent, the Documentation Agents, the Issuing Bank and the
Lenders desire to evidence certain amendments and modifications to the Original
Credit Agreement and to amend and restate the Original Credit Agreement in its
entirety as set forth in this Agreement.
NOW, THEREFORE, the Borrower, the Lead Arrangers, the Syndication
Agent, the Documentation Agents, the Lenders and the Administrative Agent agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the following
terms shall have the meanings specified below (to be equally applicable to both
the singular and plural forms of the terms defined):
"A-0 License" shall have the meaning ascribed thereto in the Astoria
Asset Acquisition Agreement.
"A-10 License" shall have the meaning ascribed thereto in the Astoria
Asset Acquisition Agreement.
"Acceptable Allowance Counterparty" shall mean (1) with respect to
contracts or agreements for Allowances that will become "Owned Allowances"
within 10 Business Days of entering into such contract or agreement, (A) (i) any
Person whose long term senior unsecured indebtedness or issuer rating has been
assigned an Investment Grade Rating by Moody's and S&P, or (ii) any Person whose
obligations under such contract or agreement are guaranteed by a Person whose
long term senior unsecured indebtedness or issuer rating has been assigned an
Investment Grade Rating by Moody's and S&P, or who, with respect to such
contract or agreement, has provided a letter of credit or cash collateral;
provided, that, any such guaranty, letter of credit or cash collateral shall be
in an amount determined by the applicable Borrower Entity, in its reasonable
discretion, to be reasonably necessary to mitigate such Borrower Entity's
exposure to such counterparty to an acceptable level, consistent with Prudent
Industry Practice, (B) OPMW or any of its Subsidiaries, (C) RES, for so long as
RES is a wholly-owned Subsidiary, directly or indirectly, of Reliant and (D)
Reliant Energy Mid-Atlantic Power Holdings, LLC ("REMA"), for so long as REMA is
a wholly-owned Subsidiary, directly or indirectly, of Reliant and (2) with
respect to all contracts or agreements for Allowances other than as contemplated
by clause (1) preceding, only Persons that are listed in Clause 1(A), 1(C) and
1(D) preceding.
"Acceptable Reserves" shall mean, with respect to any contest, dispute,
appeal or other similar circumstance in respect of which any Borrower Entity is
entitled hereunder to provide reserves, any of (i) reserves maintained by the
relevant Borrower Entity in conformity with GAAP; (ii) cash reserves in an
amount equal to such Borrower Entity's maximum probable liability (as reasonably
determined by the Lead Arrangers after taking into account applicable insurance
coverage) in respect of such contest, dispute, appeal or circumstance deposited
with the Administrative Agent or such lesser amount of cash reserves as is
reasonably determined by the Administrative Agent to be sufficient under
particular circumstances; (iii) a bond or bonds, surety, insurance or other
similar obligation of the relevant Borrower Entity reasonably acceptable to the
Administrative Agent and in an amount necessary to satisfy the applicable
reserve requirement as reasonably determined by the Administrative Agent; or
(iv) such other reserves or arrangements as may be reasonably approved by the
Lead Arrangers.
"Accounts" shall mean the collective reference to the Revenue Account,
the Operating Account, the Insurance Proceeds Account, the Debt Service Account,
the Debt Service Reserve Account, the Major Maintenance Reserve Account, the
Extraordinary Proceeds Account, the O&M Reserve Account, the Prepayment Account
and all sub-accounts established within any of the foregoing.
"Acquisition Lender" shall mean each Lender that has made Acquisition
Loan Advances hereunder.
"Acquisition Loan" shall mean the Loans consisting of simultaneous
Acquisition Loan Advances of the same Type from each of the Acquisition Lenders
made pursuant to the terms of the Original Credit Agreement.
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"Acquisition Loan Advance" shall mean an advance by an Acquisition
Lender to the Borrower as part of an Acquisition Loan made pursuant to the terms
of the Original Credit Agreement.
"Acquisition Loan Exposure" shall mean, on any date of determination
and as to any Acquisition Lender, the aggregate outstanding principal amount of
Acquisition Loan Advances made or held by such Lender as of such date.
"Acquisition Loan Note" shall have the meaning ascribed thereto in
Section 2.01(b)(i).
"Additional Contract" shall mean any contract or other agreement
between one or more Borrower Entities and any Person, that is entered into
subsequent to the Restructuring Effective Date and (i) has a term of 365 days or
more, or (ii) has as a counterparty any Person (A) whose long term senior
unsecured indebtedness or issuer rating has not been assigned an Investment
Grade Rating by Moody's and S&P, and (B) who, with respect to such contract or
agreement, has not, if it is determined by the applicable Borrower Entity, in
its reasonable discretion, to be reasonably necessary to mitigate such Borrower
Entity's exposure to such counterparty to an acceptable level, provided a
guaranty by a Person whose long-term senior unsecured indebtedness or issuer
rating has been assigned an Investment Grade Rating by Moody's and S&P, or a
letter of credit or cash collateral; provided, that, any such guaranty, letter
of credit or cash collateral shall be in an amount determined by the applicable
Borrower Entity, in its reasonable discretion, to be reasonably necessary to
mitigate such Borrower Entity's exposure to such counterparty to an acceptable
level, consistent with Prudent Industry Practice; provided, further, that, the
provisions of clause (ii) preceding shall not apply to the following
counterparties in the following circumstances: (A) RES, with respect to
contracts or agreements specified in any then current Operational Plan, (B) any
contract counterparty with respect to any contract or agreement, to the extent
the cost thereof would not exceed any Operating Budget limitation imposed by
Section 5.11, including (i) any seller of fuel under a spot purchase agreement
or a provider of transportation in connection therewith, in each case, to the
extent permitted by the then current Fuel Plan, and (ii) any provider of
transmission of Energy Related Products, to the extent permitted by the then
current Power Marketing Plan, (C) the New York ISO, and (D) any counterparty to
a contract or agreement with a term of less than 365 days which is entered into
to address or respond to an Emergency. For the sake of clarity, any Approved
Agreement entered into after the Restructuring Effective Date and with a term of
less than 365 days shall not be deemed to be an Additional Contract.
"Additional Contract Consent" shall mean the consent of the
counterparty to each Additional Contract to the assignment of each such
Additional Contract, to the extent such consent is required to be obtained
pursuant to Section 5.24, to the Administrative Agent pursuant to a Security
Agreement, in form and substance approved by the Administrative Agent, such
approval not to be unreasonably withheld, conditioned or delayed, it being
acknowledged and agreed that a consent no less favorable to the Lenders than the
CPS Consent shall be deemed reasonable.
"Administrative Agent" shall have the meaning ascribed thereto in the
preamble to this Agreement.
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"Administrative Agent Fee Side Letter" shall mean the letter agreement
regarding the Agency Fee described therein, dated as of the Restructuring
Effective Date, between the Borrower and the Administrative Agent.
"Advance" shall mean, as applicable, an Acquisition Loan Advance or a
Working Capital Advance.
"Affiliate" shall mean, as to any Person, any other Person directly or
indirectly controlling or controlled by, or under common control with, such
Person. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with") when used with respect to any Person means the possession, directly or
indirectly, of the power either (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agency Fee" shall have the meaning ascribed thereto in the
Administrative Agent Fee Side Letter.
"Agents" shall mean the collective reference to the Administrative
Agent, the Syndication Agent and the Documentation Agents.
"Air Emission Allowance Plan" shall mean the plan of the Borrower (as a
supplement to the O&M Plan) (delivered to the Lead Arrangers on or before the
Restructuring Effective Date, covering the period from the Restructuring
Effective Date through December 31, 2003, to acquire air emission Allowances,
install air pollution control equipment and make fuel or operational
modifications for the Portfolio Assets through 2007 and a similar plan delivered
in respect of each calendar year thereafter in accordance with Section 5.28
below. The initial Air Emission Allowance Plan, all such subsequent plans, and
any amendments thereto shall be reasonably satisfactory to the Lead Arrangers
(in consultation with the Independent Experts) in all respects.
"Allowance" shall mean any air emission allowances, credits, trading
units, allocations or other comparable terms used by any Governmental Authority
to express and quantify the authority of a holder of an Allowance to emit
specified quantities of air pollution under any Emissions Regulatory Program.
"Allowance Purchase Reserve Account" shall mean the special account
designated by that name and established by the Collateral Agent pursuant to the
Holdco Deposit Account Agreement.
"Applicable Lending Office" shall mean, with respect to each Lender,
such Lender's LIBO Lending Office, and, with respect to the Administrative
Agent, its office located at 101 North Tryon Street, NC1-001-08-19, Charlotte,
NC 28255, or such other office as the Administrative Agent may from time to time
specify to the Borrower and the Lenders.
"Applicable Margin" shall mean the Base Rate Margin or the LIBO Rate
Margin, as the context requires.
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"Approved Agreement" shall mean (i) the agreements described on
Schedule 3.01(b) hereto and any participating generator agreement(s) entered
into with the New York ISO, (ii) any contract or agreement designated as an
"Approved Agreement" in any Operational Plan, and (iii) any contract or other
agreement between any Borrower Entity and any Person, that (x) is entered into
contemporaneously with (but which is not described on Schedule 3.01(b) hereto)
or after the Restructuring Effective Date and (y) is expressly approved as an
"Approved Agreement" by the Lead Arrangers as expressly required by an
Operational Plan in accordance with the terms and provisions thereof or as a
waiver, consent or approval made pursuant to this Agreement.
"Approved Agreement Consent" shall mean the consent of the counterparty
to each Approved Agreement to the assignment of each such Approved Agreement, to
the extent such consent was required to be obtained pursuant to Section 5.24, to
the Administrative Agent pursuant to a Security Agreement, in form and substance
reasonably approved by the Administrative Agent, such approval not to be
unreasonably withheld, conditioned or delayed, it being acknowledged and agreed
that a consent no less favorable to the Lenders than the CPS Consent shall be
deemed reasonable.
"Approved Capacity Purchaser" shall mean the New York ISO.
"Approved IDA Transaction" shall mean any transfer (including any lease
or sublease) of assets by Erie Boulevard to a New York State (or political
subdivision thereof) industrial development authority and the subsequent lease,
sublease, sub-sublease or other transfer back by Erie Boulevard of such assets
for the procurement of beneficial tax treatment in respect of such assets, and,
if applicable, the grant of a mortgage or other security interest securing only
payments in lieu of taxes, the terms and conditions of which have been approved
in writing by the Lead Arrangers, which approval will not be unreasonably
withheld, conditioned or delayed if the terms and conditions of such
arrangements are on substantially similar terms as exist with respect to any
such arrangements for any other Portfolio Assets either in existence on the
Original Closing Date and disclosed to the Lenders or subsequently approved by
the Lead Arrangers; provided, that, in no event shall any Approved IDA
Transaction include terms or conditions pursuant to which any Borrower Entity
incurs Indebtedness or supports the payment of any such Indebtedness of any
other Person (other than payments in lieu of taxes, and any indemnity, expense
reimbursement or similar payments paid to the lessor or similar counterparty of
such property).
"Approved Master Agreement" shall mean the fuel oil and natural gas
master agreements entered into as of the Restructuring Effective Date, by and
between the Borrower and RES as described in the Fuel Plan.
"Approved Power Sales Agreement" shall mean any contract or other
agreement between any Borrower Entity (or any Affiliate thereof) and an Approved
Capacity Purchaser relating to sales of Energy-Related Products and/or options
to sell Energy-Related Products to Approved Capacity Purchasers that contain
provisions for, among other things, a maximum forward delivery date thereunder
that is the greater of (x) the minimum forward delivery date required by the
NYISO Rules, and (y) with respect to energy, one day or less, and, with respect
to capacity, for a term not greater than seven months from the date on which the
capacity is sold.
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"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, and accepted by the
Administrative Agent, in accordance with Section 9.06 and substantially in the
form of Exhibit O.
"Astoria Asset Acquisition Agreement" shall mean the Generating Plant
and Gas Turbine Asset Purchase and Sale Agreement, dated as of March 2, 1999 by
and between ConEd and Astoria Generating as modified and amended pursuant to the
First Amendment thereto, dated as of July 1, 1999, by and between ConEd and
Astoria Generating.
"Astoria Bundle" shall mean the collective reference to those certain
generating assets and associated property and equipment located in Queens and
Brooklyn, New York, more fully described on Schedule 1.01(a) hereto.
"Astoria Bundle O&M Agreement" shall mean that certain Operations and
Maintenance Service Agreement, dated as of August 11, 1999, between Astoria
Generating and OPOS Astoria.
"Astoria Continuing Site Agreement" shall have the meaning ascribed
thereto in the Astoria Asset Acquisition Agreement.
"Astoria First Mortgage" shall mean the Amended and Restated Mortgage,
Security Agreement, Fixture Filing and Assignment of Leases and Rents executed
and delivered by Astoria Generating in favor of the Administrative Agent (for
the benefit of the Secured Parties) on the Astoria Generating Effective Date, as
amended as of the Restructuring Effective Date, that secures principal
Indebtedness in the aggregate amount of $100,000,000, in respect of real
property located in Astoria, Queens, New York and Brooklyn, New York which is
owned or leased by Astoria Generating, substantially in the form of Exhibit
N-1-A hereto.
"Astoria Generating" shall mean Astoria Generating Company, L.P., a
Delaware limited partnership.
"Astoria Generating Effective Date" shall mean August 19, 1999.
"Astoria Generating Note" shall mean that certain promissory note of
Astoria Generating, substantially in the form of Exhibit K-1 hereto, evidencing
certain Indebtedness of Astoria Generating to the Borrower incurred in
connection with Astoria Generating's acquisition of the Astoria Bundle.
"Astoria Generating Partnership Agreement" shall mean that certain
First Amended and Restated Agreement of Limited Partnership of Astoria
Generating Company, L.P., dated as of April 19, 2000.
"Astoria Generating Second Lien Security Agreement" shall mean
that certain Security Agreement between Astoria Generating and the OPMW
Administrative Agent (for the benefit of the OPMW Secured Parties), delivered in
connection with the OPMW Restated Credit Agreement.
6
"Astoria Generating Security Agreement" shall mean that certain Amended
and Restated Security Agreement, dated as of the Restructuring Effective Date,
between Astoria Generating and the Administrative Agent (for the benefit of the
Secured Parties), substantially in the form of Exhibit M hereto.
"Astoria Mortgages" shall mean the collective reference to the Astoria
First Mortgage and the Astoria Supplemental Mortgage.
"Astoria Supplemental Mortgage" shall mean the Amended and Restated
Astoria Mortgage executed and delivered by Astoria Generating in favor of the
Administrative Agent (for the benefit of the Secured Parties) on the Astoria
Generating Effective Date, as amended as of the Restructuring Effective Date,
that secures principal Indebtedness in the amount of $260,000,000, encumbering
the real property interests encumbered by the Astoria First Mortgage
substantially in the form of Exhibit N-1-B hereto, and is held by the
Administrative Agent for recording in accordance with Section 5.28 below.
"Astoria Zoning Lot Agreement" shall have the meaning ascribed thereto
in the Astoria Asset Acquisition Agreement.
"Base Rate" shall mean, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the higher of (a) the rate of interest announced publicly by
the Administrative Agent, from time to time, as its "base rate" or "prime rate"
for Dollar loans (which rate may not necessarily be its lowest rate) and in
effect on any date of determination, as determined by the Administrative Agent,
and (b) the sum of the Federal Funds Rate in effect on any date of
determination, as determined by the Administrative Agent plus 0.50%.
"Base Rate Advance" shall mean any Advance which bears interest based
upon the Base Rate.
"Base Rate Loan" shall mean a Loan consisting of simultaneous Base Rate
Advances from each of the applicable Lenders.
"Base Rate Margin" shall mean during the period (i) from and including
the Restructuring Effective Date until the date that is twelve (12) months
thereafter, 1.50%, (ii) from and including the date twelve (12) months after the
Restructuring Effective Date until the date that is eighteen (18) months after
the Restructuring Effective Date, 1.75%, (iii) from and including the date that
is eighteen (18) months after the Restructuring Effective Date until the date
that is twenty four (24) months after the Restructuring Effective Date, 2.25%,
and (iv) from and including the date that is twenty four (24) months after the
Restructuring Effective Date until and including the Final Maturity Date, 2.75%.
"Benefit Arrangement" shall mean at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
Borrower Entity, any Operator or any ERISA Affiliate.
7
"Borrower" shall have the meaning ascribed thereto in the preamble to
this Agreement.
"Borrower Entities" shall mean the collective reference to the
Borrower, Carr Street Generating, Erie Boulevard and Astoria Generating.
"Borrower Partnership Agreement" shall mean that certain First Amended
and Restated Agreement of Limited Partnership of Orion Power New York, L.P.,
dated as of April 19, 2000.
"Borrower Partnership Interest Pledge Agreement" shall mean that
certain Amended and Restated Partnership Interest Pledge Agreement, dated as of
the Restructuring Effective Date, between the Borrower and the Administrative
Agent (for the benefit of the Secured Parties), relating to the Borrower's
limited partnership interest in each of Carr Street Generating, Erie Boulevard
and Astoria Generating, substantially in the form of Exhibit J-2 hereto.
"Borrower Second Lien Partnership Interest Pledge Agreement" shall mean
that certain Partnership Interest Pledge Agreement between the Borrower and the
OPMW Administrative Agent (for the benefit of the OPMW Secured Parties),
relating to the Borrower's limited partnership interest in each of Carr Street
Generating, Erie Boulevard and Astoria Generating, delivered in connection with
the OPMW Restated Credit Agreement.
"Borrower Second Lien Security Agreement" shall mean that certain
Security Agreement between the Borrower and the OPMW Administrative Agent (for
the benefit of the OPMW Secured Parties) delivered in connection with the OPMW
Restated Credit Agreement.
"Borrower Security Agreement" shall mean that certain Amended and
Restated Security Agreement, dated as of the Restructuring Effective Date,
between the Borrower and the Administrative Agent (for the benefit of the
Secured Parties), substantially in the form of Exhibit H-1 hereto.
"Borrowing" shall mean a borrowing consisting of Loans made of, or
Converted into, the same Type and Interest Period made on the same day by the
Lenders. Borrowings consisting of Loans of the same Type and Interest Period on
the same day shall be deemed a single Borrowing hereunder until repaid in full
or next Converted.
"Budgeted Operating Costs" shall mean, with respect to the Operating
Budget for any fiscal year or Initial Budget Period, as applicable, of the
Borrower Entities, the aggregate amount of all Operating Costs set forth in such
Operating Budget.
"Business Day" shall mean any day, which is not a Saturday or Sunday,
on which commercial banks are open for business in New York, New York and
Charlotte, North Carolina and, if such day relates to a borrowing of, a payment
or prepayment of principal of, or a Conversion of or into, or an interest period
for, a LIBO Rate Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment, Conversion or interest period, which day is also
a day on which dealings in U.S. dollar deposits are carried out in the London
interbank market.
8
"Capacity Sale and Tolling Agreement" shall mean that certain Capacity
Sale and Tolling Agreement, dated as of November 18, 1998, between Carr Street
Generating and CPS.
"Capital Expenditures" shall mean, for any period, all expenditures by
any Borrower Entity which would be classified as "capital expenditures" in
accordance with GAAP (including, without limitation, expenditures for
maintenance and repairs which, in conformity with GAAP, would be capitalized and
obligations under Capital Leases).
"Capital Lease" shall mean, with respect to any Person, any lease of
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interest in (however designated) the common or
preference share capital of such Person, including, without limitation,
partnership interests and limited liability company interests.
"Carr Street Asset Acquisition Agreement" shall mean the Asset Purchase
Agreement, dated June 23, 1998, by and between East Syracuse Generating Company,
L.P. and Carr Street Generating, as amended by Amendment No. 1 to Asset Purchase
Agreement, dated as of November 19, 1998.
"Carr Street Generating" shall mean Carr Street Generating Station,
L.P., a Delaware limited partnership.
"Carr Street Generating Note" shall mean that certain promissory note
of Carr Street Generating, substantially in the form of Exhibit K-1 hereto,
evidencing Indebtedness of Carr Street Generating to the Borrower incurred as
part of the funding of the acquisition of the Carr Street Generating Station.
"Carr Street Generating Partnership Agreement" shall mean that certain
Second Amended and Restated Agreement of Limited Partnership of Carr Street
Generating Company, L.P., dated as of April 19, 2000.
"Carr Street Generating Second Lien Security Agreement" shall mean that
certain Security Agreement between Carr Street Generating and the OPMW
Administrative Agent (for the benefit of the OPMW Secured Parties), delivered in
connection with the OPMW Restated Credit Agreement.
"Carr Street Generating Security Agreement" shall mean that certain
Amended and Restated Security Agreement, between Carr Street Generating and the
Administrative Agent (for the benefit of the Secured Parties), substantially in
the form of Exhibit M hereto.
"Carr Street Generating Station" shall mean that certain generating
facility located in East Syracuse, New York, as more fully described on Schedule
1.01(a) hereto.
9
"Carr Street Generating Station O&M Agreement" shall mean that certain
Operations and Maintenance Agreement, dated as of November 16, 1998, between
Carr Street Generating and OPOS Carr Street.
"Cash Collateral" shall mean Revenues or proceeds of Working Capital
Loans that are used to collateralize (and not prepay) Contractual Obligations as
permitted by Section 6.07(c) of this Agreement, it being understood that "Cash
Collateral" funds are funds that are used to assure performance and are not
used, except on default, to satisfy or pay for goods or services.
"Closing Expenses" shall mean all Fees payable by the Borrower pursuant
to any Financing Document and all other costs and expenses (including prorated
taxes) payable by the Borrower or its Subsidiaries which are included in detail
in the Projections or are otherwise approved by the Borrower and the Lead
Arrangers, in each case payable on the Restructuring Effective Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean at any time all property and interest of any
kind, now owned or hereafter acquired, which is at such time subject to, or
purported to be subject to, a Lien in favor of the Administrative Agent (for the
benefit of the Secured Parties) created or granted pursuant to the Security
Documents in effect at such time.
"Collateral Agent" shall mean Bank of America, N.A., and any successor
or assign in such capacity.
"Combined Debt Service Coverage Ratio" shall have the meaning assigned
to that term in the Holdco Deposit Account Agreement.
"Combined Exposure" shall mean, as of any date of determination, the
sum of (a) the aggregate amount of Acquisition Loans outstanding as of such
date, (b) the aggregate Working Capital Loan Commitments existing as of such
date, and (c) an amount equal to 10% of the aggregate notional amount under all
Interest Hedge Contracts (other than caps or options) in effect as of such date.
"Commitment Fees" shall mean any fees payable by the Borrower to the
Administrative Agent (for the account of the Lenders) in accordance with Section
2.05(a).
"Commitments" shall mean the Working Capital Loan Commitments.
"Compliance Year" shall mean a year in which compliance with any
"Emissions Regulatory Program" must be shown in accordance with Section 5.29 or
any Requirement of Law.
"Condemnation Proceeds" shall mean all amounts and proceeds (including
instruments) received in respect of any action by any Governmental Authority to
condemn, or
10
obtain through powers of eminent domain any portion of the Portfolio Assets or
the property or assets of any Borrower Entity.
"ConEd" shall mean Consolidated Edison Company of New York, Inc., a New
York corporation.
"ConEd Consent" shall mean that certain consent and acknowledgment
agreement, among ConEd, the Administrative Agent and Astoria Generating in
regard to the ConEd Documents.
"ConEd Documents" shall mean the collective reference to the Astoria
Zoning Lot Agreement, the Gowanus Zoning Lot Agreement, the A-10 License, the
A-0 License and the Continuing Site Agreements.
"ConEd Guarantee" shall mean that certain Guarantee Agreement, dated as
of March 2, 1999, between the Sponsor and ConEd.
"ConEd Letter of Credit" shall mean an irrevocable standby letter of
credit, substantially in the form of Exhibit T hereto issued pursuant to Section
2.16 (or any letter of credit in replacement thereof that has been issued in
accordance with this Agreement), and satisfying the requirements set forth in
Section 21 of the ConEd Guarantee Agreement which shall in no event be issued in
an amount in excess of $10,000,000.
"ConEd Letter of Credit Availability Period" shall mean the period from
and including the Restructuring Effective Date to but excluding the earliest of
(a) the date five Business Days prior to the Final Maturity Date, (b) the
termination of the Working Capital Loan Commitments in accordance with the terms
hereof and (c) thirty (30) days after the date on which the long term debt of
the Borrower or Holdco shall receive an Investment Grade Rating.
"ConEd Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Issuing Bank pursuant to the ConEd Letter of Credit.
"ConEd Letter of Credit Exposure" shall mean at any time the sum of (a)
the aggregate undrawn amount of the ConEd Letter of Credit, plus (b) the
aggregate amount of all ConEd Letter of Credit Disbursements not yet reimbursed
by the Borrower as provided in Section 2.16. The ConEd Letter of Credit Exposure
of any Working Capital Lender at any time shall mean its Pro Rata Share (based
on such Working Capital Lender's Working Capital Loan Commitment) of the
aggregate ConEd Letter of Credit Exposure at such time.
"ConEd Letter of Credit Fee" shall mean the fee payable to the Issuing
Bank and the Working Capital Lenders pursuant to Section 2.16(f).
"Consents" shall mean the collective reference to the CPS Consent, the
NiMo Consent, the OPOS Consent, the OPOS Cold Water Consent, the OPOS Carr
Street Consent, the ConEd Consent, the OPOS Astoria Consent, all Additional
Contract Consents, all Approved Agreement Consents, the RES Consent and the
REWSC Consent.
11
"Continuing Site Agreements" shall mean the collective reference to the
Astoria Continuing Site Agreement, the Narrows Continuing Site Agreement and the
Gowanus Continuing Site Agreement.
"Contract Allowances" shall mean Allowances that any applicable
Borrower Entity has the exclusive contractual right to purchase in or prior to
the Compliance Year needed, from any Acceptable Allowance Counterparty, at a
fixed price pursuant to an Approved Agreement.
"Contractual Obligation" shall mean, with respect to any Person, any
provision of any securities issued by such Person or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
subject.
"Conversion", "Convert" or "Converted" each refers to a conversion of
Loans pursuant to Section 2.04, including but not limited to any selection of a
longer or shorter Interest Period to be applicable thereto or any continuation
of a Loan as described in Section 2.04.
"Cost Cap Policy" shall mean the Cleanup Cost Cap Policy issued by
American International Group, Inc. covering the Portfolio Assets.
"CPI" shall mean the consumer price index computed and issued monthly
by the Bureau of Labor Statistics of the U. S. Department of Labor.
"CPS" shall mean Constellation Power Source, Inc., a Delaware
corporation.
"CPS Consent" shall mean that certain consent and acknowledgment
agreement, among CPS, the Administrative Agent and Carr Street Generating in
regard to the Capacity Sale and Tolling Agreement.
"Credit Party" shall mean each of the Sponsor, Holdco, the Borrower,
each Partner, Carr Street Generating, Erie Boulevard and Astoria Generating.
"Debt Service" shall mean, for any period and without duplication, the
difference between (a) the sum of (i) all interest payments paid, payable or
accrued on all Indebtedness of the Borrower for borrowed money during such
period (other than interest accrued on any Permitted Affiliate Loan), (ii)
scheduled principal payments set forth on Schedule 2.07 due and payable during
such period, (iii) all payments under Interest Hedge Contracts paid by the
Borrower during such period, and (iv) all Fees (other than Fees constituting
Closing Expenses) payable by the Borrower pursuant to any Financing Document
during such period, minus (b) amounts, if any, received by the Borrower under
Interest Hedge Contracts during such period; provided, that, nothing in this
definition shall be deemed to modify Section 6.02 hereof.
"Debt Service Account" shall mean the special account designated by
that name and established by the Administrative Agent pursuant to the Deposit
Account Agreement.
"Debt Service Coverage Ratio" shall mean, for any period of
determination, the ratio of (i) Net Cash Flow, to (ii) Debt Service, calculated
on a trailing twelve (12) month basis;
12
provided, that for any date of determination that is prior to June 30, 2003, the
Debt Service Coverage Ratio shall be measured based on actual results over the
applicable period from and including July 1, 2002 to but excluding the last day
of such period.
"Debt Service Reserve Account" shall mean the special account
designated by that name and established by the Administrative Agent pursuant to
the Deposit Account Agreement.
"Debt Service Reserve Requirement" shall mean an amount equal to, as of
any date, the aggregate Debt Service payable in the immediately successive 6
month period after such date; provided, that, the Debt Service Reserve
Requirement for any date occurring in the 6 month period immediately preceding
the Final Maturity Date, shall equal the Debt Service Reserve Requirement
calculated as of the day before the commencement of such 6 month period.
"Default" shall mean any condition or event which, with giving of
notice or lapse of time or both, would constitute an Event of Default.
"Default Rate" shall mean the rate determined pursuant to Section
2.06(c).
"Deposit Account Agreement" shall mean that certain Second Amended and
Restated Deposit Account Agreement, dated as of the Restructuring Effective
Date, among the Borrower, Astoria Generating, Carr Street Generating, Erie
Boulevard and the Administrative Agent (for the benefit of the Secured Parties),
substantially in the form of Exhibit F hereto.
"Distribution" shall mean any payment or other distribution of assets,
properties, cash, rights, obligations or securities to any Person in respect of
such Person's equity ownership interest in the Borrower or on account of any
Permitted Affiliate Loans.
"Documentation Agents" shall have the meaning ascribed thereto in the
preamble to this Agreement.
"Dollar" and the sign "$" shall mean lawful money of the United States
of America.
"Effective Date" shall have the meaning ascribed thereto in Section
9.06(c).
"Emergency" shall mean a condition or situation which is declared or
designated as an Emergency or for which a notice under Section 5.17 is issued
identifying such condition or situation as an "Emergency", and in the reasonable
judgment of the relevant Borrower Entity either affects or will affect such
Borrower Entity's ability to safely operate any portion of the Portfolio Assets
or the ability of any portion of the Portfolio Assets to operate due to any
sudden or unexpected mechanical breakdown, other unforeseen event or any other
event not reasonably anticipated as of the Restructuring Effective Date.
"Emissions Regulatory Program" shall mean any statutory or regulatory
program of any kind for the reduction of emissions of air pollutants (including,
without limitation, SO2, NOx, mercury, PM 2.5, carbon or other greenhouse gases)
established or implemented by any Governmental Authority that applies or comes
to apply to sources of air emissions at Carr Street
13
Generating or the Astoria Bundle, whether such program now exists or is
hereafter established, and pursuant to which any required limitations on or
reductions in emissions of air pollutants may be met, in whole or in part,
through the use of tradable Allowances, and including, by way of example, and
without limitation, such existing programs as the U.S. Environmental Protection
Agency's NOx Budget Trading Program and Acid Rain Allowance Program, and such
contemplated future programs as the Bush Administration's 2001 "Clear Skies"
proposal.
"Energy-Related Products" shall mean electric capacity, energy,
ancillary services and transmission services and products.
"Environmental Cap Ex" shall mean any Capital Expenditure project for
the purposes of effecting any planned control project contemplated by the then
current Air Emission Allowance Plan.
"Environmental Claim" shall mean, with respect to any Person, any
written notice, claim, assertion, administrative, regulatory or judicial action,
suit, judgment, demand or other written communication by any other Person
alleging or asserting such Person's liability for investigatory costs, cleanup
costs, governmental response costs, damages to natural resources or other
property of such Person, personal injuries, fines or penalties arising out of,
based on or resulting from (a) the presence, use, Release or threatened Release
into the environment of any Hazardous Material at any location, whether or not
owned by such Person or (b) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law. The term "Environmental Claim" shall include, without limitation, any claim
by any Governmental Authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable Environmental
Law, and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence of Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Laws" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements with any Governmental Authority issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities, and including any Lien filed
against any Portfolio Asset in favor of any Governmental Authority), of any
Borrower Entity directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Erie Boulevard" shall mean Erie Boulevard Hydropower, L.P., a Delaware
limited partnership.
14
"Erie Boulevard Note" shall mean that certain promissory note of Erie
Boulevard, substantially in the form of Exhibit K-1 hereto, and evidencing
certain Indebtedness of Erie Boulevard to the Borrower incurred in connection
with Erie Boulevard's acquisition of the NiMo Assets.
"Erie Boulevard Partnership Agreement" shall mean that certain First
Amended and Restated Agreement of Limited Partnership of Erie Boulevard
Hydropower, L.P., dated as of April 19, 2000.
"Erie Boulevard Second Lien Security Agreement" shall mean that certain
Security Agreement between Erie Boulevard and the OPMW Administrative Agent (for
the benefit of the OPMW Secured Parties), delivered in connection with the OPMW
Restated Credit Agreement.
"Erie Boulevard Security Agreement" shall mean that certain Amended and
Restated Security Agreement, dated as of the Restructuring Effective Date,
between Erie Boulevard and the Administrative Agent (for the benefit of the
Secured Parties), substantially in the form of Exhibit M hereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any trade, business or entity (whether or
not incorporated) that is treated as a member of a group described in Sections
414(b) or (c) of the Code or Section 4001(b) of ERISA that includes the
Borrower, or members of the same "controlled group" as the Borrower pursuant to
Section 4001(a)(14) of ERISA.
"Event of Default" shall have the meaning ascribed thereto in Article
VII hereof.
"Excess Cash Flow" shall have the meaning ascribed thereto in the
Deposit Account Agreement.
"Existing Surety Bonds" shall mean those certain surety bonds listed on
Schedule 1.01(c) to this Agreement.
"Extraordinary Proceeds" shall mean the collective reference to (i)
Condemnation Proceeds, (ii) proceeds realized from the sale of assets by any
Borrower Entity permitted pursuant to Section 6.11(c) or (d), (iii) net proceeds
from the issuance of debt (other than Permitted Affiliate Loans) or equity by
any Borrower Entity, (iv) any liquidated damage payments or penalties received
by any Borrower Entity pursuant to any Project Contract (which, for the
avoidance of doubt, shall not include any costs of cover, payment adjustments
for fuel (including any such payments relating to fuel specifications),
imbalance charges or similar payments), and (v) Insurance Proceeds, to the
extent such Insurance Proceeds are not applied to the reinstatement,
reconstruction, repair or replacement of the affected Portfolio Assets pursuant
to the Deposit Account Agreement.
15
"Extraordinary Proceeds Account" shall mean the special account
designated by that name and established by the Administrative Agent pursuant to
the Deposit Account Agreement.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by it.
"Fee Side Letters" shall mean the collective reference to (i) the
letter agreements, dated as of the Restructuring Effective Date, between the
Borrower and each of the Lead Arrangers, (ii) the Administrative Agent Fee Side
Letter, and (iii) the Collateral Agent letter agreement dated as of the
Restructuring Effective Date, between the Borrower and the Collateral Agent.
"Fees" shall mean the Agency Fee, the Commitment Fees, the ConEd Letter
of Credit Fees, the Operational Letter of Credit Fees and any other fees payable
by the Borrower to any Secured Party pursuant to any Financing Documents.
"FERC" shall mean the Federal Energy Regulatory Commission and its
successors.
"Final Maturity Date" shall mean with respect to the Acquisition Loans
and the Working Capital Loans, the earliest to occur of (i) October 28, 2005 and
(ii) the date of acceleration of any of the Loans pursuant to the terms of the
Financing Documents.
"Financing Documents" shall mean the collective reference to the Credit
Agreement, the Notes, the Letters of Credit, the Security Documents, the
Interest Hedge Contracts, the Fee Side Letters, the Subsidiary Guarantee, the
Holdco Guarantee, the OPMW Guarantee, the GP Guarantee, the LP Guarantee, the
Intercreditor Agreement, the Intercompany Notes, the Intercompany Working
Capital Agreement, the OPMW Indemnity, Subrogation and Contribution Agreement
and the Holdco Indemnity and Subrogation Agreement.
"Financing Statement" shall mean any UCC-1 financing statement or other
similar instrument which is filed pursuant to any Security Document to perfect
the security interest purported to be created thereby.
"FPA" shall mean the Federal Power Act of 1920.
"Fuel Plan" shall mean the plan of the Borrower addressing the sale,
procurement, transportation, storage, delivery and management of fuel to, and
the marketing, sale, transportation and delivery of excess fuel from, the
Portfolio Assets for the period from the Restructuring Effective Date until
December 31, 2003 and a similar plan delivered in respect of each calendar year
thereafter in accordance with Section 5.26 below. The initial Fuel Plan, all
16
subsequent Fuel Plans and any amendments thereto shall be reasonably
satisfactory to the Lead Arrangers (in consultation with the Independent
Experts) in all respects.
"Funding Breakage Costs" shall have the meaning ascribed thereto in
Section 2.09(c).
"GAAP" shall mean generally accepted accounting principles in effect
from time to time in the United States of America.
"General Partner" shall mean Orion Power New York GP, Inc., a Delaware
corporation and 1% general partner of each of the Borrower Entities.
"Governing Documents" of any Person shall mean the charter and by-laws,
memorandum or articles of association, partnership agreement, operating
agreement or other organizational or governing documents of such Person.
"Governmental Approvals" shall mean any action, authorization,
certificate, consent, waiver, approval, license, franchise, lease, ruling,
permit, variance, order, right, tariff, rate, certification, exemption of or
from, and any filing or registration with, any Governmental Authority
(including, without limitation, all environmental permits) relating to the
ownership, operation or maintenance of the Portfolio Assets or to the execution,
delivery or performance of any Project Contract by any Person party thereto.
"Governmental Authority" shall mean any nation or government, any
state, county, city or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, government.
"Gowanus Continuing Site Agreement" shall have the meaning ascribed
thereto in the Astoria Asset Acquisition Agreement.
"Gowanus Zoning Lot Agreement" shall have the meaning ascribed thereto
in the Astoria Asset Acquisition Agreement.
"GP Guarantee" shall mean that certain Guarantee Agreement, dated as of
the Restructuring Effective Date, by the General Partner in favor of the
Administrative Agent (for the benefit of the Secured Parties), substantially in
the form of Exhibit L-4 hereto.
"GP Partnership Interest Pledge Agreement" shall mean that certain
Amended and Restated Partnership Interest Pledge Agreement, dated as of the
Restructuring Effective Date, between the General Partner and the Administrative
Agent (for the benefit of the Secured Parties), relating to the General
Partner's partnership interest in each of the Borrower, Carr Street Generating,
Erie Boulevard and Astoria Generating, substantially in the form of Exhibit J-1
hereto.
"GP Second Lien Partnership Interest Pledge Agreement" shall mean that
certain Partnership Interest Pledge Agreement between the General Partner and
the OPMW Administrative Agent (for the benefit of the OPMW Secured Parties),
delivered in connection with the OPMW Restated Credit Agreement.
17
"Guarantee" shall mean each of the GP Guarantee, the Holdco Guarantee,
the LP Guarantee, the OPMW Guarantee, and the Subsidiary Guarantee.
"Guarantee Obligation" shall mean the obligation or agreement of any
Person, contingently or otherwise, to purchase or repurchase the Indebtedness
of, or assume, guaranty, endorse or otherwise become or remain liable, directly
or indirectly, for the Indebtedness, obligations, stock or dividends of any
other Person.
"Harwick" shall mean MidWest Ash Disposal, Inc., a Delaware corporation
and a wholly-owned subsidiary of Orion Power Operating Services, Inc. and the
Sponsor.
"Hazardous Materials" shall mean all explosive or radioactive
substances and all hazardous or toxic substances, or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
"Holdco" shall mean Orion Power Capital, LLC, a Delaware limited
liability company.
"Holdco Deposit Account Agreement" shall mean that certain Deposit
Account Agreement, dated as of the Restructuring Effective Date, between Holdco
and the Collateral Agent.
"Holdco Guarantee" shall mean that certain Guarantee Agreement, dated
as of the Restructuring Effective Date, by Holdco in favor of the Administrative
Agent (for the benefit of the Secured Parties), substantially in the form of
Exhibit L-3 hereto.
"Holdco Indemnity and Subrogation Agreement" shall mean that certain
Indemnity and Subrogation Agreement, dated as of the Restructuring Effective
Date among Holdco, OPMW, the OPMW Limited Partner, the OPMW General Partner,
Twelvepole and the Administrative Agent, substantially in the form of Exhibit
L-6 hereto.
"Holdco Midwest Second Lien Stock Pledge Agreement" shall mean that
certain Stock Pledge Agreement between Holdco and the OPMW Administrative Agent
(for the benefit of the OPMW Secured Parties), relating to the capital stock of
the General Partner and the Limited Partner owned by Holdco, delivered in
connection with the OPMW Restated Credit Agreement.
"Holdco NY Second Lien Stock Pledge Agreement" shall mean that certain
Stock Pledge Agreement, dated as of the Restructuring Effective Date, between
Holdco and the Administrative Agent (for the benefit of the Secured Parties),
relating to the capital stock of OPMW General Partner and OPMW Limited Partner
owned by Holdco, substantially in the form of Exhibit I-3 hereto.
"Holdco NY Stock Pledge Agreement" shall mean that certain Stock Pledge
Agreement, dated as of the Restructuring Effective Date, between Holdco and the
Administrative
18
Agent (for the benefit of the Secured Parties), relating to the capital stock of
the General Partner and the Limited Partner owned by Holdco, substantially in
the form of Exhibit I-2 hereto.
"Holdco Securities Account Control Agreement" shall mean that certain
Securities Account Control Agreement, dated as of the Restructuring Effective
Date, among Holdco, the Collateral Agent and Bank of America, N.A., as
securities intermediary thereunder, substantially in the form of Exhibit G-2
hereto.
"Indebtedness" of any Person shall mean:
(i) all obligations of such Person for borrowed money or for
the deferred purchase price of property or services (including, without
limitation, all obligations contingent or otherwise of such Person in
connection with acceptance, letter of credit or similar facilities and
in connection with any agreement to purchase, redeem or otherwise
acquire for value any Capital Stock of such Person, or any rights or
options to acquire such Capital Stock, now or hereafter outstanding);
(ii) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments or securities;
(iii) all indebtedness created or arising under any sale and
leaseback arrangement, conditional sale or other title retention
agreement with respect to property owned or acquired by such Person
(whether or not the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or
sale of such property), but excluding any payment obligations in lieu
of taxes created or arising under any Approved IDA Transaction;
(iv) all rental obligations under Capital Leases to the extent
not included in clause (iii) above;
(v) all Guarantee Obligations, all contingent reimbursement
obligations under undrawn letters of credit and all other contingent
obligations of such Person in respect of, or obligations to purchase or
otherwise acquire or to assure payment of, Indebtedness of others;
(vi) all "take or pay" obligations of such Person;
(vii) Indebtedness of others secured by any Lien upon property
owned by such Person, whether or not assumed, but only to the extent of
such property's fair market value;
(viii) all obligations, contingent or otherwise, of such
Person in connection with surety bonds; and
(ix) all obligations of such Person under Interest Hedge
Contracts to the extent not included in clauses (i) through (viii)
above.
"Indemnified Person" shall have the meaning ascribed thereto in Section
9.04.
19
"Independent Engineer" shall mean Stone & Webster, as independent
engineer for the Lead Arrangers, the Lenders and the Agents or any successor
thereto appointed by the Administrative Agent at the direction of the Required
Lenders after consultation with the Borrower.
"Independent Engineer's Report" shall mean the report of the
Independent Engineer, dated as of September 5, 2002.
"Independent Experts" shall mean the collective reference to the
Independent Engineer, the Power Market and Fuel Consultant and the Insurance
Consultant.
"Initial Budget Period" shall have the meaning ascribed thereto in
Section 5.11(c).
"Insurance Consultant" shall mean Marsh USA, Inc., as insurance
consultant to the Lead Arrangers, the Lenders and the Agents, or any successor
thereto appointed by the Administrative Agent on the direction of the Required
Lenders after consultation with the Borrower.
"Insurance Consultant's Report" shall mean the report of the Insurance
Consultant, dated as of October 28, 2002.
"Insurance Policies" shall mean the policies of insurance with respect
to the ownership, operation or maintenance of the Portfolio Assets meeting the
requirements set forth in Schedule 5.06.
"Insurance Proceeds" shall mean all amounts and proceeds (including
interest, if any, thereon) and instruments in respect of the proceeds of any
Insurance Policy (other than in respect of business interruption insurance)
receivable by, or for the account of, any Borrower Entity.
"Insurance Proceeds Account" shall mean the special account designated
by that name and established by the Administrative Agent pursuant to the Deposit
Account Agreement.
"Intellectual Property" shall have the meaning ascribed thereto in
Section 4.19.
"Intercompany Notes" shall mean the collective reference to the Carr
Street Generating Note, the Erie Boulevard Note, the Astoria Generating Note and
the Intercompany Working Capital Note.
"Intercompany Working Capital Agreement" shall mean that certain
Amended and Restated Intercompany Working Capital Agreement, dated as of the
Restructuring Effective Date, among the Borrower Entities, substantially in the
form of Exhibit S hereto.
"Intercompany Working Capital Note" shall mean that certain promissory
note of Carr Street Generating, Astoria Generating and Erie Boulevard,
substantially in the form of Exhibit K-2 hereto, evidencing all Indebtedness of
Carr Street Generating, Astoria Generating and Erie Boulevard to the Borrower
outstanding at any time other than Indebtedness evidenced by the Astoria
Generating Note, the Carr Street Generating Note and the Erie Boulevard Note.
20
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement, dated as of the Restructuring Effective Date, among the
Administrative Agent, the OPMW Administrative Agent, the Collateral Agent, the
Lenders and the financial institutions party to the OPMW Restated Credit
Agreement; provided, that, if and to the extent the Intercreditor Agreement is
amended, supplemented or modified at any time or from time to time and such
amendment, supplement or modification could reasonably be expected to have an
adverse effect on any Credit Party's rights, duties or obligations hereunder or
under any other Financing Document, such amendment, supplement or modification
shall not be effective as to such Credit Party without such Credit Party's prior
written acknowledgment (which acknowledgement shall not be unreasonably
conditioned, withheld or delayed) that such amendment, modification or
supplement shall be effective for purposes of this Agreement and the other
Financing Documents.
"Interest Hedge Contracts" shall mean the interest rate swaps, caps,
options or other interest rate hedging mechanisms entered into by the Borrower
as approved by the Administrative Agent on or prior to the Restructuring
Effective Date.
"Interest Payment Date" shall mean (i) with respect to any LIBO Rate
Loan, the last day of the Interest Period applicable to such Loan, and, in the
case of an Interest Period of more than three months' duration, each day that
would have been an Interest Payment Date had successive Interest Periods of
three months' duration been applicable to such Loan and, in addition, the date
of any refinancing or Conversion of such LIBO Rate Loan with or to a Loan of a
different Type or with a different Interest Period, (ii) with respect to any
Base Rate Loan, each Quarterly Payment Date and, in addition, the date of any
refinancing or Conversion of such Base Rate Loan with or to a Loan of a
different Type, and (iii) the Final Maturity Date.
"Interest Period" shall mean, for each LIBO Rate Loan the period from
the date on which such LIBO Rate Loan was most recently Converted or, if not
previously Converted, on which such LIBO Rate Loan was made, to (and including)
a date selected by the Borrower in accordance with this definition and Article
II hereof.
All Loans comprising part of the same Borrowing shall have the same
Interest Period. The duration of each Interest Period for any LIBO Rate Loan
shall be 1, 3, 6 or, if available, 12 months, in each case as the Borrower may
select in the relevant Notice of Borrowing or Notice of Conversion; provided,
that:
(i) any Interest Period for any Loan which would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day
unless such extension would cause the last day of such Interest Period
to occur in the next following calendar month, in which case the last
day of such Interest Period shall occur on the next preceding Business
Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
21
(iii) the Borrower may not select any Interest Period which
ends after the Final Maturity Date.
"Interim Operating Budget" shall mean, during the period of any dispute
described in Section 5.11(a), an Operating Budget contemplating expenditures in
an amount equal to the lesser of (i) the expenditures contemplated in the
Operating Budget in effect for the immediately preceding calendar year (as
adjusted by the then current year's annual increase in the CPI over such
preceding calendar year and as may be further adjusted for changes in variable
costs attributable to changes in dispatch requirements during such current year)
and (ii) the expenditures contemplated in the Projections (or if delivered more
recently, the projections described in Section 5.10(c) hereof).
"Investment" shall mean, with respect to any Person, any direct or
indirect advance, loan or other extension of credit or capital contribution by
such Person (by means of transfers of property to others or payments for
property or services for the account or use of others, or otherwise) to any
other Person, or any direct or indirect purchase or other acquisition by such
Person of, or of a beneficial interest in, capital stock, bonds, notes,
debentures or other securities issued by any other Person.
"Investment Grade Rating" shall mean, in respect of any nationally
recognized statistical rating organization (as such term is defined in the Rules
under the Securities Exchange Act of 1934, as amended), one of such
organization's generic categories that signifies investment grade.
"Issuing Bank" shall mean Bank of America, N.A., in its capacity as the
issuer of the ConEd Letter of Credit and any Operational Letters of Credit, and
its successors in such capacity.
"Known Conditions List" shall mean those Pollution Conditions
identified in the reports and documents set forth on Schedule 1.01(b).
"Lead Arranger" shall mean each of Banc of America Securities LLC and
BNP Paribas, or any of their respective Affiliates which becomes a party to this
Agreement and the other applicable Financing Documents as a "Lead Arranger".
"Lender" shall have the meaning ascribed thereto in the preamble to
this Agreement.
"Letter of Credit Exposure" shall mean at any time the sum of (a) the
ConEd Letter of Credit Exposure, plus (b) the Operational Letter of Credit
Exposure.
"Letters of Credit" shall mean the ConEd Letter of Credit and all
Operational Letters of Credit.
"LIBO Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "LIBO Lending Office" opposite its name
on Annex I hereto, as such annex may be amended from time to time, or such other
office of an Affiliate of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
22
"LIBO Rate" shall mean, with respect to any LIBO Rate Loan for any
Interest Period, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Dow Jones Market Page 3750 (or any successor
page) as the London interbank offered rate for deposits in dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "LIBO Rate" shall mean, for any
LIBO Rate Loan for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, that, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates.
"LIBO Rate Advance" shall mean an Advance which bears interest based
upon the LIBO Rate.
"LIBO Rate Loan" shall mean a Loan consisting of simultaneous LIBO Rate
Advances from each of the applicable Lenders.
"LIBO Rate Margin" shall mean, during the period, (i) from and
including the Restructuring Effective Date until the date that is twelve (12)
months thereafter, 2.50%, (ii) from and including the date that is twelve (12)
months after the Restructuring Effective Date until the date that is eighteen
(18) months after the Restructuring Effective Date, 2.75%, (iii) from and
including the date that is eighteen (18) months after the Restructuring
Effective Date until the date that is twenty-four (24) months after the
Restructuring Effective Date, 3.25%, and (iv) from and including the date that
is twenty-four (24) months after the Restructuring Effective Date until and
including the Final Maturity Date, 3.75%.
"Lien" shall mean any mortgage, deed of trust, pledge, security
interest, encumbrance, lien, option, restriction, charge or deposit arrangement
or other arrangement having the practical effect of the foregoing or other
preferential arrangement of any other kind and shall include the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement.
"Limited Partner" shall mean Orion Power New York LP, Inc., a Delaware
corporation and 99% limited partner of the Borrower.
"Loans" shall mean the Acquisition Loans and the Working Capital Loans,
or any of them, as the case may be.
"LP Guarantee" shall mean that certain Guarantee Agreement, dated as of
the Restructuring Effective Date, by the Limited Partner in favor of the
Administrative Agent (for the benefit of the Secured Parties), substantially in
the form of Exhibit L-4 hereto.
"LP Partnership Interest Pledge Agreement" shall mean that certain
Amended and Restated Partnership Interest Pledge Agreement, dated as of the
Restructuring Effective Date, between the Limited Partner and the Administrative
Agent (for the benefit of the Secured
23
Parties), relating to the Limited Partner's partnership interest in the
Borrower, substantially in the form of Exhibit J-3 hereto.
"LP Second Lien Partnership Interest Pledge Agreement" shall mean that
certain Partnership Interest Pledge Agreement between the Limited Partner and
the OPMW Administrative Agent (for the benefit of the OPMW Secured Parties),
delivered in connection with the OPMW Restated Credit Agreement.
"Maintenance Expenditures" shall mean any amounts from time to time
paid by any Borrower Entity in respect of Major Maintenance.
"Major Maintenance" shall mean labor, materials and other direct
expenses for any Capital Expenditures or other overhaul of, or major maintenance
procedure for, any Portfolio Asset which requires significant disassembly or
shutdown of such Portfolio Asset pursuant to manufacturers' guidelines or
recommendations, engineering or operating considerations or the requirements of
any applicable Requirement of Law.
"Major Maintenance Reserve Account" shall mean the special account
designated by that name and established by the Administrative Agent pursuant to
the Deposit Account Agreement.
"Major Maintenance Reserve Requirement" shall mean $5,000,000.
"Major Project Party" shall mean the collective reference to the
following Persons (during the term of the applicable Project Contracts to which
they are a party, it being understood and agreed that the term of any such
Project Contract shall be deemed to terminate upon any exercise of an early
termination option expressly contained in such Project Contract which, for the
avoidance of doubt, shall not constitute any termination of any such Project
Contract pursuant to any exercise of remedies): NiMo, RES, REWSC, OPOS, OPOS
Astoria, OPOS Carr Street, OPOS Cold Water, each other Project Party which is
party to any O&M Agreement and each other Project Party which is both a party to
any agreement set forth in any of the Operational Plans and designated as a
Major Project Party in any of the Operational Plans.
"Margin Stock" shall have the meaning ascribed thereto in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on (i)
the ability of any Credit Party, OPMW Credit Party or any Major Project Party to
perform their respective obligations under any Transaction Document to which it
is a party; (ii) the legality, validity or enforceability of any Transaction
Document; (iii) the performance, operations, prospects, business, property,
assets, liabilities or financial condition of the Borrower Entities or of the
Portfolio Assets taken as a whole; or (iv) the rights or interests of the
Secured Parties under the Financing Documents, including, without limitation,
any security interest in any material portion of the Collateral granted pursuant
thereto.
"Material Plan" shall mean at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
24
"Material Regulatory Change" shall mean any Regulatory Change that the
Lead Arrangers, in consultation with the Independent Experts, reasonably have
determined will cause Excess Cash Flow to be reduced by more than $25,000,000
between the date of the occurrence of the Regulatory Change and the Final
Maturity Date.
"Maximum Acquisition Loan Amount" shall mean the aggregate principal
amount of Acquisition Loans outstanding under the Original Credit Agreement
immediately after giving effect to the transactions described in Sections 1(A),
1(B) and 1(C) of the Restructuring Effective Date Letter Agreement and
immediately before giving effect to this Agreement.
"Maximum Working Capital Loan Amount" shall mean $30,000,000.
"Minimum Allowance Holding Requirement" shall mean a number of
Allowances sufficient to comply with all of the requirements of each applicable
Emissions Regulatory Program necessary to support no less than the percentage of
the capacity factors that underlie the Projections for the Portfolio Assets for
a Compliance Year as such percentages are set forth on Schedule 5.29(b).
"Moody's" shall mean Moody's Investors Service, Inc., and its
successors.
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be an ERISA Affiliate
during such five year period.
"Net Cash Flow" shall mean for any period, the amount, if any, by which
Revenues for such period exceed Operating Costs for such period (as such
Operating Costs are reduced, however, by amounts withdrawn from the Major
Maintenance Reserve Account during such period and used to pay Maintenance
Expenditures for such period).
"Netting Agreement" shall mean that certain Netting Agreement, dated as
of the Restructuring Effective Date, among RES and the Borrower Entities.
"New York ISO" shall mean the independent system operator for the New
York City and New York State regions.
"NiMo" shall mean Niagara Mohawk Power Corporation, a New York
corporation.
"NiMo Asset Acquisition Agreement" shall mean the Asset Sales
Agreement, dated December 2, 1998, between Erie Boulevard and NiMo.
"NiMo Assets" shall mean the collective reference to those certain
hydroelectric generation assets more fully described on Schedule 1.01(a) hereto.
25
"NiMo Assets O&M Agreement" shall mean that certain Operations and
Maintenance Agreement, dated as of July 28, 1999 between Erie Boulevard and OPOS
Cold Water.
"NiMo Consent" shall mean that certain consent and acknowledgment
agreement, among NiMo, the Administrative Agent, Erie Boulevard and Carr Street
Generating regarding the Carr Street Generating Station and the NiMo Documents.
"NiMo Documents" shall mean the collective reference to the NiMo Power
Supply Agreement, the Nine Mile Point One Emergency Power Supply Agreement, the
NiMo Interconnection Agreement and the NiMo Site Agreement.
"NiMo Interconnection Agreement" shall have the meaning ascribed
thereto in the NiMo Asset Acquisition Agreement.
"NiMo Power Supply Agreement" shall mean that certain Power Purchase
Agreement (Hydro), dated March 16, 2001, by and between NiMo and Erie Boulevard.
"NiMo Site Agreement" shall have the meaning ascribed thereto in the
NiMo Asset Acquisition Agreement.
"Nine Mile Point One Emergency Power Supply Agreement" shall have the
meaning ascribed thereto in the NiMo Asset Acquisition Agreement.
"Non-Owned Covered Locations Schedule" shall mean the "Non-Owned
Covered Locations Schedule" attached to and made a part of the PLL Policy.
"Non-Recourse Party" shall have the meaning ascribed thereto in Section
9.16.
"Notes" shall mean the collective reference to the Acquisition Loan
Notes and the Working Capital Loan Notes.
"Notice Date" shall have the meaning ascribed thereto in Section
2.09(a).
"Notice of Borrowing" shall mean a Notice of Working Capital Borrowing.
"Notice of Conversion" shall have the meaning ascribed thereto in
Section 2.04.
"Notice of Working Capital Borrowing" shall have the meaning ascribed
thereto in Section 2.03(b).
"NYISO Rules" shall mean the then-current rules and protocols of the
New York ISO that govern the sale of Energy-Related Products by a generator to
the New York ISO, which rules and protocols contemplate, as of the Restructuring
Effective Date, in the case of energy, a maximum forward delivery date of one
day or less and, in the case of capacity, a maximum forward delivery date of
seven months from the date on which capacity is sold for periods of six
consecutive months pursuant to the capacity auction that is conducted by the New
York ISO twice each calendar year.
26
"O&M Agreements" shall mean the collective reference to the Carr Street
Generating Station O&M Agreement, the NiMo Assets O&M Agreement and the Astoria
Bundle O&M Agreement.
"O&M Plan" shall mean the plan of the Borrower (delivered to the Lead
Arrangers on or before the Restructuring Effective Date) addressing the
operation and maintenance of the Portfolio Assets for the period from the
Restructuring Effective Date to December 31, 2003 and a similar plan delivered
in respect of each calendar year thereafter in accordance with Section 5.26
below. The initial O&M Plan, all subsequent O&M Plans, and any amendments
thereto shall be reasonably satisfactory to the Lead Arrangers (in consultation
with the Independent Experts) in all respects.
"O&M Reserve Account" shall mean the special account designated by that
name and established by the Administrative Agent pursuant to the Deposit Account
Agreement.
"Obligations" shall mean (i) all principal, interest, fees and other
liabilities payable from time to time by the Credit Parties to the Secured
Parties under the Financing Documents (including, without limitation, those
payable with respect to any Loan, the ConEd Letter of Credit and any Operational
Letters of Credit) as well as all other indebtedness, obligations and
liabilities (including, without limitation, guaranties and other contingent
liabilities) of the Credit Parties to the Secured Parties arising under or in
connection with any Financing Document, in each case whether now existing or
hereafter arising, (ii) all obligations under any Interest Hedge Contracts to
which a Swap Bank is a party relating to the Obligations referred to in clause
(i) above, (iii) any and all sums advanced by the Secured Parties pursuant to
the Financing Documents in order to preserve the Collateral or preserve the
Administrative Agent's security interest in the Collateral and (iv) in the event
of any proceeding for the collection or enforcement of any indebtedness,
obligations or liabilities of the Credit Parties referred to above, the expenses
of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the Secured
Parties of their rights hereunder or under any other Financing Document,
together with attorneys' fees and disbursements and court costs.
"Operating Account" shall mean the special account designated by that
name and established by the Administrative Agent pursuant to the Deposit Account
Agreement.
"Operating Budget" shall mean a budget of Capital Expenditures and
Operating Costs for the period from the Restructuring Effective Date to the
conclusion of the then current calendar year and the immediately succeeding
calendar year; and, for each full calendar year thereafter, a similar budget for
such calendar year and the immediately succeeding calendar year in each
instance, set forth on a monthly basis, and, in each case, as such budget is
administered pursuant to Section 5.11 hereof. The initial Operating Budget shall
be in form and substance reasonably satisfactory to the Lead Arrangers and the
Borrower, and subsequent Operating Budgets shall be in form and substance
reasonably satisfactory to the Borrower and the Administrative Agent after
consultation with the Independent Experts.
"Operating Costs" shall mean with respect to the Borrower Entities or
the Portfolio Assets, for any period, the difference between (a) the sum
(without duplication) of the
27
following amounts, in each case to the extent disbursed in cash by, or for the
benefit of, any Borrower Entity or the Portfolio Assets during such period: (i)
the sum of all salaries, employee benefits, labor costs and other compensation
expended in the operation of the Portfolio Assets, plus (ii) the cost of raw
materials, fuel and the cost of other materials and utilities, including the
transportation costs for raw materials, fuel and such other materials and
utilities, consumed in the operation of the Portfolio Assets, and fuel
procurement and handling costs, and the cost of Energy-Related Products
purchases and any commitments or options to purchase Energy-Related Products in
compliance with the Operational Plans then in effect, plus (iii) insurance
premiums incurred in maintaining the insurance coverages required by this
Agreement and the other Project Contracts, plus (iv) all other cash expenditures
for administrative expense, operating costs, permitting and licensing costs,
property taxes, fuel related taxes and all other taxes (other than income
taxes), hedging costs, ancillary service and transmission procurement costs and
expenses, power marketing costs, emissions control related costs (including
costs of required materials, supplies and chemicals relating to operations of
emission control equipment and costs of emissions offsets and including Owned
Allowances and Contract Allowances), professional expenses and maintenance
expenditures, incurred in the operation of the Portfolio Assets, plus (v) all
costs and expenses paid by any Borrower Entity pursuant to any O&M Agreement and
plus (vi) all amounts paid by any Borrower Entity in respect of any Emergency
during such period, and (b) the sum of (i) amounts released from the Allowance
Purchase Reserve Account for purchases of Allowances during such period that
were used by the Borrower Entities to comply with this Agreement, (ii) Closing
Expenses, and (iii) amounts that are on deposit in the O&M Reserve Account on
the Restructuring Effective Date and that are released therefrom prior to
December 31, 2002. For the avoidance of doubt, income taxes resulting from the
operation and ownership of the Portfolio Assets and amounts posted as Cash
Collateral pursuant to the terms of this Agreement are not Operating Costs. For
the avoidance of doubt, for the purpose of calculating the Debt Service Coverage
Ratio, prepayments of Operating Costs shall be included in the Debt Service
Coverage Ratio as an Operating Cost at the time such prepayment is made.
"Operating Subsidiary" shall mean, collectively, Astoria Generating,
Erie Boulevard and Carr Street Generating, or any of them individually.
"Operational Letter of Credit" shall mean any letter of credit issued
by the Issuing Bank for the account of the Borrower in accordance with the terms
of Section 2.17.
"Operational Letter of Credit Availability Period" shall mean the
period from and including the Restructuring Effective Date to but excluding the
earliest of (a) the date five Business Days prior to the Final Maturity Date and
(b) the termination of the Working Capital Loan Commitments in accordance with
the terms hereof.
"Operational Letter of Credit Disbursement" shall have the meaning
ascribed thereto in Section 2.17(g).
"Operational Letter of Credit Exposure" shall mean at any time the sum
of (a) the aggregate undrawn amount of all outstanding Operational Letters of
Credit, plus (b) the aggregate amount of all Operational Letter of Credit
Disbursements not yet reimbursed by the Borrower as provided in Section 2.17.
The Operational Letter of Credit Exposure of any Working Capital Lender at any
time shall mean its Pro Rata Share (based on such Working
28
Capital Lender's Working Capital Loan Commitment) of the aggregate Operational
Letter of Credit Exposure at such time.
"Operational Letter of Credit Fee" shall mean the fee payable to the
Issuing Bank and the Working Capital Lenders pursuant to Section 2.17(f).
"Operational Plans" shall mean the collective reference to the Fuel
Plan, the O&M Plan and the Power Marketing Plan, each as in effect from time to
time.
"Operator" shall mean OPOS Coldwater, OPOS Carr Street or OPOS Astoria,
as the context requires.
"OPH Membership Interest Pledge Agreement" shall mean that certain OPH
Membership Interest Pledge Agreement, dated as of the Restructuring Effective
Date, among the Sponsor and the Collateral Agent (for the benefit of the Secured
Parties and the OPMW Secured Parties), substantially in the form of Exhibit I-1
hereto.
"OPMW" shall mean Orion Power MidWest, L.P., a Delaware limited
partnership.
"OPMW Administrative Agent" shall mean Bank of America, N.A., as
administrative agent for the lenders party to the OPMW Restated Credit
Agreement.
"OPMW Combined Exposure" shall have the meaning assigned to the term
"Combined Exposure" in the OPMW Restated Credit Agreement.
"OPMW Credit Parties" shall mean each of OPMW, OPMW General Partner,
OPMW Limited Partner, Twelvepole and Harwick.
"OPMW General Partner" shall mean Orion Power MidWest GP, Inc., a
Delaware corporation and 1% general partner of OPMW.
"OPMW Guarantee" shall mean that certain Guarantee Agreement, dated as
of the Restructuring Effective Date, by OPMW and Twelvepole in favor of the
Administrative Agent (for the benefit of the Secured Parties), substantially in
the form of Exhibit L-2 hereto.
"OPMW Indemnity, Subrogation and Contribution Agreement" shall mean
that certain Indemnity, Subrogation and Contribution Agreement, dated as of the
Restructuring Effective Date, by and among OPMW Limited Partner, OPMW General
Partner, OPMW and Twelvepole dated as of the Restructuring Effective Date
relating to the OPMW Guarantee, substantially in the form of Exhibit L-5 hereto.
"OPMW Limited Partner" shall mean Orion Power MidWest LP, Inc., a
Delaware corporation and 99% limited partner of OPMW.
"OPMW Obligations" shall mean the "Obligations" as defined in the OPMW
Restated Credit Agreement.
29
"OPMW Restated Credit Agreement" shall mean that certain Second Amended
and Restated Credit Agreement, dated as of October 28, 2002, among OPMW, the
OPMW Administrative Agent and the OPMW Secured Parties.
"OPMW Second Lien Documents" shall mean the collective reference to the
Holdco Midwest Second Lien Stock Pledge Agreement, the GP Second Lien
Partnership Interest Pledge Agreement, the LP Second Lien Partnership Interest
Pledge Agreement, the Borrower Second Lien Partnership Interest Pledge
Agreement, the Borrower Second Lien Security Agreement, the Erie Boulevard
Second Lien Security Agreement, the Carr Street Generating Second Lien Security
Agreement and the Astoria Generating Second Lien Security Agreement.
"OPMW Second Lien GP Partnership Interest Pledge Agreement" shall mean
that certain Partnership Interest Pledge Agreement, dated as of the
Restructuring Effective Date, between the OPMW General Partner and the
Administrative Agent (for the benefit of the Secured Parties), relating to OPMW
General Partner's general partnership interest in OPMW, substantially in the
form of Exhibit J-5 hereto.
"OPMW Second Lien LP Partnership Interest Pledge Agreement" shall mean
that certain Partnership Interest Pledge Agreement, dated as of the
Restructuring Effective Date, between the OPMW Limited Partner and the
Administrative Agent (for the benefit of the Secured Parties), relating to OPMW
Limited Partner's limited partnership interest in OPMW, substantially in the
form of Exhibit J-6 hereto.
"OPMW Second Lien Mortgages" shall mean one or more Mortgage, Security
Agreement, Fixture Filing and Assignment of Leases and Rents executed and
delivered by OPMW in favor of the Administrative Agent (for the benefit of the
Secured Parties) in respect of real property located in Allegheny County,
Pennsylvania, Beaver County, Pennsylvania, Lawrence County, Pennsylvania,
Washington County, Pennsylvania, Lorain County, Ohio and Trumbull County, Ohio
which is owned or leased by OPMW, substantially in the form of Exhibit N-2
hereto.
"OPMW Second Lien Security Agreement" shall mean that certain Security
Agreement, dated as of the Restructuring Effective Date, between OPMW and the
Administrative Agent (for the benefit of the Secured Parties), substantially in
the form of Exhibit H-2 hereto.
"OPMW Second Lien Twelvepole Membership Interest Pledge Agreement"
shall mean that certain Membership Interest Pledge Agreement dated as of the
Restructuring Effective Date, between OPMW and the Administrative Agent (for the
benefit of the Secured Parties) relating to OPMW's membership interest in
Twelvepole, substantially in the form of Exhibit J-4 hereto.
"OPMW Secured Parties" shall mean the OPMW Administrative Agent, the
lead arrangers, the syndication agent, the documentation agents, the issuing
bank, the financial institutions party to the OPMW Restated Credit Agreement and
any swap banks thereunder.
"OPNY Guarantee" shall mean that certain Guarantee Agreement, dated as
of the Restructuring Effective Date, by the Borrower Entities in favor of the
OPMW Administrative
30
Agent (for the benefit of the OPMW Secured Parties), delivered in connection
with the OPMW Restated Credit Agreement.
"OPNY Primary Security Documents" shall mean the collective reference
to the Borrower Security Agreement, the Subsidiary Security Agreements, the
Securities Account Control Agreement, the Holdco Securities Account Control
Agreement, the Deposit Account Agreement, the Holdco Deposit Account Agreement,
the Consents, the Partnership Interest Pledge Agreements, the OPH Membership
Interest Pledge Agreement, the Holdco NY Stock Pledge Agreement, the Astoria
Mortgages, and all filings made pursuant to any of the above.
"OPNY Second Lien Documents" shall mean the collective reference to the
Holdco NY Second Lien Stock Pledge Agreement, the OPMW Second Lien Twelvepole
Membership Interest Pledge Agreement, the OPMW Second Lien GP Partnership
Interest Pledge Agreement, the OPMW Second Lien LP Partnership Interest Pledge
Agreement, the OPMW Second Lien Security Agreement, the Twelvepole Second Lien
Security Agreement, the OPMW Second Lien Mortgages and the Twelvepole Second
Lien Mortgage.
"OPOS" shall mean Orion Power Operating Services, Inc., a Delaware
corporation (formerly Constellation Operations System, Inc., a Maryland
corporation).
"OPOS Astoria" shall mean Orion Power Operating Services Astoria, Inc.,
a Delaware corporation (formerly COSI Astoria, Inc., a Maryland corporation).
"OPOS Astoria Consent" shall mean that certain consent and
acknowledgment agreement, among OPOS Astoria, the Administrative Agent and
Astoria Generating relating to the Astoria Bundle O&M Agreement.
"OPOS Carr Street" shall mean Orion Power Operating Services Carr
Street, Inc., a Delaware corporation (formerly COSI Carr Street, Inc., a
Maryland corporation).
"OPOS Carr Street Consent" shall mean that certain consent and
acknowledgment agreement, among OPOS Carr Street, the Administrative Agent and
Carr Street Generating relating to the Carr Street Generating Station O&M
Agreement.
"OPOS Coldwater" shall mean Orion Power Operating Services Coldwater,
Inc., a Delaware corporation (formerly COSI Coldwater, Inc., a Maryland
corporation).
"OPOS Cold Water Consent" shall mean that certain consent and
acknowledgment agreement, among OPOS Cold Water, the Administrative Agent and
Erie Boulevard relating to the NiMo Assets O&M Agreement.
"OPOS Consent" shall mean that certain consent and acknowledgement
agreement among OPOS, OPOS Astoria, OPOS Carr Street, OPOS Cold Water, the
Borrower and the Administrative Agent relating to the OPOS Support Agreement.
"OPOS Support Agreements" shall mean the collective reference to the
respective Guarantees by and among OPOS, on the one hand, and each of OPOS
Astoria, OPOS Carr Street, and OPOS Coldwater respectively, on the other hand,
and the Borrower relating to the
31
Astoria Bundle O&M Agreement, the Carr Street Generating Station O&M Agreement
and the NiMo Assets O&M Agreement, as applicable.
"Original Closing Date" shall mean July 28, 1999.
"Original Credit Agreement" shall have the meaning ascribed thereto in
the recitals of this Agreement.
"Owned Allowances" shall mean Allowances acquired by, or allocated by
any applicable Governmental Authority to, any applicable Borrower Entity and
owned free and clear of all Liens (other than Permitted Liens), and held by such
Borrower Entity exclusively in its name.
"Partners" shall mean the collective reference to the General Partner
and the Limited Partner.
"Partnership Agreements" shall mean the collective reference to the
Borrower Partnership Agreement, the Carr Street Generating Partnership
Agreement, the Erie Boulevard Partnership Agreement and the Astoria Generating
Partnership Agreement.
"Partnership Interest Pledge Agreements" shall mean the collective
reference to the Borrower Partnership Interest Pledge Agreement, the GP
Partnership Interest Pledge Agreement and the LP Partnership Interest Pledge
Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Affiliate Loans" shall mean any loan from the Sponsor or any
Affiliate of the Sponsor which (a) is unsecured, (b) does not require payments
of principal or interest to be made thereunder or permit any exercise of lender
remedies (including, without limitation, acceleration of the applicable
indebtedness) until after all of the Obligations have been indefeasibly paid in
full in cash, all Letters of Credit have been cancelled or have expired and all
amounts thereunder have been indefeasibly reimbursed in full in cash and all
Commitments have terminated, (c) is subordinated in all respects to the
Obligations of the Borrower on, and payments in respect of principal thereof and
interest thereon are made in accordance with, the terms set forth on Exhibit U
hereto, and (d) is created and evidenced by documents and instruments that
contain clear legends indicating such documents and instruments are subordinated
to the Obligations pursuant to the terms of the agreement described in clause
(c) preceding.
"Permitted Distribution" shall mean, with respect to any Borrower
Entities, Distributions to Holdco, and with respect to Holdco, shall have the
meaning ascribed thereto in the Holdco Deposit Account Agreement.
"Permitted Indebtedness" shall mean (i) Indebtedness of any Borrower
Entity under the Financing Documents; (ii) Indebtedness of any Subsidiary of the
Borrower, to the Borrower, as evidenced by an Intercompany Note; (iii)
Indebtedness of the Borrower Entities under the OPNY Guarantee; (iv)
Indebtedness in respect of operating leases (and not Capital
32
Leases) where the aggregate rental obligation (excluding indemnity and expense
reimbursement payments) of the Borrower Entities under all such operating leases
shall not exceed $5,000,000 at any time; (v) Indebtedness in respect of trade
amounts payable which are incurred in the ordinary course of business and
payable within 60 days (and within a period of not more than 90 days with
respect to trade amounts payable to RES or any of its Affiliates) of the date
incurred, but only to the extent such amounts are incurred in connection with
the operation or maintenance of the Portfolio Assets or any Borrower Entity's
interest therein or otherwise in compliance with Operational Plans then in
effect; (vi) Permitted Affiliate Loans; (vii) Indebtedness in respect of surety
bonds not exceeding $10,000,000 in the aggregate incurred in connection with the
ordinary course of operation of the Portfolio Assets or any Borrower Entity's
interest therein; and (viii) "take or pay" obligations contemplated by the Fuel
Plan then in effect or contained in any Project Contract.
"Permitted Investments" shall mean any of the following instruments or
transactions:
(i) direct obligations of the United States of America or
obligations fully guaranteed as to principal and interest by the United
States of America, maturing not later than 30 days from the date of
acquisition thereof;
(ii) certificates of deposit issued by, bankers' acceptances
created by, or time deposits with any bank or trust company which is
organized under the laws of the United States of America or any state
thereof, and having capital, surplus and undivided profits of at least
$500,000,000 and a Tomson Bank Watch Rating of "B" or better, and that
is rated "A" or better by S&P or "A1" by Moody's maturing not later
than 30 days from the date of acquisition thereof;
(iii) commercial paper rated (on the date of acquisition
thereof) A-1 or better by S&P and P-1 or better by Moody's, maturing
not more than 30 days from the date of acquisition thereof;
(iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (i)
and (ii) above, entered into with any financial institution meeting the
qualifications specified in clause (iii) above; and
(v) investments in money market funds or money market mutual
funds sponsored by any securities broker dealer of recognized national
standing (or an affiliate thereof), having an investment policy that
requires substantially all the invested assets of such fund to be
invested in investments described in any one or more of the foregoing
clauses having a rating of "A" or better by S&P or "A1" or better by
Moody's (including money market funds for which the Administrative
Agent in its individual capacity or any of its affiliates is investment
manager or adviser).
"Permitted Liens" shall mean the collective reference to (i) Liens for
taxes, assessments and other governmental charges not yet due or payable, or the
validity of which are being contested in good faith by appropriate proceedings
and as to which Acceptable Reserves have been established, (ii) deposits or
pledges to secure the payment of workmen's
33
compensation, unemployment insurance or other social security benefits or
obligations, public or statutory obligations or other obligations of a like
general nature incurred in the ordinary course of business, (iii) easements,
licenses, restrictions on the use of real property and other matters affecting,
or other irregularities in, title thereto which are expressly listed or
described in either the owner's or the lender's policies of title insurance
delivered on the Original Closing Date or the Astoria Generating Effective Date,
as applicable, as contemplated by Article III of the Original Credit Agreement,
or as expressly permitted by any Security Document, (iv) mechanic's,
warehouseman's, carrier's, materialmen's, maritime or other like liens arising
in the ordinary course of business securing obligations which (a) are not yet
due or (b) are being contested in good faith by appropriate proceedings and as
to which Acceptable Reserves have been established as security therefor, (v)
rights and interests of the parties as provided in the Financing Documents,
including, without limitation, Liens securing the Obligations under the Security
Documents, (vi) Liens arising out of judgments or awards, but only so long as an
appeal or proceeding for review is being prosecuted in good faith and Acceptable
Reserves have been established, (vii) rights and interests of the OPMW Secured
Parties under the OPMW Second Lien Documents, (viii) Liens to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, performance or payment bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or made in connection
with the borrowing of money; provided, that, the obligations secured by such
Liens were incurred in the ordinary course of business and shall not exceed
$10,000,000 in the aggregate, (ix) precautionary filings under the applicable
Uniform Commercial Code by a lessor with respect to personal property leased to
such Person or any Subsidiary of such Person to the extent such lease is
permitted under the Financing Documents, (x) set-off rights under the Netting
Agreement, (xi) Liens on cash that is used as Cash Collateral as permitted in
Section 6.07, and (xii) the PILOT Mortgage dated as of December 31, 2001, filed
against Erie Boulevard to secure payments to the local taxing authority in lieu
of real estate taxes pursuant to the Payment in Lieu of Tax Agreement, dated as
of December 31, 2001, between Erie Boulevard and City of Cohoes Industrial
Development Agency and the related lease, sublease and IDA contract, and (xiii)
any Liens arising or created in connection with an Approved IDA Transaction.
"Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority, limited liability company or other entity of whatever
nature.
"PLL Policy" shall mean the Pollution Legal Liability Select Policy
issued by American International Group, Inc. covering the Portfolio Assets.
"Plan" shall mean at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (i) is
sponsored, maintained, or contributed to, by any Borrower Entity, any Operator
or any ERISA Affiliate for employees of the Borrower or any ERISA Affiliate or
(ii) has at any time within the preceding five years been sponsored, maintained,
or contributed to, by any Borrower Entity, any Operator or any Person which was
at such time an ERISA Affiliate.
"Pollution Conditions" shall have the meaning as set forth in the PLL
Policy.
34
"Portfolio Assets" shall mean, collectively, the Carr Street Generating
Station, the NiMo Assets and the Astoria Bundle.
"Power Market and Fuel Consultant" shall mean Pace Global Energy
Services, Inc., as power market and fuel consultant to the Lead Arrangers, the
Lenders and the Agents, or any successor thereto appointed by the Administrative
Agent on the direction of the Required Lenders after consultation with the
Borrower.
"Power Market and Fuel Consultant's Report" shall mean the collective
reference to the power marketing report and the fuel report of the Power Market
and Fuel Consultant, each dated as of October 28, 2002.
"Power Marketing Plan" shall mean the plan of the Borrower addressing,
among other things, the marketing and sale of Energy-Related Products produced
by the Portfolio Assets and the purchase of Energy-Related Products necessary or
advisable for the performance by any Borrower Entity of its obligations under
any Project Contract, as well as an energy hedging strategy, for the period from
the Restructuring Effective Date until December 31, 2003 and a similar plan
delivered in respect of each calendar year thereafter in accordance with Section
5.27 below. The initial Power Marketing Plan, all subsequent Power Marketing
Plans and any amendments thereto shall be reasonably satisfactory to the Lead
Arrangers (in consultation with the Independent Experts) in all respects.
"Prepayment Account" shall mean the special account designated by that
name and established by the Administrative Agent pursuant to the Deposit Account
Agreement.
"Principal Payments" shall mean the collective reference to all
principal reductions of the Obligations and the OPMW Obligations that occur
after the Restructuring Effective Date, including all scheduled principal
payments, and all prepayments of principal, whether voluntary or mandatory
(other than prepayments resulting from liquidation of property, plant or
equipment of any Borrower Entity whether as the result of a casualty, permitted
sale, or otherwise.
"Prohibited Transaction" shall mean any transaction described in
Section 406 of ERISA which is not exempt by reason of Section 408 of ERISA or
the transitional rules set forth in Section 414(c) of ERISA and any transaction
described in Section 4975(c)(1) of the Code which is not exempt by reason of
Section 4975(c)(2) or Section 4975(d) of the Code, or the transitional rules of
Section 2003(c) of ERISA.
"Project Contracts" shall mean the collective reference to (i) the NiMo
Power Supply Agreement, the Capacity Sale and Tolling Agreement, the O&M
Agreements, the OPOS Support Agreement, the Partnership Agreements and all other
Governing Documents of Holdco, the Partners, the Borrower and its Subsidiaries,
the Nine Mile Point One Emergency Power Supply Agreement, the NiMo
Interconnection Agreement, the NiMo Site Agreement, the Continuing Site
Agreements, the Astoria Zoning Lot Agreement, the Gowanus Zoning Lot Agreement,
the A-10 License and the A-0 License, the Netting Agreement, the Second Sempra
Agreement (ii) all other material interconnection agreements, all material
transmission services agreements, and all material utility supply agreements,
(iii) all Additional Contracts, and (iv) all Approved Agreements
35
designated as a "Project Contract" on either (x) Schedule 3.01(b) hereto, or (y)
at the time of approval by the Lead Arrangers as an "Approved Agreement"
pursuant to the terms hereof.
"Project Party" shall mean the collective reference to the Major
Project Parties and each other Person which from time to time becomes a party to
a Project Contract.
"Projections" shall mean the pro forma financial projections for the
twenty years of operations of the Portfolio Assets immediately following the
Restructuring Effective Date, as delivered on the Restructuring Effective Date
in form and substance reasonably acceptable to the Borrower and the Lead
Arrangers, as updated pursuant to Section 5.10(c).
"Pro Rata Share" shall mean (i) as to any Acquisition Lender, the
percentage set forth opposite such Lender's name on Annex I attached hereto
(which percentages for all such Lenders shall equal 100%), as such annex may be
amended from time to time, under the heading entitled "Pro Rata Share -
Acquisition Loan," and (ii) as to any Working Capital Lender, the percentage set
forth opposite such Lender's name on Annex I attached hereto (which percentages
for all such Lenders shall equal 100%), as such annex may be amended from time
to time, under the heading entitled "Pro Rata Share - Working Capital Loan".
"Prudent Industry Practice" shall mean (i) with respect to a particular
time, those practices, methods, techniques, standards, third-party contract
counterparty collateral requirements and acts engaged in, required by or
approved by a significant portion of the competitive, non-regulated fossil fuel
fired electric generating industry at such time, including those practices,
methods, techniques, standards, third-party contract counterparty collateral
requirements and acts necessary to operate in the reliability region in which
the applicable Portfolio Assets are located, or (ii) with respect to any matter
to which clause (i) does not apply, any of the practices, methods, third-party
contract counterparty collateral requirement or other similar collateral
requirement and acts which, in the exercise of reasonable judgment at the time
the decision was made, could have been expected to accomplish the desired result
consistent with good business practices, reliability, safety and expedition.
"Prudent Industry Practice" is not intended to be limited to the optimum
practice, method, collateral requirement or act to the exclusion of all others,
but rather to be a spectrum of possible practices, methods or acts having due
regard for, among other things, current market practices, manufacturers'
warranties and the requirements of any Governmental Authority of competent
jurisdiction.
"PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
amended.
"Quarterly Payment Date" shall mean each March 31, June 30, September
30 and December 31 occurring after the Restructuring Effective Date and up to,
and including, the Final Maturity Date.
"Register" shall have the meaning ascribed thereto in Section 9.06(e).
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
36
"Regulatory Change" shall mean the occurrence of any action through or
as a result of which (i) the load serving entities in New York City shall not be
required to purchase at least 75% of their retail peak load from generating
sources located within the New York City Load Pocket ("In-City Generators"), or
(ii) the price cap for installed capacity from In-City Generators shall be
reduced to less than $90/kw-year.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"Reliant" shall mean Reliant Resources, Inc., a Delaware corporation.
"Remedial Action Plan" shall have the meaning as set forth in the Cost
Cap Policy.
"Remedy Notice" shall have the meaning ascribed thereto in Article VII.
"Replacement Lender" shall have the meaning ascribed thereto in Section
2.15.
"Required Lenders" shall mean, as of any date, Secured Parties holding
51% of the Combined Exposure as of such date.
"Requirement of Law" shall mean any foreign, federal, state, local or
municipal laws, rules, orders, judgments, regulations, statutes, ordinances,
codes, or published decrees of any Governmental Authority (including any
determination of an arbitration or a court or other Governmental Authority) and
including, without limitation, all Environmental Laws.
"RES" shall mean Reliant Energy Services, Inc., a Delaware corporation.
"RES Consent" shall mean that certain consent and acknowledgement
agreement among RES, the Administrative Agent and the Borrower.
"Responsible Officer" shall mean (i) with respect to the Sponsor or any
Subsidiary of the Sponsor, the president, any senior vice president, vice
president-finance, vice president-accounting, treasurer, controller, or any vice
president of operations thereof and, with respect to certifications, the
Secretary or Assistant Secretary thereof; (ii) with respect to any other Person
(other than a partnership or limited liability company), the chief executive
officer, the president and any senior vice president of such Person or, with
respect to financial matters, the chief financial officer or treasurer of such
Person; and (iii) with respect to any partnership or limited liability company,
the president, any senior vice president, vice president-finance, vice
president-accounting, controller, secretary, treasurer and any vice president of
operations of a general partner or manager in such Person or, with respect to
financial matters, the chief financial officer, the senior vice
president-finance, the vice-president-finance or the treasurer of the general
partner or manager of such partnership or limited liability company, or, with
respect to certifications, the Secretary or Assistant Secretary of the general
partner or manager of such partnership or limited liability company. Solely for
the purposes of Section 5.17, a Responsible Officer of any Borrower Entity shall
include any designated compliance officer of such Borrower Entity and the
Borrower shall
37
cause Reliant's General Counsel and Deputy General Counsel to use reasonable
efforts to keep the Borrower Entities' Responsible Officers informed with
respect to the occurrence or existence of any matter of which such General
Counsel or Deputy General Counsel obtains actual knowledge and for which notice
is required as described in Section 5.17.
"Restructuring Effective Date" shall mean the date on which all of the
conditions precedent set forth in Section 3.01 hereof have been satisfied or
waived.
"Restructuring Effective Date Letter Agreement" shall mean the Letter
Agreement, dated as of the Restructuring Effective Date, among the Borrower, the
Administrative Agent (on behalf of the Secured Parties), OPMW and the OPMW
Administrative Agent (on behalf of the OPMW Secured Parties), substantially in
the form of Exhibit P hereto.
"Revenue Account" shall mean the special account designated by that
name and established by the Administrative Agent pursuant to the Deposit Account
Agreement.
"Revenue Interruption Event" shall have the meaning ascribed thereto in
the Deposit Account Agreement.
"Revenues" shall mean for any period, all cash income and receipts
derived from the ownership and ordinary course of operation of the Portfolio
Assets, including, without limitation, revenues from the sale of Energy-Related
Products, proceeds of business interruption insurance, interest and other income
earned on amounts on deposit in the Accounts and Permitted Investments. For the
avoidance of doubt, contributions from Holdco as contemplated by the Holdco
Deposit Account Agreement, any equity contributions from any Person and the
proceeds of Indebtedness for borrowed money shall not be considered Revenues.
"REWSC" shall mean Reliant Energy Wholesale Services Corporation, a
Delaware corporation.
"REWSC Consent" shall mean that certain consent and acknowledgement
agreement among REWSC, the Administrative Agent and the Borrower.
"S&P" shall mean Standard and Poor's Rating Services, and its
successors.
"Second Sempra Agreement" shall mean the Firm Natural Gas Supply
Agreement, dated as of March 17, 2000, between Astoria Generating and Sempra
Energy Trading Corp.
"Secured Parties" shall mean the Agents, the Lead Arrangers, the
Lenders, the Swap Banks and the Issuing Bank.
"Securities Account Control Agreement" shall mean that certain Amended
and Restated Securities Account Control Agreement, dated as of the Restructuring
Effective Date, among the Borrower, the Administrative Agent and Bank of
America, N.A., as securities intermediary thereunder, substantially in the form
of Exhibit G-1 hereto.
38
"Security Agreements" shall mean the collective reference to the
Borrower Security Agreement, the Subsidiary Security Agreements, the OPMW Second
Lien Security Agreement and the Twelvepole Second Lien Security Agreement.
"Security Documents" shall mean the collective reference to the OPNY
Primary Security Documents and the OPNY Second Lien Documents.
"Semi-Annual Date" shall mean each June 30 and December 31 to occur
after the Restructuring Effective Date and up to, and including, the Final
Maturity Date.
"Settlement Amount" shall mean the amount payable by the Borrower
pursuant to the terms of an Interest Hedge Contract, in connection with an early
termination, in whole or in part, thereunder.
"Solvency Opinion" shall mean the certification from Valuation Research
Corporation as to the financial condition, available surplus and solvency of
Holdco and the Borrower Entities after giving effect to the transactions
contemplated hereby and the incurrence of indebtedness related hereto.
"Sponsor" shall mean Orion Power Holdings, Inc., a Delaware
corporation.
"Sponsor High Yield Debt" shall mean the 12% Senior Notes due 2010
issued by the Sponsor pursuant to an indenture dated April 27, 2000, for up to
an aggregate principal amount not to exceed $425,000,000 and the 4.5% Senior
Notes due June 1, 2008 for an aggregate principal amount of up to $200,000,000,
issued on May 31, 2001.
"Subsidiary" shall mean with respect to any Person, any corporation or
other legal entity of which a majority of the Capital Stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Subsidiary Guarantee" shall mean that certain Amended and Restated
Subsidiary Guarantee Agreement, dated as of the Restructuring Effective Date,
among the Subsidiaries of the Borrower in favor of the Administrative Agent (for
the benefit of the Secured Parties), substantially in the form of Exhibit L-1
hereto.
"Subsidiary Security Agreements" shall mean the collective reference to
the Carr Street Generating Security Agreement, the Erie Boulevard Security
Agreement and the Astoria Generating Security Agreement.
"Swap Banks" shall mean any Lender from time to time party to an
Interest Hedge Contract.
"Swap Trigger Event" shall mean that the ten year treasury rate shall
be greater than 6.50% for any period of three (3) consecutive days.
39
"Syndication Agent" shall have the meaning ascribed thereto in the
preamble of this Agreement.
"Taxes" shall have the meaning ascribed thereto in Section 2.12(a).
"Transaction Documents" shall mean the collective reference to the
Financing Documents and the Project Contracts.
"Transfer" shall mean any sale, transfer, assignment, hypothecation,
pledge or other disposition, and, when used as a verb shall have a correlative
meaning.
"Twelvepole" shall mean Twelvepole Creek, LLC, a Delaware limited
liability company.
"Twelvepole Second Lien Mortgage" shall mean a Mortgage, Security
Agreement, Fixture Filing and Assignment of Leases and Rents executed and
delivered by Twelvepole in favor of the Administrative Agent (for the benefit of
the Secured Parties) in respect of real property located in Wayne County, West
Virginia which is owned or leased by Twelvepole, substantially in the form of
Exhibit N-3 hereto.
"Twelvepole Second Lien Security Agreement" shall mean that certain
Security Agreement, dated as of the Restructuring Effective Date, between
Twelvepole and the Administrative Agent (for the benefit of the Secured
Parties), substantially in the form of Exhibit H-3 hereto.
"Type" of any Loan shall mean, as the context requires, a Base Rate
Loan or a LIBO Rate Loan.
"Unfunded Liabilities" shall mean, with respect to any Plan at any
time, the amount (if any), by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of the Borrower or an ERISA
Affiliate to the PBGC or any other Person under Title IV of ERISA.
"Working Capital Advance" shall mean an advance by a Working Capital
Lender to the Borrower as part of a Working Capital Loan pursuant to Section
2.02(a).
"Working Capital Lender" shall mean each Lender that, from time to
time, has Working Capital Loan Commitments outstanding or holds Working Capital
Loans.
"Working Capital Loan" shall mean a Loan consisting of simultaneous
Working Capital Advances of the same Type from each of the Working Capital
Lenders pursuant to Section 2.02(a).
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"Working Capital Loan Availability Period" shall mean the period from
and including the Restructuring Effective Date to but excluding the Final
Maturity Date.
"Working Capital Loan Commitment" shall mean, as to any Lender, the
amount set forth opposite such Lender's name on Annex I hereto under the heading
"Working Capital Loan Commitments" as such annex may be amended from time to
time and as such amount may be reduced from time to time pursuant to the terms
of this Agreement.
"Working Capital Loan Exposure" shall mean, on any date of
determination, (i) in the aggregate, the aggregate outstanding principal amount
of all Working Capital Advances hereunder as of such date, and (ii) as to any
Working Capital Lender, the aggregate outstanding principal amount of Working
Capital Advances made by such Working Capital Lender as of such date.
"Working Capital Loan Funding Date" shall mean any Business Day on or
after the Restructuring Effective Date and prior to the Final Maturity Date, on
which the conditions precedent contained in Section 3.02 shall have been
satisfied and the Lenders shall make Working Capital Advances in accordance with
the terms hereof.
"Working Capital Loan Notes" shall have the meaning ascribed thereto in
Section 2.02(b)(i).
Section 1.02 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
Section 1.03 Computation of Time Periods. Except as otherwise provided
herein, in this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and words "to" and "until" each means "to but excluding".
Section 1.04 Rules of Construction. When used in this Agreement: (a)
"or" is not exclusive; (b) a reference to a Requirement of Law includes any
amendment or modification to such Requirement of Law; (c) a reference to a
Person includes its permitted successors and permitted assigns; (d) a reference
to an agreement, instrument or document shall, except as otherwise expressly
provided herein, include such agreement, instrument or document and all exhibits
and schedules thereto as the same may be amended, modified or supplemented from
time to time in accordance with its terms and as permitted by the Financing
Documents; and (e) the words "include," "includes," and "including" mean
"including without limitation".
Article II
CREDIT FACILITIES
Section 2.01 Acquisition Loans
(a) Acquisition Loans. Once prepaid or repaid, an Acquisition Loan
cannot be reborrowed.
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(b) Acquisition Loan Notes. (i) All Acquisition Loan Advances made by
each Acquisition Lender shall be evidenced by the Acquisition Loan Note of the
Borrower in the form of Exhibit A hereto (each an "Acquisition Loan Note" and,
collectively, the "Acquisition Loan Notes"), dated the Restructuring Effective
Date, payable to the order of such Acquisition Lender for the account of its
Applicable Lending Office in an aggregate principal amount equal to its Pro Rata
Share of the Maximum Acquisition Loan Amount and otherwise duly completed. Each
Acquisition Loan Note shall (A) represent the Borrower's obligation to pay the
aggregate unpaid principal amount of all outstanding Acquisition Loan Advances
made by such Acquisition Lender, (B) be stated to mature on the Final Maturity
Date, (C) bear interest for the period from the date thereof until paid in full
on the unpaid principal amount thereof from time to time outstanding at the
applicable interest rate per annum provided in, and payable as specified in,
this Agreement, and (D) be entitled to the benefits of this Agreement, the
Security Documents, the Subsidiary Guarantees, the GP Guarantee, the LP
Guarantee, the OPMW Guarantee and the Holdco Guarantee.
(ii) Each Acquisition Lender is hereby authorized to record the date and
the amount of each Acquisition Loan Advance made by it and the Type thereof and
the date and amount of each payment and prepayment of principal made with
respect thereto, and all Conversions of such Advances pursuant to Section 2.04,
and prior to any Transfer of its Acquisition Loan Note, may annotate on the
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Acquisition Loan Advance then outstanding;
provided, that, failure by such Acquisition Lender to make any such annotation
or any error therein shall not affect the obligations of the Borrower hereunder
or under such Acquisition Loan Note in respect of such Acquisition Loan Advances
evidenced thereby. Each Acquisition Lender is hereby irrevocably authorized by
the Borrower to endorse its Acquisition Loan Note and to attach to and make a
part of its Acquisition Loan Note a continuation of such schedule as and when
required.
(c) Type of Acquisition Loan Advances. All or any portion of
Acquisition Loan Advances shall be either Base Rate Advances or LIBO Rate
Advances and may be Converted or continued from time to time pursuant to Section
2.04.
(d) [Intentionally omitted.]
(e) Repayment of Acquisition Loans. On each Quarterly Payment Date, the
Borrower shall repay the Acquisition Loans in accordance with Schedule 2.07 and
in accordance with the terms of the Deposit Account Agreement. The Borrower
shall repay all Acquisition Loans in full on the Final Maturity Date.
Section 2.02 Working Capital Loans.
(a) Working Capital Loan Commitments. (i) Subject to the terms and
conditions of this Agreement and relying on the representations and warranties
set forth herein, each Working Capital Lender severally agrees to make Working
Capital Advances to the Borrower, during the Working Capital Loan Availability
Period on any Working Capital Loan Funding Date, in an amount equal to its Pro
Rata Share of the Working Capital Loan requested to be made on such date, but in
no event shall the sum of (x) any Working Capital Advance made
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by any Working Capital Lender as of any date, plus (y) the aggregate principal
amount of Working Capital Advances previously made by such Working Capital
Lender that remain outstanding and unpaid as of such date, plus (z) such Working
Capital Lender's ConEd Letter of Credit Exposure on such date, exceed such
Working Capital Lender's Working Capital Loan Commitment. As of any date, the
aggregate amount of all Working Capital Advances made by all Working Capital
Lenders hereunder and that remain outstanding and unpaid from time to time plus
the aggregate amount of all ConEd Letter of Credit Exposure on such date, shall
not in any event exceed the Maximum Working Capital Loan Amount. Unless earlier
terminated in accordance herewith, the Working Capital Loan Commitments shall
terminate in their entirety on the Final Maturity Date. Subject to the terms
hereof, Working Capital Loans that are repaid prior to the Final Maturity Date
may be reborrowed.
(ii) The failure of any Working Capital Lender to make a Working Capital
Advance to be made by it as part of any Working Capital Loan shall not relieve,
in and of itself, any other Working Capital Lender of its obligation hereunder
to make its Working Capital Advance on the date of such Working Capital Loan,
but no Working Capital Lender shall be responsible for the failure of any other
Working Capital Lender to make the Working Capital Advance to be made by such
other Working Capital Lender on the date of such Working Capital Loan.
(b) Working Capital Loan Notes. (i) All Working Capital Advances made
by each Working Capital Lender shall be evidenced by a Working Capital Loan Note
of the Borrower in the form of Exhibit B hereto (each a "Working Capital Loan
Note" and, collectively, the "Working Capital Loan Notes"), dated the
Restructuring Effective Date, payable to such Working Capital Lender for the
account of its Applicable Lending Office in an aggregate principal amount equal
to its Pro Rata Share of the Maximum Working Capital Loan Amount and otherwise
duly completed. Each Working Capital Loan Note shall (A) represent the
Borrower's obligation to pay the aggregate unpaid principal amount of all
outstanding Working Capital Advances made by such Working Capital Lender, (B) be
stated to mature on the Final Maturity Date, (C) bear interest for the period
from the date thereof until paid in full on the unpaid principal amount thereof
from time to time outstanding at the applicable interest rate per annum provided
in, and payable as specified in, this Agreement, and (D) be entitled to the
benefits of this Agreement, the Security Documents, the Subsidiary Guarantees,
the GP Guarantee, the LP Guarantee, the OPMW Guarantee and the Holdco Guarantee.
(ii) Each Working Capital Lender is hereby authorized to record the date
and amount of each Working Capital Advance made by it and the Type thereof and
the date and amount of each payment and prepayment of principal made with
respect thereto, and all Conversions of such Advances pursuant to Section 2.04,
and prior to any Transfer of its Working Capital Loan Note may annotate on the
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Working Capital Advance then outstanding;
provided, that, failure by such Working Capital Lender to make any such
annotation or any error therein shall not affect the obligations of the Borrower
hereunder or under such Working Capital Loan Note in respect of such Working
Capital Advances evidenced thereby. Each Working Capital Lender is hereby
irrevocably authorized by the Borrower to endorse its Working Capital Loan Note
and to attach to and make a part of its Working Capital Loan Note a continuation
of such schedule as and when required.
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(c) Types of Working Capital Advances. All or any portion of any
Working Capital Advances shall be either Base Rate Advances or LIBO Rate
Advances, and may be Converted or continued from time to time pursuant to
Section 2.04.
(d) Use of Proceeds of Working Capital Loans. The Borrower shall use
the proceeds of each Working Capital Loan solely (i) to pay Operating Costs, and
(ii) to make prepayments of Operating Costs and to provide Cash Collateral to
the extent permitted by, and subject to the limitations of, Section 6.07 of this
Agreement. In no event shall the proceeds of Working Capital Loans be used to
(a) pay Debt Service, (b) make Distributions, or (c) make a contribution to the
capital of any Subsidiary of the Borrower.
(e) Repayment; Cleanup Call. (i) The Borrower shall repay the principal
of all outstanding Working Capital Loans in full on the Final Maturity Date.
(ii) Notwithstanding anything to the contrary in this Agreement, for so
long as the Working Capital Loan Commitments are in effect, the Borrower agrees
to repay the principal amount of Working Capital Loans outstanding from time to
time such that in all events, for a period of ten (10) consecutive days during
each calendar year (beginning with the 2003 calendar year) in which either a
Working Capital Loan Commitment is in effect or any Loan remains outstanding and
unpaid, there shall be no Working Capital Loans outstanding under this
Agreement. It is also understood and agreed that the Borrower may not comply
with this Section 2.02(e)(ii) for consecutive calendar years during two (2)
consecutive ten (10) day periods. Once this Section 2.02(e)(ii) has been
complied with for a calendar year then, in order for the Borrower to meet its
obligations under this Section 2.02(e)(ii) for the subsequent calendar year, (a)
a Working Capital Loan must have been made since the previous calendar year's
compliance herewith, and (b) a minimum of thirty (30) calendar days must have
been elapsed since the date of compliance herewith for the previous calendar
year. It is further understood and agreed that with respect to calendar year
2005, repayment in full of all Working Capital Loans on the Final Maturity Date
shall constitute compliance with this Section 2.02(e)(ii).
Section 2.03 Borrowings.
(a) [Intentionally omitted.]
(b) Working Capital Loans. Each Working Capital Loan shall be made on
notice from the Borrower to the Administrative Agent, given not later than 10:00
a.m. (New York City time) (x) on the third (3rd) Business Day prior to the
proposed Working Capital Loan Funding Date, if such Working Capital Loan is to
be a LIBO Rate Loan, or (y) on the Business Day prior to the proposed Working
Capital Loan Funding Date, if such Working Capital Loan is to be a Base Rate
Loan. Such notice by the Borrower (a "Notice of Working Capital Borrowing"),
shall be irrevocable and shall be in writing in substantially the form of
Exhibit D, specifying therein (i) the proposed Working Capital Loan Funding
Date, (ii) the requested aggregate amount of the Working Capital Loan, (iii) any
specific payment instructions regarding the disbursement of the proceeds of such
Working Capital Loan, (iv) the requested Type of Working Capital Loan and (v)
with respect to a LIBO Rate Loan, the initial Interest Period applicable
thereto. The Notice of Working Capital Borrowing shall be accompanied by the
certificates and information required by Section 3.02. The Administrative Agent
shall give each
44
Working Capital Lender prompt notice of the Notice of Working Capital Borrowing
by telecopy, telex or cable. Each Working Capital Lender shall, no later than
10:00 a.m. (New York City time) on the applicable Working Capital Loan Funding
Date, make available to the Administrative Agent, for the account of its
Applicable Lending Office, in immediately available funds, the amount of such
Working Capital Lender's Working Capital Advance. Subject to the Administrative
Agent's receipt of such funds and fulfillment of the applicable conditions set
forth in Article III for such Loans, the Administrative Agent will make such
funds available to the Borrower by depositing the proceeds of such Working
Capital Loan into the Operating Account.
(c) Participations. If the Administrative Agent has not received from
the Borrower the payment required by Section 2.16(g) by 12:30 p.m. (New York
City time), on the Business Day immediately following the date on which the
Issuing Bank has notified the Borrower and the Administrative Agent that payment
of a draft presented under the ConEd Letter of Credit or any Operational Letter
of Credit will be made, as provided in Section 2.16(g) or 2.17(g), as
applicable, the Administrative Agent will promptly notify the Issuing Bank and
each Working Capital Lender of the ConEd Letter of Credit Disbursement or any
Operational Letter of Credit Disbursement, as the case may be, and, in the case
of each Working Capital Lender, its Pro Rata Share (based on such Working
Capital Lender's Working Capital Loan Commitment) of the ConEd Letter of Credit
Disbursement or any Operational Letter of Credit Disbursement, as the case may
be. Not later than 10:00 a.m. (New York City time) on the next Business Day,
each Working Capital Lender shall, irrespective of the existence of any Default
or Event of Default or failure of any other applicable condition precedent, make
available its Pro Rata Share of the ConEd Letter of Credit Disbursement or any
Operational Letter of Credit Disbursement, as the case may be, in Federal or
other funds immediately available in New York, New York, to the Administrative
Agent at its address set forth in Section 9.01. Any such funding of a ConEd
Letter of Credit Disbursement or any Operational Letter of Credit Disbursement,
as the case may be, by the Working Capital Lenders shall be considered as
Working Capital Advances made to the Borrower. Any Working Capital Loans made
pursuant to this Section 2.03(c) shall be made as Base Rate Loans and the
Administrative Agent will promptly make such funds available to the Issuing
Bank. In the event that any Working Capital Advance cannot for any reason be
made on the date otherwise required above (including, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each Working Capital Lender shall forthwith purchase (as of the
date such Working Capital Advance would otherwise have occurred) from the
Issuing Bank such Working Capital Lender's Pro Rata Share of the ConEd Letter of
Credit Disbursement or any Operational Letter of Credit Disbursement, as the
case may be.
Section 2.04 Election of Interest Rates.
(a) So long as no Default or Event of Default shall have occurred and
be continuing (and notwithstanding the existence of any Default or Event of
Default with respect to a Conversion from a LIBO Rate Loan to a Base Rate Loan),
the Borrower may from time to time elect to Convert any Loan of any Type to a
Loan of the same or any other Type on the following terms and subject to the
following conditions:
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(i) Each such Conversion shall be made as to all or a portion
of the outstanding Loans, on notice given not later than 10:00 a.m.
(New York City time) on the third (3rd) Business Day prior to the date
of the proposed Conversion, in the case of any such Conversion into
LIBO Rate Loans, or on the Business Day prior to the date of the
proposed Conversion, in the case of any such Conversion into Base Rate
Loans, by the Borrower to the Administrative Agent, who shall give each
applicable Lender prompt notice thereof. Each such notice of Conversion
(a "Notice of Conversion") shall be in writing in substantially the
form of Exhibit E hereto, specifying therein the requested (A) date of
such Conversion, (B) Type of, and, with respect to LIBO Rate Loans,
Interest Period applicable to, the Loans proposed to be Converted, (C)
Type of Loans to which such Loans are proposed to be Converted, (D) in
the case of a Conversion to LIBO Rate Loans, initial Interest Period to
be applicable to the Loans resulting from such Conversion and (E)
aggregate amount of Loans proposed to be Converted. If the Notice of
Conversion applies only to a portion of the aggregate principal amount
of the Loans, (X) such portion shall be allocated ratably among the
applicable Lenders and (Y) both the portion to which the Notice of
Conversion applies and the remaining portion to which it does not
apply, shall be sufficient to meet the minimum amounts specified in
Section 2.06(f). In the case of a proposed Conversion into LIBO Rate
Loans, the Administrative Agent shall, within one Business Day of
receiving the Notice of Conversion from the Borrower, notify each
applicable Lender of the interest rate to be applicable to such LIBO
Rate Loan resulting from such Conversion pursuant to this Section 2.04.
(ii) LIBO Rate Loans may not be Converted on a date other than
the last day of the Interest Period then applicable thereto.
(iii) No Conversion may be requested by the Borrower hereunder
unless made in compliance with the definition of "Interest Period,"
Section 2.06 and Section 2.10.
(iv) Any selection by the Borrower of a longer or shorter
Interest Period to be applicable to any LIBO Rate Loan shall be deemed
a Conversion pursuant to this Section 2.04, shall be governed by the
terms and conditions hereof and shall be notified to the Administrative
Agent as herein provided. In the event the Borrower shall fail to elect
an Interest Period in respect of any LIBO Rate Loan prior to the
expiration of the then current Interest Period in respect of such LIBO
Rate Loan, then such LIBO Rate Loan shall automatically be Converted
into a Base Rate Loan in accordance with this Section 2.04.
(b) Each Notice of Borrowing and Notice of Conversion shall be
irrevocable and binding on the Borrower. The Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill, on or before the proposed date specified in such Notice
of Borrowing or Notice of Conversion, as the case may be, the applicable
conditions set forth in this Article II or Article III, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Lender to fund or
Convert such Loan.
46
(c) So long as any Interest Hedge Contract is in effect with respect to
any Loans, the Borrower shall maintain as LIBO Rate Loans having Interest
Periods corresponding to the payment dates under such Interest Hedge Contract an
aggregate amount of Loans at least equal to the notional amount then in effect
under such Interest Hedge Contract, except to the extent the Borrower would be
prevented from complying with this Section 2.04(c) by operation of Section 2.10.
Section 2.05 Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent,
quarterly in arrears on each Quarterly Payment Date, for the account of each
Lender, commitment fees (the "Commitment Fees") of .50% per annum on the average
daily unutilized amount of each Working Capital Lender's Working Capital Loan
Commitment during the period from the Restructuring Effective Date until, and
including, the Final Maturity Date. For purposes of this Section 2.05(a), the
"unutilized amount" of a Working Capital Lender's Working Capital Loan
Commitment on any date shall mean the amount of such Working Capital Lender's
Working Capital Loan Commitment on such date, minus the sum of (X) its
outstanding Working Capital Advances on such date and (Y) its Letter of Credit
Exposure on such date.
(b) Agency Fee. The Borrower shall pay the Agency Fee to the
Administrative Agent, for the Administrative Agent's own account, in accordance
with the terms of the Administrative Agent Fee Side Letter.
(c) Letter of Credit Fees. The Borrower shall pay (i) the ConEd Letter
of Credit Fees to the applicable Persons in accordance with the terms set forth
in Section 2.16 below and (ii) any Operational Letter of Credit Fees to the
applicable Persons in accordance with the terms set forth in Section 2.17 below.
(d) Other Fees. The Borrower shall pay all Fees not specifically
contemplated by clauses (a) and (b) of this Section 2.05 to the appropriate
Persons in the amounts and at such times as set forth in the Fee Side Letters
and any other applicable Financing Document.
Section 2.06 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Lender from the date of such
Advance until such principal amount shall be paid in full, at one of the
following rates per annum:
(a) If such Advance is a Base Rate Advance, a rate per annum equal at
all times to the sum of the Base Rate in effect from time to time plus the
Applicable Margin, payable quarterly in arrears on each applicable Interest
Payment Date and on the date that such Base Rate Advance shall be repaid in
full.
(b) If such Advance is a LIBO Rate Advance, a rate per annum equal at
all times during each Interest Period for such Advance to the sum of the LIBO
Rate for such Interest Period for such Advance plus the Applicable Margin,
payable on the applicable Interest Payment Date and on the date that such LIBO
Rate Advance shall be repaid in full.
(c) If an Event of Default shall have occurred and be continuing and
whether or not so specified in any Note, the Borrower shall pay, upon receipt of
written demand, interest
47
on the entire principal amount of the Loans to the extent permitted by
applicable Requirements of Law, on any overdue installment of interest and on
any other amount due hereunder during such period at a rate per annum equal at
all times to 2.00% plus the LIBO Rate for such period plus the LIBO Rate Margin
for such period, if the Loans are LIBO Rate Loans or, at a rate per annum equal
to 2.00% plus the Base Rate for such period plus the Base Rate Margin for such
period, if the Loans are Base Rate Loans, which increased interest shall be
payable on the last Business Day of each month during the continuation of such
Event of Default.
(d) If the Administrative Agent is unable at any time to determine the
LIBO Rate for LIBO Rate Loans, if the Administrative Agent shall determine that
the LIBO Rate does not reflect the cost of funding LIBO Rate Loans or if any
Lender shall have determined that such Lender is unable to acquire funding in a
reasonable manner so as to make available LIBO Rate Loans in the amount and for
the Interest Period requested, the right to maintain the Loans as LIBO Rate
Loans shall be suspended at the end of the then current Interest Period and all
Loans shall be maintained as Base Rate Loans until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(e) At no time shall more than six (6) different Interest Periods be in
effect as to outstanding LIBO Rate Loans hereunder.
(f) Each LIBO Rate Loan shall be in a minimum aggregate principal
amount of $1,000,000.
Section 2.07 Mandatory Prepayments.
(a) Subject to Section 2.07(c) hereof, all Extraordinary Proceeds
received by the Administrative Agent or any Borrower Entity shall be applied to
prepay the then outstanding Acquisition Loans in accordance with the Deposit
Account Agreement, and after all Acquisition Loans have been prepaid in full,
applied to prepay then outstanding Working Capital Loans in accordance with the
Deposit Account Agreement. Any prepayment of Working Capital Loans required by
this Section 2.07(a) shall automatically reduce pro rata the amount of Working
Capital Loan Commitments by an amount equal to the prepayment so required.
Contemporaneously with any reduction of Working Capital Commitments required by
this Section 2.07(a), the Borrower shall cash collateralize with the
Administrative Agent the difference between (y) any Letter of Credit Exposure
existing at such time, less (z) the aggregate amount of the Working Capital Loan
Commitments existing after the application of the terms of this Section 2.07(a),
until such time as such Letter of Credit Exposure no longer exists. Nothing in
this Section 2.07(a) shall be deemed to imply that any of the activities or
actions described in clauses (ii) or (iii) of the definition of Extraordinary
Proceeds are permitted under this Agreement other than as specifically set forth
in this Agreement.
(b) In addition to the foregoing, until the Final Maturity Date, the
Borrower shall prepay the Acquisition Loans (i) on a quarterly basis in such
amounts as set forth on Schedule 2.07 attached hereto unless accelerated sooner
pursuant to Article VII and (ii) upon receipt of the proceeds of any equity
contribution or loan from Holdco when and as required by the Holdco Deposit
Account Agreement.
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(c) Notwithstanding Section 2.07(a) hereof, to the extent that
prepayment of Loans with Extraordinary Proceeds would require the Borrower to
pay Funding Breakage Costs in accordance with Section 2.09(c) below, such
Extraordinary Proceeds shall be deposited in the Extraordinary Proceeds Account
in accordance with the Deposit Account Agreement until such date(s) as the
application of such proceeds can be applied to the prepayment of Loans without
incurring such Funding Breakage Costs.
Otherwise, in the case of LIBO Rate Loans which shall be prepaid
pursuant to this Section 2.07, the Borrower shall, concurrently with such
prepayment, pay all applicable Funding Breakage Costs in accordance with Section
2.09(c) below.
(d) In the event the interest rate on any Acquisition Loans is fixed or
capped pursuant to an Interest Hedge Contract, the Borrower shall pay all
Settlement Amounts required under such Interest Hedge Contract in connection
with any mandatory prepayment of such Loan.
Section 2.08 Voluntary Prepayment; Termination of Commitments; Working
Capital Commitment Reductions. (a) As permitted by the Deposit Account Agreement
and Holdco Deposit Account Agreement, the Borrower may, upon at least five
Business Days' prior written notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amounts of
the Loans in whole or ratably in part in the amount set forth in such notice,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, that (i) each partial prepayment shall be in a minimum
aggregate principal amount of $1,000,000 or whole multiples thereof (or, if
less, the entire balance then remaining), (ii) concurrently with such payment,
the Borrower shall pay all applicable Funding Breakage Costs in accordance with
Section 2.09(c) below and, (iii) to the extent applicable, the Borrower shall
have reduced the aggregate notional amounts of any Interest Hedge Contracts
existing on such prepayment date such that such aggregate notional amounts do
not exceed the aggregate principal amount of outstanding Loans on such date and
shall have paid any Settlement Amounts incurred in connection therewith. Each
such voluntary prepayment shall otherwise be without penalty or premium.
(b) The Working Capital Loan Commitments shall be automatically
terminated on the expiration of the Working Capital Loan Availability Period.
(c) Upon at least five Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Working Capital Loan Commitments; provided, that, (i) each partial reduction
of the Working Capital Loan Commitments shall be in an aggregate principal
amount which is equal to $1,000,000 or an integral multiple thereof; (ii)
concurrently with such payment, the Borrower shall pay all applicable Funding
Breakage Costs in accordance with Section 2.09 (c) below, (iii) to the extent
applicable, the Borrower shall have reduced the aggregate notional amounts of
any Interest Hedge Contracts existing on such prepayment date such that such
aggregate notional amounts do not exceed the aggregate principal amount of
outstanding Loans on such date and shall have paid any Settlement Amounts
incurred in connection therewith, and (iv) concurrently with any such reduction
in the Working Capital Loan Commitments, the Borrower shall deposit with the
49
Administrative Agent cash collateral in an amount equal to the difference
between (y) any Letter of Credit Exposure existing at such time, less (z) the
aggregate amount of the Working Capital Loan Commitments existing after the
effectiveness of such reduction, until such time as such Letter of Credit
Exposure no longer exists.
(d) Each reduction in the Working Capital Loan Commitments shall be
made ratably among the Working Capital Lenders in accordance with their
respective Working Capital Loan Commitments. The Borrower shall pay to the
Administrative Agent for the account of the Working Capital Lenders, on the date
of each termination or reduction of the Working Capital Loan Commitments, all
accrued but unpaid Commitment Fees on the amount of the Working Capital Loan
Commitments so terminated or reduced accrued to the date of such termination or
reduction.
(e) Upon at least five Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time prepay
all or any portion of the outstanding principal balance of Working Capital Loans
pursuant to Section 5.2(f) of the Deposit Account Agreement.
Section 2.09 Increased Costs; Capital Adequacy; Funding Breakage Costs.
(a) If, due to either (i) the enactment, promulgation or any change
(including any change by way of imposition of reserve requirements in the case
of LIBO Rate Loans) in any Requirement of Law or in the interpretation or
administration of any Requirement of Law by any Governmental Authority charged
with the interpretation or administration thereof on or after the date hereof or
(ii) the compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law) imposed on or after the date
hereof, there shall be any increase in the cost to any Lender of agreeing to
make or making, funding or maintaining LIBO Rate Loans, then such Lender shall
deliver to the Borrower and the Administrative Agent a certificate as to the
amount of such increased cost setting forth in reasonable detail the basis for
calculation thereof as soon as practicable but in no event later than one
hundred twenty (120) days after such Lender has actual knowledge of the event
(the date that is 120 days from the date any Lender obtains actual knowledge of
any such event being referred to herein as the "Notice Date"). Within fifteen
(15) days after delivery of such certificate, the Borrower shall pay to such
Lender the amount shown as due on the certificate; provided, that the Borrower
shall not be obligated to compensate that Lender for the amount of such
increased cost incurred during the period of time from the Notice Date to the
date of actual delivery of the certificate. A certificate as to the amount of
such increased cost showing the basis therefor and the calculation thereof, in
reasonable detail, submitted to the Borrower and the Administrative Agent by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender determines that compliance with any Requirement of
Law or regulation or with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
this Agreement, any Letter of Credit or such Lender's Commitments, or its making
or maintaining Loans below the rate which the Lender or any other corporation
would have achieved but for such compliance (taking into account the policies of
such Lender or
50
corporation with regard to capital), then such Lender shall deliver to the
Borrower and the Administrative Agent a certificate setting forth in reasonable
detail the amount being charged by such Lender and the basis for the
determination of such amount as soon as practicable but in no event later than
the Notice Date in respect thereof. Within fifteen (15) days after delivery of
such certificate, the Borrower shall pay to such Lender the amount shown as due
on the certificate; provided, that the Borrower shall not be obligated to
compensate that Lender for the amount of such charge incurred with respect to a
period of time from the Notice Date to the date of actual delivery of the
certificate. A certificate as to such amounts, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(c) If (i) any payment of principal of any LIBO Rate Loan is made other
than on the last day of the Interest Period for such Loan, as a result of a
payment or prepayment of such Loan or acceleration of the maturity of the Notes
or for any other reason or (ii) upon failure to prepay a LIBO Rate Loan after
notice of prepayment has been given or any failure to borrow a LIBO Rate Loan,
continue a LIBO Rate Loan or convert a LIBO Rate Loan after notice of borrowing,
continuation or conversion has been given, then the Borrower shall, upon demand
by any Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Loan.
The foregoing amounts payable by the Borrower under this Section 2.09(c) shall
be referred to herein as "Funding Breakage Costs".
(d) Each Lender agrees to notify the Borrower and the Administrative
Agent of any circumstances that would cause the Borrower to pay additional
amounts pursuant to subsections (a) and (b) of this Section 2.09 on or prior to
the Notice Date; provided, that, the failure to give such notice shall not
affect the Borrower's obligation to pay any such additional amounts accrued
prior to the Notice Date or after delivery of such notice.
Section 2.10 Illegality. If the enactment, promulgation or any change
in or in the interpretation of any Requirement of Law after the Restructuring
Effective Date shall make it unlawful, or any central bank or other Governmental
Authority to which any Lender is subject shall assert that it is unlawful, for
any Lender or its LIBO Lending Office to perform its obligations hereunder to
make LIBO Rate Loans or to continue to fund or maintain LIBO Rate Loans
hereunder, then, on notice thereof and demand therefor by such Lender to the
Borrower through the Administrative Agent, the obligation of such Lender to make
or maintain LIBO Rate Loans shall be suspended until such Lender shall notify
the Administrative Agent that the circumstances causing such suspension no
longer exist and such Lender shall maintain all of its Loans as Base Rate Loans.
Section 2.11 Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes
not later than 12:00 Noon New York City time on the day when due in Dollars to
the Administrative Agent at its Applicable Lending Office in immediately
available funds. The
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Administrative Agent shall promptly thereafter cause to be distributed like
funds relating to the payment of principal, interest or Fees (other than amounts
payable to the Administrative Agent for Agency Fees and expenses or to reimburse
the Administrative Agent pursuant to Section 2.12) ratably to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its Applicable Lending Office, in each case to be distributed
and applied in accordance with the terms of subsection (b) of this Section 2.11.
(b) All payments received by the Administrative Agent in respect of the
Loans whether received under Section 2.11(a), in connection with any sale or
other realization upon the Collateral or otherwise shall be distributed and
applied in the order and in the amounts set forth in the Intercreditor Agreement
and the Deposit Account Agreement.
(c) The Borrower hereby authorizes each Lender, if and to the extent
that the Borrower has failed to pay amounts due hereunder or under any Financing
Document and as a result payment owed to such Lender is not made when due
hereunder or under any other Financing Document, to charge from time to time
against any or all of the Borrower's accounts with such Lender any amount so
due. Each Lender receiving any payment as a result of charging any such account
shall promptly notify the Administrative Agent thereof and make such
arrangements as the Administrative Agent shall request to share the benefit
thereof in accordance with Section 2.13 and the Deposit Account Agreement.
(d) All computations of (i) interest hereunder based on the LIBO Rate
or the Federal Funds Rate and (ii) Commitment Fees, shall be made by the
Administrative Agent on the basis of a year of 360 days and all computations of
interest hereunder based on the Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, in each
case for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest or fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(e) Except as contemplated by the definition of "Interest Period" for
LIBO Rate Loans, whenever any payment hereunder or under any Financing Document
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the first Business Day preceding such required payment date.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to a Secured Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may, but shall not be required to, assume that the Borrower
has made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, but shall not be
required to, cause to be distributed to each Secured Party on such due date an
amount equal to the amount then due such Secured Party. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, each Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, (i) at the Federal Funds
Rate
52
for the three Business Days following demand by the Administrative Agent and
(ii) the Federal Funds Rate plus 1% for each day thereafter.
(g) Unless the Administrative Agent shall have received notice from a
Secured Party prior to the date of any Borrowing, or prior to the time of any
required payment by such Secured Party in respect of a ConEd Letter of Credit
Disbursement or an Operational Letter of Credit Disbursement, as the case may
be, that such Secured Party will not make available to the Administrative Agent
such Secured Party's portion of such Borrowing or payment, the Administrative
Agent may assume that such Secured Party has made such portion available to the
Administrative Agent on the date of such Borrowing or payment in accordance with
Section 2.03 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Secured Party shall not have made such portion available to
the Administrative Agent, such Secured Party and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower or the Issuing Bank (or, if the Administrative Agent
and the Issuing Bank are the same person, from the date of such payment in
respect of a ConEd Letter of Credit Disbursement or an Operational Letter of
Credit Disbursement, as the case may be), as applicable, until the date such
amount is repaid to the Administrative Agent at (i) in the case of the Borrower,
the interest rate applicable thereto pursuant to Section 2.06 or 2.16(g), as
applicable, and (ii) in the case of such Secured Party, (y) the Federal Funds
Rate for the three Business Days following demand by the Administrative Agent
and (z) the Federal Funds Rate plus 1% for each day thereafter.
Section 2.12 Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes
to or for the benefit of any Secured Party shall be made free and clear of and
without deduction for any and all present or future taxes (including, without
limitation, income, gross receipts, franchise, sales, use, personal property,
license, stamp, documentary, recording, privilege or other excise tax), levies,
imposts, deductions, charges or withholdings, together with any penalties, fines
or interest thereon, and all liabilities with respect thereto, imposed by any
Governmental Authority, excluding, income or franchise taxes measured by net
income imposed under the laws of the United States or any state, or any
political subdivision thereof, in which each such Secured Party is organized,
or, solely in the case of each such Lender, in which the Applicable Lending
Office or the principal office of such Lender is located (all such excluded net
income taxes and franchise taxes hereinafter referred to as "Income Taxes" and
all nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to or for the benefit of any Secured Party Lender,
(i) the sum payable shall be increased as may be necessary so that after making
all required deductions of Taxes (including deductions of Taxes applicable to
additional sums payable under this Section 2.12) such Secured Party receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount so deducted to the relevant taxation authority or other
authority in accordance with applicable Requirement of Law.
53
(b) In addition, without limiting the generality of this Section 2.12,
the Borrower agrees to pay any present or future stamp, documentary, recording,
privilege, intangible or similar taxes or any other excise or property taxes,
charges or similar levies that arise at any time or from time to time (i) from
any payment made under any and all Financing Documents, (ii) from the transfer
of the rights of any Secured Party under any Financing Documents to any other
Secured Party or (iii) from the execution or delivery by the Borrower, any
Credit Party or any OPMW Credit Party of, or from the filing or recording or
maintenance of, or otherwise with respect to, any and all Financing Documents.
(c) The Borrower will indemnify each Secured Party for the full amount
of all Taxes excluding any Income Taxes imposed by any jurisdiction on amounts
payable under this Section 2.12) paid by, or imposed or asserted against, such
Secured Party or any Collateral, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, which Taxes are imposed or asserted in any manner resulting from or
relating to or arising from the execution, delivery or performance of the
Financing Documents, the Transaction Documents or the transactions contemplated
thereby, whether or not such Taxes were correctly or legally asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability prepared by such Secured Party, absent manifest error, shall be
final, conclusive and binding for all purposes. Payment of this indemnification
shall be made within 30 days from the date such Secured Party makes written
demand therefor. With respect to any such Taxes for which any Secured Party is
entitled to indemnification pursuant to this paragraph, such Secured Party,
agrees to cooperate with the Borrower and to provide to it such information as
may be reasonably requested by it for the purpose of establishing the
entitlement of the Borrower to a refund or credit of all or any portion of such
Taxes; provided, that, no Secured Party shall be required to provide to the
Borrower (a) copies of any of its tax or information returns or (b) any other
information which would prejudice the interests of such Secured Party (as
reasonably determined by such Secured Party, in its good faith judgment) or
which it reasonably deems to be of a confidential nature.
(d) As soon as practicable after the date of any payment of Taxes by
the Borrower or other authority to the relevant Governmental Authority, the
Borrower will deliver to the Administrative Agent (for delivery to each Lender)
at its address referred to on its signature page hereto, the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
payment thereof and identifying the Taxes paid. If such receipt does not
identify such Taxes paid, and no procedure exists for identifying such Taxes
paid, the Borrower shall concurrently furnish to the Administrative Agent a
certificate, signed by a Responsible Officer of the Borrower providing such
identification. The Borrower shall compensate each Secured Party, as the case
may be, for all reasonable losses and expenses sustained by such Secured Party,
as a result of any failure by the Borrower to so furnish such original or copy
of such receipt or such certificate.
(e) If any Secured Party is not organized and existing under the laws
of the United States of America or any political subdivision thereof or therein
(a "Foreign Secured Party"), to the extent entitled to do so under any
applicable Requirements of Law, such Secured Party shall furnish to the
Borrower, on the Restructuring Effective Date (or on the date on which such
Foreign Secured Party first becomes a Secured Party pursuant to Section 9.06) a
duly executed certificate to the effect that such Foreign Secured Party is
entitled to receive all
54
amounts payable under the Financing Documents without deduction or withholding
(or at a reduced rate of deduction or withholding) on account of Taxes imposed
by the United States of America (i) pursuant to the terms of an applicable tax
treaty in effect with the United States of America (in which case such
certificate shall be accompanied by two executed copies of IRS Form W-8BEN), or
(ii) under Code Section 1441(c) (in which case such certificate shall be
accompanied by two executed copies of IRS Form W-8ECI) (such forms being the
"Prescribed Forms"). If requested by the Borrower from time to time after the
Restructuring Effective Date (upon the obsolescence of any previously delivered
form or otherwise), or if a new form is required by any applicable Requirement
of Law, a Foreign Secured Party shall, to the extent required thereto under any
applicable Requirement of Law, provide to the Borrower new Prescribed Forms, in
each case duly executed and completed by such Foreign Secured Party. The
Borrower shall not be required to indemnify any Foreign Secured Party or pay any
additional amounts to any Foreign Secured Party pursuant to Sections 2.12(a),
2.12(c) or 2.12(d) to the extent that the obligation to indemnify such Foreign
Secured Party or pay such additional amounts would not have arisen but for the
failure by such Foreign Secured Party to comply with applicable certification,
information or other documentation requirements concerning the nationality,
residency, identity or connection with the United States of such Foreign Secured
Party if such compliance is required by statute or regulation of the United
States as a precondition to relief or exemption from such amounts payable under,
or for which indemnification is given pursuant to, Sections 2.12(a), (c) or (d);
provided, that, the Borrower shall be required to indemnify each Foreign Secured
Party to the extent that (A) any such payment or indemnification is attributable
to an enactment, promulgation or any change in or interpretation of any
Requirement of Law occurring after the date hereof and (B) such deductions,
withholding, payments or liabilities accrue after the date on which such Secured
Party timely furnishes to the Borrower all Prescribed Forms required to be
furnished by this Section 2.12(e) with respect to such enactment, promulgation
or any change in or interpretation of any Requirement of Law.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.12 shall survive the payment in full of principal and interest on
the Loans hereunder and under the Notes.
Section 2.13 Sharing of Payments. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of a Loan made by it in excess of its Pro Rata
Share of payments on account of such Loan obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Loan made by it as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, that, if all or
any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's Pro Rata Share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
to the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.13
may, to the fullest extent permitted by law, exercise all its rights of payment
55
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 2.14 Change of Applicable Lending Office. Without affecting its
rights under Section 2.09(a), 2.09(b), 2.10 or 2.12, each of the Lenders, the
Issuing Bank and the Administrative Agent agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, in its sole opinion)
to designate a different Applicable Lending Office if such redesignation would
thereafter eliminate or reduce any amounts that the Borrower is required to pay
to any of the Lenders, the Issuing Bank or the Administrative Agent pursuant to
such Sections; provided, that, in determining, in its sole opinion, whether
designating a different Applicable Lending Office would be disadvantageous to
it, the applicable Lender, the Issuing Bank or the Administrative Agent, as the
case may be, shall disregard any direct financial loss of making such a
designation if the Borrower agrees in form and substance satisfactory to such
Lender, the Issuing Bank or the Administrative Agent, as the case may be, to
indemnify and hold such Lender, the Issuing Bank or the Administrative Agent, as
the case may be, harmless from such financial loss and provided, further, that
any out-of-pocket costs and expenses associated with such efforts shall be paid
or reimbursed by the Borrower.
Section 2.15 Replacement of Lenders. On each occasion that a Lender
either makes a demand for compensation pursuant to Section 2.06(d), 2.09(a),
2.09(b) or 2.12 in an amount in excess of the amount that the Borrower would
have had to pay pursuant to such Sections if such Lender's Commitments were held
by a Lender with respect to which no such amounts would then be payable pursuant
to any such Section or is unable for a period of two consecutive months to fund
or maintain LIBO Rate Loans pursuant to Section 2.10, the Borrower may, upon at
least ten (10) Business Days' prior written notice to each of such Lender and
the Administrative Agent and upon the payment by the Borrower of all applicable
assignment fees associated therewith (as set forth in Section 9.06(j) below), in
whole permanently replace the Commitment of such Lender; provided, that, the
Borrower shall replace such Commitment with the commitment of (i) a commercial
bank which is reasonably satisfactory to the Administrative Agent or (ii) any
other Lender (a "Replacement Lender"). Such Replacement Lender shall, upon the
effective date of replacement, purchase the Obligations owed to such replaced
Lender for the aggregate amount thereof and shall thereupon for all purposes
become a "Lender" hereunder. Such notice from the Borrower shall specify an
effective date for the replacement of such Lender's Commitment, which date shall
not be earlier than the tenth (10th) day after the day such notice is given. On
the effective date of any replacement of such Lender's Commitment pursuant to
this Section 2.15, the Borrower shall pay to the Administrative Agent for the
account of such Lender (i) any Fees or other amounts due to such Lender to the
date of such replacement, (ii) accrued interest on the principal amount of
outstanding Loans held by such Lender to the date of such replacement and (iii)
the amount or amounts payable to such Lender pursuant to Section 2.09(a),
Section 2.09(b) or Section 2.12, as applicable. The Borrower will be liable to
such replaced Lender for costs that such Lender may sustain or incur pursuant to
Section 2.09(c) as a direct consequence of repayment of such Lender's Loans.
Upon the effective date of repayment of any Lender's Commitment and Obligations
pursuant to this Section 2.15, such Lender shall cease to be a "Lender"
hereunder. No such termination of any such Lender's Commitment and the purchase
of such Lender's Loans pursuant to this Section 2.15 shall affect (x) any
liability or obligation of the Borrower or any other Lender to such terminated
Lender
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which accrued on or prior to the date of such termination or (y) such terminated
Lender's rights hereunder in respect of any such liability or obligation.
Section 2.16 ConEd Letter of Credit.
(a) The Borrower may request the issuance of the ConEd Letter of
Credit, for the account of the Borrower, at any time during the ConEd Letter of
Credit Availability Period; provided, that, the ConEd Letter of Credit shall be
issued only if (and a request by the Borrower for the issuance of the ConEd
Letter of Credit shall be deemed a representation and warranty of the Borrower
that) immediately following the issuance of the ConEd Letter of Credit, (i) the
ConEd Letter of Credit Exposure shall not exceed $10,000,000, and (ii) the sum
of the aggregate Letter of Credit Exposure and the aggregate principal amount of
outstanding Working Capital Loans at such time shall not exceed lesser of (y)
the aggregate Working Capital Loan Commitments at such time and (z) the Maximum
Working Capital Loan Amount.
(b) The ConEd Letter of Credit shall expire at 5:00 p.m., New York City
time, on the last day of the ConEd Letter of Credit Availability Period, unless
the ConEd Letter of Credit expires by its terms (or is required by Section
2.16(c) to expire) on an earlier date. The ConEd Letter of Credit shall provide
for payments of drawings in Dollars.
(c) The issuance of the ConEd Letter of Credit shall be made on at
least five Business Days' prior irrevocable written or telecopy notice (such
notice to be delivered by 10:00 a.m., New York City time) from the Borrower (or
such shorter notice as shall be acceptable to the Issuing Bank) to the
Administrative Agent and the Issuing Bank, specifying the date of issuance, the
date on which the ConEd Letter of Credit is to expire (which shall not be later
than the last day of the ConEd Letter of Credit Availability Period and shall be
for such period of time as is contemplated by the form of letter of credit
attached hereto as Exhibit T), the amount of the ConEd Letter of Credit, the
name and address of the beneficiary of the ConEd Letter of Credit, and such
other information as may be necessary or desirable to complete the ConEd Letter
of Credit. The Issuing Bank will give the Administrative Agent prompt notice of
the issuance and amount of the ConEd Letter of Credit and the expiration date of
the ConEd Letter of Credit (and the Administrative Agent shall give prompt
notice thereof to each Working Capital Lender). The ConEd Letter of Credit
issued hereunder will be subject to the Uniform Customs and Practices for
Documentary Credits, as in effect from time to time.
(d) By the issuance of the ConEd Letter of Credit and without any
further action on the part of the Issuing Bank, the Administrative Agent or the
Working Capital Lenders in respect thereof, the Issuing Bank hereby grants to
each Working Capital Lender, and each Working Capital Lender hereby acquires
from the Issuing Bank, a participation in the ConEd Letter of Credit equal to
such Working Capital Lender's Pro Rata Share (based on such Working Capital
Lender's Working Capital Loan Commitment) of the aggregate amount available to
be drawn under the ConEd Letter of Credit, effective upon the issuance of the
ConEd Letter of Credit. In consideration and in furtherance of the foregoing,
each Working Capital Lender having a Working Capital Loan Commitment hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, on
behalf of the Issuing Bank, in accordance with Section 2.03(c), such Working
Capital Lender's Pro Rata Share (based on such Working Capital Lender's Working
Capital Loan Commitment) of the ConEd Letter of Credit Disbursement made
57
by the Issuing Bank and not reimbursed by the Borrower when due in accordance
with Section 2.16(g); provided, that, the Working Capital Lenders shall not be
obligated to make any such payment with respect to any wrongful ConEd Letter of
Credit Disbursement made as a result of the gross negligence or willful
misconduct of the Issuing Bank.
(e) Each Working Capital Lender acknowledges and agrees that its
obligation to acquire participations pursuant to Section 2.16(d) in respect of
the ConEd Letter of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or Event of Default, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever
(subject only to the proviso set forth in the last sentence of Section 2.16(d)).
(f) During the ConEd Letter of Credit Availability Period, from and
after the date on which the ConEd Letter of Credit is issued, the Borrower shall
pay to the Administrative Agent, on each Quarterly Payment Date in each year and
on the date on which the Working Capital Loan Commitments shall be terminated as
provided herein, (i) for the account of the Working Capital Lenders, ratably in
proportion to their Working Capital Loan Commitments, a fee on the average daily
aggregate undrawn amount of the ConEd Letter of Credit during the preceding
quarter (or shorter period commencing with the Restructuring Effective Date) at
a rate per annum equal to the applicable LIBO Rate Margin from time to time in
effect during such period pursuant to Section 2.06 and (ii) for the account of
the Issuing Bank, a fee on the average daily aggregate amount available to be
drawn under the ConEd Letter of Credit during the preceding quarter (or shorter
period commencing with the Restructuring Effective Date) at a rate per annum
equal to 0.25%. Such fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days. Such fees shall accrue from and including
the Restructuring Effective Date to but excluding the last day of the ConEd
Letter of Credit Availability Period. In addition to the foregoing, the Borrower
shall pay directly to the Issuing Bank, for its account, payable within 15 days
after written demand therefor by the Issuing Bank has been received by the
Borrower, the Issuing Bank's out-of-pocket expenses and customary fees in
connection with the issuance, transfer or amendment of or payment on the ConEd
Letter of Credit.
(g) The Borrower hereby agrees to reimburse the Issuing Bank for any
payment or disbursement made by the Issuing Bank under the ConEd Letter of
Credit, by making payment in immediately available funds to the Administrative
Agent within one Business Day after receipt of notice of such payment or
disbursement, in an amount equal to the amount of such payment or disbursement,
plus interest on the amount so paid or disbursed by the Issuing Bank, to the
extent not reimbursed prior to 12:00 p.m. (New York City time) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but excluding the date the Issuing Bank is reimbursed by the Borrower therefor,
at a rate per annum equal to the rate applicable to Base Rate Working Capital
Loans during such period pursuant to Section 2.06. In the event the Borrower
fails to reimburse the Issuing Bank as required by the preceding sentence, the
Issuing Bank shall so notify the Administrative Agent and such payment or
disbursement shall be reimbursed to the Issuing Bank as contemplated by Section
2.03(c) or Section 2.16(d), as applicable. The Issuing Bank shall give the
Borrower prompt notice of each drawing under the ConEd Letter of Credit,
provided, that, the failure to give any such notice shall in no way affect,
impair or diminish the Borrower's obligations hereunder. The Administrative
Agent shall promptly pay any such amounts received by it to the Issuing Bank.
58
(h) The Borrower's obligation to reimburse ConEd Letter of Credit
Disbursements as provided in Section 2.16(g) shall be absolute, unconditional
and irrevocable and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances, including the following:
(i) any lack of validity or enforceability of the ConEd Letter
of Credit or any other Financing Document;
(ii) except as otherwise provided in clause (iv) of this
Section 2.16(h), the existence of any claim, setoff, defense or other
right which the Borrower, any Subsidiary or any other person may at any
time have against the beneficiary under the ConEd Letter of Credit, the
Issuing Bank, the Administrative Agent, any Working Capital Lender or
any other person in connection with this Agreement, any other Financing
Document or any other related or unrelated agreement or transaction;
(iii) any draft or other document presented under the ConEd
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or failing to comply with the Uniform
Customs and Practices for Documentary Credits, as in effect from time
to time, or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the Issuing Bank under the ConEd Letter of
Credit against presentation of a draft or other document which does not
comply with the terms of the ConEd Letter of Credit; provided, that,
such payment was not wrongfully made as a result of the gross
negligence or willful misconduct of the Issuing Bank;
(v) any amendment, waiver or consent in respect of this
Agreement or any other Financing Document; and
(vi) any other act or omission or delay of any kind or any
other circumstance or event whatsoever, whether or not similar to any
of the foregoing and whether or not foreseeable, that might, but for
the provisions of this Section 2.16(h), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(i) It is expressly understood and agreed that, for purposes of
determining whether a wrongful payment under the ConEd Letter of Credit resulted
from the Issuing Bank's gross negligence or willful misconduct, (i) the Issuing
Bank's acceptance of documents that appear on their face to comply with the
requirements of the ConEd Letter of Credit, without responsibility for further
investigation, regardless of any notice or information to the contrary, (ii) the
Issuing Bank's exclusive reliance on the documents presented to it under the
ConEd Letter of Credit as to any and all matters set forth therein, including
the amount of any draft presented under the ConEd Letter of Credit, whether or
not the amount due to the beneficiary thereunder equals the amount of such draft
and whether or not any document presented pursuant to the ConEd Letter of Credit
proves to be insufficient in any respect (so long as such document on its face
appears to comply with the requirements of the ConEd Letter of Credit), and
whether or not any other statement or any other document presented pursuant to
the ConEd Letter of Credit proves to be forged or invalid or any statement
therein proves to be inaccurate or untrue in any respect whatsoever and (iii)
any noncompliance in any immaterial respect of the documents
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presented under the ConEd Letter of Credit with the terms thereof shall, in each
case, be deemed not to constitute willful misconduct or gross negligence of the
Issuing Bank. It is further understood and agreed that, notwithstanding the
proviso to clause (iv) of Section 2.16(h), the Borrower's obligation hereunder
to reimburse Letter of Credit Disbursements will not be excused by the gross
negligence or willful misconduct of the Issuing Bank to the extent that the
ConEd Letter of Credit Disbursement actually discharged a liability of, or
otherwise benefited, or was recovered by, the Borrower; provided, that, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages suffered by the Borrower that
are caused by the Issuing Bank's gross negligence or willful misconduct in
determining whether drafts and other documents presented under the ConEd Letter
of Credit comply with the terms thereof.
(j) The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under the
ConEd Letter of Credit. The Issuing Bank shall as promptly as possible give
telephonic notification, confirmed by telex or telecopy, to the Administrative
Agent and the Borrower of such demand for payment and whether the Issuing Bank
has made or will make the ConEd Letter of Credit Disbursement thereunder;
provided, that, the failure to give such notice shall not relieve the Borrower
of its obligation to reimburse the ConEd Letter of Credit Disbursement in
accordance with this Section 2.16. The Administrative Agent shall promptly give
each Working Capital Lender notice thereof.
(k) The Borrower shall use the ConEd Letter of Credit solely to support
its obligations under the ConEd Guarantee Agreement as required thereby.
(l) In the event that the Borrower is required pursuant to the terms of
this Agreement to provide cash collateral in respect of the ConEd Letter of
Credit Exposure, the Borrower shall deposit in an account with the
Administrative Agent, for the benefit of each Lender having a Working Capital
Loan Commitment, an amount in cash equal to the ConEd Letter of Credit Exposure
(or such lesser amount as shall be required hereunder or thereunder). Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of any outstanding ConEd Letter of Credit Exposure. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Moneys in such account shall
be held and applied by the Administrative Agent in accordance with the Deposit
Account Agreement.
Section 2.17 Operational Letters of Credit.
(a) The Borrower may request the issuance of one or more Operational
Letters of Credit, for the account of the Borrower, at any time during the
Operational Letter of Credit Availability Period; provided, that, any
Operational Letter of Credit shall be issued only if (and a request by the
Borrower for the issuance of any Operational Letter of Credit shall be deemed a
representation and warranty of the Borrower that) immediately following the
issuance of such Operational Letter of Credit, (i) the Operational Letter of
Credit Exposure shall not exceed $30,000,000, and (ii) the sum of the aggregate
Letter of Credit Exposure and the aggregate principal amount of outstanding
Working Capital Loans at such time shall not exceed
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the lesser of (y) the aggregate Working Capital Loan Commitments at such time
and (z) the Maximum Working Capital Loan Amount effective as of such time.
(b) Each Operational Letter of Credit shall expire at 5:00 p.m., New
York City time, on the last day of the Operational Letter of Credit Availability
Period, unless such Operational Letter of Credit expires by its terms (or is
required by Section 2.17(c) to expire) on an earlier date. Each Operational
Letter of Credit shall provide for payments of drawings in Dollars.
(c) Each issuance of any Operational Letter of Credit shall be made on
at least three Business Days' prior irrevocable written or telecopy notice (such
notice to be delivered by 10:00 a.m., New York City time) from the Borrower (or
such shorter notice as shall be acceptable to the Issuing Bank) to the
Administrative Agent and the Issuing Bank, specifying whether such Operational
Letter of Credit is a standby letter of credit or a trade letter of credit, the
date of issuance, the date on which such Operational Letter of Credit is to
expire (which shall not be later than (i) in all events, the last day of the
Operational Letter of Credit Availability Period and (ii)(A) in the case of
standby letters of credit, subject to extension or renewal, one year after the
date of issuance of such Operational Letter of Credit and (B) in the case of
trade letters of credit, 180 days after the date of issuance of such Operational
Letter of Credit), the amount of such Operational Letter of Credit, the name and
address of the beneficiary of such Operational Letter of Credit, and such other
information as may be reasonably necessary or desirable to complete such
Operational Letter of Credit. The Issuing Bank will give the Administrative
Agent prompt notice of the issuance and amount of such Operational Letter of
Credit and the expiration date of such Operational Letter of Credit (and the
Administrative Agent shall give prompt notice thereof to each Working Capital
Lender). Each Operational Letter of Credit issued hereunder will be subject to
the Uniform Customs and Practices for Documentary Credits, as in effect from
time to time.
(d) By the issuance of an Operational Letter of Credit and without any
further action on the part of the Issuing Bank, the Administrative Agent or the
Working Capital Lenders in respect thereof, the Issuing Bank hereby grants to
each Working Capital Lender, and each Working Capital Lender hereby acquires
from the Issuing Bank, a participation in such Operational Letter of Credit
equal to such Working Capital Lender's Pro Rata Share (based on such Working
Capital Lender's Working Capital Loan Commitment) of the aggregate amount
available to be drawn under such Operational Letter of Credit, effective upon
the issuance of such Operational Letter of Credit. In consideration and in
furtherance of the foregoing, each Working Capital Lender having a Working
Capital Loan Commitment hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, on behalf of the Issuing Bank, in accordance with
Section 2.03(c), such Working Capital Lender's Pro Rata Share (based on such
Working Capital Lender's Working Capital Loan Commitment) of each Operational
Letter of Credit Disbursement made by the Issuing Bank and not reimbursed by the
Borrower when due in accordance with Section 2.17(g); provided, that, the
Working Capital Lenders shall not be obligated to make any such payment with
respect to any wrongful Operational Letter of Credit Disbursement made as a
result of the gross negligence or willful misconduct of the Issuing Bank.
(e) Each Working Capital Lender acknowledges and agrees that its
obligation to acquire participations pursuant to Section 2.17(d) in respect of
Operational Letters of Credit is
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absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever (subject only to the proviso set forth in
the last sentence of Section 2.17(d)).
(f) During the Operational Letter of Credit Availability Period, the
Borrower shall pay to the Administrative Agent, on each Quarterly Payment Date
in each year and on the date on which the Working Capital Loan Commitments shall
be terminated as provided herein, (i) for the account of the Working Capital
Lenders, ratably in proportion to their Working Capital Loan Commitments, a fee
on the average daily aggregate undrawn amount of all outstanding Operational
Letters of Credit during the preceding quarter (or shorter period commencing
with the Restructuring Effective Date) at a rate per annum equal to the
applicable LIBO Rate Margin from time to time in effect during such period
pursuant to Section 2.06 and (ii) for the account of the Issuing Bank, a fee on
the average daily aggregate amount available to be drawn under all outstanding
Operational Letters of Credit during the preceding quarter (or shorter period
commencing with the Restructuring Effective Date) at a rate per annum equal to
0.25%. Such fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. Such fees shall accrue from and including the
Restructuring Effective Date to but excluding the last day of the Operational
Letter of Credit Availability Period. In addition to the foregoing, the Borrower
shall pay directly to the Issuing Bank, for its account, payable within 15 days
after written demand therefor by the Issuing Bank has been received by the
Borrower, the Issuing Bank's out-of-pocket expenses in connection with the
issuance, transfer or amendment of or payment on any Operational Letter of
Credit.
(g) The Borrower hereby agrees to reimburse the Issuing Bank for any
payment or disbursement made by the Issuing Bank under any Operational Letter of
Credit (each an "Operational Letter of Credit Disbursement"), by making payment
in immediately available funds to the Administrative Agent within one Business
Day after receipt of notice of such payment or disbursement, in an amount equal
to the amount of such payment or disbursement, plus interest on the amount so
paid or disbursed by the Issuing Bank, to the extent not reimbursed prior to
12:00 p.m. (New York City time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but excluding the date the
Issuing Bank is reimbursed by the Borrower therefor, at a rate per annum equal
to the rate applicable to Base Rate Working Capital Loans during such period
pursuant to Section 2.06. In the event the Borrower fails to reimburse the
Issuing Bank as required by the preceding sentence, the Issuing Bank shall so
notify the Administrative Agent and such payment or disbursement shall be
reimbursed to the Issuing Bank as contemplated by Section 2.03(c) or Section
2.17(d), as applicable. The Issuing Bank shall give the Borrower prompt notice
of each drawing under any Operational Letter of Credit, provided, that, the
failure to give any such notice shall in no way affect, impair or diminish the
Borrower's obligations hereunder. The Administrative Agent shall promptly pay
any such amounts received by it to the Issuing Bank.
(h) The Borrower's obligation to reimburse Operational Letter of Credit
Disbursements as provided in Section 2.17(g) shall be absolute, unconditional
and irrevocable and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances, including the following:
62
(i) any lack of validity or enforceability of any Operational
Letter of Credit or any other Financing Document;
(ii) except as otherwise provided in clause (iv) of this
Section 2.17(h), the existence of any claim, setoff, defense or other
right which the Borrower, any Affiliate or any other person may at any
time have against the beneficiary under any Operational Letter of
Credit, the Issuing Bank, the Administrative Agent, any Working Capital
Lender or any other person in connection with this Agreement, any other
Financing Document or any other related or unrelated agreement or
transaction;
(iii) any draft or other document presented under an
Operational Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or failing to comply with the Uniform
Customs and Practices for Documentary Credits, as in effect from time
to time, or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the Issuing Bank under an Operational Letter
of Credit against presentation of a draft or other document which does
not comply with the terms of such Operational Letter of Credit;
provided, that, such payment was not wrongfully made as a result of the
gross negligence or willful misconduct of the Issuing Bank;
(v) any amendment, waiver or consent in respect of this
Agreement or any other Financing Document; and
(vi) any other act or omission or delay of any kind or any
other circumstance or event whatsoever, whether or not similar to any
of the foregoing and whether or not foreseeable, that might, but for
the provisions of this Section 2.17(h), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(i) It is expressly understood and agreed that, for purposes of
determining whether a wrongful payment under an Operational Letter of Credit
resulted from the Issuing Bank's gross negligence or willful misconduct, (i) the
Issuing Bank's acceptance of documents that appear on their face to comply with
the requirements of such Operational Letter of Credit, without responsibility
for further investigation, regardless of any notice or information to the
contrary, (ii) the Issuing Bank's exclusive reliance on the documents presented
to it under such Operational Letter of Credit as to any and all matters set
forth therein, including the amount of any draft presented under such
Operational Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Operational Letter of Credit proves to be
insufficient in any respect (so long as such document on its face appears to
comply with the requirements of such Operational Letter of Credit), and whether
or not any other statement or any other document presented pursuant to such
Operational Letter of Credit proves to be forged or invalid or any statement
therein proves to be inaccurate or untrue in any respect whatsoever and (iii)
any noncompliance in any immaterial respect of the documents presented under
such Operational
63
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute willful misconduct or gross negligence of the Issuing Bank. It is
further understood and agreed that, notwithstanding the proviso to clause (iv)
of Section 2.17(h), the Borrower's obligation hereunder to reimburse Operational
Letter of Credit Disbursements will not be excused by the gross negligence or
willful misconduct of the Issuing Bank to the extent that such Operational
Letter of Credit Disbursement actually discharged a liability of, or otherwise
benefited, or was recovered by, the Borrower; provided, that, the foregoing
shall not be construed to excuse the Issuing Bank from liability to the Borrower
to the extent of any direct damages suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or willful misconduct in determining whether
drafts and other documents presented under an Operational Letter of Credit
comply with the terms thereof.
(j) The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under an
Operational Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telex or telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether the
Issuing Bank has made or will make the Operational Letter of Credit Disbursement
thereunder; provided, that, the failure to give such notice shall not relieve
the Borrower of its obligation to reimburse Operational Letter of Credit
Disbursement in accordance with this Section 2.17. The Administrative Agent
shall promptly give each Working Capital Lender notice thereof.
(k) The Borrower shall use the Operational Letters of Credit solely to
support various financial and other payment or performance obligations of the
Borrower Entities incurred in the ordinary course of business including, without
limitation, any expansion, repowering, maintenance, repairs, Capital
Expenditures, purchase, sale, transportation or transmission of fuel or
Energy-Related Products, purchases of other goods and services contemplated by
the Operating Budget, and surety bonds (including the Existing Surety Bonds).
For the sake of clarity, the phrase "ordinary course of business" in this
Section 2.17(k) shall include the issuance of Letters of Credit in circumstances
where Cash Collateral is permitted as set forth in Section 6.07(c).
(l) In the event that the Borrower is required pursuant to the terms of
this Agreement to provide cash collateral in respect of the Operational Letter
of Credit Exposure, the Borrower shall deposit in an account with the
Administrative Agent, for the benefit of each Lender having a Working Capital
Loan Commitment, an amount in cash equal to the Operational Letter of Credit
Exposure (or such lesser amount as shall be required hereunder or thereunder).
Such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of any outstanding Operational Letter of Credit
Exposure. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Moneys in such
account shall be held and applied by the Administrative Agent in accordance with
the Deposit Account Agreement.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to the Restructuring Effective Date.
The effectiveness of this Agreement and the obligation of the Lenders to make
any Advances under this Agreement is subject to the fulfillment on the
Restructuring Effective Date (in form, scope and substance satisfactory to the
Lenders) of the following conditions precedent:
(a) Financing Documents. Each of the following Financing Documents
shall have been duly authorized, executed and delivered by each party thereto
and shall be in full force and effect and all associated notices and
acknowledgments shall have been made or waived:
(i) this Agreement;
(ii) the Acquisition Loan Notes;
(iii) the Working Capital Loan Notes;
(iv) the Borrower Security Agreement;
(v) the Intercompany Working Capital Agreement;
(vi) the Intercompany Notes, accompanied by undated assignments
executed in blank;
(vii) the Subsidiary Guarantee;
(viii) the OPMW Guarantee;
(ix) the OPMW Indemnity, Subrogation and Contribution Agreement;
(x) the Holdco Guarantee;
(xi) the Holdco Indemnity and Subrogation Agreement;
(xii) the GP Guarantee;
(xiii) the LP Guarantee;
(xiv) the Erie Boulevard Security Agreement;
(xv) the Carr Street Generating Security Agreement;
(xvi) the Astoria Generating Security Agreement;
(xvii) the OPMW Second Lien Security Agreement;
(xviii) the Twelvepole Second Lien Security Agreement;
65
(xix) the Securities Account Control Agreement;
(xx) the Deposit Account Agreement;
(xxi) the Holdco Securities Account Control Agreement;
(xxii) the Holdco Deposit Account Agreement;
(xxiii) the Partnership Interest Pledge Agreements;
(xxiv) the OPMW Second Lien Twelvepole Membership Interest Pledge
Agreement;
(xxv) the OPMW Second Lien GP Partnership Interest Pledge
Agreement;
(xxvi) the OPMW Second Lien LP Partnership Interest Pledge
Agreement;
(xxvii) the OPH Membership Interest Pledge Agreement;
(xxviii) the Holdco NY Stock Pledge Agreement;
(xxix) the Holdco NY Second Lien Stock Pledge Agreement;
(xxx) the Intercreditor Agreement;
(xxxi) the Astoria First Mortgage and the Astoria Supplemental
Mortgage;
(xxxii) the OPMW Second Lien Mortgages;
(xxxiii) the Twelvepole Second Lien Mortgage; and
(xxxiv) the Financing Statements in respect of the Security
Documents.
(b) Project Contracts. Receipt of a copy of the Project Contracts
specified on Schedule 3.01(b) hereto certified by a Responsible Officer of the
Borrower or a certificate of a Responsible Officer of the Borrower certifying
that each such Project Contract (together with all amendments thereto) have been
previously delivered to the Administrative Agent.
(c) Corporate Proceedings. Receipt of copies of (i) all partnership
actions taken by or on behalf of the Borrower authorizing the execution,
delivery and performance of this Agreement and each other Transaction Document
to which the Borrower is a party, certified by a Responsible Officer of the
Borrower, (ii) all corporate, partnership or limited liability company action
taken by or on behalf of each other Credit Party and OPMW Credit Party
authorizing the execution, delivery and performance of each Transaction Document
to which such Person is a party, certified by a Responsible Officer of such
Person and (iii) all other documents evidencing other necessary corporate,
limited liability company, partnership or other action of each Credit Party and
OPMW Credit Party, with respect to the Financing Documents to which such Person
is a party, certified by a Responsible Officer of such Person.
66
(d) Incumbency; Governing Documents; Federal Tax ID Numbers. Receipt of
a certificate of a secretary or assistant secretary of the Borrower and each
other Credit Party and OPMW Credit Party certifying (x) the names and true
signatures of the officers or authorized representatives of such Person
authorized to sign the Financing Documents to which it is a party and the other
documents to be delivered thereunder, (y) a copy of the Governing Documents of
each Credit Party and OPMW Credit Party as in effect on the Restructuring
Effective Date and (z) the Federal tax identification numbers and addresses of
each Credit Party and OPMW Credit Party.
(e) Good Standing Certificates. Receipt of copies of certificates dated
as of a recent date from the Secretary of State or other appropriate authority
of such jurisdiction evidencing the good standing of the Borrower and each other
Credit Party and OPMW Credit Party in the jurisdiction of incorporation or its
organization, as the case may be, and in every jurisdiction where the character
of such Person's properties or the nature of its activities make such
qualifications necessary.
(f) Legal Opinions. Receipt of the following legal opinions in form and
substance reasonably satisfactory to the Lead Arrangers: (i) Thelen Reid &
Priest LLP, special counsel to the Credit Parties and the OPMW Credit Parties;
(ii) Baker Botts L.L.P., special federal energy regulatory counsel to the Credit
Parties and the OPMW Credit Parties; (iii) Stroock & Stroock & Lavan LLP,
special New York counsel to the Credit Parties and the OPMW Credit Parties; (iv)
Nixon Peabody, special New York regulatory counsel to the Credit Parties and the
OPMW Credit Parties; (v) Jones Day Reavis & Pogue, special Pennsylvania counsel
to the Credit Parties and the OPMW Credit Parties; (vi) Jones Day Reavis &
Pogue, special Ohio counsel to the Credit Parties and the OPMW Credit Parties;
(vii) Jackson & Kelly PLLC, special West Virginia counsel to the Credit Parties
and the OPMW Credit Parties; and (viii) Hugh Rice Kelly, Senior Vice President,
General Counsel and Corporate Secretary of Reliant.
(g) Independent Engineer's Report. Receipt of the Independent
Engineer's Report, addressing all aspects of the Portfolio Assets, including,
without limitation, the forecasted operating and capital costs (including real
estate taxes) of the Portfolio Assets, the ability of the Portfolio Assets to
operate as expected, forecasted heat rates, overall assessment of the Portfolio
Assets and forecasted electricity generation revenues for the Borrower Entities,
fuel-related matters, environmental matters and hydrology characteristics, in
form and substance reasonably satisfactory to the Lead Arrangers.
(h) Power Market and Fuel Consultant's Report. Receipt of the Power
Market and Fuel Consultant's Report, as to matters relating to the New York
Power Pool, the New York Independent System Operator Market and electric power
sales transactions in New York and other markets available to the Portfolio
Assets for the sale of its electricity and capacity.
(i) Fuel Report. Receipt of a fuel report from the Independent
Engineer, in form and substance reasonably satisfactory to the Lead Arrangers.
(j) Fuel Plan. Receipt of the Fuel Plan.
67
(k) Power Marketing Plan. Receipt of the Power Marketing Plan.
(l) Solvency Opinion. Receipt of the Solvency Opinion, in form and
substance reasonably satisfactory to the Lead Arrangers.
(m) O&M Plan. Receipt of the O&M Plan.
(n) Projections. Receipt, on or prior to the Restructuring Effective
Date, of the Projections reasonably acceptable to the Borrower and the Lead
Arrangers.
(o) Fees and Expenses. All fees and expenses due and payable by the
Borrower or any other Credit Party or OPMW Credit Party to any Secured Party
pursuant to any Financing Document on or prior to the Restructuring Effective
Date shall have been paid to the extent invoiced to the Borrower at least one
(1) Business Day prior to the Restructuring Effective Date.
(p) No Legal Proceedings. Except as set forth on Schedule 4.05 hereto,
there shall be no (i) injunction, writ, preliminary restraining order or any
order of any nature issued by an arbitrator, court or other Governmental
Authority in connection with the transactions provided for herein or in the
other Transaction Documents, or (ii) litigation, investigation or proceedings
before any arbitrator, court or other Governmental Authority (A) pending or, to
the Borrower's knowledge threatened against the Borrower, any Credit Party or
OPMW Credit Party, any Portfolio Asset or any of their respective properties,
revenues or assets in which the maximum probable loss (taking into account
insurance) is more than $25,000,000, (B) to the Borrower's knowledge, pending or
threatened against any other Major Project Party or any of its properties,
revenues or assets which, solely with respect to this clause (B), could
reasonably be expected to result in a material adverse affect on the financial
condition of such Major Project Party or such Major Project Party's ability to
perform its obligations under the Project Contract to which it is a party, or
(C) pending, or to the Borrower's knowledge, threatened, with respect to this
Agreement or the other Transaction Documents or any of the transactions
contemplated hereby or thereby. To the Borrower's knowledge, there is no
reasonable basis for any of the foregoing and a Responsible Officer of the
Borrower shall have delivered a certificate of a Responsible Officer of as to
the matters set forth in this Section 3.01(p).
(q) Financial Statements. Unless delivered to any Lender as a Lender
under the Original Credit Agreement, receipt of the consolidated balance sheets
of the Borrower and its consolidated Subsidiaries and of Carr Street Generating,
Erie Boulevard and Astoria Generating for the quarter ended June 30, 2002 and
the balance sheet and income statement of Holdco as of the Restructuring
Effective Date, each prepared in accordance with GAAP and certified as to
accuracy by a Responsible Officer of the Borrower.
(r) Establishment of Accounts. All Accounts and sub-accounts thereof
shall have been established pursuant to the Transaction Documents and the
Borrower shall have caused the amount on deposit in (i) the Debt Service Reserve
Account to be not less than $18,200,000, (ii) the Major Maintenance Reserve
Account to be not less than $400,000, and (iii) the O&M Reserve Account to be
not less than $6,000,000.
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(s) Perfection of Security Interests. All filings, recordings
(including the Astoria First Mortgage) and other actions that are necessary or,
in the reasonable opinion of the Lenders, desirable in order to establish,
protect and preserve (i) the Administrative Agent's (for the benefit of the
Secured Parties) first priority lien on and, perfected security interest in all
right, title, estate and interest in and to the Collateral covered by the OPNY
Primary Security Documents executed and delivered as of the Restructuring
Effective Date, on the terms set forth therein, and (ii) the Administrative
Agent's (for the benefit of the Secured Parties) second priority lien on and,
perfected security interest in all right, title, estate and interest in and to
the Collateral covered by the OPNY Second Lien Documents, on the terms set forth
therein, shall have been duly made or taken or satisfactory arrangements to make
such filings promptly following the Restructuring Effective Date shall be
established. Upon making such filings, the Administrative Agent (for the benefit
of the Secured Parties) shall have, on the terms set forth in such Security
Documents, (i) a first priority lien on and perfected security interest in all
right, title, estate and interest in and to the applicable Collateral covered by
the OPNY Primary Security Documents, in each case prior and superior to all
other Liens except Permitted Liens and (ii) a second priority lien on and
perfected security interest in all right, title, estate and interest in and to
the applicable Collateral covered by the OPNY Second Lien Documents, in each
case prior and superior to all other Liens except Permitted Liens and the Liens
of the OPMW Administrative Agent (for the benefit of the OPMW Secured Parties).
(t) Real Estate Matters. Receipt of endorsements to the lender's
policies of title insurance issued by Commonwealth Land Title Insurance Company
in respect of the real property interests encumbered by the Astoria First
Mortgage, as may be reasonably requested by the Lead Arrangers.
(u) Insurance. (i) Receipt, from the Insurance Consultant, of the
Insurance Consultant's Report in respect of the insurance coverages for the
Portfolio Assets, in form and substance reasonably satisfactory to the Lead
Arrangers, (ii) all insurance policies required to be maintained by any Borrower
Entity pursuant to Section 5.06 shall have been obtained, shall be in full force
and effect on the Restructuring Effective Date and not subject to cancellation
without prior notice, all such insurance policies shall comply in all material
respects with the requirements of Schedule 5.06, all premiums then due and
payable thereon shall have been paid and the Lead Arrangers shall have received
a certificate from the Insurance Consultant as to the matters set forth in this
clause (ii), (iii) the Borrower shall deliver or cause to be delivered originals
or certified copies of all policies evidencing such insurance described in
clause (ii) of this Section 3.01(u) (or a binder, commitment or certificates
signed by the insurer or a broker authorized to bind the insurer) in form and
substance satisfactory to the Lead Arrangers, and (iv) the Insurance Consultant
shall have approved all insurance policies, applications, disclosures and other
information provided to or obtained from, as the case may be, all insurers
providing the insurances identified in Schedule 5.06.
(v) Intellectual Property. The Borrower shall provide satisfactory
evidence to the Lenders that it, Erie Boulevard, Carr Street Generating and
Astoria Generating have obtained, on or prior to the Restructuring Effective
Date, all Intellectual Property rights contemplated by Section 4.19.
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(w) Operating Budget. The Lead Arrangers and the Independent Engineer
shall have received an Operating Budget conforming to the requirements set forth
in the definition thereof and otherwise reasonably acceptable to them.
(x) Process Agent. Receipt of evidence that each Credit Party and OPMW
Credit Party has irrevocably appointed as its agent for service of process
National Registered Agents, Inc. (or another Person satisfactory to the Lead
Arrangers), and that each such agent has accepted the appointment and has agreed
to forward forthwith to such Credit Party or OPMW Credit Party, as the case may
be, all legal process in New York, New York addressed to such Credit Party or
OPMW Credit Party as applicable, received by such agent.
(y) Regulatory Change. Receipt of a certificate of a Responsible
Officer of the Borrower certifying that no Regulatory Change has occurred and is
continuing.
(z) Fee Side Letters. Each Lead Arranger, the Collateral Agent and the
Administrative Agent shall have received a copy of each such Person's respective
Fee Side Letter, in form and substance satisfactory to such Person.
(aa) Lien Searches. Receipt of results of a recent search by a Person
satisfactory to the Lenders of the Uniform Commercial Code, judgment and tax
lien filings which may have been filed with respect to personal property of the
Credit Parties and the OPMW Credit Parties, and the results of such search shall
be reasonably satisfactory to the Lenders.
(bb) Officer's Certificate. Receipt of a certificate from a Responsible
Officer of the Borrower certifying that (i) all representations and warranties
made by the Borrower in Article IV hereof are true in all respects, (ii) each
Borrower Entity has duly performed and complied with each of the material
obligations required under the Project Contracts to which each is a party, (iii)
no Default or Event of Default has occurred and is continuing, (iv) each
Financing Document to which any Borrower Entity is a party remains in full force
and effect, (v) to such Responsible Officer's knowledge, no event has occurred
which could reasonably be expected to cause a Material Adverse Effect, both
before and after giving effect to the transactions contemplated to occur on the
Restructuring Effective Date.
(cc) Restructuring Effective Date Letter Agreement. The Restructuring
Effective Date Letter Agreement shall have been executed and delivered by each
party thereto and the activities contemplated by Section 1(A), 1(B) and 1(C)
thereof shall have been consummated.
(dd) Orion Power Midwest, L.P. Restructuring. The conditions precedent
to the effectiveness of the OPMW Restated Credit Agreement shall have been
satisfied or waived.
(ee) Other Documents; Information. The Lead Arrangers shall have
received (with a copy for each of the other Lenders) all such other statements,
certificates, documents and other information with respect to the matters
contemplated by this Agreement and the other Financing Documents, Transaction
Documents and Operational Plans as the Lead Arrangers or any Lender may
reasonably request.
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Section 3.02 Conditions Precedent to Working Capital Loans and
Operational Letters of Credit. The obligation of any Lender to make its
respective Working Capital Advance and the obligation of the Issuing Bank to
issue the ConEd Letter of Credit or any Operational Letter of Credit under this
Agreement is subject to the fulfillment on the applicable Working Capital Loan
Funding Date in a manner reasonably satisfactory to each such Lender of the
following conditions precedent:
(a) Notice of Working Capital Loan. The Administrative Agent shall have
received (with a copy for each of the other Working Capital Lenders) a Notice of
Working Capital Borrowing in accordance with the terms of Section 2.03(b) and/or
a request for the issuance of an Operational Letter of Credit in accordance with
the terms of Section 2.17(c).
(b) Representations and Warranties. The representations and warranties
made by the Credit Parties under this Agreement and in each other Financing
Document to which each such Person is a party shall be true and correct in all
material respects (both before and after giving effect to the proposed Working
Capital Loan) on and as of the Working Capital Loan Funding Date as though made
on and as of the Working Capital Loan Funding Date, except to the extent that
such representations and warranties relate to a specific earlier date, in which
case such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(c) Event of Default. No Default or Event of Default shall have
occurred and be continuing under any Transaction Document (both before and after
giving effect to the proposed Working Capital Loan) on and as of such Working
Capital Loan Funding Date.
Article IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and
the other agreements contemplated hereby, the Borrower makes the following
representations and warranties to the Secured Parties:
Section 4.01 Existence; Due Qualification; Compliance With Law. Each
Borrower Entity (a) is duly formed, validly existing and in good standing under
the laws of the respective jurisdiction of its formation, (b) has all requisite
power and authority to own its property and assets, to borrow money and to
transact the business in which it is presently engaged and in which it proposes
to be engaged, (c) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (d) is in full compliance with its
Governing Documents, all Contractual Obligations, all applicable material
Requirements of Law and all Governmental Approvals, except to the extent that
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
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Section 4.02 Power; Authority; No Violation; Binding Effect. (a) The
execution, delivery and performance by the Borrower Entities of the Transaction
Documents to which each is a party and the consummation of the transactions
contemplated thereby (i) are within their respective powers, (ii) have been duly
authorized by all necessary corporate or partnership action, (iii) do not and
will not contravene (A) their respective Governing Documents or (B) any material
Requirement of Law, any material Contractual Obligation or any material
Governmental Approval binding on or affecting any of them and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (except Permitted Liens) upon any of their respective
properties or assets pursuant to, the terms of any material Contractual
Obligation binding on or affecting any of them.
(b) Each Borrower Entity has duly executed and delivered each
Transaction Document to which it is a party. Each Transaction Document
constitutes the legal, valid and binding obligation of each Borrower Entity (to
the extent it is a party thereto), enforceable against such Borrower Entity in
accordance with its terms, except as enforcement thereof may be subject to (i)
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and (ii) general
principles of equity.
Section 4.03 Ownership of Property. Except for property, assets and
revenues disposed of in accordance with Section 6.11 hereof, each Borrower
Entity has good title to, or valid leasehold, easement or right-of-way interests
in, the material property, assets or revenues which it purports to own, lease or
hold any such interest in, free and clear of all Liens (except Permitted Liens),
including possession of all required real estate interests and licenses,
Intellectual Property and other proprietary rights, except where the failure to
own or possess any of the foregoing could not reasonably be expected to have a
material adverse effect on any Portfolio Asset.
Section 4.04 Governmental Approvals. Each Borrower Entity has all
Governmental Approvals required to authorize, and currently required to be
maintained (and currently expects to be able to obtain all Governmental
Approvals required in the future on or prior to the date and time required)
under applicable Requirements of Law in connection with (i) the execution,
delivery and performance by such Borrower Entity of the Transaction Documents
and the Operational Plans to which it is a party, (ii) the ownership,
maintenance or operation of the Portfolio Assets as contemplated by the
Transaction Documents and the Operational Plans, and (iii) the legality,
validity, binding effect or enforceability of any Transaction Document except,
in each case where the failure to obtain such Governmental Approvals could not
reasonably be expected to have a material adverse effect on any Portfolio Asset.
Except as set forth on Schedule 4.04, all applicable waiting periods (including
appeal periods) relating to any such Governmental Approval or other approval
which are required and have been obtained have expired without any adverse
action taken with respect thereto. All such Governmental Approvals are in full
force and effect and are not subject to any appeal or similar proceeding, except
where the failure to be in full force and effect or any such appeal or
proceeding could not reasonably be expected to have a material adverse effect on
any Portfolio Asset. No Borrower Entity is in violation of any condition in any
material Governmental Approval, which violation could reasonably be expected to
have a material adverse effect on any Portfolio Asset.
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Section 4.05 Legal Proceedings. Except as set forth on Schedule 4.05
attached hereto, there is no (a) injunction, writ, preliminary restraining order
or order of any nature issued by an arbitrator, court or other Governmental
Authority against any Borrower Entity, or, to the Borrower's knowledge, against
any other Major Project Party, in connection with the transactions provided for
herein or in the other Transaction Documents or the Operational Plans or (b)
action, suit, arbitration, litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority pending against (i) any Borrower Entity
or, to the Borrower's knowledge, threatened against any Borrower Entity nor, to
the Borrower's knowledge, is there any reasonable basis for any such action,
suit arbitration, litigation, investigation or proceeding in which the maximum
probable loss (taking into account insurance) is more than $25,000,000, or, (ii)
to the Borrower's knowledge, pending or threatened against any other Major
Project Party, which, solely with respect to this clause (ii), could reasonably
be expected to result in a material adverse affect on the financial condition of
such Major Project Party or such Major Project Parties' ability to fulfill its
obligations under the Project Contract to which it is a party.
Section 4.06 Financial Statements. Each financial statement required to
be delivered by or on behalf of the Credit Parties to the Lead Arrangers,
Lenders or the Administrative Agent under and pursuant to the Financing
Documents on the Restructuring Effective Date (or previously delivered) was
prepared in accordance with GAAP and fairly presents the financial condition of
such parties as of the date of such financial statement. Each financial
statement of the Credit Parties, delivered from time to time by (or on behalf
of) the Borrower as required hereunder and under the Financing Documents, was
prepared in accordance with GAAP and fairly presents the financial condition of
such party as of the date of such financial statement. Since June 30, 2002,
there has been no material adverse change in the business, condition (financial
or otherwise), operations, performance or properties taken as a whole of the
Credit Parties.
Section 4.07 Indebtedness. No Borrower Entity has any outstanding
Indebtedness other than Permitted Indebtedness.
Section 4.08 No Default. No Default or Event of Default has occurred
and is continuing.
Section 4.09 Taxes. Each Borrower Entity has filed all tax returns
required to be filed by it and has paid all taxes and assessments payable by it
which have become due, other than those not yet delinquent and those being
contested in good faith and by appropriate proceedings and for which Acceptable
Reserves have been established. No tax Liens have been filed which have not been
satisfied and no claims or assessments are currently being asserted or, to the
Borrower's knowledge, are reasonably expected to be asserted with respect to any
such taxes or other charges.
Section 4.10 Use of Proceeds. All proceeds of the Loans will be used
only for the purposes specified in Section 2.02(d). No part of the proceeds of
any Loan and no proceeds of any Letter of Credit will be used by the Borrower to
purchase or carry any Margin Stock or to extend credit to any other Person for
the purpose of purchasing or carrying any Margin Stock.
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Section 4.11 Compliance with ERISA. The Borrower and each ERISA
Affiliate has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Benefit Arrangement and Plan and is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Code with respect to each Plan. Neither the Borrower nor any ERISA
Affiliate has (a) sought a waiver of the minimum funding standard under Section
412 of the Code in respect of any Plan, (b) failed to make any contribution or
payment to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement, or made any amendment to any Plan, which failure or amendment has
resulted or would reasonably be expected to result in the imposition of a
material Lien under Section 412(n) of the Code (or any corresponding provisions
of ERISA) or the posting of a material bond or other material security under
Section 401(a)(29) of the Code (or any corresponding provisions of ERISA), (c)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA, (d) engaged in any transaction
described in Section 4069 of ERISA, or (e) engaged in any Prohibited
Transaction. For purposes of this Section 4.11, "in all material respects" means
that the cost to cure any noncompliance is not reasonably expected to exceed
$3,000,000 in the aggregate, "material Lien" means a lien or liens exceeding
$3,000,000 in the aggregate, "material bond" means a bond or bonds exceeding
$3,000,000 in the aggregate, and "material security" means security exceeding
$3,000,000 in the aggregate.
Section 4.12 Material Liabilities. No Borrower Entity has any material
liabilities (actual or contingent) other than those (a) existing on the
Restructuring Effective Date as set forth in Schedule 4.12 hereto, as set forth
in its most recent financial statements or in the Operating Budget, (b) arising
out of, or expressly permitted by, this Agreement or the other Transaction
Documents to which it is, or is to become, a party or (c) liabilities incurred,
existing or assumed after the Restructuring Effective Date pursuant to written
agreements, contracts, commitments and/or arrangements of any Borrower Entity,
entered into in the ordinary course of business permitted pursuant to the
Financing Documents and which individually or in the aggregate would not be
reasonably likely to result in a material adverse effect on such Borrower
Entity's financial condition or its ability to fulfill its obligations under the
Transaction Documents to which it is a party.
Section 4.13 Regulation of Parties. (a) Each of the Borrower Entities
(other than the Borrower) and OPOS Cold Water, OPOS Carr Street and OPOS Astoria
has been determined by FERC to be an "exempt wholesale generator" under Section
32 of PUHCA. So long as the Borrower Entities (other than the Borrower) and OPOS
Cold Water, OPOS Carr Street and OPOS Astoria are owning and operating the
Portfolio Assets and are "exempt wholesale generators" under Section 32 of
PUHCA, none of the Borrower Entities nor any Credit Party nor any of OPOS Cold
Water, OPOS Carr Street and OPOS Astoria is, and none will be, solely as a
result of its participation in the transactions contemplated hereby or by any
other Transaction Document or Operational Plan, or as a result of the ownership,
use or operation of the Portfolio Assets, subject to regulation by the
Securities and Exchange Commission as a "public-utility company," an
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"electric utility company," a "holding company," or a subsidiary or affiliate of
any of the foregoing under PUHCA.
(b) None of the Credit Parties is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
Section 4.14 Security Documents. Except as set forth on Schedule 4.14,
the Security Documents, together with all necessary recordings thereof and
filings with respect thereto, are effective to create as security for the Loans,
valid and enforceable Liens in and on all of the material Collateral described
in each such Security Document in favor of the Administrative Agent (for the
benefit of the Secured Parties), and upon making the filings referenced in
Schedule 4.14 hereof in the applicable filing or recording office in accordance
with applicable Requirements of Law, all necessary and appropriate recordings
and filings will have been made, and, upon taking possession of the equity
security and accompanying stock powers to be delivered to the Administrative
Agent pursuant to the Holdco NY Stock Pledge Agreement and the OPH Membership
Interest Pledge Agreement, all other necessary and appropriate action will have
been taken so that each such Security Document creates a perfected Lien (other
than with respect to any vehicles or emergency response boat or as to second
liens in any of the Collateral for which possession, or exclusive control or any
other action which would not be permitted pursuant to any OPNY Primary Security
Document is required to perfect such second lien) on and security interest in
the material Collateral covered thereby and, except as provided in Section
5.18(b), appropriate consents to the action, perfection and enforcement of such
Liens have been obtained, if required hereby, from each of the Project Parties
superior to and prior to the rights of all other Persons, subject only to
Permitted Liens. All taxes, fees and other charges payable in connection
therewith will have either been paid in full by the Borrower or arrangements for
the payment of such amounts satisfactory to the Administrative Agent shall have
been made.
Section 4.15 Accuracy and Completeness of Information. (a) All factual
written information heretofore or contemporaneously created and furnished by or
on behalf of any Credit Party to the Lead Arrangers, the Administrative Agent or
any Lender, for purposes of, or in connection with, this Agreement, any other
Transaction Document, or any transaction contemplated hereby or thereby is, and
all such other factual information hereafter furnished by or on behalf of any
Credit Party to the Lead Arrangers, the Administrative Agent or any Lender will
be, true and accurate in all material respects on the date as of which such
information is given, dated or certified and not incomplete by omitting to state
any material fact necessary to make such information not materially misleading
at such time, in each case taken as a whole together with all other information
theretofore or contemporaneously supplied; provided, that, no representation or
warranty is made in any provision of this Section 4.15, any Operational Plans or
any Financing Document with regard to (a) any projections or other
forward-looking statements provided by the Borrower, including the Projections
(except as set forth in Section 4.26 below), (b) general market information and
(c) any report of any Independent Expert.
(b) The Borrower has made a reasonable inquiry in respect of factual
written information (other than the reports of the Independent Experts)
heretofore or contemporaneously created and furnished by or on behalf of any
Person (other than any Credit Party) to the Lead
75
Arrangers, the Administrative Agent or any Lender, for purposes of, or in
connection with, this Agreement, any other Transaction Document, or any
transaction contemplated hereby or thereby. To the knowledge of the Borrower
based on such inquiry, all such factual information is true and accurate in all
material respects on the date as of which such information is given, dated or
certified and is not incomplete by omitting to state any material fact necessary
to make such information not materially misleading at such time, in each case
taken as a whole together with all other information theretofore or
contemporaneously supplied.
(c) There is no fact known to any Credit Party which has, or could
reasonably be expected to have, a Material Adverse Effect which fact has not
been set forth herein, in the financial statements delivered pursuant hereto, or
any certificate or other written statement made or furnished by any Credit Party
to the Lead Arrangers or the Administrative Agent.
Section 4.16 Project Contracts. The Borrower has delivered to the
Lenders prior to the Restructuring Effective Date, true, correct and complete
copies of the Project Contracts in effect as of the date hereof and all of the
Governing Documents of each Credit Party in existence as of the date hereof. As
of the date hereof, none of such Project Contracts or Governing Documents has
been amended, modified or terminated except in accordance herewith and as
disclosed in writing to the Administrative Agent, the representations and
warranties of each Borrower Entity and, to the Borrower's knowledge each Major
Project Party, in each such Project Contract to which each such Person is a
party are true and correct in all material respects and, to the Borrower's
knowledge, no other party to a Project Contract is in default of such party's
material obligations thereunder. The Borrower Entities are not parties to any
material contracts or agreements other than the Governing Documents, the
Transaction Documents, Approved Agreements, the contracts and agreements listed
or described on Schedule 3.01(b) and any other contracts or agreements which
such Borrower Entity is obligated to provide copies of on a regular basis in
accordance with the Financing Documents.
Section 4.17 Property Rights, Utilities, Etc. All easements, leasehold
and other property interests, and all utility and other services, means of
transportation, facilities, other materials and other rights that are necessary
for the operation and maintenance of the Portfolio Assets in accordance with all
material Requirements of Law and the then existing Project Contracts (including,
without limitation, gas, electrical, water and sewage services and facilities)
have been procured and are available to the Borrower Entities and the Portfolio
Assets pursuant to the Project Contracts or are otherwise commercially available
to the Borrower Entities and the Portfolio Assets and, to the extent
appropriate, arrangements have been made by, or on behalf of (and with the
approval of), each Borrower Entity on commercially reasonable terms for such
easements, interests, services, means of transportation, facilities, materials
and rights in each case, except where the failure to procure or have available
any of the foregoing could not reasonably be expected to have a material adverse
effect on the operation of any material Portfolio Asset.
Section 4.18 Principal Place of Business. (a) The principal place of
business of the Borrower and the office where the Borrower maintains its records
relating to the transactions contemplated by the Transaction Documents is
located at 1111 Louisiana Street, Houston, Texas 77002.
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(b) The principal place of business of Astoria Generating and the
office where Astoria Generating maintains its records relating to the
transactions contemplated by the Transaction Documents is located at 225
Greenfield Parkway, Suite 201, Liverpool, New York 13008 or at 1111 Louisiana
Street, Houston, Texas 77002.
(c) The principal place of business of Carr Street Generating and the
office where Carr Street Generating maintains its records relating to the
transactions contemplated by the Transaction Documents is located at 225
Greenfield Parkway, Suite 201, Liverpool, New York 13008 or at 1111 Louisiana
Street, Houston, Texas 77002.
(d) The principal place of business of Erie Boulevard and the office
where Erie Boulevard maintains its records relating to the transactions
contemplated by the Transaction Documents is located at 225 Greenfield Parkway,
Suite 201, Liverpool, New York 13008 or at 1111 Louisiana Street, Houston, Texas
77002.
Section 4.19 Patents; Licenses; Franchises and Formulas. (a) Each
Borrower Entity owns, has a license to use or otherwise has the right to use,
free and clear of any pending or, to the knowledge of the Borrower, threatened
Liens (other than Permitted Liens), all the patents, patent applications,
trademarks, permits, service marks, names, trade secrets, proprietary
information and knowledge, technology, computer programs, databases, copyrights,
licenses, franchises and formulas, or rights with respect thereto required to
operate and maintain the Portfolio Assets as presently operated and maintained
(collectively, "Intellectual Property"), and to conduct of its business as
presently conducted and as presently proposed to be conducted, in each case,
except where the failure to own or possess any such Intellectual Property could
not reasonably be expected to result in a Material Adverse Effect.
(b) Except as set forth on Schedule 4.19 attached hereto and except for
any municipal zoning, building or other land use approvals relating to the
Astoria Bundle and the non-FERC regulated NiMo Assets, the absence of which
could not reasonably be expected to result in a material adverse effect on the
affected property or asset, (i) each Borrower Entity has obtained and holds in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals which are necessary for the operation of the Portfolio Assets as
presently conducted and as presently proposed to be conducted, and each Borrower
Entity currently expects that it will obtain on or prior to the date required
under applicable Requirements of Law any additional franchises, licenses,
permits, certificates, authorizations, qualifications, easements, rights of way
and other rights and approvals which may be required in the future to operate
the Portfolio Assets and the activities and transactions contemplated in the
Transaction Documents and the Operational Plans, and (ii) neither the Borrower
nor any of its Subsidiaries is in violation of the terms of any such franchise,
license, permit, certificate, authorization, easement, right of way,
qualification, right or approval, except in any such case with respect to clause
(i) or (ii) above, which could reasonably be expected to have a Material Adverse
Effect.
Section 4.20 Environmental Matters. Except as described in Schedule
4.20:
(a) There are no facts, circumstances, conditions or occurrences
regarding the Portfolio Assets that could reasonably be likely to (i) form the
basis of any Environmental Claim
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arising with respect to the Portfolio Assets, against the Portfolio Assets or
any Borrower Entity, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, (ii) cause any material Portfolio
Assets to be subject to any material restrictions on ownership, occupancy, or
use under any Environmental Law, other than any such restriction that could not
reasonably be expected to have a material adverse effect on any Portfolio Asset,
or (iii) require the filing or recording of any notice, registration, permit or
disclosure documents with respect to any material violation of any Environmental
Law.
(b) There are no past, pending or, to the Borrower's knowledge,
threatened Environmental Claims arising with respect to the ownership, operation
and maintenance of the Portfolio Assets, which individually or in the aggregate
could reasonably be likely to have a Material Adverse Effect.
(c) Hazardous Materials have not at any time been used or Released by
any Borrower Entity or, to the Borrower's knowledge, by any other Person, at,
on, under or from the Portfolio Assets other than in compliance at all times
with all applicable Environmental Laws, except where such use or Release could
not reasonably be expected to have a Material Adverse Effect. As of the
Restructuring Effective Date, no Hazardous Material generated by any Borrower
Entity has been recycled, treated, stored, disposed of or Released by any
Borrower Entity at any location in violation or breach of any of Section 5.23.
(d) (i) There are not now and, to the Borrower's knowledge after
reasonable inquiry, never have been any underground storage tanks located at the
sites of any of the Portfolio Assets, (ii) there is no asbestos contained in,
forming part of, or contaminating any part of the Portfolio Assets, and (iii) no
polychlorinated biphenyls ("PCBs") are used, stored, located at or contaminate
any part of the Portfolio Assets, except in any such case referenced in any of
clauses (i), (ii), or (iii) which individually or in the aggregate could
reasonably be likely to have a Material Adverse Effect.
(e) As of the Restructuring Effective Date, all written third-party
environmental investigations, studies, audits, tests, reviews or other analyses
conducted for, or that are in the possession of or which have been delivered to,
any Credit Party in relation to facts, circumstances or conditions at or
affecting the Portfolio Assets or any site or facility now or previously owned,
operated or leased by any Borrower Entity have been made available to the
Lenders.
(f) No Borrower Entity has transported or contractually permitted for
the transportation of any Hazardous Material to any location that is listed on
the National Priorities List ("NPL") under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), listed
for possible inclusion on the NPL by the Environmental Protection Agency in the
Comprehensive Environmental Response and Liability Information System, as
provided for by 40 C.F.R. ss. 300.5 ("cerclis"), or on any similar state or
local list or that is the subject of Federal, state or local enforcement actions
or other investigations that could reasonably be expected to result in any
material Environmental Claims against any Borrower Entity.
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(g) No written notification of a material Release of a Hazardous
Material has been filed by or on behalf of any Borrower Entity and neither the
Portfolio Assets nor any site or facility now or previously owned, operated or
leased by any Borrower Entity is listed or, to the Borrower's knowledge,
proposed for listing on the NPL, CERCLIS or any similar state list of sites
requiring investigation or clean-up.
(h) (i) No Liens have arisen under or pursuant to any Environmental
Laws on the Portfolio Assets or any site or facility that will be owned,
operated or leased by any Borrower Entity, and (ii) no government action has
been taken or is in process that could subject any of the Portfolio Assets or
any such site or facility to such Liens or that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No Borrower Entity will be required to place any notice or restriction relating
to the presence of Hazardous Materials at any of the Portfolio Assets or any
site or facility owned by any of them in any deed to the real property on which
any of the Portfolio Assets or such site or facility is located.
(i) The Portfolio Assets are in compliance with all Environmental Laws
and, to the Borrower's knowledge after reasonable inquiry, there is no reason to
believe that there are any facts or circumstances that will materially limit the
continued compliance of the operation of the Portfolio Assets with all
Environmental Laws or which would, other than as set forth in the Projections,
require material changes to the Portfolio Assets, or the operation thereof, to
comply with Environmental Laws in the future, except in any such case where such
non-compliance could not be reasonably expected to materially adversely effect
the operation or performance of a material portion of the NiMo Assets or any
other Portfolio Asset that solely for the purposes of this Section 4.20(i), is
the subject of such non-compliance, it being understood that each NiMo Asset
that has a capacity of 6 MW or more is, individually, a material portion of the
NiMo Assets.
Section 4.21 Equity Interests. The Borrower has free and clear title to
the equity interests of its Subsidiaries, except for Permitted Liens, and all
pledged equity interests are validly issued, fully paid and non-assessable and
not subject to restrictions on transfer other than applicable restrictions on
transfer pursuant to applicable state or federal securities laws.
Section 4.22 Insurance. All insurance policies required to be obtained
by the Borrower pursuant to Section 5.06 have been obtained and are in full
force and such insurance policies comply with the requirements of Section 5.06.
Section 4.23 Transactions with Affiliates. No Borrower Entity is a
party to any contract or agreement with, or has any other commitment of any
nature or kind, to any Affiliate, which would result in a breach of the
Borrower's covenants and agreements set forth in the first sentence of Section
6.09.
Section 4.24 [Intentionally omitted.]
Section 4.25 Organizational Structure. On the Restructuring Effective
Date, the organizational structure of the Credit Parties is as set forth on
Schedule 4.25 hereof.
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Section 4.26 Projections. The Borrower has prepared or caused to be
prepared the Projections and the Operational Plans and is responsible for
developing the assumptions on which the Projections and the Operational Plans
are based. The Projections and the Operational Plans are, to the Borrower's
knowledge after reasonable inquiry (a) based on reasonable assumptions,
including all legal and factual matters material to the estimates set forth
therein, and (b) consistent with the provisions of the Transaction Documents;
provided, that each of the Secured Parties hereby acknowledges and agrees that
such Projections (and any projections or other forward-looking information
contained in the Operational Plans) may or may not prove to be correct and that
no representation or warranty is made as to whether actual performance of the
Portfolio Assets is or will be accurately reflected in such Projections (or any
projections or other forward-looking information contained in the Operational
Plans).
Section 4.27 Environmental Insurance.
(a) To the Borrower's knowledge after reasonable inquiry, all Pollution
Conditions existing in, on, under or from the Portfolio Assets prior to the
inception date of the PLL Policy are identified in the reports and documents on
the Known Conditions List and were disclosed in the application for the PLL
Policy. The Borrower reasonably believes, based on reasonable assumptions, that
a reasonable estimate of the amount necessary to pay the applicable
self-insurance retention under the Cost Cap Policy is $9,956,614. The Borrower
reasonably believes, based on reasonable assumptions that the Remedial Action
Plan includes all actions necessary to cleanup, investigate, remediate and
monitor all Hazardous Materials identified therein it being acknowledged and
agreed that any actual remedial action plan effected by any Borrower Entity may
differ from the Remedial Action Plan and may change or be altered over time and
is subject to the interpretation and administration of applicable Requirements
of Law by applicable governmental officials; provided that any difference,
change or alteration shall comply with the Cost Cap Policy requirements.
(b) The Borrower reasonably believes, based on reasonable assumptions,
that a reasonable estimate of the amount necessary to pay the applicable
deductibles under the PLL Policy for the cleanup, investigation, remediation and
monitoring of any Hazardous Materials existing in, on, under or from the
Portfolio Assets on or before the date hereof which, to the Borrower's knowledge
after reasonable inquiry, the Borrower believes may reasonably be expected to be
required under the Environmental Laws and not excluded from coverage under the
PLL Policy is $635,000.
Section 4.28 Allowances. As of the Restructuring Effective Date, the
Borrower Entities hold Owned Allowances and Contract Allowances sufficient to
meet the Minimum Allowance Holding Requirements as set forth on Part A of
Schedule 5.29(b).
Article V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as this Agreement is in
effect and any Lender shall have any Commitment outstanding hereunder, and until
the Notes, together with interest, and all other Obligations are indefeasibly
paid in full and all Letters of Credit have
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been cancelled or have expired and all amounts drawn thereunder have been
indefeasibly reimbursed in full and the OPMW Obligations have been indefeasibly
paid in full, the Borrower will:
Section 5.01 Conduct of Business; Maintenance of Existence. (i) Engage
solely in the business of owning, operating, maintaining and managing its
interests in its Subsidiaries, (ii) preserve and maintain in full force and
effect its existence as a limited partnership under the laws of the state of
Delaware and its qualification to do business in every jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect on any Portfolio Asset,
(iii) preserve and maintain all of its rights, privileges, permits and
franchises necessary for the ownership of its interest in its Subsidiaries in
accordance with the Transaction Documents and (iv) subject to Section 6.11, keep
all property useful and necessary in its business in good working order and
condition (except to the extent that any such property is no longer used or
useful for the business of any Borrower Entity), ordinary wear and tear
excepted. No Borrower Entity shall amend its respective Governing Documents in
any manner, the result of which would be to alter the distribution, nature of
business, management, transfer of interests or powers of the general partner
provisions thereof.
Section 5.02 Governmental Approvals. Duly obtain on, or prior to, such
date as the same may be legally required, and thereafter maintain in effect as
long as legally required, all Governmental Approvals required under Section
4.04, except to the extent the failure to so obtain or maintain could not
reasonably be expected to result in a Material Adverse Effect.
Section 5.03 Payment of Indebtedness. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of its Obligations and other Indebtedness and monetary obligations of
whatever nature (except for any Indebtedness (other than the Obligations) or
other monetary obligations which are being contested in good faith and by
appropriate proceedings if (a) Acceptable Reserves have been established, and
(b) such contest does not involve any unreasonable risk of the sale, forfeiture
or loss of any of the right, title estate and interest of any Borrower Entity in
any material Portfolio Asset, taking into account the existence of such
Acceptable Reserves).
Section 5.04 Accounts. Maintain all of the Accounts with the
Administrative Agent in accordance with, and, apply or cause the application of,
all amounts on deposit therein as required by the Deposit Account Agreement and
the other Financing Documents.
Section 5.05 Performance of Covenants, Etc. Perform and observe all
Contractual Obligations, including all of such covenants and agreements
contained in the Project Contracts to which it is a party and shall enforce
(including, as necessary, through negotiation, litigation or other reasonable
means) the rights granted to it under and in connection with each of the
Transaction Documents, except where the failure to perform and observe such
Contractual Obligations or enforce such rights could not reasonably be expected
to have a material adverse effect on any Portfolio Asset.
Section 5.06 Insurance Requirements. Procure and maintain with respect
to all Borrower Entities and all Portfolio Assets, as applicable, insurance
against physical loss, public
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liability, property damage, general liability, business interruption,
environmental risk and other insurance, with coverages and limits in no event
less than those set forth on Schedule 5.06 hereto (and in conformance with the
requirements set forth thereon). All premiums due under all insurance policies
required to be maintained under this Section 5.06 will be paid timely by, or on
behalf of, the Borrower. All proceeds of insurance shall be applied as provided
in the Deposit Account Agreement.
Section 5.07 Books and Records. Keep proper books of records and
accounts in which full, true and correct entries shall be made of all of its
transactions in accordance with GAAP.
Section 5.08 Visitation, Inspection, etc. Permit representatives of the
Administrative Agent, the Independent Engineer and the Lead Arrangers (at the
cost and expense of the Borrower so long as any Default or Event of Default
exists), and any other Lender (at the cost and expense of such Lender) to visit
and inspect any of the Portfolio Assets, to examine its books and records and to
make copies and take extracts therefrom, and to discuss its affairs, finances
and accounts with its officers and employees and its independent accountants,
all with reasonable prior notice and at such reasonable times as such Person may
reasonably request and subject to the applicable Borrower Entity's reasonable
rules and procedures regarding operation, safety and confidentiality.
Section 5.09 Requirements of Law. Comply with all Requirements of Law
and Governmental Approvals (a) applicable to it and the Portfolio Assets,
including all Environmental Laws and (b) required of any Borrower Entity by
virtue of any concessions and licenses held by a Borrower Entity, except in each
case when any such Requirement of Law or Governmental Approval is being
contested in good faith and by appropriate proceedings or, as appropriate,
settlement negotiations and for which Acceptable Reserves have been established,
except in each case where the failure to so comply could not reasonably be
expected to have a material adverse effect on any Portfolio Asset; provided,
that, no Borrower Entity shall be required to establish Acceptable Reserves in
respect of any "new source review" enforcement action brought by the
Environmental Protection Agency against such Borrower Entity or any Portfolio
Asset (other than for penalties that may be assessed as a result of such
enforcement action) that such Borrower Entity is contesting in good faith or in
respect of which such Borrower Entity is involved in settlement negotiations.
Section 5.10 Reporting Requirements. Furnish to the Administrative
Agent:
(a) as soon as available, but in any event, within 60 days after the
end of each fiscal quarter of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of each such quarter
and the related unaudited statement of income, partners' capital (or, if
converted to a limited liability company in accordance with the LP Guarantee,
members' capital) and cash flows for such quarter and the portion of the fiscal
year through the end of each such quarter, prepared in accordance with GAAP,
certified by a Responsible Officer of the Borrower as being fairly stated in all
material respects, it being understood and agreed that delivery of financial
statements for the fiscal quarter ended September 30, 2002, within 60 days
thereafter and in all other respects in conformity with
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Section 5.10(a) of the Original Credit Agreement shall satisfy the requirements
of this Section 5.10(a) with respect to such fiscal quarter;
(b) as soon as available, but in any event, within 120 days after the
end of each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such year and the related
statement of income, partners' capital (or, if converted to a limited liability
company in accordance with the LP Guarantee, members' capital), cash flows and a
statement of sources and uses of all funds for such year, prepared in accordance
with GAAP and audited by Deloitte & Touche LLP or any other independent
certified public accountants of recognized standing in the United States of
America reasonably satisfactory to the Administrative Agent and setting forth in
each case in comparative form the figures for the previous year, and a
certificate as to compliance with the Financing Documents; (c) as soon as
available, but in any event, not later than 60 days after the commencement of
each fiscal year of the Borrower (commencing with the 2004 fiscal year), furnish
forecasts prepared by management in form and detail reasonably satisfactory to
the Administrative Agent, of projections (substantially in the form of the
Projections) on a fiscal period basis for such fiscal year and on a fiscal year
basis for each of the remaining fiscal years until at least twenty years beyond
the Restructuring Effective Date;
(d) each time the financial statements of the Borrower are delivered
under this Section 5.10, a certificate signed by a Responsible Officer of the
Borrower shall be delivered along with such financial statements, certifying
that such Responsible Officer has made or caused to be made a review of the
transactions and financial condition of the Borrower and its Subsidiaries during
the relevant fiscal period and that such review has not, to the best of such
Responsible Officer's knowledge, disclosed the existence of any event or
condition which constitutes a Default or an Event of Default under any Financing
Document to which any Borrower Entity is a party, or if any such event or
condition existed or exists, the nature thereof and the corrective actions that
the relevant Borrower Entity has taken or proposes to take with respect thereto,
and also certifying that each Borrower Entity is in compliance in all material
respects with its obligations under this Agreement and each other Financing
Document to which it is a party or, if such is not the case, stating the nature
of such non-compliance and the corrective actions which the relevant Borrower
Entity has taken or proposes to take with respect thereto; and
(e) the certificates required by Sections 5.25(a) and 5.25(b) as and
when required thereby.
Section 5.11 Operating Budget.
(a) Deliver to the Administrative Agent for its approval (such approval
not to be unreasonably conditioned, withheld or delayed) an Operating Budget not
less than 30 days in advance of each calendar year satisfying the requirements
contained in the definition thereof (it being understood that the initial
Operating Budget shall cover the period through December 31, 2003); provided,
that, with respect to any Operating Budget, if the Administrative Agent fails to
approve such Operating Budget or provides notice to the Borrower that it rejects
all or any portion of such Operating Budget, the Borrower and the Administrative
Agent (in consultation
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with the Independent Experts) agree to work in good faith to resolve such
dispute; and provided, further, that if an Operating Budget is not adopted and
approved on or prior to the first day of any calendar year, the Borrower
Entities shall adhere to the Interim Operating Budget until such time as an
Operating Budget is adopted and approved by the Administrative Agent (in
consultation with the Independent Experts).
(b) Subject to clauses (c) through (f) of this Section 5.11, operate
and maintain the Portfolio Assets or cause the Portfolio Assets to be operated
and maintained, in accordance with each Operating Budget.
(c) The Borrower Entities shall not make expenditures in respect of
Operating Costs in any fiscal year or, with respect to the period from and after
the Restructuring Effective Date through December 31, 2003 (the "Initial Budget
Period"), in such Initial Budget Period, in an aggregate amount in excess of
110% of the Budgeted Operating Costs for such fiscal year or the Initial Budget
Period, as applicable, provided that, the Borrower Entities may make
expenditures in any fiscal year or the Initial Budget Period, as applicable, in
an aggregate amount in excess of 110%, but less than or equal to 115%, of the
Budgeted Operating Costs for such fiscal year or the Initial Budget Period, as
applicable, with the written consent of the Administrative Agent (after
consultation with the Independent Experts) (such consent not to be unreasonably
withheld, conditioned or delayed) and may make expenditures in any fiscal year
or the Initial Budget Period, as applicable, in an aggregate amount in excess of
115% of the Budgeted Operating Costs for such fiscal year or the Initial Budget
Period, as applicable, with the written consent of the Lead Arrangers (such
consent not to be unreasonably withheld, conditioned or delayed); provided, that
nothing in this Section 5.11 shall impose any spending limitation on or prevent
the Borrower from making expenditures in excess of the Budgeted Operating Costs
for the purchase of any fuel (including transportation thereof), Energy-Related
Products, Allowances or Environmental Cap Ex required for the operation of the
Portfolio Assets or for compliance with the Financing Documents; and provided,
further, that, the Borrower may propose amendments to the then-existing
Operating Budget due to material changes in the operation of the Portfolio
Assets which amendments shall be subject to the receipt of the prior written
consent of the Lead Arrangers, after consultation with the Independent Experts
(such consent not to be unreasonably withheld, conditioned or delayed). The
Borrower Entities shall not make Capital Expenditures (other than Environmental
Cap Ex), in any fiscal year or the Initial Budget Period, as applicable, in an
aggregate amount in excess of 110% of the Capital Expenditures (other than
Environmental Cap Ex) set forth in the Operating Budget in effect for such
fiscal year or the Initial Budget Period, as applicable; provided, that, the
Borrower Entities may make expenditures in any fiscal year or the Initial Budget
Period, as applicable, in an aggregate amount in excess of 110%, but less than
or equal to 115%, of the budgeted Capital Expenditures (other than Environmental
Cap Ex) for such fiscal year or the Initial Budget Period, as applicable, with
the written consent of the Administrative Agent (after consultation with the
Independent Experts) (such consent not to be unreasonably withheld, conditioned
or delayed) and may make expenditures in any fiscal year or the Initial Budget
Period, as applicable, in an aggregate amount in excess of 115% of the budgeted
Capital Expenditures (other than Environmental Cap Ex) for such fiscal year or
the Initial Budget Period, as applicable, with the written consent of the Lead
Arrangers (such consent not to be unreasonably withheld, conditioned or
delayed). For the avoidance of doubt, it is understood and agreed that this
Section
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5.11(c), together with Section 5.11(d) below, imposes "line-item" budget
expenditure restrictions only with respect to Capital Expenditures (other than
Environmental Cap Ex) as set forth above.
(d) The Borrower Entities shall not make re-allocations in respect of
any line item of Budgeted Operating Cost in any fiscal year or the Initial
Budget Period, as applicable, in excess of 10% of such line item of Budgeted
Operating Cost for such fiscal years; provided, that, the Borrower Entities may
make re-allocations in any fiscal year or the Initial Budget Period, as
applicable, of any line item of Budgeted Operating Cost for such fiscal year or
the Initial Budget Period, as applicable, in an excess of 10% of such line item
of Budgeted Operating Cost, but less than or equal to 15% of such line item of
Budgeted Operating Cost, with the written consent of the Administrative Agent
(after consultation with the Independent Experts) (such consent not to be
unreasonably withheld, conditioned or delayed) and may make re-allocations in
any fiscal year or the Initial Budget Period, as applicable, in excess of 15% of
a line item of Budgeted Operating Cost for such fiscal year or the Initial
Budget Period, as applicable, with the written consent of the Lead Arrangers
(such consent not to be unreasonably withheld, conditioned or delayed).
(e) Notwithstanding the foregoing, in the event of any Emergency, the
Borrower Entities may make expenditures and/or reallocations in excess of the
limitations set forth in clauses (c) and (d) to the extent of such amount
reasonably necessary for the remediation of the conditions giving rise to such
Emergency and otherwise in accordance with Prudent Industry Practice.
(f) To the extent that modifications to, or deviations from, an
approved Operating Budget have been consented to by the Administrative Agent or
the Lead Arrangers, as applicable, such modifications or deviations shall be
deemed to amend such approved Operating Budget and all references in this
Agreement or the other Financing Documents to the Operating Budget shall be
deemed to refer to the Operating Budget as so amended.
Section 5.12 Payment of Taxes and Claims. Timely cause to be paid and
discharged (whether by the Sponsor, or any parent or Affiliate of the Sponsor,
or otherwise) all taxes, assessments and governmental charges or levies lawfully
imposed upon any Borrower Entity or upon its respective income or profits or
upon any portion of the Portfolio Assets or the Collateral and all lawful claims
or obligations that, if unpaid, would become a Lien upon the Collateral, real or
personal, or upon any part thereof; provided, that, the Borrower Entities shall
have the right to contest in good faith the validity or amount of any such tax,
assessment, charge, levy, claim or obligation by proper proceedings, and may
permit the taxes, assessments, charges, levies, claims or obligations so
contested to remain unpaid during the period of such contest if: (a) such
Borrower Entity diligently prosecutes such contest in good faith and by
appropriate proceedings and for which Acceptable Reserves have been established;
(b) during the period of such contest, the enforcement of any contested item is
effectively stayed; and (c) the failure to pay or comply with the contested item
could not reasonably be expected to result in a Material Adverse Effect taking
into account the existence of such Acceptable Reserves.
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Section 5.13 Maintenance and Operation of Portfolio Assets; Repair and
Replacement of Portfolio Assets.
(a) Operate and maintain the Portfolio Assets and conduct its business
(i) in accordance with Prudent Industry Practice, (ii) in accordance with all
applicable material Requirements of Law, except where being contested in good
faith and by appropriate proceedings and as to which Acceptable Reserves have
been established, or except where the failure to so operate and maintain the
Portfolio Assets could not reasonably be expected to have a material adverse
effect on any Portfolio Asset, and (iii) in accordance with the terms of any
insurance policy or policies in effect at any time with respect to the Portfolio
Assets or any part thereof; and
(b) After the occurrence of a loss, damage, destruction or taking of
any part of the Portfolio Assets, proceed diligently with all work necessary to
replace and/or repair such loss, destruction or damage to the extent required
pursuant to the terms of the Financing Documents.
Section 5.14 Real and Personal Property. Except as permitted in Section
6.11, maintain good title to or valid leasehold, easement or right-of-way
interests in the material property, assets or revenues on which it purports to
own, lease or hold any such interest in, free and clear of all Liens (except
Permitted Liens), including the possession of all material real estate interests
and licenses, material Intellectual Property and other material proprietary
rights required for the ownership, operation and maintenance of the Portfolio
Assets, all to the extent contemplated by the Transaction Documents and in
accordance with Prudent Industry Practice.
Section 5.15 ERISA. The Borrower shall deliver to the Administrative
Agent, if and when the Borrower or any ERISA Affiliate (a) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan, other than a reportable event for which
30-day notice to the PBGC has been waived, or knows that the plan administrator
of any Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required to be
given to the PBGC; (b) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such notice; (c)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of such notice;
(d) applies for a waiver of the minimum funding standard under Section 412 of
the Code, a copy of such application; (e) gives notice of intent to terminate
any Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (f) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (g) fails to make
any payment or contribution to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which in either case would trigger the provisions of Section 412(n)
or 401(a)(29) of the Code (or any corresponding provisions of ERISA), a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable ERISA Affiliate is required or proposes to
take.
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Section 5.16 Interest Hedge Contracts.
(a) Enter into Interest Hedge Contracts only with one or more of the
Lenders. Except pursuant to and to the extent of, any prepayment of outstanding
Loans, the Borrower shall not terminate any Interest Hedge Contract without the
prior written consent of the Administrative Agent (such consent not to be
unreasonably withheld, conditioned or delayed).
(b) Within ten (10) Business Days of the occurrence of any Swap Trigger
Event during the period from the Restructuring Effective Date to the second
anniversary thereof, the Borrower shall enter into one or more Interest Hedge
Contracts with one or more Swap Banks in respect of the aggregate principal
amount of at least 50% of the Obligations then outstanding (less the aggregate
principal amount of Obligations then subject to an Interest Hedge Contract) and
having an aggregate weighted average maturity of seven (7) years from the date
of delivery thereof; provided, that, the Borrower shall not, at any time, enter
into Interest Hedge Contracts in respect of principal Obligations in excess of
$350,000,000.
(c) If no Swap Trigger Event shall have occurred during the period from
the Original Closing Date to the second anniversary thereof, then, on the second
anniversary of the Original Closing Date, the Borrower shall enter into one or
more Interest Hedge Contracts with one or more Swap Banks in respect of at least
66 2/3% of the aggregate principal amount of the Acquisition Loans estimated to
be payable on the Final Maturity Date.
Section 5.17 Notices. Within ten (10) Business Days after a Responsible
Officer of any Borrower Entity obtains actual knowledge thereof, give notice to
the Lenders of:
(a) any Default or Event of Default, together with a description of any
action being taken or proposed to be taken with respect thereto;
(b) any action, suit, arbitration, litigation, investigation or
proceeding involving or affecting any Borrower Entity or any Portfolio Asset or
any Major Project Party which is an Affiliate involving $1,000,000 or more or
seeking any injunctive, declaratory or other equitable relief;
(c) any action, suit, arbitration, litigation, investigation or
proceeding instituted for the purpose of revoking, terminating, suspending,
withdrawing, modifying or withholding any material Governmental Approval
necessary for any Borrower Entity or any other Major Project Party to perform
its obligations or exercise its rights under any Project Contract or for the
operation or maintenance of the Portfolio Assets in the manner contemplated by
the Transaction Documents;
(d) proposed execution of any Additional Contract or Approved Agreement
(other than confirmations issued under Approved Master Agreements or any other
master agreement);
(e) any casualty, loss or damage to any Portfolio Asset, whether or not
insured, involving a probable loss of $500,000 or more;
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(f) any termination, material default or event of default or notice
thereof under any Project Contract;
(g) any change in the Responsible Officers of any Credit Party or OPMW
Credit Party, together with evidence of authority thereof and specimen
signature;
(h) any fact, circumstance, condition or occurrence that is reasonably
likely to form the basis of a material Environmental Claim arising with respect
to the Portfolio Assets against any Borrower Entity or any pending or threatened
material Environmental Claim arising with respect to the Portfolio Assets
against any Borrower Entity, describing the same in reasonable detail and,
together with or as soon thereafter as is reasonably possible, a description of
the action that the applicable Borrower Entity has taken or proposes to take
with respect thereto and, thereafter, from time to time such detailed reports
with respect thereto as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request;
(i) copies of all written communications with any Governmental
Authority relating to any material violation or alleged material violation of
any material Environmental Law or other Environmental Claim arising out of the
Portfolio Assets;
(j) copies of all notices and other information that any Borrower
Entity receives from, or delivers to, any Governmental Authority that could
reasonably be expected to be materially adverse to the Portfolio Assets;
(k) all material notices relating to the Insurance Policies;
(l) any Emergency then requiring any payment of money or the execution
and delivery of any agreement and the amount of related spending associated
therewith;
(m) any other event or development that could reasonably be expected to
have a Material Adverse Effect; and
(n) any condemnation or similar proceeding involving assets having an
aggregate value of $1,000,000.
Section 5.18 Preservation of Security Interests; Further Assurances
(a) Except with respect to dispositions of assets permitted under
Section 6.11 or as otherwise provided in any Security Document, preserve, or
cause to be preserved, the security interests granted under and pursuant to the
Security Documents and undertake all actions which are necessary or appropriate
in the reasonable judgment of the Administrative Agent to (i) maintain the
Secured Parties' security interest in the Collateral in full force and effect at
all times (including the priority thereof, other than with respect to vehicles
and any emergency response boat or as to second liens in any of the Collateral
for which possession or exclusive control or any other action which would not be
permitted pursuant to any OPNY Primary Security Document is required to perfect
such second lien) and (ii) preserve and protect the Collateral and protect and
enforce each Borrower Entity's rights and title and the rights of the Secured
Parties to the Collateral, including, without limitation, the making or delivery
of all
88
filings and recordations, the payments of fees and other charges and the
issuance of supplemental documentation.
(b) Upon notice from the Administrative Agent, take or cause to be
taken all action required or, in the reasonable opinion of the Administrative
Agent, which is desirable to maintain and preserve the Liens of the Security
Documents and execute or cause to be executed any and all further instruments
(including financing statements, continuation statements and similar statements
with respect to any of the Security Documents) requested by the Administrative
Agent for such purpose. Notwithstanding any provision of this Agreement or any
other Financing Document, each of the parties hereto hereby acknowledges and
agrees that (i) the Borrower Entities are in the process of obtaining each of
the consents identified in the attached Schedule 5.18 as a consent the Borrower
Entities are required to obtain, (ii) the Borrower Entities shall use diligent
and commercially reasonable efforts to obtain such consents, and (iii) no
Borrower Entity shall be deemed to be in breach or violation of any provision of
this Agreement or any other Financing Document due to a failure to obtain any
such consent referenced in Schedule 5.18, including those consents the Borrower
Entities are in the process of obtaining, except as a result of the breach of
such Borrower Entity's obligations under this the second sentence of this
Section 5.18(b).
(c) Any action under this Section 5.18, with respect to OPNY Second
Lien Documents, shall be subject to the terms of the Section entitled
"Subordination" contained in each OPNY Second Lien Document.
Section 5.19 Use of Proceeds. Use all proceeds of Working Capital Loans
solely in accordance with Section 2.02(d). Use the ConEd Letter of Credit solely
in accordance with Section 2.16(k). Use any Operational Letter of Credit solely
in accordance with Section 2.17(k). Neither any part of the proceeds of any Loan
nor any Letter of Credit will be used by any Borrower Entity to purchase or
carry any Margin Stock or to extend credit to any other Person for the purpose
of purchasing or carrying any Margin Stock.
Section 5.20 Extraordinary Proceeds. Promptly apply all payments in
respect of Extraordinary Proceeds or Insurance Proceeds received by, or for the
account of, any Borrower Entity in accordance with the terms of the Deposit
Account Agreement.
Section 5.21 [Intentionally Omitted.]
Section 5.22 [Intentionally Omitted.]
Section 5.23 Environmental Compliance.
(a) The Borrower Entities shall not use or Release, or permit the use
or Release of, Hazardous Materials at the site of any Portfolio Asset other than
in material compliance with all applicable Environmental Laws or except to the
extent that any such use or Release could not reasonably be expected to have a
material adverse effect on any Portfolio Asset; provided, that, the Borrower
Entities shall have the right to contest or engage in any settlement
negotiations with respect to such Environmental Laws in accordance with Section
5.09 hereof, so long as during such contest, enforcement of any such contested
Environmental Law is stayed.
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(b) The Borrower Entities shall conduct and complete any investigation,
study, sampling and testing and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials Released
at, on, in, under or from the Portfolio Assets, in accordance with the
requirements of all applicable Environmental Laws, except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
(c) The Borrower shall ensure that the insurer adds any off-site
location for the disposal of Hazardous Materials from any of the Portfolio
Assets on the Non-Owned Covered Locations Schedule under the PLL Policy before
disposing of any such Hazardous Materials or entering into any contractual
arrangement permitting any such disposal.
(d) The Borrower shall promptly provide the Administrative Agent with
copies of any (1) reports of claims made to the insurer pursuant to the PLL
Policy or claims made under the Cost Cap Policy and (2) denials, partial denials
or reservations of rights in respect to any such claims received from an
insurer. The Borrower shall report claims to the insurer pursuant to the PLL
Policy for any Pollution Conditions which the Borrower reasonably believes based
upon reasonable assumptions will exceed $1,000,000 in "clean-up costs" (as
defined under the PLL Policy); however, this covenant shall in no way prohibit
the Borrower from reporting claims pursuant to the PLL Policy for amounts below
$1,000,000 in "clean-up costs" (as defined under the PLL Policy).
Section 5.24 Additional Contracts and Approved Agreements.
(a) The Borrower Entities shall enter into Additional Contracts only
with the prior written consent of the Required Lenders, such consent not to be
unreasonably withheld, conditioned or delayed; provided that no such consent
shall be required to the extent such Additional Contracts were entered into in
response to an Emergency in accordance with Prudent Industry Practice; provided,
further, that this clause 5.24(a) shall not be construed to permit any Borrower
Entity to enter into an Additional Contract for a term longer than is reasonably
necessary to deal with such Emergency and in no event with a term in excess of
364 days without the consent of the Required Lenders, such consent not to be
unreasonably withheld, conditioned or delayed.
(b) (i) If any Borrower Entity shall at any time enter into an
Additional Contract or Approved Agreement (other than confirmations under
Approved Master Agreements), the Borrower shall within ten (10) Business Days
after a Responsible Officer has actual knowledge of such execution provide a
copy of the same to the Administrative Agent and to the extent the
Administrative Agent so requests in writing to the Borrower, promptly execute,
deliver and record, or cause to be executed, delivered and recorded, a
supplement to the Security Documents, reasonably satisfactory in form and
substance to the Administrative Agent, subjecting such Additional Contract or
applicable Approved Agreement, as the case may be, to the Lien and security
interests created by the Security Documents, and shall ensure that the security
interest in such interest will be a valid and an effective interest on terms
comparable to the security interest of the Secured Parties in the Collateral.
(ii) If reasonably requested by the Lead Arrangers, each applicable Borrower
Entity shall use commercially reasonable efforts to obtain and deliver to the
Administrative Agent, a duly executed and delivered Additional
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Contract Consent or Approved Agreement Consent in respect of each Approved
Agreement (which is a Project Contract) or Additional Contract, as applicable.
(c) The Borrower shall enter into Approved Agreements as contemplated
by, and in accordance with, the then current Operational Plans. In addition, the
Borrower may enter into and perform any Approved Agreement for the sale or
purchase of Energy-Related Products or fuel (including transportation) having
terms and conditions other than those set forth in Schedule 5.30, provided, that
each such Approved Agreement has been approved by the Lead Arrangers, such
approval not to be unreasonably withheld, conditioned or delayed.
Section 5.25 Other Information. Furnish to the Administrative Agent:
(a) on each anniversary of the Restructuring Effective Date, a
certificate from the Borrower's insurers or insurance agents (i) evidencing that
the insurance policies in place satisfy the requirements of this Agreement and
(ii) setting forth a summary of all losses in excess of $500,000 incurred with
respect to the Portfolio Assets in the preceding year;
(b) as and when required by the Holdco Deposit Account Agreement, a
certificate signed by a Responsible Officer of the Borrower, setting forth the
Debt Service Coverage Ratio of the Borrower for the applicable period
immediately preceding such date of determination;
(c) upon the request of the Administrative Agent, within 10 days of the
end of each month, a monthly transaction summary of confirmations issued under
Approved Master Agreements; and
(d) any such other information or data with respect to its business or
operations (including supporting information as to compliance with this
Agreement) as the Administrative Agent may reasonably request from time to time.
Section 5.26 Fuel Procurement and O&M Arrangements.
(a) (i) Deliver to the Lead Arrangers for their approval (such approval
not to be unreasonably withheld, delayed or conditioned) a Fuel Plan on or prior
to December 1 of each year, covering the period from January 1 through the
following December 31 (it being understood and agreed that the initial Fuel Plan
shall cover the period through December 31, 2003), satisfying the requirements
contained in the definition thereof; provided, that, with respect to any Fuel
Plan, if the Lead Arrangers fail to approve such Fuel Plan or provide notice to
the Borrower that they reject all or any portion of such Fuel Plan, the Borrower
and the Lead Arrangers (in consultation with the Independent Engineer) agree to
work in good faith to resolve such dispute.
(ii) The Borrower Entities shall conduct the procurement, purchase
and use of fuel and, to the extent covered by the Fuel Plan, the operation of
the Portfolio Assets in all material respects in accordance with the most
recently approved Fuel Plan. If the New York ISO changes its bidding
requirements to be more than a one-day forward obligation, then the Borrower and
the Lead Arrangers shall discuss in good faith what effect, if any, such changes
may have on fuel supply arrangements. If the parties mutually determine that the
existing fuel
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arrangements need to be modified, such parties shall reasonably cooperate and
negotiate in good faith with respect to any alternative fuel procurement
arrangements such parties mutually agree is reasonably necessary.
(b) (i) Deliver to the Lead Arrangers for their approval (such approval
not to be unreasonably withheld, delayed or conditioned) an O&M Plan on or prior
to December 1 of each year, covering the period from January 1 through the
following December 31 (it being understood and agreed that the initial O&M Plan
shall cover the period through December 31, 2003), satisfying the requirements
contained in the definition thereof; provided, that, with respect to any O&M
Plan, if the Lead Arrangers fail to approve such O&M Plan or provide notice to
the Borrower that they reject all or any portion of such O&M Plan, the Borrower
and the Lead Arrangers (in consultation with the Independent Engineer) agree to
work in good faith to resolve such dispute.
(ii) The Borrower Entities shall perform operation and maintenance
of the Portfolio Assets, or contract for the provision thereof as permitted by
this Agreement and related Financing Documents, in all material respects in
accordance with the most recently approved O&M Plan.
Section 5.27 Power Marketing and Transmission Arrangements.
(a) (i) The Borrower shall deliver to the Lead Arrangers for their
approval (such approval not to be unreasonably withheld, delayed or conditioned)
a Power Marketing Plan on or prior to December 1 of each year, covering the
period from January 1 through the following December 31 (it being understood and
agreed that the initial Power Marketing Plan shall cover the period through
December 31, 2003), satisfying the requirements contained in the definition
thereof; provided, that, with respect to any Power Marketing Plan, if the Lead
Arrangers fail to approve such Power Marketing Plan or provide notice to the
Borrower that they reject all or any portion of such Power Marketing Plan, the
Borrower and the Lead Arrangers (in consultation with the Power Market and Fuel
Consultant and the Independent Engineer) agree to work in good faith to resolve
such dispute. Unless otherwise approved by the Lead Arrangers pursuant to the
Power Marketing Plan or by the Required Lenders in the case of Additional
Contracts, in all events the Borrower Entities will sell all Energy-Related
Products pursuant to an Approved Power Sales Agreement or an Approved Agreement.
(ii) Without limiting the provisions of this Section 5.27, the
Borrower Entities (either themselves or through an Affiliate or agent) shall
conduct the marketing or sale of Energy-Related Products produced by the
Portfolio Assets or the purchase of any thereof that is necessary or advisable
for the performance of its material obligations under each Project Contract,
Additional Contract and Approved Agreement and in all material respects in
accordance with the most recently approved Power Marketing Plan.
(b) The Borrower Entities shall maintain such access or other rights to
transmission capacity (including firm and/or non-firm and interstate and/or
non-interstate transmission capacity, as the case may be) as may be required for
the Borrower Entities to conduct successfully any marketing or sale of
Energy-Related Products produced by the Portfolio Assets, or the purchase of any
thereof, in accordance with any then current Power
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Marketing Plan and all applicable Project Contracts, Additional Contracts and
Approved Agreements.
(c) On or prior to December 1 of each year (beginning December 1,
2003), the Borrower shall deliver or cause to be delivered, an update to the
Power Market and Fuel Consultant's Report, substantially in the form delivered
on the Restructuring Effective Date.
Section 5.28 Astoria Supplemental Mortgage. The Borrower shall (a)
indefeasibly pay in full all outstanding Obligations and terminate all then
existing Commitments, or (b) record, or cause Astoria Generating to record, the
Astoria Supplemental Mortgage (including, without limitation, the payment by the
Borrower of all mortgage recording fees and taxes associated therewith and the
purchase of title insurance therefor substantially similar to that purchased for
the Astoria First Mortgage from funds other than those on deposit in the
Accounts), (I) within 45 days after the occurrence of any of the following
events and upon demand by the Administrative Agent: (a) any Person shall have
filed (and not released within such 45 day period) a lawsuit or lawsuits against
any Borrower Entity where the maximum probable loss not adequately covered by
insurance is in excess of $10,000,000 in the aggregate, unless Acceptable
Reserves described in clauses (i) and (ii) of the definition thereof shall have
been established, or unless the Lead Arrangers, in their discretion, determine
the lawsuit to be either without merit or that such maximum probable loss not
covered by insurance is not in excess of $10,000,000 (b) any Event of Default
(unless cured within the applicable 45 day period referred to above), (c) the
failure of the Borrower to maintain an average Debt Service Coverage Ratio as of
any two consecutive Semi-Annual Dates of greater than 2.25 to 1, or (d) the
failure of the Borrower to maintain an average Debt Service Coverage Ratio as of
any single Semi-Annual Date of greater than 2.00 to 1, or (II) within five (5)
Business Days of delivery of written demand by the Administrative Agent to the
Borrower after (a) the failure of the Sponsor to observe or perform any covenant
or agreement to pay principal or interest when due (after the expiration of any
applicable cure period) contained in any agreement or instrument relating to any
Indebtedness for borrowed money of the Sponsor in excess of $5,000,000, or (b)
the failure of the Sponsor to observe or perform any covenant or agreement
(other than as described in clause (II)(a) above or (II)(c) below) in any
document or instrument relating to any Indebtedness for borrowed money of the
Sponsor in excess of $5,000,000, after the expiration of any applicable cure
period, provided, that if no cure period is so provided the Borrower shall have
10 Business Days to cure such failure; provided, that, in the event that any
failure described in clauses (II)(a) and (b) above shall have occurred and the
Administrative Agent shall have made the demand described in clause (II) above,
if the Sponsor then cures such failure within the stated five (5) Business Days
after delivery of such demand, such demand shall be deemed rescinded. If the
Borrower or Sponsor, as the case may be, shall fail to comply with the
requirements of this Section 5.28, the Administrative Agent (on behalf of the
Secured Parties) shall be entitled to make Working Capital Advances and/or
offset funds on deposit in the Accounts to pay the fees and taxes associated
with the Astoria Supplemental Mortgage (and the related title insurance) and
record the same. Nothing contained in the previous sentence shall in any manner
limit other remedies available to the Secured Party under the Financing
Documents.
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Section 5.29 Air Emissions Control and Allowance Purchase Arrangements.
(a) The Borrower shall deliver to the Lead Arrangers for their
approval, such approval not to be unreasonably withheld, conditioned or delayed,
an Air Emission Allowance Plan on or prior to the Restructuring Effective Date
and by December 1 of each year (beginning December 1, 2003), covering the period
from January 1 through the following December 31, satisfying the requirements
contained in the definition thereof and the requirements of this Section 5.29;
provided, that, if the Lead Arrangers fail to approve such Air Emission
Allowance Plan or provide notice to the Borrower that they reject all or any
portion of such Air Emission Allowance Plan, the Borrower and the Lead Arrangers
agree to work in good faith to resolve such dispute.
(b) The Borrower covenants and agrees to acquire and maintain
Allowances sufficient to meet the Minimum Allowances Holding Requirements for
the Compliance Years, in the manner (i.e., either as Owned Allowances or
Contract Allowances), at the times and at the levels set forth on Part B of the
Schedule 5.29(b). Notwithstanding the foregoing sentence, the Minimum Allowances
Holding Requirements will be reduced by an amount equal to any reduction in
emissions as the result of air pollution control equipment, fuel modifications
or operational modifications, provided that an internal project work order has
been written (with a copy thereof having been provided to the Lead Arrangers)
and funding therefor is approved by Borrower and is contained in the Operating
Budget (or is or will be funded with Permitted Indebtedness and/or equity
contributions). A monthly report will be provided to the Lead Arrangers for all
planned control projects for which the Minimum Allowances Holding Requirements
have been reduced pursuant to the immediately preceding sentence. The monthly
report will provide project progress for the prior month, cumulative project
progress, and comparison to the original project schedule. To the extent that
the project falls behind schedule for the expected initial operation date and
the new expected initial operation date would result, absent purchasing
additional Allowances, in the Borrower failing to comply with Schedule 5.29(b),
the Borrower will be required to purchase the projected shortfall of Allowances
within 60 days of the delivery of such monthly report. In connection with each
update of the Air Emission Allowance Plan delivered pursuant to Section 5.29(a)
above, the Borrower will deliver an updated Schedule 5.29(b) that is reasonably
satisfactory to the Lead Arrangers (such satisfaction not to be reasonably
withheld, conditioned or delayed) and that is prepared for future years (through
2007) consistent with the pattern of Owned and Contract Allowance acquisition
levels set forth on Schedule 5.29(b) as of the Restructuring Effective Date.
(c) The Borrower shall provide documentation which demonstrates, to the
reasonable satisfaction of the Lead Arrangers (such satisfaction not to be
unreasonably withheld, conditioned or delayed), that Borrower has complied with
its obligation to purchase or enter into agreements for purchase and/or other
transfer of Owned and Contract Allowances prior to the dates set forth on
Schedule 5.29(b). Contracts for or rights to Allowances must be subject to first
priority Liens in favor of the Administrative Agent, subject only to Permitted
Liens. The Borrower covenants and agrees not to use, sell, transfer or diminish
any Owned Allowances or Contract Allowances acquired or held (as of the
Restructuring Effective Date or thereafter) to meet the obligations of this
Section 5.29 except that Borrower Entity may sell or transfer any Allowances so
long as the Borrower Entities are, and will be, after giving effect to any such
sale or transfer, in compliance with their respective obligations under this
Section 5.29 and the then
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current Air Emission Allowance Plan. No approved form of agreement, nor any
Lender approval of any individual agreement, shall be required for any purchase
by Borrower of any Owned Allowances. Borrower may enter into any agreement for
the acquisition of Contract Allowances, if the term of such agreement exceeds
364 days, only with the approval of the Lead Arrangers. If the term of any
agreement for the acquisition of Contract Allowances does not exceed 364 days,
then Borrower may enter into any such agreement without any Lender approval of
such individual agreement, provided, that the Lead Arrangers have approved a
form of agreement for the acquisition of Contract Allowances and the individual
agreement proposed to be entered into by Borrower does not vary materially from
the terms and conditions of such approved form of agreement.
(d) During any Compliance Year, the Borrower agrees to own and hold,
free and clear of any and all Liens (other than Permitted Liens) Owned
Allowances sufficient to cover (as required by any Emissions Regulatory Program)
all of the actual emissions of all air pollutants emitted by sources at any
applicable Portfolio Asset during that Compliance Year, within 30 days of any
such actual emissions.
(e) In the event that new or modified Emissions Regulatory Programs are
enacted or promulgated, the Borrower shall promptly submit for approval by the
Lead Arrangers (such approval not to be unreasonably withheld, conditioned or
delayed) a compliance plan to address those requirements that is consistent with
the approach taken in this Section 5.29 with respect to existing Emissions
Regulatory Program. Once so approved, such compliance plan shall be made part of
each Air Emission Allowance Plan required under this Section 5.29. It is agreed
and understood that any new or modified Emissions Regulatory Program may require
implementing regulations to be developed after promulgation or enactment and
that the Borrower's efforts promptly to develop a compliance plan to address
such programs promptly in the absence of any necessary final implementing
regulations shall be made on a commercially reasonable efforts basis based upon
the best available information.
(f) Nothing in this Section alters or is intended to alter the
Borrower's obligations under Section 5.09, "Requirements of Law," with respect
to any air emission reduction program or requirement, including any such program
or requirement that does not qualify as an Emissions Regulatory Program.
Section 5.30 Certain Operational Covenants. Comply with the covenants
set forth in Schedule 5.30 hereto, as such Schedule 5.30 may be amended or
modified from time to time with the consent of the Lead Arrangers, such consent
not to be unreasonably withheld, conditioned or delayed.
Section 5.31 Required Principal Reduction. Pay or cause to be paid
Principal Payments which, together with all Principal Payments paid or caused to
be paid by OPMW under the OPMW Restated Credit Agreement, are in an aggregate
combined amount of not less than (a) One Hundred Nine Million dollars
($109,000,000) on or prior to December 31, 2003, (b) Two Hundred Thirty Four
Million dollars ($234,000,000) on or prior to December 31, 2004, and (c) Three
Hundred Nine Million dollars ($309,000,000) on or prior to June 30, 2005; and,
for the avoidance of doubt, in determining compliance with this Section 5.31, if
the aggregate amount of Principal Payments made during any calendar year under
this Agreement and the OPMW
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Restated Credit Agreement exceeds the minimum level of such aggregate Principal
Payments required to be made during such calendar year, such excess Principal
Payments shall constitute Principal Payments for purposes of compliance with the
minimum level of Principal Payments required during any subsequent calendar
years. It is understood and agreed that the principal reduction made as of the
Restructuring Effective Date in the amount of $6,200,000 in the aggregate,
hereunder and under the OPMW Credit Agreement, shall be considered a Principal
Payment for purposes of this Section 5.31. Any amendment or waiver of compliance
with this Section 5.31 shall require approval by the Secured Parties hereunder
and under the OPMW Restated Credit Agreement holding 66-2/3% of the sum of the
Combined Exposure under this Agreement and the OPMW Combined Exposure.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as this Agreement is in
effect and any Lenders shall have any Commitment outstanding hereunder, and
until the Notes, together with interest, and all other Obligations are
indefeasibly paid in full and all Letters of Credit have been cancelled or have
expired and all amounts drawn thereunder have been indefeasibly reimbursed in
full and the OPMW Obligations have been indefeasibly paid in full, the Borrower
shall not:
Section 6.01 Limitation on Mergers. Merge or consolidate with or into
any other Person or liquidate, wind up, dissolve or otherwise transfer or
dispose of all or substantially all of its property, assets or business, acquire
all or substantially all of the assets of any Person or abandon the Portfolio
Assets, except that nothing in this Agreement shall restrict mergers or
consolidations, liquidations, winding up, dissolutions, transfers or other
dispositions by one Subsidiary of the Borrower with or to another Subsidiary of
the Borrower or with or to the Borrower, so long as such merger, consolidation,
liquidation, winding up, dissolution, transfer or other disposition does not
have, in the reasonable judgment of the Lead Arrangers, any adverse effect on
the Liens granted under the Financing Documents or the Collateral secured
thereby.
Section 6.02 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, other than Permitted Indebtedness.
Section 6.03 Limitation on Liens. Create or permit to exist any Lien or
encumbrance on any Portfolio Assets or any other assets of the Borrower, other
than Permitted Liens.
Section 6.04 Nature of Business. Change its legal form or Governing
Documents (other than to (i) change its name, (ii) add, replace or eliminate
offices and/or officers, and/or (iii) add to, replace or reduce the number of
directors comprising the board so long as such addition, replacement or
reduction does not eliminate the independent director or modify the nature of
the independent director's powers in any way), change its fiscal year nor engage
in any business other than the acquisition, ownership, development, operation
and financing of the Portfolio Assets; provided, that the Governing Documents
may be amended as provided herein, or otherwise may be amended with the prior
written approval of the Lead
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Arrangers, such approval not to be unreasonably withheld. The Borrower shall not
engage in the sale or trading of any fuel which is necessary for the operation
of any Portfolio Assets (including reasonable reserves as determined by Borrower
in its reasonable discretion in the exercise of Prudent Industry Practice;
provided, that, any sale or other transfer made in compliance with the covenants
set forth in Schedule 5.30 shall not be deemed to violate this Section 6.04).
Section 6.05 Project Contracts; Waiver; Modification; Amendment.
(a) Terminate, or agree to any termination of, any Transaction Document
to which it is a party (except as with respect to Project Contracts terminated
by the applicable counterparty pursuant to the express terms thereof) or any
Governmental Approval, unless , with respect to Project Contracts, (i) such
termination is pursuant to the Borrower's compliance with Section 5.05 hereof
and such Project Contract is a Project Contract approved pursuant to clause (iv)
of the definition thereof and such termination could not reasonably be expected
to have a material adverse effect on any Portfolio Asset, or (ii) the Borrower
first obtains the written consent of the Lead Arrangers (such consent not to be
unreasonably withheld, conditioned or delayed).
(b) Except as provided in Section 6.04, amend or modify, or consent or
agree to such amendment or modification of, or waive timely performance by any
Person of, any of the material obligations under or in respect of any Project
Contract or Operational Plan to which it is a party or any material Governmental
Approval, unless the Borrower first obtains the consent of the Lead Arrangers,
which consent will not be unreasonably withheld, delayed or conditioned, upon
demonstration to the reasonable satisfaction of the Lead Arrangers (in
consultation with the Independent Engineer, or Power Market and Fuel Consultant,
as applicable) that the proposed action could not reasonably be expected to have
a Material Adverse Effect; provided, that without the prior consent of the Lead
Arrangers (i) none of the Borrower Entities may amend or modify Sections 1.07,
1.09, 2.02(b), 2.05, Article V(b) and Article VI of their respective Partnership
Agreements and (ii) the General Partner may not amend or modify Articles II, IV,
V and VI of its Governing Documents. Upon granting any such consent by the Lead
Arrangers with respect to a Project Contract, the Administrative Agent shall
forthwith grant consent to such amendment or modification required under any
Consent applicable to any such Project Contract, such consent not to be
unreasonably withheld, conditioned or delayed.
Section 6.06 Partnerships; Subsidiaries. Become a general or limited
partner in any partnership or a joint venturer in any joint venture, acquire any
ownership interest in any other Person or enter into any profit-sharing or
royalty agreement or other similar arrangement whereby the Borrower's income or
profits are, or might be, shared with any other Person, or enter into any
management contract or similar arrangement whereby its business or operations
are managed by any other Person (other than the O&M Agreements or as
contemplated in any Operational Plan) or form any Subsidiary (other than those
validly existing on the Restructuring Effective Date).
Section 6.07 Loans, Advances or Investments. (a) Make or permit to
remain outstanding any loans, extensions of credit or advances to or investments
in (whether by acquisitions of any stocks, notes or other securities or
obligations) any Person, except Permitted Investments or as expressly
contemplated by this Agreement.
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(b) Prepay Operating Costs other than in circumstances where a
prepayment of such Operating Cost is made in amounts required to continue
operations of the Borrower Entities in the ordinary course of business or if the
failure to so prepay would reasonably be expected to result in the loss or
breach of the applicable contract or agreement (or the ability to timely obtain
the goods and services thereunder) or would reasonably be expected to result in
any material increase in the cost for replacement goods or services; provided,
that, any such prepayment shall be consistent with Prudent Industry Practices;
and provided, further, that no prepayments shall be made (i) to any Affiliate,
or (ii) when the aggregate amount of any such prepayment, when added (without
duplication) to the aggregate amount of all other prepayments then made under
this Section 6.07(b) for which goods or services have not been delivered or
received, all amounts of Cash Collateral then outstanding under Section 6.07(c)
below, all prepayments then made pursuant to Section 6.07(b) of the OPMW
Restated Credit Agreement for which goods or services have not been delivered or
received, and all amounts of Cash Collateral then outstanding under Section
6.07(c) of the OPMW Restated Credit Agreement, would exceed $50,000,000.
(c) Use Revenues or proceeds of any Working Capital Loan as Cash
Collateral other than in circumstances where cash collateralization of any
applicable Contractual Obligation is made in amounts reasonably necessary to
adequately mitigate the applicable counterparties' exposure to a Borrower Entity
under the applicable contract, agreement or undertaking, and the failure to cash
collateralize would reasonably be expected to result in the loss or breach of
the applicable contract or agreement (or the ability to timely obtain the goods
and services thereunder) or any material increase in the cost for replacement
goods or services; and provided, that, any such cash collateralization shall be
consistent with Prudent Industry Practices; provided, further, that, no Cash
Collateral shall be provided (i) to any Affiliate, or (ii) when the aggregate
amount of any such Cash Collateral, when added (without duplication) to the
aggregate amount of all other Cash Collateral then outstanding under this
Section 6.07(c), all prepayments then made under Section 6.07(b) and for which
the applicable good or service has not been delivered or received, all
prepayments then made pursuant to Section 6.07(b) of the OPMW Restated Credit
Agreement for which goods or services have not been delivered or received, and
all amounts of Cash Collateral then outstanding under Section 6.07(c) of the
OPMW Restated Credit Agreement, would exceed $50,000,000.
(d) If any Borrower Entity enters into any contract or agreement
providing any prepayments or cash collateral to a third party for the purchase
of any goods or materials and such Borrower Entity subsequently enters into a
separate contract with respect to those same goods or materials with any
Affiliate of such Borrower Entity, then the contract with such Affiliate shall
be on substantially the same terms and conditions as the third party contract,
unless such terms and conditions would violate or breach Section 6.09 hereof or
any similar contractual provision contained in any contract to which such
Affiliate is a party, in which case such terms and conditions will be modified
to the extent required to comply with Section 6.09 and any similar contract
provisions. No Borrower Entity shall enter into any contract or agreement for
the purchase of any goods or materials (including the provision of prepayments
or cash collateral) in consideration for any concession or improved terms or
conditions (including collateral requirements or pricing) in any separate
contract or agreement with any Affiliate of such Borrower Entity.
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Section 6.08 Limitation on Capital Expenditures. Make any Capital
Expenditure other than such Capital Expenditures that are (a) contemplated by
the annual Operating Budget in effect for such fiscal year (as administered
pursuant to Section 5.11), (b) Environmental Cap Ex, (c) provided no Event of
Default has occurred and is continuing, determined in writing by the
Administrative Agent (after consultation with the Independent Engineer) to be
required by applicable Requirements of Law or to be reasonable and necessary and
to arise from circumstances which could not reasonably have been anticipated,
which determination will not be unreasonably withheld, conditioned or delayed,
or (d) subject to Section 5.2(p) of the Deposit Account Agreement, required as a
result of an Emergency.
Section 6.09 Affiliate Transactions. Directly or indirectly enter into
any transaction with any Affiliate other than in the ordinary course of business
and on an arm's length basis. Unless otherwise approved by the Lead Arrangers,
directly or indirectly enter into any transactions with any Person (other than
an Affiliate) other than in the ordinary course of business and on an arm's
length basis.
Section 6.10 Distributions. Declare or pay any Distributions in respect
of any Person's ownership interest in any Borrower Entity other than Permitted
Distributions.
Section 6.11 Limitation on Disposition of Assets. Except in connection
with any transaction permitted by Section 6.01 or in connection with any
Permitted Lien, convey, sell, lease, assign, transfer or otherwise dispose of
any of its assets (including equipment, inventory and other physical assets of
similar nature), other than (a) Energy-Related Products, steam, emissions
credits, scrap metal and other scrap materials, and excess fuel conveyed, sold,
leased, assigned, transferred or otherwise disposed of in the ordinary course of
any Borrower Entity's business, (b) such assets that are replaced within 120
days by other assets of like utility in any Borrower Entity's business;
provided, that, this clause (b) above shall not permit any sale of assets for an
aggregate sales price in excess of $10,000,000 in any calendar year during the
term hereof less the aggregate amount of all such asset sales of the Operating
Subsidiary consummated during such year, (c) obsolete or surplus assets or
assets not required in connection with the operation of the Portfolio Assets,
and (d) assets that do not have, in any single transaction or related series of
transactions, an aggregate sales price in excess of $25,000,000; provided
however, the Lead Arrangers may waive the limitation set forth in this clause
(d) in connection with any conveyance, sale, lease assignment, transfer or
disposition of assets in any single transaction or series of related
transactions with aggregate proceeds in excess of $25,000,000 so long as the
proceeds thereof are applied to the prepayment of Acquisition Loans. All
proceeds of any disposition of such assets pursuant to clause (a) above shall be
deposited into the Revenue Account for application therefrom in accordance with
the Deposit Account Agreement. All proceeds of any disposition of such assets
pursuant to clause (b) above, shall be deposited into the O&M Reserve Account
and applied pursuant to the terms of the Deposit Account Agreement. All proceeds
of any disposition of such assets pursuant to clauses (c) and (d) above shall be
applied to the prepayment of Loans to the extent required under Section 2.07(a)
and shall be deposited into the Extraordinary Proceeds Account pursuant to the
Deposit Account Agreement. Notwithstanding the foregoing, Erie Boulevard shall
be permitted to transfer interests in the NiMo Assets to industrial development
authorities in connection with any Approved IDA Transaction.
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Section 6.12 Operating Budget. Amend, adjust, modify or re-allocate any
portion of the Operating Budget except as specifically permitted in Section
5.11.
Section 6.13 [Intentionally Omitted.]
Section 6.14 Environmental Insurance. Add any properties not included
within the Portfolio Assets to the insured properties under the PLL Policy or
any matters to the Cost Cap Policy which are not identified as covered locations
under the Cost Cap Policy without the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, that, the Borrower delivers to the
Administrative Agent all reasonably requested information regarding (1)
pollution conditions or potential for pollution conditions on the new properties
or pertaining to the matters relating to Cost Cap Policy and (2) the effects on
the protections afforded to the Portfolio Assets by adding such new properties
to the PLL Policy or matters relating to the Cost Cap Policy.
Section 6.15 Speculative Trading. Engage in any speculative trading
activities.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following specified events (each an "Event of Default")
shall occur and be continuing:
Section 7.01 Payments.
(a) The Borrower shall fail to pay in accordance with the terms hereof
(including, without limitation, by mandatory prepayment or acceleration) (i) any
principal of any Loan or reimbursement obligation in respect of any Letter of
Credit when due; (ii) any scheduled or periodic payment of interest or any other
scheduled or periodic amount (including Fees) payable by the Borrower on demand
hereunder or under the other Financing Documents, within three (3) Business Days
after any such amount becomes due in accordance with the terms hereof or of any
other Financing Document or (iii) any other payment, including non-scheduled and
non-periodic payments of the Borrower, and such failure shall continue for ten
(10) Business Days after written notice thereof to the Borrower;
(b) except as set forth in Sections 7.02(a)(ii) and 7.02(a)(iii), any
Credit Party or OPMW Credit Party (other than the Borrower) shall fail to pay
any amount when due under any Financing Document to which such Credit Party or
OPMW Credit Party, as the case may be, is a party in accordance with the terms
thereof and such failure shall continue for ten (10) Business Days after written
notice thereof to such Credit Party or OPMW Credit Party, as the case may be; or
(c) any Borrower Entity shall fail to deposit, in accordance with the
terms hereof or any other Financing Document, the amounts required to be
deposited into the Accounts as and when required by the terms hereof or any
other Financing Document and such failure shall not be remedied within five (5)
Business Days after such Borrower Entity shall have received such amount;
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Section 7.02 Covenants.
(a) (i) The Borrower shall fail to observe or perform any covenant or
agreement contained in Section 5.01(i), 5.01(ii), 5.06, 5.17, 5.24(a),
5.24(b)(i) or 5.31 hereof, or in Article VI hereof (other than Section 6.08 and
Section 6.12); (ii) any of Astoria Generating, Carr Street Generating or Erie
Boulevard shall fail to observe or perform any covenant or agreement contained
in Section 7.01(a), 7.01(b), 7.06, 7.16, 7.22(a), 7.22(b)(i) or Section 8 (other
than Sections 8.08 and 8.12 thereof) of the Subsidiary Guarantee; (iii) Holdco
shall fail to observe or perform any covenant or agreement contained in Section
11(b), 11(d), 11(i), 11(j), 11(l) or 11(p) of either Holdco Pledge Agreement or
Section 7 of the Holdco Guarantee; (iv) General Partner shall fail to observe or
perform any covenant or agreement contained in Sections 12(b), 12(d) or 12(i) of
the GP Partnership Interest Pledge Agreement or Sections 12(b), 12(d) or 12(i)
of the GP Second Lien Partnership Interest Pledge Agreement; or (v) Limited
Partner shall fail to observe or perform any covenant or agreement contained in
Section 7 of the LP Guarantee or Section 12(b), 12(d) or 12(i) of the LP
Partnership Interest Pledge Agreement or Sections 12(b) or 12(d) of the LP
Second Lien Partnership Interest Pledge Agreement;
(b) The Borrower shall fail to observe or perform any covenant or
agreement contained in Section 5.26(a)(i), Section 5.26(b)(i), Section
5.27(a)(i) or Section 5.29(a) and such failure shall remain unremedied for
thirty (30) days after written notice thereof shall have been given to the
Borrower by any Lender or the Administrative Agent;
(c) Subject to Section 7.02(e), any Credit Party or OPMW Credit Party
shall fail to observe or perform any covenant or agreement contained in any
Financing Document to which it is a party, other than those referred to in
Sections 7.01, 7.02(a) and 7.02(b), and, if capable of being remedied, such
failure shall remain unremedied and material for thirty (30) days after the
earlier of (i) such Credit Party's or OPMW Credit Party's, as applicable,
obtaining actual knowledge thereof or (ii) written notice thereof shall have
been given to such Credit Party or OPMW Credit Party, as applicable, by any
Lender or the Administrative Agent; provided, that, such Credit Party or OPMW
Credit Party, as applicable, shall have such longer period of time (up to a
maximum of an additional 120 days) which may be necessary to remedy such
failure, so long as, (x) such Credit Party or OPMW Credit Party, as applicable,
commences such remedy within such thirty (30) day period, (y) such Credit Party
or OPMW Credit Party, as applicable, is diligently pursuing such remedy and (z)
such Default has not had, and could not reasonably be expected to have, a
Material Adverse Effect;
(d) Any other Major Project Party shall fail to observe or perform any
material covenant or material agreement contained in any Project Contract to
which such Major Project Party is a party, and, (i) such failure could
reasonably be expected to have a Material Adverse Effect and (ii) if capable of
being remedied, such failure shall remain unremedied and material beyond the
applicable grace period provided therefor in such Project Contract or if no
grace period is provided therefor, for a period of 120 days after written notice
thereof; provided, however, that it shall not be an Event of Default under this
Section 7.02(d) if, prior to the date such cure period specified above expires,
such Project Contract shall be replaced by an agreement in form and substance
and with a party reasonably satisfactory to the Lead Arrangers;
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(e) Notwithstanding anything to the contrary contained in this
Agreement or in any other Financing Document, in no event shall the breach by
any Borrower Entity of any of the covenants contained in Section 5.11, Section
5.26(a)(ii), Section 5.26(b)(ii), Section 5.27(a)(ii), Section 6.08 or Section
6.12 hereof or Sections 7.11, 8.08 or 8.12 of the Subsidiary Guarantee, or the
occurrence of any Regulatory Change or Material Regulatory Change or the breach
by any Borrower Entity of any other covenant or agreement in any other Financing
Document which is substantially similar to any of the sections of the Financing
Documents referenced above in this Section 7.02(e), constitute a Default or
Event of Default, and the sole remedy for any such breach available to any of
the Lenders shall be as expressly set forth in the Holdco Deposit Account
Agreement;
Section 7.03 Representations. Any representation or warranty made by
any Credit Party or OPMW Credit Party in any Financing Document, or any
representation, warranty or statement in any certificate, financial statement or
other document furnished to any Lender by or on behalf of any Credit Party or
OPMW Credit Party under any Financing Document, shall prove to have been false
or misleading in any material respect as of the time made, confirmed or
furnished and such Credit Party or OPMW Credit Party, as applicable, shall fail
to correct such representation or warranty or any material adverse effect
therefrom within 30 days after written notice thereof to the Borrower;
Section 7.04 Defaults Of Other Indebtedness. (a) Any Borrower Entity
shall fail to observe or perform any covenant or agreement contained in any
material agreement or instrument relating to any of its Indebtedness in excess
of $1,000,000 within any applicable grace period, or any other event shall
occur, if the effect of such failure or other event is to accelerate the
maturity of such Indebtedness or cause the holder of such Indebtedness to take
steps to accelerate such Indebtedness; or any such Indebtedness shall be
required to be prepaid (other than by a regularly scheduled required prepayment
or a refinancing thereof) in whole or in part prior to its stated maturity, (b)
an Event of Default shall occur under the OPMW Restated Credit Agreement or (c)
the Sponsor shall fail to observe or perform any covenant or agreement contained
in any agreement or instrument relating to any of its Indebtedness in excess of
$25,000,000 within any applicable grace period, or any other event shall occur,
if the effect of such failure or other event is to accelerate the maturity of
such Indebtedness or cause the holder of such Indebtedness to take steps to
accelerate such Indebtedness; or any such Indebtedness shall be required to be
prepaid (other than by a regularly scheduled required prepayment or a
refinancing thereof) in whole or in part prior to its stated maturity;
Section 7.05 Security Documents. Any of the Security Documents shall,
after the execution and delivery thereof, cease to be in full force and effect,
or shall cease to give the Administrative Agent (for the benefit of the Secured
Parties) the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a security interest in, and Lien on, any
material portion of Collateral covered thereby which, except as provided in such
Security Document is superior to and prior to the rights of all other Persons,
other than with respect to vehicles and any emergency response boat), in favor
of the Administrative Agent (for the benefit of the Secured Parties) subject to
no other Liens other than Permitted Liens;
Section 7.06 Transaction Documents. Any (i) Financing Document (other
than the Intercreditor Agreement), or any material provision contained in any
thereof, or (ii) Project
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Contract to which a Major Project Party is a party or the termination of which
could reasonably be expected to result in a material adverse effect on any
Portfolio Asset, or any material provision contained in any thereof, shall
become invalid, illegal or unenforceable or shall cease, for any reason not
permitted hereby, to be in full force and effect prior to its stated termination
date (except as with respect to any Project Contract terminated by the
counterparty pursuant to the terms thereof), or any party thereto asserts the
same in writing, unless such Transaction Document or provision, as the case may
be, is either (x) replaced within 120 days of such cessation by an agreement in
form and substance and with a party reasonably satisfactory to the Lead
Arrangers or (y) during such 120 day period alternative arrangements reasonably
satisfactory to the Lead Arrangers shall have been made;
Section 7.07 Bankruptcy. Any Credit Party, OPMW Credit Party or Major
Project Party shall commence a voluntary case or proceeding concerning itself
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors; or such
an involuntary case or proceeding is commenced against any Credit Party, OPMW
Credit Party or Major Project Party and the petition is not dismissed within 60
days after commencement of the case; or a custodian, receiver, trustee,
conservator or other similar official is appointed for, or takes charge of, all
or any substantial part of the property of any Credit Party, OPMW Credit Party
or Major Project Party and such official is not dismissed or removed within 60
days after such appointment; or any Credit Party, OPMW Credit Party or Major
Project Party commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to such Credit Party, OPMW Credit Party or Major Project Party,
or there is commenced against any Credit Party, OPMW Credit Party or Major
Project Party any such proceeding which remains undismissed for a period of 60
days; or any Credit Party, OPMW Credit Party or Major Project Party is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered and is undischarged and
unstayed for a period of 60 days; or any Credit Party, OPMW Credit Party or
Major Project Party suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged and unstayed
for a period of 60 days; or any Credit Party, OPMW Credit Party or Major Project
Party makes a general assignment for the benefit of creditors; or any Credit
Party, OPMW Credit Party or Major Project Party shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or any Credit Party, OPMW Credit Party or Major Project
Party shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; or any Credit Party, OPMW Credit Party
or Major Project Party shall by any act or failure to act indicate its consent
to, approval of or acquiescence in any of the foregoing; or any corporate action
is taken by any Credit Party, OPMW Credit Party or Major Project Party for the
purpose of effecting any of the foregoing; provided, that, the foregoing, as it
relates to any Major Project Party, shall not constitute an Event of Default if
the Borrower obtains, within 60 days after expiration of such 60 day period, a
replacement Person reasonably satisfactory to the Lead Arrangers to perform the
obligations of the affected Major Project Party on terms and conditions
reasonably satisfactory to the Lead Arrangers;
Section 7.08 Governmental Approvals. (a) Any material Governmental
Approval required by any Borrower Entity shall not be obtained, shall be revoked
or cancelled or materially and adversely modified, which failure to obtain,
modification, revocation or
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cancellation (i) could reasonably be expected to have a Material Adverse Effect
and (ii) is not promptly stayed upon appeal or other legal challenge instituted
by or on behalf of such Borrower Entity by any Governmental Authority having
jurisdiction; or (b) any notice of violation is issued under any material
Governmental Approval or any proceeding is commenced by any Governmental
Authority for the purpose of modifying in any materially adverse manner,
revoking or canceling any such Governmental Approval and any such event or
condition described in this clause (b) shall have a material adverse effect on
any Portfolio Asset and shall continue for a period of one hundred fifty (150)
days without a variance or similar relief being granted with respect thereto;
provided, that, notwithstanding the foregoing, it shall be an Event of Default
(with no cure period except as provided in the following proviso) if any event
or condition described in this clause (b) occurs and any Governmental Authority
commences any enforcement action with respect thereto which has or could
reasonably be expected to have a Material Adverse Effect; provided, further,
that if no Material Adverse Effect has in fact occurred and, within forty-five
(45) days after the commencement of any such enforcement action, such
enforcement action is stayed or otherwise resolved in a manner reasonably
satisfactory to the Lead Arrangers, then the Borrower shall be entitled to the
full cure period specified above with respect to the occurrence of any such
event or condition described in this clause (b);
Section 7.09 Ownership. (a) The failure of the Sponsor to own, directly
or indirectly, one hundred percent (100%) of the outstanding Capital Stock of
Holdco, the Partners, the Borrower and all of their respective Subsidiaries, (b)
the failure of Holdco to own, directly or indirectly, one hundred percent (100%)
of the outstanding Capital Stock of the Partners, the Borrower and all of their
respective Subsidiaries or (c) the failure of Reliant to own, directly or
indirectly, one hundred percent (100%) of the outstanding Capital Stock of the
Sponsor, Holdco, the Partners, the Borrower and all of their respective
Subsidiaries;
Section 7.10 Judgment. A judgment shall be entered (i) for the payment
of money (a) in excess of $1,000,000 against any Borrower Entity or any Partner,
or (b) in excess of $10,000,000 against the Sponsor and such judgment or order
(in the case of a money judgment) shall continue unsatisfied and in effect, or
such party shall fail to provide Acceptable Reserves for the satisfaction
thereof, for a period of 60 days during which execution shall not be effectively
stayed or deferred (whether by action of a court, by agreement or otherwise);
(ii) which could reasonably be expected to cause a Material Adverse Effect; or
(iii) in the form of an injunction or similar form of relief requiring
suspension of operations of any material Portfolio Asset on the grounds of
violation of an Environmental Law or other Requirement of Law and failure of the
Borrower to have such injunction or similar form of relief stayed or discharged
within 90 days;
Section 7.11 Destruction of Portfolio Assets. All or substantially all
of the Astoria Bundle or the NiMo Assets shall suffer a substantial casualty, or
be destroyed, irreparably damaged, or requisitioned or taken by condemnation,
and such casualty, destruction, damage, requisition or taking could reasonably
be expected to have a Material Adverse Effect, after taking into account
application of all Extraordinary Proceeds relating thereto;
Section 7.12 ERISA. The Borrower or any ERISA Affiliate shall fail to
pay when due an amount or amounts aggregating in excess of $10,000,000 which it
shall have
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become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by the Borrower or any
ERISA Affiliate, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, or one or more
Multiemployer Plans which could cause the Borrower or one or more ERISA
Affiliates to incur a current payment obligation in excess of $10,000,000;
Section 7.13 Regulatory Status. Any Borrower Entity (other than the
Borrower) or any Operator shall fail at any time to be an "exempt wholesale
generator" under PUHCA;
Section 7.14 [Intentionally Omitted.]
Section 7.15 Negative Pledge. Any Person pledging an interest pursuant
to any Partnership Interest Pledge Agreement or Stock Pledge Agreement, as the
case may be, shall, or shall agree to, create, incur, assume or suffer to exist
any Lien upon, or with respect to, such pledged interest other than Permitted
Liens;
Section 7.16 Abandonment. Any Borrower Entity shall have voluntarily
abandoned any Portfolio Asset for a non-temporary period other than pursuant to
a Requirement of Law (it being understood, without limitation, that any such
cessation of operations due to the market price of power and the marginal cost
of operating such Portfolio Asset does not, in and of itself, constitute
abandonment), however, for the avoidance of doubt, during any such cessation of
operations of any Portfolio Asset, such Portfolio Asset shall remain in good
working order, ordinary wear and tear excepted, and be capable of restarting
without cold start-up or other material cost; or
Section 7.17 Sponsor Indebtedness. The Sponsor shall incur Indebtedness
(or any amendment, modification, restructuring, replacement or refinancing
thereof) for borrowed money (or issue any guarantee or surety of any
Indebtedness for borrowed money) (other than the Sponsor High Yield Debt (as in
effect on the Restructuring Effective Date)) that (i) has a maturity date of
less than 37 months, (ii) the terms and provisions of which, as reasonably
determined by the Lead Arrangers, limit or restrict the Lenders in exercising
their rights and remedies hereunder and under the other Financing Documents, in
any way that is more limiting or restricting than the provisions of the Sponsor
High Yield Debt (as in effect on the Restructuring Effective Date), (iii) is not
expressly subordinated to the Obligations on terms reasonably acceptable to the
Lead Arrangers; or (iv) the net proceeds of which are not deposited into the
Voluntary Prepayment Account (as defined in the Holdco Deposit Account
Agreement) for application therefrom in accordance with the Holdco Deposit
Account Agreement; then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the Administrative Agent may, and
upon the written, telecopied or telex request of the Required Lenders, shall, by
written notice to the Credit Parties (a "Remedy Notice"), take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
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any Secured Party or the holder of any Note to enforce its claims against the
Borrower: (i) declare the Commitments terminated, whereupon the Commitments of
each Lender shall terminate immediately and any accrued but unpaid Commitment
Fee shall forthwith become due and payable without any action of any kind; or
(ii) declare the principal of and any accrued interest on the Loans, and all
other Obligations, to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived; provided that, if any Event of Default specified in
Section 7.07 shall occur, the result which would occur upon the giving of a
Remedy Notice by the Administrative Agent, as specified in clauses (i) and (ii)
above, shall occur automatically without the giving of any such Notice. Except
as expressly provided in the immediately preceding sentence, neither the
Administrative Agent nor any Secured Party shall otherwise be precluded from
pursuing any other right or remedy then available to them against the Borrower,
any other Credit Party or any OPMW Credit Party pursuant to the Financing
Documents. Upon the exercise of any of the foregoing remedies, any excess
remaining after payments to each Secured Party of any and all amounts sufficient
to compensate such Secured Party for all amounts owing and all costs incurred
under any Financing Document, shall be remitted by the Administrative Agent to
the Borrower.
It is understood and agreed that a distribution made by Holdco in
breach or violation of the terms of the Holdco Deposit Account Agreement shall
constitute a violation of this Credit Agreement.
ARTICLE VIII
THE AGENTS, LEAD ARRANGERS AND ISSUING BANK
Section 8.01 Appointment of Agents, Powers and Immunities. Each Secured
Party hereby irrevocably appoints and authorizes each of the Agents, the Lead
Arrangers and the Issuing Bank to act as its Agent, Lead Arrangers and the
Issuing Bank hereunder and under the other Transaction Documents with such
powers as are expressly delegated to such Agent, Lead Arranger and the Issuing
Bank by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Neither the Agents nor the Lead Arrangers shall
have any duties or responsibilities except those expressly set forth in this
Agreement or in any other Transaction Document, or be a trustee for any Secured
Party. Notwithstanding anything to the contrary contained herein, no Agent or
Lead Arranger shall be required to take any action which is contrary to this
Agreement or any other Transaction Document or applicable law. Neither the
Agents, the Lead Arrangers, the Issuing Bank nor any Secured Party nor any of
their respective affiliates shall be responsible to any other Secured Party for
any recitals, statements, representations or warranties made by the Borrower
contained in this Agreement or any other Transaction Document or in any
certificate or other document referred to or provided for in, or received by any
Secured Party under, this Agreement or any other Transaction Document, for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the Notes, the other Transaction Documents or any other document
referred to or provided for herein or therein or for any failure by the Borrower
to perform its obligations hereunder or thereunder. Each Agent and Lead Arranger
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such Agents or attorneys-in-fact selected by it
with reasonable care. Neither the Agents, the Lead Arrangers, the Issuing Bank
nor any of their respective directors, officers, employees or agents shall be
responsible for any action taken
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or omitted to be taken by it or them hereunder or under any other Transaction
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.
Section 8.02 Reliance by Agents. Each Agent, Lead Arranger and the
Issuing Bank shall be entitled to rely upon any certificate, notice or other
document (including any cable, telegram, telecopy or telex) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by such Agent, Lead Arranger
or the Issuing Bank. As to any matters related to this Agreement or the
transactions contemplated hereby, none of the Agents, Lead Arrangers nor the
Issuing Bank shall be required to take any action or exercise any discretion,
but the Agents, Lead Arrangers and the Issuing Bank shall be required to act or
to refrain from acting upon instructions of the Required Lenders and shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or under any other Transaction Document in accordance with the instructions of
the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of the
Secured Parties. Notwithstanding the foregoing, nothing herein shall be deemed
to require approval by the Required Lenders to the extent that Lead Arranger
approval is expressly provided for herein or in any other Financing Document.
Section 8.03 Defaults. The Administrative Agent shall not be deemed to
have actual knowledge or notice of the occurrence of a Default or an Event of
Default unless the Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Administrative Agent receives such a notice of the occurrence of a Default
or an Event of Default the Administrative Agent shall give notice thereof to the
Secured Parties. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if required by Section 9.02, as shall be reasonably directed by all
of the Lenders); provided, that, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interest of the Secured Parties.
Section 8.04 Rights as Lenders. With respect to its commitment to make
Loans, Bank of America, N.A. shall have the same rights and powers hereunder as
any Lender and may exercise the same as though it was not acting as the
Administrative Agent and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include Bank of America, N.A. in its individual
capacity. Bank of America, N.A. and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, extend credit (on a
secured or unsecured basis) to and generally engage in any kind of banking,
trust or other business with the Borrower or any of its Affiliates, as if it
were not acting as the Administrative Agent.
Section 8.05 Indemnification. Without limiting the obligations of the
Borrower under Section 9.04 hereof, each Lender agrees to indemnify each Agent,
the Issuing Bank and the Lead Arrangers, ratably in accordance with the
aggregate principal amount of the Loans and Letter of Credit Exposure held by
the Lenders, or, if no Loans are then outstanding, the
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respective amounts of the Lenders' Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements or any kind or nature whatsoever which may at any time
(including, without limitation, at any time following the payment of principal
of and/or interest on the Loans) be imposed on, incurred by or asserted against
any Agent, the Issuing Bank or either Lead Arranger in any way relating to or
arising out of this Agreement or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including
the costs and expenses which the Borrower is obligated to pay under Section 9.04
hereof) or the enforcement of any of the terms hereof or thereof or of any such
other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from any Agent's, the Issuing Bank's or
either Lead Arranger's gross negligence or willful misconduct as determined by a
court of competent jurisdiction. The Agents, the Issuing Bank and the Lead
Arrangers shall be fully justified in refusing to take or to continue to take
any action hereunder unless it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
Section 8.06 Documents. The Administrative Agent will forward to each
Lender, promptly after the Administrative Agent's receipt thereof, a copy of
each document furnished to the Administrative Agent for such Secured Party
hereunder (and a copy of such other documents furnished to the Administrative
Agent pursuant to Article III hereof as may be requested by such Lender).
Section 8.07 Non-Reliance on Agents and Other Lenders. Each Lender
represents that it has, independently and without reliance on any Agent, the
Issuing Bank, any Lead Arranger, or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of the financial condition and affairs of the Borrower and its own decision to
enter into this Agreement and agrees that it will, independently and without
reliance upon any Agent, the Issuing Bank, any Lead Arranger or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement. None of the Agents, the Issuing Bank, any
Lead Arranger or any Lender shall be required to keep informed as to the
performance or observance by the Borrower under this Agreement or any other
document referred to or provided for herein or to make inquiry of, or to inspect
the properties or books of, the Borrower. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
any Agent, the Issuing Bank, or any Lead Arranger hereunder, none of the Agents,
the Issuing Bank, any Lead Arranger or any Lender shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the Borrower, or any Affiliate of the Borrower, which may come into
the possession of such Agent, the Issuing Bank, any Lead Arranger or such Lender
or any of its or their Affiliates.
Section 8.08 Resignation. Subject to the appointment and acceptance of
a successor as provided below, each of the Agents, the Lead Arrangers and the
Issuing Bank (prior to the issuance of the ConEd Letter of Credit) may resign at
any time by giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent, Lead Arranger and/or Issuing Bank, as applicable, which shall be a Lender
hereunder. If no successor Agent, Lead Arranger and/or Issuing Bank, as
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applicable, shall have been appointed by the Required Lenders and no Lender
shall have accepted such appointment within 30 days after the retiring Agent's,
Lead Arranger's and/or Issuing Bank's giving of notice of resignation, then the
retiring Agent, Lead Arranger or Issuing Bank may, on behalf of the Lenders,
appoint a successor Agent, Lead Arranger and/or Issuing Bank, which shall be a
Lender hereunder having a combined capital and surplus of not less than
$500,000,000. Upon the acceptance of any appointment as an Agent, Lead Arranger
and/or Issuing Bank, as applicable, hereunder by a successor Agent, Lead
Arranger and/or Issuing Bank, as the case may be, such successor Agent, Lead
Arranger and/or Issuing Bank shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, Lead
Arranger and/or Issuing Bank, and the retiring Agent, Lead Arranger and/or
Issuing Bank shall be discharged from its duties and obligations hereunder.
After any retiring Agent's, Lead Arranger's and/or Issuing Bank's resignation
hereunder as Agent, Lead Arranger and/or Issuing Bank, the provisions of this
Article VIII shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent, Lead Arranger
and/or Issuing Bank; provided, that if no successor agent, lead arranger and/or
issuing bank has accepted appointment by the date that is 30 days following a
retiring Agent's, Lead Arranger's and/or Issuing Bank's notice of resignation,
the retiring Agent's, Lead Arranger's and/or Issuing Bank's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of such Agent, Lead Arranger and/or Issuing Bank hereunder until such
time, if any, as the Required Lenders appoint a successor agent, lead arranger
or issuing bank as provided above.
Section 8.09 Authorization. The Administrative Agent, the Lead
Arrangers and the Issuing Bank are hereby authorized by the Lenders to execute,
deliver and perform each of the Transaction Documents to which they (whether as
"Administrative Agent", "Issuing Bank", "Secured Party", "Grantee" or
"Mortgagee") are or are intended to be a party and each Lender agrees to be
bound by all of the agreements of the Administrative Agent and the Issuing Bank
respectively, contained in the Transaction Documents. The Administrative Agent,
the Lead Arrangers is hereby authorized by the Lenders to execute, deliver and
perform the Intercreditor Agreement and each Lender agrees to be bound by all of
the agreements of the Administrative Agent contained in the Intercreditor
Agreement.
Section 8.10 Documentation Agents; Syndication Agent. Nothing in this
Agreement shall create or impose on any Documentation or Syndication Agent, in
each case in such capacity, any duty, obligation or responsibility whatsoever to
any Person.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. All notices, requests and other communications to
the Borrower or any Secured Party shall be in writing (including bank wire,
cable, telex, telecopy or similar teletransmission or writing) and shall be
given to such party at its address, or telex, cable or telecopy number set forth
on Annex II hereto or such other address or telecopy number as such party may
hereafter specify by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telecopy, when
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such telecopy is transmitted to the telecopy number specified in Annex II and
receipt thereof is confirmed in writing, or (ii) if given by any other means
(including, without limitation, by air courier), when delivered at the address
specified in Annex II.
Section 9.02 Amendments, Etc. No amendment or waiver of any provision
of any Financing Document, nor consent to any departure by any Credit Party or
OPMW Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders and the Administrative
Agent or Issuing Bank, as the case may be, or if the Lenders shall not be
parties thereto, by the parties thereto and consented to by the Required
Lenders, and each such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
that, any amendment, waiver or consent with respect to Section 5.31 hereof shall
be effective upon the vote of the Lenders and the OPNY Lenders as expressly
provided therein; and provided, further, that, no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders, do any of the following:
(i) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (ii) reduce the principal of, or interest on, the Notes
or any Fees hereunder, (iii) postpone any date fixed for any payment in respect
of scheduled principal of, or interest on, the Notes or any Fees hereunder, (iv)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number or identity of the Lenders which shall be
required for the Lenders or any of them to take any action hereunder, (v)
postpone the date fixed for reimbursement of any ConEd Letter of Credit
Disbursement or any Operational Letter of Credit Disbursement, (vi) amend or
waive Sections 9.02, 9.04 or the definitions of the terms used in such Sections
under any Financing Document insofar as the definitions affect the substance of
such Sections, (vii) consent to the assignment or other transfer by any Credit
Party or OPMW Credit Party of any of its rights and obligations under any
Financing Document, (viii) release any Collateral (other than a release
resulting from changes in the Financing Documents which constitute or otherwise
result in alterations in Permitted Distributions, changes or amendments to
reserve requirements (and associated requirements to maintain and replenish such
reserves) to effect prepayments of Obligations, changes to permit cash
collateralization of Contractual Obligations of the Borrower Entities and
otherwise as expressly contemplated under the Financing Documents) or any
Guarantee, (ix) extend the Working Capital Loan Availability Period, or (x)
subordinate the Loans to any other Indebtedness; and provided, further, that no
amendment, waiver or consent affecting the rights or duties of the
Administrative Agent or the Issuing Bank under any Financing Document shall in
any event be effective, unless in writing and signed by the Administrative Agent
or the Issuing Bank, as the case may be, in addition to the Lenders required
hereinabove to take such action. Notwithstanding any of the foregoing to the
contrary, the consent of the Borrower shall not be required for any amendment,
modification or waiver of the provisions of Article VIII (other than the
provisions of Section 8.08). For the avoidance of doubt, the parties confirm
that any amendment, waiver or consent with respect to Section 7.16 shall be
effective upon the vote of the Required Lenders. In addition, the Borrower, the
Lead Arrangers, the Lenders and the Swap Banks hereby authorize the
Administrative Agent to modify this Agreement by amending or supplementing
Annexes I and II from time to time in the manner requested by the Borrower, the
Administrative Agent or any other Secured Party and otherwise in accordance with
the terms of this Agreement; provided, however, that the Administrative Agent
shall promptly deliver a copy of any such modification to the Borrower and each
Secured Party.
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Section 9.03 No Waiver; Remedies Cumulative. No failure or delay on the
part of any Secured Party or any holder of a Note in exercising any right or
remedy under any Financing Document and no course of dealing between the
Borrower and any Secured Party or the holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
under any Financing Document preclude any other or further exercise thereof or
the exercise of any other right or remedy hereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Secured Parties or the holder of any Note would otherwise
have. No notice to or demand on the Borrower not required under any Financing
Document shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Secured Party or the holder of any Note to any other or further action in any
circumstances without notice or demand.
Section 9.04 Payment of Expenses and Indemnification(a) . The Borrower
shall:
(i) promptly reimburse each Agent, the Issuing Bank and each
Lead Arranger for all of such Person's reasonable costs and expenses
(including, without limitation, (A) the reasonable fees and
disbursements of legal counsel, (B) reasonable out-of-pocket expenses
of its personnel, (C) other reasonable legal, appraisal, environmental,
audit, consulting, filing fees and expenses and (D) all reasonable
fees, taxes, assessments and duties (to the extent such taxes,
assessments and duties are required to be paid under Article II of this
Agreement)) incurred by it in connection with the due diligence,
negotiation, preparation, review, execution, delivery, interpretation,
administration or syndication of this Agreement and the Loans made
thereunder, the other Transaction Documents and the transactions
contemplated hereby and thereby;
(ii) promptly reimburse each Swap Bank for all reasonable
costs and expenses (including, without limitation, (A) the reasonable
fees and disbursements of legal counsel, (B) reasonable out-of-pocket
expenses of its personnel and (C) all reasonable fees, taxes,
assessments and duties (to the extent such taxes, assessments and
duties are required to be paid under Article II of this Agreement))
reasonably incurred by it in connection with the negotiation,
preparation, review, execution, delivery, administration, collection,
enforcement, termination or unwinding of any Interest Hedge Contract;
(iii) promptly pay all out-of-pocket costs and other
reasonable expenses of the Secured Parties (both before and after the
execution hereof) in connection with protecting or perfecting the
security interest in the Collateral or in connection with any matters
contemplated by or arising out of this Agreement or any of the
Financing Documents, whether (a) to prepare, negotiate or execute any
amendment to, modification of or extension of this Agreement or any
other Financing Document, (b) to commence, defend, or intervene in any
litigation or to file a petition, complaint, answer, motion or other
pleadings necessary to protect the rights of the Secured Parties under
any of the Financing Documents, (c) to take any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) necessary
to protect the rights of the Secured Parties under any of the Financing
Documents, (d) to protect, collect, lease, sell, take possession of,
release or liquidate any of the Collateral or (e) to attempt to enforce
any
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security interest in any of the Collateral, or to enforce any rights of
the Administrative Agent to collect any of the Obligations, including
all reasonable fees and expenses of attorneys and paralegals (including
reasonable charges for inside counsel), and, in the case of
enforcement, pay such costs and expenses for any of the Secured
Parties;
(iv) indemnify each Secured Party, its officers, directors,
employees, representatives, agents, affiliates and advisors (each an
"Indemnified Person") from, and hold each of them harmless against, any
and all costs, losses, liabilities, claims, damages or expenses
incurred by any Indemnified Person of any kind or nature whatsoever
(including, without limitation, any such costs, losses, liabilities,
claims, damages or expenses of such Indemnified Person (whether or not
a party) arising out of or by reason of any investigation, litigation
or other proceeding) relating to any actual or proposed use by any
Borrower Entity of any Letter of Credit or the proceeds of any of the
Loans or any Credit Party's or OPMW Credit Party's entering into and
performing of this Agreement or any of the other Financing Documents
and the Transaction Documents, together with the reasonable fees and
disbursements of attorneys and paralegals (including reasonable charges
for inside counsel) incurred in connection with any of the foregoing;
provided that the Borrower shall have no obligation to an Indemnified
Person hereunder with respect to any of the foregoing to the extent
resulting from the gross negligence or willful misconduct of such
Indemnified Person; and
(v) indemnify each Indemnified Person from, and hold each
Indemnified Person harmless against, any and all costs, losses,
liabilities, claims, damages or expenses incurred by any of them
resulting from (x) any past, present or future storage, holding,
existence, release, emission discharge, generation, abatement,
disposition, handling or transportation by, any Borrower Entity, or
their agents, employees and representatives of any Hazardous Materials
or (y) any past, present or future violation of, failure to comply
fully with or requirement to comply with any Environmental Law by any
Borrower Entity, or their agents, employees and representatives, in
each case together with the reasonable fees and disbursements of
attorneys and paralegals (including reasonable charges for inside
counsel) incurred in connection with any of the foregoing; provided,
that the Borrower shall have no obligation to an Indemnified Person
hereunder with respect to any of the foregoing to the extent resulting
from the gross negligence or willful misconduct of such Indemnified
Person.
(b) If and to the extent that the obligations of the Borrower under
this Section 9.04 are unenforceable for any reason, the Borrower hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Requirement of Law. The
Borrower's obligations under this Section 9.04 shall survive any termination of
this Agreement and the payment of the Notes.
(c) This Section 9.04 is not intended to include obligations of Sponsor
under the OPH Membership Interest Pledge Agreement.
Section 9.05 Right of Setoff. In addition to and not in limitation of
all rights of offset that any Lender or other holder of a Note may have under
applicable Requirement of Law, each Lender or other holder of a Note shall, upon
the occurrence and during the continuance of
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any Event of Default and whether or not such Lender or such holder has made any
demand or the Obligations of the Borrower are matured, have the right to
appropriate and apply to the payment of the Obligations of the Borrower all
deposits (general or special, time or demand, provisional or final) then or
thereafter held by and other indebtedness or property then or thereafter owing
by such Lender or other holder, whether or not related to this Agreement or any
transaction hereunder. Any amount received as a result of the exercise of such
rights shall be re-allocated among the Lenders as set forth in Section 2.13 and
the Borrower shall receive prompt notice thereof from the Administrative Agent;
provided, that any failure by the Administrative Agent to provide such notice
shall in no way affect the rights of any Lender or other holder of a Note under
this Section 9.05.
Section 9.06 Benefit of Agreement; Assignments and Participations.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided that the Borrower may not assign or transfer any of its
interest hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender except to the extent such transfer would result in increased costs to the
Borrower.
(c) Each Lender may assign (with the consent of the Administrative
Agent, if such proposed assignment is not to an existing Lender or an Affiliate
of an existing Lender, such consent not to be unreasonably withheld, conditioned
or delayed, after consultation with the Borrower) to one or more banks or other
entities all or a portion of its rights and obligations under this Agreement,
the Notes and the Letters of Credit; provided that (i) no such assignment shall
be for less than $5,000,000 of such Lender's Commitments or Loans, as the case
may be, and (ii) each assignment shall be of a pro rata portion of such Lender's
Commitments or Loans. Upon such execution, delivery and acceptance, from and
after the effective date (the "Effective Date") of such Assignment and
Acceptance (x) the assignee thereunder shall be a party hereto, and, to the
extent that rights and obligations hereunder have been assigned to and assumed
by it pursuant to such Assignment and Acceptance, such assignee shall have the
rights and obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assignee thereunder confirms and agrees as follows: (i) other than as provided
in such Assignment and Acceptance, the assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the Notes, the Letters of Credit or any other
instrument or document furnished pursuant hereto, (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or
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any other Credit Party or OPMW Credit Party or the performance or observance by
the Borrower or any other Credit Party or OPMW Credit Party of any of its
obligations under this Agreement, any other Financing Document or Transaction
Document or any other instrument or document furnished pursuant hereto or
thereto, (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 5.10 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such assignee will, independently and without
reliance upon the Lead Arrangers, the Agents, the Issuing Bank, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement, (v) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Financing
Documents as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(e) The Administrative Agent shall maintain at its address referred to
in Section 9.01 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower and each Secured Party may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Agreement. The
Register and copies of each Assignment and Acceptance shall be available for
inspection by the Borrower, the Issuing Bank or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with the Note or Notes subject to such assignment,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit O hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Issuing Bank and the
Borrower. Within five (5) Business Days after its receipt of such notice, the
Borrower shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note or Notes to the order of such assignee
in an amount equal to the Commitment or Commitments assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment or Commitments hereunder, a new Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment or Commitments retained by
it hereunder. Such new Note or Notes shall re-evidence the indebtedness
outstanding under the old Notes or Notes and shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the Note or Notes subject to
such assignments.
(g) Each Lender may sell participations (without the consent of the
Administrative Agent, the Issuing Bank, the Borrower or any other Lender) to one
or more
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parties in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Loans owing to it and the Note or Notes held by it and the participations in
the Letters of Credit held by it); provided that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment) shall
remain unchanged, (ii) such Lender shall remain solely responsible to other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) such Lender shall
not transfer, grant, assign or sell any participation under which the
participant shall have rights to approve any amendment or waiver of this
Agreement except to the extent such amendment or waiver would (A) extend the
final maturity date or the date for the payments of any installment of fees or
principal or interest of any Loans in which such participant is participating,
(B) reduce the amount of any installment of principal of the Loans in which such
participant is participating, (C) reduce the interest rate applicable to the
Loans in which such participant is participating, (D) reduce any fees payable
hereunder, or (E) release all or substantially all of the Collateral.
(h) Each Lender agrees that, without the prior written consent of the
Borrower and the Administrative Agent, it will not make any assignment hereunder
in any manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan, Note or other Obligation
under the securities laws of the United States of America or of any state.
(i) Any Lender may at any time assign all or any portion of its rights
under this Agreement and the other Financing Documents to the Federal Reserve
Bank of the United States; provided, that any payment in respect of such
assigned rights made by the Borrower to the assigning Lender in accordance with
the terms of this Agreement shall satisfy the Borrower's obligations hereunder
in respect of such assigned rights to the extent of such payment. No such
assignment shall release the assignor Lender from its obligations hereunder.
(j) After the completion of the primary and general syndication of the
Loans described herein, each transferor Lender shall pay the Administrative
Agent a fee of $3,500.00 for processing each assignment made pursuant to this
Section 9.06.
Section 9.07 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Damages.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW
THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE
LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE BORROWER AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT
AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY
OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
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(AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF
NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE BORROWER AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE BORROWER AND EACH
SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE BORROWER WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE BORROWER AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(d) THE BORROWER AND THE SECURED PARTIES EACH WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE BORROWER HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 440 9TH AVENUE, 5TH FLOOR, NEW YORK, NEW YORK
10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND
ON BEHALF OF THE BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES,
THE OTHER FINANCING DOCUMENTS OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD
THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY
MAIL TO THE BORROWER AT ITS ADDRESS SET FORTH IN ANNEX II HERETO IN
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ACCORDANCE WITH SECTION 9.01. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO (I) TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (II) TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY, IN EITHER CASE, SOLELY AS
PERMITTED IN SUBSECTION (C) OF THIS SECTION 9.07.
Section 9.08 Nonliability of Administrative Agent and Lenders. The
relationship between the Borrower and the Secured Parties shall be solely that
of borrower and lender. No Secured Party shall have any fiduciary
responsibilities to the Borrower. No Secured Party undertakes any responsibility
to the Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations.
Section 9.09 Marshalling; Recapture. No Secured Party shall be under
any obligation to marshal any assets in favor of the Borrower or any other party
or against or in payment of any or all of the Obligations. To the extent any
Secured Party receives any payment by or on behalf of the Borrower, which
payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to the Borrower
or its estate, trustee, receiver, custodian or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such payment or repayment, the obligation or part thereof which has
been paid, reduced or satisfied by the amount so repaid shall be reinstated by
the amount so repaid and shall be included within the liabilities of the
Borrower to such Secured Party as of the date such initial payment, reduction or
satisfaction occurred.
Section 9.10 Independent Nature of Lenders' Rights. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and, except as otherwise provided in any Financing Document, each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement, and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
Section 9.11 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
Section 9.12 Effectiveness. This Agreement shall become effective as of
the date hereof; provided, that, all of the parties hereto shall have signed a
copy hereof (whether the same or different copies) and shall have delivered the
same to the Administrative Agent pursuant to Section 9.01 or, in the case of the
Lenders, shall have given to the Administrative Agent written, telecopied or
telex notice (actually received) at such office that the same has been signed
and mailed to it.
117
Section 9.13 Survival of Indemnities and Representations and
Warranties. All indemnities set forth herein and all representations and
warranties made herein and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement, the Notes, the Letters of Credit and the other
Financing Documents and the making and repayment of the Loans and the expiration
or cancellation of all Letters of Credit.
Section 9.14 Severability. In case any provision in or obligation under
this Agreement or the Notes or the other Financing Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 9.15 Headings Descriptive. The headings of the several sections
and subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
Section 9.16 Limitation of Recourse. The obligations of the Borrower
hereunder and under the other Financing Documents are obligations solely of the
Borrower (other than as expressly assumed by any Credit Party or OPMW Credit
Party pursuant to any Financing Document) and shall not constitute a debt or
obligation of any direct or indirect partner, shareholder or other equity owner
of the Borrower or any of their respective directors, officers, agents or
employees (each such Person, a "Non-Recourse Party"). No Non-Recourse Party
shall be liable for any amount payable by the Borrower under this Agreement or
the other Financing Documents, and the Secured Parties shall not seek a money
judgment or deficiency or personal judgment against any Non-Recourse Party for
payment of the indebtedness payable by the Borrower evidenced by this Agreement
or the other Financing Documents. No property or assets of any Non-Recourse
Party, other than as provided in the Financing Documents, shall be sold, levied
upon or otherwise used to satisfy any judgment rendered in connection with any
action brought against the Borrower with respect to this Agreement or the other
Financing Documents. The foregoing acknowledgments, agreements and waivers shall
be enforceable by any Non-Recourse Party. Notwithstanding the foregoing, nothing
in this Section shall limit or affect or be construed to limit or affect the
obligations and liabilities of any Credit Party, OPMW Credit Party or any other
Non-Recourse Party (a) in accordance with the terms of any Transaction Document
or Financing Document creating such liabilities and obligations to which such
Credit Party, OPMW Credit Party or Non-Recourse Party is a party, (b) arising
from liability pursuant to applicable Requirements of Law for such Credit
Party's, OPMW Credit Party's or such Non-Recourse Party's fraudulent actions,
knowing misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 hereof.
118
Section 9.17 Confidentiality. In connection with the negotiation and
administration of this Agreement and the other Transaction Documents, Reliant
and the Borrower have furnished and will from time to time furnish to the Lead
Arrangers, the Administrative Agent, the Issuing Banks and the Lenders (each, a
"Recipient") written information regarding Reliant, the Borrower and their
respective Subsidiaries and other Affiliates (such information, other than any
such information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as "Confidential
Information"). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to the Recipient's legal counsel,
governmental regulators, independent auditors and other professional advisors),
and will take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information, in each
case until such time as the same ceases to be Confidential Information or as the
Borrower may otherwise instruct. It is understood, however, that the foregoing
will not restrict the Recipient's ability to freely exchange such Confidential
Information with its Affiliates or with prospective participants in or assignees
of the Recipient's position herein, but the Recipient's ability to so exchange
Confidential Information shall be conditioned upon any such Affiliate's or
prospective participant's (as the case may be) entering into an agreement as to
confidentiality similar to this Section 9.17. It is further understood that the
foregoing will not prohibit the disclosure of any or all Confidential
Information if and to the extent that such disclosure may be required (1) by a
regulatory agency or otherwise in connection with an examination of the
Recipient's records by appropriate authorities, (2) pursuant to court order,
subpoena or other legal process, (3) otherwise as required by law, or (4) in
order to protect such Recipient's interests or its rights or remedies hereunder
or under the other Transaction Documents; in the event of any required
disclosure under clause (2), (3) or (4), above, the Recipient agrees to use
reasonable efforts to inform the Borrower as promptly as practicable to the
extent not prohibited by law.
[Remainder of page intentionally left blank.]
119
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
BORROWER:
ORION POWER NEW YORK, L.P.,
a Delaware limited partnership
By: Orion Power New York GP, Inc.,
its general partner
By:
--------------------------------------
Name:
Title:
LEAD ARRANGERS:
--------------
BANC OF AMERICA SECURITIES LLC,
as Lead Arranger
By:
--------------------------------------
Name:
Title:
BNP PARIBAS,
as Lead Arranger
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
JOINT BOOK RUNNERS:
------------------
BANK OF AMERICA SECURITIES LLC,
as Joint Book Runner
By:
--------------------------------------
Name:
Title:
BNP PARIBAS,
as Joint Book Runner
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
ISSUING BANK:
------------
BANK OF AMERICA, N.A.,
as Issuing Bank
By:
--------------------------------------
Name:
Title:
SYNDICATION AGENT:
-----------------
BNP PARIBAS,
as Syndication Agent
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
DOCUMENTATION AGENTS:
--------------------
UNION BANK OF CALIFORNIA, N.A.,
as Documentation Agent
By:
--------------------------------------
Name:
Title:
COBANK, ACB,
as Documentation Agent
By:
--------------------------------------
Name:
Title:
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
as Documentation Agent
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT:
--------------------
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
--------------------------------------
Name:
Title:
LENDERS:
BANK OF AMERICA, N.A.
By:
--------------------------------------
Name:
Title:
BNP PARIBAS
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
BAYERISCHE HYPO- UND VEREINSBANK
AG, NEW YORK BRANCH
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
--------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
COBANK, ACB
By:
--------------------------------------
Name:
Title:
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
--------------------------------------
Name:
Title:
ING CAPITAL LLC
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
DZ BANK AG DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK, FRANKFURT
AM MAIN, NEW YORK BRANCH
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
--------------------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
CIBC INC.
By:
--------------------------------------
Name:
Title:
MIZUHO CORPORATE BANK, LTD
By:
--------------------------------------
Name:
Title:
THE ROYAL BANK OF SCOTLAND PLC
By:
--------------------------------------
Name:
Title:
BANK OF SCOTLAND
By:
--------------------------------------
Name:
Title:
LLOYDS TSB BANK PLC
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
ABBEY NATIONAL TREASURY SERVICES PLC
By:
--------------------------------------
Name:
Title:
THE GOVERNOR AND COMPANY OF THE
BANK OR IRELAND
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK/GRAND CAYMAN ISLANDS
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
SUMITOMO MITSUI BANKING CORPORATION
By:
--------------------------------------
Name:
Title:
ERSTE BANK NEW YORK BRANCH
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
EXHIBIT A
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
[FORM OF]
ACQUISITION LOAN NOTE
U.S.$[Amount] NEW YORK, NEW YORK
OCTOBER 28, 2002
ORION POWER NEW YORK, L.P., a limited partnership organized under the laws
of the State of Delaware (the "Borrower"), FOR VALUE RECEIVED, hereby promises
to pay to the order of ___________________________ (the "Payee"), at the office
of Bank of America, N.A. (the "Administrative Agent") at 101 North Tryon Street,
NC1-001-08-19, Charlotte, NC 28255, the principal sum of _____________________
DOLLARS ($____________) or if less, the aggregate unpaid principal amount of all
Loans under this Acquisition Loan Note made by the Payee to the Borrower, on or
before the Final Maturity Date and at the times and in the manner provided in
the Credit Agreement (as defined below). All capitalized terms used herein and
not otherwise defined herein shall have the meaning set forth in the Credit
Agreement.
The Borrower promises also to pay interest on the unpaid principal amount
hereof in like money at the Administrative Agent's office from the date hereof
until such principal amount shall be paid in full at the rates per annum which
shall be determined in accordance with the provisions of Article II of the
Amended and Restated Credit Agreement, dated as of October 28, 2002 (as such
agreement may be amended, modified or supplemented from time to time, the
"Credit Agreement"), among the Borrower, BANC OF AMERICA SECURITIES LLC, as a
Lead Arranger and a Joint Book Runner, BNP PARIBAS, as a Lead Arranger and a
Joint Book Runner, BNP PARIBAS, as Syndication Agent, UNION BANK OF CALIFORNIA,
N.A., COBANK, ACB and DEUTSCHE BANK AG NEW YORK and/or CAYMAN ISLAND BRANCH, as
Documentation Agents, BANK OF AMERICA, N.A., as Issuing Bank, the Administrative
Agent, and each financial institution which is a signatory thereto or which may
hereafter become an assignee pursuant to Section 9.06 of the Credit Agreement
(collectively the "Lenders"), such interest to be payable at the times provided
for in the Credit Agreement.
This Acquisition Loan Note is one of the Notes referred to in the Credit
Agreement and is entitled to the benefits thereof and of the other Financing
Documents referred to therein and is subject to the other terms, conditions and
provisions set forth therein. This Acquisition Loan Note is subject to
prepayment, in whole or in part, as provided in the Credit Agreement. In case an
Event of Default shall occur and be continuing, the principal of and accrued
interest on this Acquisition Loan Note may, subject to provisions pertaining
thereto in the Credit Agreement, be declared to be due and payable in the manner
and with the effect provided in the Credit Agreement.
The granting of participating interests by the Payee in, and the assignment
or transfer by the Payee of, its rights in and to this Acquisition Loan Note and
its Acquisition Loan Commitment are subject to the terms and conditions set
forth in Section 9.06 of the Credit Agreement.
All Loans made by the Payee and the Type of each thereof and all payments
and prepayments made on account of the principal thereof may be recorded by the
Payee on the schedule (or a continuation thereof) attached hereto, it being
understood that failure by the Payee to make any such endorsement or any error
therein shall not affect the obligations of the Borrower hereunder.
The Borrower and any and all sureties, guarantors and endorsers of this
Acquisition Loan Note and all other parties now or hereafter liable hereon,
severally waive grace (except grace provided pursuant to the express terms of
the Credit Agreement or any other Financing Document), presentment for payment,
protest, notice of any kind (including notice of dishonor, notice of protest,
notice of intention to accelerate and notice of acceleration) and diligence in
collecting and bringing suit against any party hereto, and agree (i) to all
extensions and partial payments, with or without notice, before or after
maturity, (ii) to any substitution, exchange or release of any security now or
hereafter given for this Acquisition Loan Note, (iii) to the release of any
party primarily or secondarily liable hereon and (iv) that it will not be
necessary for the Administrative Agent or any Lenders, in order to enforce
payment of this Acquisition Loan Note, to first institute or exhaust their
remedies against the Borrower or any other party liable therefor or against any
security for this Acquisition Loan Note. The nonexercise by the holder of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
This Acquisition Loan Note is an amendment and restatement of the
Acquisition Loan Note in the amount of $[ ] made by the Borrower to the Payee,
dated [ ], 1999 (the "Original Acquisition Loan Note"). It is the
intention of the Borrower and the Payee that this Acquisition Loan Note amend,
restate, extend and renew the terms and conditions of the Original Acquisition
Loan Note, and is not intended to be a novation or discharge of the obligations
of the Borrower thereunder.
2
This Acquisition Loan Note shall be governed by and interpreted in
accordance with the laws of the State of New York other than any such laws that
would apply the laws of another jurisdiction, except to the extent that the laws
of another jurisdiction are mandatorily applicable.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
---------------------------------
Name:
Title:
EXHIBIT B
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
[FORM OF]
WORKING CAPITAL LOAN NOTE
U.S. $[Amount] NEW YORK, NEW YORK
OCTOBER 28, 2002
ORION POWER NEW YORK, L.P., a limited partnership organized under the
laws of the State of Delaware (the "Borrower"), FOR VALUE RECEIVED, hereby
promises to pay to the order of ___________________________ (the "Payee"), at
the office of Bank of America, N.A. (the "Administrative Agent") at 101 North
Tryon Street, NC1-001-08-19, Charlotte, NC 28255, the principal sum of
_____________________ DOLLARS ($____________) or if less, the aggregate unpaid
principal amount of all Loans under this Working Capital Note made by the Payee
to the Borrower, on or before the Final Maturity Date and at the times and in
the manner provided in the Credit Agreement (as defined below). All capitalized
terms used herein and not otherwise defined herein shall have the meaning set
forth in the Credit Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at the Administrative Agent's office from the date
hereof until such principal amount shall be paid in full at the rates per annum
which shall be determined in accordance with the provisions of Article II of the
Amended and Restated Credit Agreement, dated as of October 28, 2002 (as such
agreement may be amended, modified or supplemented from time to time, the
"Credit Agreement"), among the Borrower, BANC OF AMERICA SECURITIES LLC, as a
Lead Arranger and a Joint Book Runner, BNP PARIBAS, as a Lead Arranger and a
Joint Book Runner, BNP PARIBAS, as Syndication Agent, UNION BANK OF CALIFORNIA,
N.A., COBANK, ACB and DEUTSCHE BANK AG NEW YORK and/or CAYMAN ISLAND BRANCH, as
Documentation Agents, BANK OF AMERICA, N.A., as Issuing Bank, the Administrative
Agent, and each financial institution which is a signatory thereto or which may
hereafter become an assignee pursuant to Section 9.06 of the Credit Agreement
(collectively the "Lenders"), such interest to be payable at the times provided
for in the Credit Agreement.
This Working Capital Note is one of the Notes referred to in the Credit
Agreement and is entitled to the benefits thereof and of the other Financing
Documents referred to therein and is subject to the other terms, conditions and
provisions set forth therein. This Working Capital Note is subject to
prepayment, in whole or in part, as provided in the Credit Agreement. In case an
Event of Default shall occur and be continuing, the principal of and accrued
interest on this Working Capital Note may,
subject to provisions pertaining thereto in the Credit Agreement, be declared to
be due and payable in the manner and with the effect provided in the Credit
Agreement.
The granting of participating interests by the Payee in, and the
assignment or transfer by the Payee of, its rights in and to this Working
Capital Note and its Working Capital Commitment are subject to the terms and
conditions set forth in Section 9.06 of the Credit Agreement.
All Loans made by the Payee and the Type of each thereof and all
payments and prepayments made on account of the principal thereof may be
recorded by the Payee on the schedule (or a continuation thereof) attached
hereto, it being understood that failure by the Payee to make any such
endorsement or any error therein shall not affect the obligations of the
Borrower hereunder.
The Borrower and any and all sureties, guarantors and endorsers of this
Working Capital Note and all other parties now or hereafter liable hereon,
severally waive grace (except grace provided pursuant to the express terms of
the Credit Agreement or any other Financing Document), presentment for payment,
protest, notice of any kind (including notice of dishonor, notice of protest,
notice of intention to accelerate and notice of acceleration) and diligence in
collecting and bringing suit against any party hereto, and agree (i) to all
extensions and partial payments, with or without notice, before or after
maturity, (ii) to any substitution, exchange or release of any security now or
hereafter given for this Working Capital Note, (iii) to the release of any party
primarily or secondarily liable hereon and (iv) that it will not be necessary
for the Administrative Agent or any Lenders, in order to enforce payment of this
Working Capital Note, to first institute or exhaust their remedies against the
Borrower or any other party liable therefor or against any security for this
Working Capital Note. The nonexercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.
This Working Capital Note is an amendment and restatement of the
Working Capital Note in the amount of $[ ] made by the Borrower to the Payee,
dated [ ], 1999 (the "Original Working Capital Note"). It is the intention of
the Borrower and the Payee that this Working Capital Note amend, restate, extend
and renew the terms and conditions of the Original Working Capital Note, and is
not intended to be a novation or discharge of the obligations of the Borrower
thereunder.
2
This Working Capital Note shall be governed by and interpreted in
accordance with the laws of the State of New York other than any such laws that
would apply the laws of another jurisdiction, except to the extent that the laws
of another jurisdiction are mandatorily applicable.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:_________________________________
Name:
Title:
EXHIBIT D
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
FORM OF NOTICE OF
WORKING CAPITAL LOAN
NOTICE OF WORKING
CAPITAL LOAN NO._________
__________________, 200__
Pursuant to Section 2.03(b) of the Amended and Restated Credit
Agreement entered into as of October 28, 2002 (the "Credit Agreement"), among
ORION POWER NEW YORK, L.P., a Delaware limited partnership (the "Borrower"),
BANC OF AMERICA SECURITIES LLC, as a Lead Arranger and a Joint Book Runner, BNP
PARIBAS, as a Lead Arranger and a Joint Book Runner, BNP PARIBAS, as Syndication
Agent, UNION BANK OF CALIFORNIA, N.A., COBANK, ACB and DEUTSCHE BANK AG NEW YORK
and/or CAYMAN ISLAND BRANCH, as Documentation Agents, BANK OF AMERICA, N.A., as
Issuing Bank, BANK OF AMERICA, N.A., as Administrative Agent, and each financial
institution which is a signatory thereto or which may hereafter become an
assignee pursuant to Section 9.06 of the Credit Agreement, as a Lender, the
Borrowers hereby give notice of their desire to borrow a Working Capital Loan in
accordance with the terms set forth below (all capitalized terms used herein and
not otherwise defined herein shall have the meaning specified in the Credit
Agreement):
(i) The date of the Working Capital Loan shall be ____________
(the "Borrowing Date") [the date inserted must be a Business Day and
not less than three (3) Business Days from the date hereof].
(ii) The principal amount of the Working Capital Loan shall be
______________________________ DOLLARS ($___________).
(iii) The proceeds of the Working Capital Loan are to be
disbursed by wire transfer on the Borrowing Date as follows:
Orion Power New York, L.P.
[Bank]
[Address]
Account No. ________________
ABA No. ____________________
(iv) The Working Capital Loan shall be a [LIBO][Base]Rate
Loan.
(v) The initial Interest Period shall be [___________ months]
[_________ days].* [Information to be provided in accordance with the
definition of Interest Period in the Credit Agreement]
This Notice of Working Capital Loan and acceptance by the Borrower of
any proceeds of the Working Capital Loan shall constitute a representation and
warranty that the statements set forth in Section 3.02(b) and (c) are true and
correct both as of the date of this notice and as of the Borrowing Date.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:_________________________________
Name:
Title:
- --------
* Applicable only to Fixed Rate Loans.
EXHIBIT E
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
FORM OF
NOTICE OF CONVERSION
_________________, ______
Bank of America, N.A., as Administrative Agent
101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attention: Laura S. Ryan
Ladies and Gentlemen:
This Notice of Conversion (the "Notice of Conversion") is being
provided pursuant to Section 2.04(a) of the Amended and Restated Credit
Agreement, dated as of October 28, 2002 (the "Credit Agreement"), among ORION
POWER NEW YORK, L.P., a Delaware limited partnership (the "Borrower"), BANC OF
AMERICA SECURITIES LLC, as a Lead Arranger and a Joint Book Runner, BNP PARIBAS,
as a Lead Arranger and a Joint Book Runner, BNP PARIBAS, as Syndication Agent,
UNION BANK OF CALIFORNIA, N.A., COBANK, ACB and DEUTSCHE BANK AG NEW YORK and/or
CAYMAN ISLAND BRANCH, as Documentation Agents, BANK OF AMERICA, N.A., as Issuing
Bank and Administrative Agent, and each financial institution which is a
signatory thereto or which may hereafter become an assignee pursuant to Section
9.06 of the Credit Agreement, as a Lender. Unless otherwise defined herein, all
capitalized terms in this Notice of Conversion have the meanings assigned to
those terms in the Credit Agreement. The Borrower hereby gives you notice,
irrevocably, pursuant to Section 2.04(a) of the Credit Agreement, that the
Borrower requests a Conversion under the Credit Agreement, and in connection
therewith sets forth below the information relating to such Conversion (the
"Proposed Conversion") as required by Section 2.04(a) of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is ____________, ____.
[the last day of the Interest Period then applicable to such loans and
no sooner than the third Business Day following the date of this
Notice of Conversion -- for Conversion into LIBO Rate Loans] [no
sooner than the Business Day following the date of this Notice of
Conversion -- for Conversion into Base Rate Loans]
(ii) Each Loan to be Converted in the Proposed Conversion is a [LIBO Rate
Loan][Base Rate Loan]. [The Interest Period applicable to such Loan is
_____ month(s). - for Conversion from LIBO Rate Loans only]
(iii) The Type of Loan to which each such Loan is to be Converted in the
Proposed Conversion is a [LIBO Rate Loan][Base Rate Loan].
(iv) [The initial Interest Period to be applicable to each Loan resulting
from the Proposed Conversion shall be _____ month(s) -- for Conversion
into LIBO Rate Loans only]
(v) The aggregate principal amount of Loans (or portions thereof) proposed
to be Converted in the Proposed Conversion is $___________.
The Borrower's request for the Proposed Conversion is made in
compliance with the definition of "Interest Period," Section 2.06 and Section
2.10 of the Credit Agreement; and
In the case of a Conversion to LIBO Rate Loans, no Default or Event of
Default has occurred and is continuing.
The representations and warranties made by the Credit Parties under the
Credit Agreement and in each other Financing Document to which each such Person
is a party are true and correct in all material respects (both before and after
giving effect to the Proposed Conversion) on and as of the date of the Proposed
Conversion as though made on and as of the date of the Proposed Conversion,
except to the extent that such representations and warranties relate to or were
made solely with respect to the Restructuring Effective Date or another specific
date, in which case such representations and warranties are true and correct in
all material respects on and as of the Restructuring Effective Date or such
other date.
In the event of any conflict or inconsistency between the terms hereof
and the terms in the Credit Agreement, the terms in the Credit Agreement shall
be controlling.
The undersigned hereby certifies that, as of the date hereof, the
information herein is true and complete.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By: ___________________________________
Name:
Title:
EXHIBIT F
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
SECOND AMENDED AND RESTATED
DEPOSIT ACCOUNT AGREEMENT
Dated as of October 28, 2002
among
ORION POWER NEW YORK, L.P.,
ERIE BOULEVARD HYDROPOWER, L.P.,
CARR STREET GENERATING STATION, L.P.,
ASTORIA GENERATING COMPANY, L.P.,
and
BANK OF AMERICA, N.A., as Administrative Agent
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS...............................................................................2
ARTICLE II APPOINTMENT OF ADMINISTRATIVE AGENT; CREATION OF ACCOUNTS................................9
Section 2.1 Appointment of Administrative Agent...............................................9
Section 2.2 Existing Accounts.................................................................9
Section 2.3 Holdco Accounts and Discontinuation of Accounts..................................11
Section 2.4 Accounts as Collateral...........................................................12
Section 2.5 Accounts and the Administrative Agent............................................13
ARTICLE III NOTICE REQUIREMENTS....................................................................13
Section 3.1 Monthly Notice of Deposits and Withdrawals; Confirmation of Transfers............13
Section 3.2 Notice of Monthly Operating Costs................................................13
Section 3.3 Notice of Cash Collateral and Notice of Operational Prepayment...................14
ARTICLE IV DEPOSITS INTO ACCOUNTS..................................................................14
Section 4.1 Deposit of Working Capital Advances..............................................14
Section 4.2 Deposit of Revenues..............................................................14
Section 4.3 Deposit of Extraordinary Proceeds................................................15
Section 4.4 Deposit of Insurance Proceeds....................................................15
Section 4.5 Deposit of Prepayment Amounts....................................................15
Section 4.6 Information to Accompany Amounts Delivered to the Administrative Agent,
Deposits Irrevocable.............................................................15
Section 4.7 Books of Account; Statements.....................................................16
ARTICLE V ALLOCATIONS FROM ACCOUNTS................................................................16
Section 5.1 Allocations From the Subsidiary Revenue Accounts.................................16
Section 5.2 Allocations From the Revenue Account.............................................16
Section 5.3 Allocations from Operating Account...............................................22
Section 5.4 Allocations From the Debt Service Account........................................22
Section 5.5 Allocations From the Extraordinary Proceeds Account..............................23
Section 5.6 Allocations from the Insurance Proceeds Account..................................23
Section 5.7 Allocations From the Major Maintenance Reserve Account...........................23
Section 5.8 Allocations From the Debt Service Reserve Account................................23
Section 5.9 Allocations From the Prepayment Account..........................................24
Section 5.10 Allocations From the O&M Reserve Account.........................................24
Section 5.11 Payments To Secured Parties......................................................25
Section 5.12 Defaults.........................................................................25
ARTICLE VI INVESTMENTS AND VALUATION...............................................................25
Section 6.1 Investments......................................................................25
Section 6.2 Income or Gain...................................................................26
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Page
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Section 6.3 Value............................................................................26
Section 6.4 Taxes............................................................................26
ARTICLE VII APPLICATION OF INSURANCE PROCEEDS......................................................26
Section 7.1 Insurance Failure................................................................26
ARTICLE VIII REPRESENTATIONS AND WARRANTIES........................................................28
Section 8.1 Representations and Warranties...................................................28
ARTICLE IX COVENANTS...............................................................................29
Section 9.1 Covenants........................................................................29
ARTICLE X ADMINISTRATIVE AGENT.....................................................................30
Section 10.1 Administrative Agent Appointment.................................................30
Section 10.2 Ambiguity or Inconsistency in Security Documents with Proposed Actions...........31
Section 10.3 Right and Duties.................................................................31
ARTICLE XI EXERCISE OF RIGHTS UNDER SECURITY DOCUMENTS.............................................31
Section 11.1 Actions Upon an Event of Default.................................................31
Section 11.2 Administration of Collateral.....................................................31
Section 11.3 Application of Proceeds After Acceleration.......................................32
ARTICLE XII INDEMNIFICATION........................................................................33
Section 12.1 Indemnification From Borrower....................................................33
ARTICLE XIII MISCELLANEOUS.........................................................................33
Section 13.1 Agreement for Benefit of Parties Hereto..........................................33
Section 13.2 No Warranties....................................................................34
Section 13.3 Reimbursement of Expenses........................................................34
Section 13.4 Severability.....................................................................34
Section 13.5 Notices..........................................................................34
Section 13.6 Successors and Assigns...........................................................34
Section 13.7 Counterparts.....................................................................34
Section 13.8 GOVERNING LAW....................................................................34
Section 13.9 No Impairments of Other Rights...................................................35
Section 13.10 Amendment; Waiver................................................................35
Section 13.11 Separate Liability...............................................................35
Section 13.12 Incumbency Certificates; Authorized Persons......................................35
Section 13.13 Headings.........................................................................35
Section 13.14 Termination; Release.............................................................35
Section 13.15 Entire Agreement.................................................................36
Section 13.16 Limitation of Liability..........................................................36
Exhibit A Form of Monthly Notice of Deposits and Withdrawals
Exhibit B Form of Notice of Monthly Operating Costs
Exhibit C Form of Notice of Cash Collateral
ii
This SECOND AMENDED AND RESTATED DEPOSIT ACCOUNT AGREEMENT (this
"Agreement"), dated as of October 28, 2002, among ORION POWER NEW YORK, L.P., a
Delaware limited partnership (the "Borrower"), ERIE BOULEVARD HYDROPOWER, L.P.,
a Delaware limited partnership ("Erie Boulevard"), CARR STREET GENERATING
STATION, L.P., a Delaware limited partnership ("Carr Street Generating") ASTORIA
GENERATING COMPANY, L.P., a Delaware limited partnership ("Astoria Generating")
and BANK OF AMERICA, N.A., as administrative agent under the Credit Agreement
referred to below (in such capacity, together with its successors, the
"Administrative Agent").
RECITALS
WHEREAS, the Borrower has entered into a Credit Agreement, dated as of July
28, 1999 (as the same has been amended, supplemented or otherwise modified from
time to time prior to the date hereof, the "Original Credit Agreement"), with
the Administrative Agent, Banc of America Securities LLC, as a lead arranger,
BNP Paribas, as a lead arranger, Bank of America, N.A., as the issuer of the
letters of credit referred to therein (the "Issuing Bank") and the Lenders named
on the signature pages thereto and from time to time parties thereto (the
"Original Lenders"), pursuant to which the Lenders made available credit
facilities to the Borrower to finance a portion of the purchase price of the
Portfolio Assets (as defined in the Original Credit Agreement) and to provide
working capital availability to the Borrower;
WHEREAS, it was a condition precedent to the obligation of the Lenders to
make their respective Advances under the Original Credit Agreement that the
Borrower, Erie Boulevard and Carr Street Generating shall have executed and
delivered the Deposit Account Agreement, dated as of July 28, 1999, among the
Borrower, Erie Boulevard, Carr Street Generating and Bank of America, N.A., as
Administrative Agent (the "Original Deposit Account Agreement");
WHEREAS, the Original Credit Agreement has been amended and restated in its
entirety pursuant to that certain Amended and Restated Credit Agreement, dated
as of the Restructuring Effective Date (the "Credit Agreement"), among the
Borrower, the Administrative Agent, Banc of America Securities LLC and BNP
Paribas, as lead arrangers (the "Lead Arrangers") and joint book runners, the
Issuing Bank, BNP Paribas, as syndication agent (the "Syndication Agent"), Union
Bank of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or
Cayman Island Branch, as documentation agents (the "Documentation Agents") and
the lenders named on the signature page thereof (together with the lenders from
time to time party thereto, the "Lenders");
WHEREAS, the Borrower, Erie Boulevard, Carr Street Generating, Astoria
Generating and the Administrative Agent entered into that certain Amended and
Restated Deposit Account Agreement, dated as of April 26, 2000 (the "Existing
Deposit Account Agreement"), amending and restating the Original Deposit Account
Agreement in its entirety;
WHEREAS, on the Astoria Generating Effective Date (as defined in the Credit
Agreement), Astoria Generating executed and delivered the Supplemental
Agreement, dated as
of August 19, 1999, by and between Astoria Generating and the Administrative
Agent pursuant to which it became a party to the Original Deposit Account
Agreement;
WHEREAS, as a result of the merger among Reliant, Reliant Merger Sub and
the Sponsor, the Borrower is an indirect, wholly-owned subsidiary of Reliant;
WHEREAS, as of the date hereof, the Borrower is an indirect, wholly-owned
subsidiary of Holdco;
WHEREAS, the Borrower is the 99% limited partner in each of Erie Boulevard,
Carr Street Generating and Astoria Generating, and each such Borrower Subsidiary
is the owner and operator of a portion of the Portfolio Assets;
WHEREAS, the Existing Accounts were established, maintained and operated
pursuant to the Original Deposit Account Agreement and the Existing Deposit
Account Agreement; and
WHEREAS, the Credit Agreement contemplates the execution, delivery and
implementation of this Agreement to provide, among other things, for the
establishment, if necessary, and the continued maintenance and operation of the
Accounts defined herein pursuant to the terms hereof.
NOW THEREFORE, in consideration of foregoing and of the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to amend and restate the Existing Deposit Account
Agreement in its entirety to read as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement the following terms have the following meanings
(terms defined in the singular to have the same meaning when used in the plural
and vice versa). All capitalized terms not otherwise defined herein shall have
the meanings attributed to them in the Credit Agreement or the Holdco Deposit
Account Agreement.
"Account Collateral" shall have the meaning ascribed thereto in Section
2.4.
"Accounts" shall have the meaning ascribed thereto in Section 2.3.
"Actual Operating Costs" shall mean, for any period, the amount of funds
actually expended by a Person in respect of Operating Costs.
"Administrative Agent" shall have the meaning ascribed to such term in the
first paragraph of this Agreement.
2
"Administrative Agent Claims" shall mean all obligations of the Borrower,
now or hereafter existing, to pay the reasonable fees, costs, expenses and other
amounts payable to the Administrative Agent under the Financing Documents and
any instruments or documents executed and delivered pursuant thereto.
"Agreement" shall mean this Deposit Account Agreement, as it may be
amended, modified or supplemented from time to time hereafter.
"Allowance Purchase" shall mean any purchase of an Allowance as permitted
by and in accordance with the terms of the Credit Agreement.
"Allowance Purchase Reserve Account" shall have the meaning ascribed
thereto in the Holdco Deposit Account Agreement.
"Allowance Purchase Shortfall Amount" shall mean, as of any date of
determination, an amount equal to (i) $7,900,000 minus (ii) the sum of all
distributions made pursuant to Section 5.2(n) prior to such date of
determination.
"Astoria Generating Operating Account" shall have the meaning ascribed
thereto in Section 2.2(a).
"Astoria Generating Revenue Account" shall have the meaning ascribed
thereto in Section 2.2(a).
"Borrower" has the meaning assigned to that term in the first paragraph of
this Agreement.
"Borrower Subsidiary" shall mean any of Erie Boulevard, Carr Street
Generating and Astoria Generating.
"Carr Street Generating Operating Account" shall have the meaning ascribed
thereto in Section 2.2(a).
"Carr Street Generating Revenue Account" shall have the meaning ascribed
thereto in Section 2.2(a).
"Credit Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Daily Prepayment Amount" shall equal $137,000.
"Debt Service Account" shall have the meaning ascribed thereto in Section
2.2(a).
"Debt Service Reserve Account" shall have the meaning ascribed thereto in
Section 2.2(a).
3
"Debt Service Reserve Requirement Shortfall" shall mean, as of any date,
the amount by which the Debt Service Reserve Requirement exceeds the amount of
funds on deposit in the Debt Service Reserve Account on such date.
"Debt Service Shortfall Amount" shall have the meaning ascribed thereto in
Section 5.8(a).
"Designated Office" shall mean the office of the Administrative Agent
located at the address set forth below its signature hereto, or at such other
address as may be designated by the Administrative Agent in a notice to the
Borrower.
"Distribution Account" shall have the meaning ascribed thereto in Section
2.2(a).
"Equity Proceeds Account" shall have the meaning ascribed thereto in
Section 2.2(a).
"Erie Boulevard Operating Account" shall have the meaning ascribed thereto
in Section 2.2(a).
"Erie Boulevard Revenue Account" shall have the meaning ascribed thereto in
Section 2.2(a).
"Excess Cash Flow" shall mean, as of any date, any amounts on deposit in
the Revenue Account after all allocations therefrom shall have been made in
accordance with clauses (a) through (p) of Section 5.2 below on such date.
"Existing Accounts" shall have the meaning set forth in Section 2.2(a).
"Extraordinary Proceeds Account" shall have the meaning ascribed thereto in
Section 2.2(a).
"Holdco" shall mean Orion Power Capital, LLC, a Delaware limited liability
company and a direct, wholly-owned subsidiary of the Sponsor.
"Holdco Deposit Account Agreement" shall mean that certain Deposit Account
Agreement, dated as of even date herewith, between Holdco and the Administrative
Agent (for the benefit of the Secured Parties) and the OPMW Administrative Agent
(for the benefit of the OPMW Secured Parties).
"Holdco Distribution" shall mean the funds deposited into the Revenue
Account by Holdco on any Holdco Distribution Date.
4
"Holdco Distribution Date" shall mean any date during any Transfer Period
on which Holdco makes a deposit into the Revenue Account in accordance with the
Holdco Deposit Account Agreement.
"Insurance Proceeds Account" shall have the meaning ascribed thereto in
Section 2.2(a).
"Loan Proceeds Account" shall have the meaning ascribed thereto in Section
2.2(a).
"Loan Proceeds Sub-Account" shall mean the Astoria Generating Loan Proceeds
Sub-Account, the Erie Boulevard Loan Proceeds Sub-Account or the Carr Street
Generating Loan Proceeds Sub-Account, as the context requires.
"Local Operating Account" shall mean those bank accounts set forth on
Schedule I hereto into which the account holder thereof, from time to time,
transfer funds from its respective Operating Account.
"Major Maintenance Reserve Account" shall have the meaning ascribed thereto
in Section 2.2(a).
"Notice of Cash Collateral" shall mean a notice of the Borrower to the
Administrative Agent in the form of Exhibit C hereto (i) requesting Cash
Collateral, (ii) setting forth the aggregate amount of such Cash Collateral, and
requesting that the Administrative Agent pay such amount to the Operating
Account, and (iii) certifying that all the conditions for obtaining Cash
Collateral as set forth in Section 6.07(c) of the Credit Agreement have been
met.
"Notice of Monthly Deposits and Withdrawals" shall have the meaning
ascribed thereto in Section 3.1.
"Notice of Monthly Operating Costs" shall have the meaning ascribed thereto
in Section 3.2.
"Notice of Operational Prepayment" shall mean a notice from the Borrower to
the Administrative Agent in the form of Exhibit D hereto (i) requesting an
Operational Prepayment, (ii) setting forth the aggregate amount of such
Operational Prepayment, and requesting that the Administrative Agent pay such
amount to the Operating Account, and (iii) certifying that all the conditions
for such payment set forth in Section 6.07(b) of the Credit Agreement thereof
have been met.
"O&M Reserve Account" shall have the meaning ascribed thereto in Section
2.2(a).
"O&M Reserve Requirement" shall mean $6,000,000.
"O&M Reserve Requirement Shortfall" shall mean, as of any date the amount
by which the O&M Reserve Requirement exceeds the amount on deposit in the O&M
Reserve Account on such date.
5
"Officer's Certificate" shall mean a certificate of a Responsible Officer
of the Borrower delivered to the Administrative Agent as required from time to
time hereby.
"Operating Account" shall have the meaning ascribed thereto in Section
2.2(a).
"Operating Distribution Notices" shall mean Notices of Monthly Operating
Costs, Notices of Cash Collateral and Notices of Operational Prepayments issued
by the applicable Borrower Entity pursuant to any of Section 5.2(b)(i), (ii) or
(iii).
"Operational Prepayment" shall mean any prepayment of an Operating Cost as
permitted by Section 6.07(b) of the Credit Agreement. For the avoidance of
doubt, any prepaid Operating Cost shall be counted as an Operating Cost as of
the date of payment.
"Operator Labor Expenses" shall mean the collective reference to the OPOS
Astoria Labor Expenses, the OPOS Carr Street Labor Expenses and the OPOS Cold
Water Labor Expenses.
"OPMW Administrative Agent" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"OPMW Deposit Account Agreement" shall mean that certain Second Amended and
Restated Deposit Account Agreement, dated as of the Restructuring Effective
Date, among OPMW, Twelvepole Creek, LLC, and Bank of America, N.A., as
administrative agent.
"OPOS Astoria Labor Expenses" shall mean those amounts payable from time to
time to OPOS Astoria in respect of salaries, employee benefits, labor costs and
other compensation (other than OPOS Astoria O&M Fees) constituting an Operating
Cost described in clause (i) of the definition thereof arising under the Astoria
Bundle O&M Agreement.
"OPOS Astoria O&M Fees" shall mean those amounts payable from time to time
to and for the account of OPOS Astoria in respect of fees arising under the
Astoria Bundle O&M Agreement, other than OPOS Astoria Labor Expenses. For the
avoidance of doubt, amounts paid to OPOS Astoria in reimbursement of direct
costs paid or payable to third parties for the performance of operation and
maintenance services shall not be deemed OPOS Astoria O&M Fees.
"OPOS Carr Street Labor Expenses" shall mean those amounts payable from
time to time to OPOS Carr Street in respect of salaries, employee benefits,
labor costs and other compensation (other than OPOS Carr Street O&M Fees)
constituting an Operating Cost described in clause (i) of the definition thereof
arising under the Carr Street Generating Station O&M Agreement.
"OPOS Carr Street O&M Fees" shall mean those amounts payable from time to
time to and for the account of OPOS Carr Street in respect of fees arising under
the Carr Street Generating Station O&M Agreement, other than OPOS Carr Street
Labor Expenses. For the
6
avoidance of doubt, amounts paid to OPOS Carr Street in reimbursement of direct
costs paid or payable to third parties for the performance of operation and
maintenance services shall not be deemed OPOS Carr Street O&M Fees.
"OPOS Cold Water Labor Expenses" shall mean those amounts payable from time
to time to OPOS Cold Water in respect of salaries, employee benefits, labor
costs and other compensation (other than OPOS Cold Water O&M Fees) constituting
an Operating Cost described in clause (i) of the definition thereof arising
under the NiMo Assets O&M Agreement.
"OPOS Cold Water O&M Fees" shall mean those amounts payable from time to
time to and for the account of OPOS Cold Water in respect of fees arising under
the NiMo Assets O&M Agreement, other than OPOS Cold Water Labor Expenses. For
the avoidance of doubt, amounts paid to OPOS Cold Water in reimbursement of
direct costs paid or payable to third parties for the performance of operation
and maintenance services shall not be deemed OPOS Cold Water O&M Fees.
"Original Credit Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Original Deposit Account Agreement" shall have the meaning set forth in
the preamble to this Agreement.
"Prepayment Account" shall have the meaning ascribed thereto in Section
2.2(a).
"Prepayment Amounts" shall mean any amounts received from, or on behalf of,
the Borrower in respect of (i) voluntary prepayments of the Loans pursuant to
Section 2.08 of the Credit Agreement, (ii) mandatory prepayments of the Loans
pursuant to Section 2.07 of the Credit Agreement and (iii) transfers made to the
Prepayment Account pursuant to Section 5.1, 5.4 or 5.7 of the Holdco Deposit
Account Agreement.
"Prepayment Shortfall Amount" shall mean, as of any Transfer Date, the
amount by which the aggregate amounts payable by the Borrower under Section
5.2(o) on such Transfer Date exceeds the amount on deposit in the Revenue
Account (after making all pending withdrawals under subsections (a) through (l)
of Section 5.2) on such Transfer Date.
"Receivables" shall have the meaning ascribed to such term in the Borrower
Security Agreement.
"Requested Cash Collateral" shall mean any Cash Collateral requested by any
Borrower Entity as permitted by Section 6.07(c) of the Credit Agreement.
"Requested Operational Prepayment" shall mean, without duplication of any
Operating Costs, a prepayment of Operating Costs requested by any Borrower
Entity as permitted by Section 6.07(b) of the Credit Agreement.
7
"Reliant" shall mean Reliant Resources, Inc., a Delaware corporation.
"Reliant Merger Sub" shall mean Reliant Energy Power Generation Merger Sub,
Inc.
"Restructuring Cost Reserve Account" shall have the meaning ascribed to
such term in the Holdco Deposit Account Agreement.
"Revenue Account" shall have the meaning ascribed thereto in Section
2.2(a).
"Revenue Interruption Event" shall mean the occurrence of any event which
is a covered event under any property casualty insurance policy required to be
maintained by any Person pursuant to Section 5.06 of the Credit Agreement that
results in an aggregate reduction in the installed capacity rating of the
Astoria Bundle by 120 MW or more.
"Revenue Interruption Event Commencement Date" shall mean, in respect of
any Revenue Interruption Event, the calendar day on which the such Revenue
Interruption Event shall have occurred.
"Revenue Interruption Event Termination Date" shall mean, in respect of any
Revenue Interruption Event, the calendar day on which the aggregate reduction of
the installed capacity rating of the Astoria Bundle shall be 120 MW or less as
reasonably determined by the Lead Arrangers (after consultation with the
Independent Engineer).
"Scheduled Debt Service Deposit Amount" shall mean, for any given month, an
amount equal to the Debt Service accruing under the Financing Documents during
such month which, for the avoidance of doubt, shall include Principal Payments
required to be made pursuant to Section 2.07 of the Credit Agreement but which
shall not include any other amounts referenced in Section 5.31 of the Credit
Agreement.
"Section 6.11(b) Deposits" shall have the meaning ascribed thereto in
Section 5.10(a).
"Semi-Annual Period" shall mean, as of any date, the six month period
ending on such date.
"Sponsor" shall mean Orion Power Holdings, Inc., a Delaware corporation.
"Subsidiary Operating Account" shall mean the Astoria Generating Operating
Account, the Carr Street Generating Operating Account and the Erie Boulevard
Operating Account, as the context requires.
"Subsidiary Revenue Account" shall mean the Astoria Generating Revenue
Account, the Carr Street Generating Revenue Account and the Erie Boulevard
Revenue Account, as the context requires.
8
"Swap Claims" shall mean , as of any date, the net amount of all
obligations of the Borrower, due and payable on such date, to any Swap Bank
under any Interest Hedge Contract and any instruments or documents executed and
delivered pursuant thereto.
"Transfer Date" shall mean the twenty-fifth day of each month (or, in the
case of February, the twenty-third day of such month), or, if the twenty-fifth
day (or twenty-third day, as applicable) of any month is not a Business Day, the
first Business Day immediately preceding the twenty-fifth (or twenty-third, as
applicable) day of each month.
"Transfer Period" shall mean the period beginning with each Transfer Date
and ending on the last Business Day before the succeeding Transfer Date.
ARTICLE II
APPOINTMENT OF ADMINISTRATIVE AGENT;
CREATION OF ACCOUNTS
Section 2.1 Appointment of Administrative Agent.
(a) Bank of America, N.A. has been appointed to act as Administrative Agent
hereunder pursuant to the Credit Agreement and hereby agrees to receive, accept
and deposit all proceeds of the Advances, Revenues, Insurance Proceeds,
Condemnation Proceeds, Extraordinary Proceeds and all monies, Permitted
Investments and other securities and instruments required to be deposited into
the Accounts in accordance with this Agreement and any other Financing Document.
(b) The Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth in this Agreement and in the Credit Agreement,
and no implied covenants, functions or responsibilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
Section 2.2 Existing Accounts.
(a) Each of the following accounts was established pursuant to the Existing
Deposit Account Agreement with the Administrative Agent at its Designated Office
(together with any sub-accounts thereto, each an "Existing Account" and,
collectively, the "Existing Accounts"):
(i) a special, segregated and irrevocable account identified as "Orion
Power New York Revenue Account" (the "Revenue Account");
(ii) a special, segregated and irrevocable account identified as
"Orion Power New York Operating Account" (the "Operating Account");
9
(iii) a special, segregated and irrevocable account identified as
"Orion Power New York Loan Proceeds Account" (the "Loan Proceeds Account");
(iv) a special, segregated and irrevocable account identified as
"Orion Power New York Equity Proceeds Account" (the "Equity Proceeds
Account");
(v) a special, segregated and irrevocable account identified as "Orion
Power New York Debt Service Account" (the "Debt Service Account");
(vi) a special, segregated and irrevocable account identified as
"Orion Power New York Extraordinary Proceeds Account" (the "Extraordinary
Proceeds Account");
(vii) a special, segregated and irrevocable account identified as
"Orion Power New York Insurance Proceeds Account" (the "Insurance Proceeds
Account");
(viii) a special, segregated and irrevocable account identified as
"Orion Power New York Major Maintenance Reserve Account" (the "Major
Maintenance Reserve Account");
(ix) a special, segregated and irrevocable account identified as
"Orion Power New York Debt Service Reserve Account" (the "Debt Service
Reserve Account");
(x) a special, segregated and irrevocable account identified as "Orion
Power New York Prepayment Account" (the "Prepayment Account");
(xi) a special, segregated and irrevocable account identified as
"Orion Power New York Distribution Account" (the "Distribution Account");
(xii) a special, segregated and irrevocable account identified as
"Orion Power New York O&M Reserve Account" (the "O&M Reserve Account");
(xiii) a special, segregated and irrevocable account identified as
"Astoria Generating Revenue Account" (the "Astoria Generating Revenue
Account");
(xiv) a special, segregated and irrevocable account identified as
"Erie Boulevard Revenue Account" (the "Erie Boulevard Revenue Account");
(xv) a special, segregated and irrevocable account identified as "Carr
Street Generating Revenue Account" (the "Carr Street Generating Revenue
Account");
(xvi) a special, segregated and irrevocable account identified as
"Astoria Generating Operating Account" (the "Astoria Generating Operating
Account");
10
(xvii) a special, segregated and irrevocable account identified
as "Erie Boulevard Operating Account" (the "Erie Boulevard Operating
Account"); and
(xviii) a special, segregated and irrevocable account identified
as "Carr Street Generating Operating Account" (the "Carr Street
Generating Operating Account").
(b) The following sub-accounts were established pursuant to the Existing
Deposit Account Agreement within the Loan Proceeds Account:
(i) Erie Boulevard Loan Proceeds Sub-Account;
(ii) Carr Street Generating Loan Proceeds Sub-Account; and
(iii) Astoria Generating Loan Proceeds Sub-Account.
Section 2.3 Holdco Accounts and Discontinuation of Accounts.
(a) In addition to the Existing Accounts, certain accounts, including the
Holdco Collection Account and Holdco Distribution Account, will be formed
pursuant to the Holdco Deposit Account Agreement.
(b) Each of the Equity Proceeds Account and Loan Proceeds Account has a
zero balance as of the date hereof and is hereby closed and no additional funds
shall be deposited therein (the Existing Accounts except the Equity Proceeds
Account and the Loan Proceeds Account, each an "Account" and, collectively, the
"Accounts").
(c) Except as specifically set forth herein, each Account shall remain in
the exclusive possession of, and under the sole dominion and control of, the
Administrative Agent and shall be maintained at all times in accordance with the
terms of the Financing Documents until the date on which the Commitments have
been terminated and the Notes, together with interest, all other Obligations and
the OPMW Obligations have been paid in full. Except as specifically set forth
herein, each Account shall be subject to debit or withdrawal solely by the
Administrative Agent, as provided in this Agreement and no Person shall have any
control over or right of withdrawal from the Accounts. No payments shall be made
out of the Accounts except for the purposes and on the terms provided in this
Agreement and in the Financing Documents. The Borrower hereby irrevocably
authorizes and empowers the Administrative Agent to endorse any check or any
other instrument or security deposited or held in such Accounts to effect a
deposit into such Accounts and, to the extent the Administrative Agent is
permitted pursuant to the other Financing Documents, to apply such funds to the
outstanding Obligations.
11
Section 2.4 Accounts as Collateral.
(a) To secure the payment of the Obligations and the OPMW Obligations when
due pursuant to the Financing Documents, as applicable, each Borrower Entity has
assigned, transferred and pledged to, and granted a security interest in favor
of, the Administrative Agent (for the benefit of the Secured Parties) pursuant
to a Security Agreement, in all of the right, title and interest of such
Borrower Entity which it now possesses or may hereafter obtain, in and to, among
other things, all Revenues, each of the Accounts (and Sub-Accounts, as the case
may be), including all monies and Permitted Investments and other securities and
instruments held in such Accounts and Sub-Accounts, and all other funds held by
the Administrative Agent under this Agreement and all of the proceeds of all the
foregoing (collectively, the "Account Collateral"). Each Borrower Entity agrees
that the Account Collateral, and all rights such Borrower Entity may have with
respect to such Account Collateral, shall be subject to the terms and conditions
of this Agreement and the other Financing Documents.
(b) Each Borrower Entity agrees that it will not take any actions or fail
to perform any of its duties or obligations under this Agreement so that after
giving effect to such action or inaction the Administrative Agent will not then,
or with the passage of time, cease to have a perfected first priority security
interest in any of the Account Collateral.
(c) Each Borrower Entity agrees that from time to time, at the expense of
such Borrower Entity, such Borrower Entity will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Administrative Agent may reasonably request, in order to
perfect and protect any pledge or security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Account Collateral. Without
limiting the generality of the foregoing, each Borrower Entity will execute and
file, with a copy thereof to the Administrative Agent, such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Administrative Agent may reasonably
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(d) Each Borrower Entity hereby authorizes the Administrative Agent to (but
the Administrative Agent shall have no obligation to) file one or more financing
or continuation statements, and amendments thereto, relating to all or any part
of the Account Collateral without the signature of such Borrower Entity where
permitted by law. A photocopy or other reproduction of this Agreement or any
security agreement or financing statement covering the Account Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
(e) Each Borrower Entity will furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing the Account
Collateral and such other reports in connection with the Account Collateral as
the Administrative Agent may reasonably request, all in reasonable detail.
12
Section 2.5 Accounts and the Administrative Agent. For purposes of this
Agreement, the parties confirm and agree as follows:
(a) The Administrative Agent confirms and agrees that it is a "securities
intermediary" as defined in Section 8-102(14) of the UCC and a "Securities
Intermediary" as defined in 31 C.F.R. Part 357.2 of the United States.
(b) The Administrative Agent hereby agrees, upon the delivery or transfer
of any Account Collateral to the Administrative Agent for deposit in an Account,
to indicate by book entry that such Account Collateral has been credited to and
is carried in the applicable Account and accept such Account Collateral for
credit to the applicable Account.
(c) The Borrower confirms and agrees that it has not and will not (i)
permit any of its creditors to obtain control over any Account or the Borrower's
interest in any financial asset credited thereto or carried therein, or (ii)
enter into any agreement, arrangement or understanding with any other Person
relating to any of the Accounts and the financial assets credited or to be
credited thereto or carried or to be carried therein pursuant to which it has
agreed to comply with entitlement orders of such Person.
(d) Each of the Accounts and the Sub-Accounts shall continue to be governed
by the Securities Account Control Agreement.
ARTICLE III
NOTICE REQUIREMENTS
Section 3.1 Monthly Notice of Deposits and Withdrawals; Confirmation of
Transfers. Following the date on which funds are first deposited in any Account,
the Administrative Agent shall, upon the request of any Secured Party or the
Borrower and in any event on or before the tenth (10th) day of each calendar
month, notify the Borrower and, if so requested by a Secured Party, such Secured
Party in the form of Exhibit A hereto (each, a "Notice of Monthly Deposits and
Withdrawals") of the amounts deposited and withdrawn, if any, from the Accounts
(including any earnings thereon) during the preceding calendar month.
Section 3.2 Notice of Monthly Operating Costs. The Borrower shall, no later
than the second (2nd) Business Day prior to each Transfer Date, notify the
Administrative Agent in the form of Exhibit B hereto (each, a "Notice of Monthly
Operating Costs") of (a) the Actual Operating Costs (including Operational
Prepayments) by each Borrower Entity and Cash Collateral payments during such
month as of the date of such Notice of Monthly Operating Costs, (b) a good faith
estimate of Operating Costs (including any Requested Operational Prepayments)
and Requested Cash Collateral expected to be paid prior to the expiration of
such month, (c) the amount of Operator Labor Expenses due and payable in the
immediately
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succeeding month and (d) the amount of funds necessary to pay the Operating
Costs (including any Requested Operational Prepayments) and Requested Cash
Collateral expected to be incurred and paid by each Borrower Entity in the
immediately succeeding month; provided, that Operating Costs shall not include
amounts attributable to Allowance Purchases, and the Borrower shall not have any
right to any distributions of such amounts hereunder, until 100% of the amount
on deposit in the Allowance Purchase Reserve Account has been used to make
Allowance Purchases. To the extent Requested Cash Collateral or Requested
Operational Prepayments are included in any Notice of Monthly Operating Costs,
such notice shall include the information required in Exhibit C and/or Exhibit
D, as applicable (including certification that the conditions for such
collateral and/or prepayment set forth in Section 6.07(c) and 6.07(b),
respectively, of the Credit Agreement and have been met).
Section 3.3 Notice of Cash Collateral and Notice of Operational Prepayment.
The Borrower shall be permitted to deliver (no more than twice per calendar week
or, to the extent such a request is included in the Notice of Monthly Operating
Costs during such week, once during such week) a Notice of Cash Collateral
and/or a Notice of Operational Prepayment to the Administrative Agent.
ARTICLE IV
DEPOSITS INTO ACCOUNTS
Section 4.1 Deposit of Working Capital Advances. Promptly upon receipt and
in any event, on the Business Day received or, if received on any day after 3:00
p.m. (New York time), on the next succeeding Business Day after receipt from the
Working Capital Lenders, the proceeds of all Working Capital Advances, shall,
upon fulfillment of the applicable conditions precedent set forth in Article III
of the Credit Agreement, be deposited by the Administrative Agent into the
Operating Account.
Section 4.2 Deposit of Revenues. Except as otherwise expressly provided
herein, each Borrower Entity shall irrevocably direct all parties which are, or
may be, obligated to pay Revenues or any other amount to such Borrower Entity to
make all payments of Revenues and such other amounts directly to the
Administrative Agent. The Administrative Agent shall deposit all Revenues and
such other amounts received from, or on behalf of, the Borrower (including
distributions from any Holdco Account designated for deposit in the Revenue
Account, including all such distributions made pursuant to Section 5.1 of the
Holdco Deposit Account Agreement) into the Revenue Account. The Administrative
Agent shall deposit all Revenues and such other amounts received from, or for
the account of, Astoria Generating, Erie Boulevard or Carr Street Generating
into the appropriate Revenue Sub-Account.
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Section 4.3 Deposit of Extraordinary Proceeds. All Extraordinary Proceeds
which are received by any Borrower Entity or any Secured Party shall be
transferred by such party to the Administrative Agent for deposit into the
Extraordinary Proceeds Account (in each case, net of all costs and expenses, if
any, associated therewith).
Section 4.4 Deposit of Insurance Proceeds. Each Borrower Entity shall pay,
or cause to be paid, all Insurance Proceeds received by such Borrower Entity
directly to the Administrative Agent. Promptly upon receipt thereof, the
Administrative Agent shall deposit the proceeds of any business interruption
Insurance Policy into the Revenue Account. Promptly upon receipt thereof, the
Administrative Agent shall deposit all Insurance Proceeds which do not
constitute Extraordinary Proceeds, if any, into the Insurance Proceeds Account.
Section 4.5 Deposit of Prepayment Amounts. Promptly upon receipt thereof by
the Administrative Agent, the Administrative Agent shall deposit all Prepayment
Amounts (net of all Funding Breakage Costs, costs incurred under any Interest
Hedge Contract, and all other costs and expenses then due and payable to any
Lender as expressly provided in any Financing Document in connection therewith)
into the Prepayment Account.
Section 4.6 Information to Accompany Amounts Delivered to the
Administrative Agent, Deposits Irrevocable.
(a) All amounts transferred by Holdco or any Borrower Entity or Secured
Party to the Administrative Agent shall be accompanied by a written direction of
such Person specifying in reasonable detail the source of such amounts and the
Account or Accounts (including the number of such Account or Accounts) into
which such amounts are to be deposited.
(b) All amounts transferred to the Administrative Agent hereunder shall be
made by federal wire transfer in immediately available funds to Bank of America,
N.A. (ABA No. 1110-0001-2) indicating the appropriate account.
(c) Any deposit made into any Account shall, absent manifest error, be
irrevocable and the amount of such deposit plus any investment earnings thereon
shall be held by the Administrative Agent and applied, invested and transferred
solely as provided herein and in the Credit Agreement.
(d) The Administrative Agent shall have no obligation to verify the
accuracy or the adequacy of the sources or amounts transferred to it pursuant to
subsection (a) of this Section 4.6 and shall be entitled to rely on the written
directions accompanying such transfers.
(e) With respect to any amount received by the Administrative Agent without
the information required in subsection (a) above, the Administrative Agent shall
cause such amount to be deposited into the Revenue Account and held by the
Administrative Agent and applied, invested and transferred solely as provided
herein; provided, that, prior to depositing such amount into the Revenue Account
the Administrative Agent shall notify Holdco and each Borrower Entity and, if
required or appropriate, any Secured Party, as appropriate, of the receipt
15
of such funds and request written direction as to the source of such funds and
the manner in which such funds are to be allocated. If Holdco or such Borrower
Entity or Secured Party, as appropriate, does not respond with an Officer's
Certificate within five days from the date of effective delivery of such written
notice, the Administrative Agent shall send a notice to Holdco, the Borrower
Entities and the Secured Parties informing such parties of the receipt of such
funds and requesting written direction as to the source of such funds and the
manner in which such funds are to be allocated; provided, further, that, if the
Administrative Agent does not receive any such written direction from any
Borrower Entity or Secured Party within 30 days after the making of such
request, it shall automatically allocate such funds as if such funds were
Revenues.
Section 4.7 Books of Account; Statements. The Administrative Agent shall
maintain books of account on a cash basis and record therein all deposits into
and transfers to, from and between the Accounts and all investment transactions
effected by the Administrative Agent, pursuant to Article V hereof. The
Administrative Agent shall make such books of account available during normal
business hours for inspection and audit by the Borrower and the Secured Parties
and their respective representatives upon reasonable prior notice.
ARTICLE V
ALLOCATIONS FROM ACCOUNTS
Section 5.1 Allocations From the Subsidiary Revenue Accounts. On each
Business Day on which any Subsidiary Revenue Account shall have a positive
balance, the Administrative Agent shall transfer all funds on deposit in each
such Subsidiary Revenue Account into the Revenue Account.
Section 5.2 Allocations From the Revenue Account. The Administrative Agent
shall transfer funds available in the Revenue Account as follows:
(a) On each Transfer Date, the Administrative Agent shall withdraw funds
from the Revenue Account and shall transfer the following amounts as indicated
in the Notice of Monthly Operating Costs delivered during such month: (i) to
OPOS Astoria, an amount equal to the OPOS Astoria Labor Expenses payable to OPOS
Astoria pursuant to the Astoria Bundle O&M Agreement in the immediately
succeeding month; (ii) to OPOS Cold Water, an amount equal to the OPOS Cold
Water Labor Expenses payable to OPOS Cold Water pursuant to the NiMo Assets O&M
Agreement in the immediately succeeding month; and (iii) to OPOS Carr Street, an
amount equal to the OPOS Carr Street Labor Expenses payable to OPOS Carr Street
pursuant to the Carr Street Generating Station O&M Agreement in the immediately
succeeding month.
(b) On each Transfer Date, the Administrative Agent shall withdraw funds
from the Revenue Account (after making any pending withdrawals required under
clause (a) of this Section 5.2) and shall deposit into the Subsidiary Operating
Accounts the following amounts:
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(i) into the Astoria Generating Operating Account, an amount equal to
the sum of (a) the Actual Operating Costs (including any Requested
Operational Prepayments, but excluding amounts attributable to Allowance
Purchases unless 100% of the amount on deposit in the Allowance Purchase
Reserve Account has been used to make Allowance Purchases) and Cash
Collateral payments actually incurred and paid by Astoria Generating in
such month on and as of the date of and as set forth in any Operating
Distribution Notice delivered in respect of such month, minus the
reasonably expected Operating Costs (including any Requested Operational
Prepayments) and Requested Cash Collateral payments applicable to such
month (to the extent previously deposited by the Administrative Agent into
the Astoria Generating Operating Account) plus (b) an amount equal to (X)
the Operating Costs (including any Requested Operational Prepayments) and
Requested Cash Collateral payments expected to be paid by Astoria
Generating during both the remainder of the current month and for the
immediately succeeding month (with regard to Operating Costs, excluding
Operational Prepayments as specified in the applicable Notice of Monthly
Operating Costs) minus (Y) the amount withdrawn pursuant to Section
5.2(a)(i) in respect of such month. If the calculation performed in
accordance with the preceding clause (a) shall yield a negative amount, the
amount to be deposited pursuant to clause (b) of this subsection (i) shall
be reduced accordingly. Upon receipt of an Officer's Certificate of Astoria
Generating (which shall be provided by Astoria Generating to the
Administrative Agent at least (3) Business Days prior to the date on which
any payment referred to in this sentence is proposed to be made) certifying
that an additional amount is required for Operating Costs (excluding
prepayments of Operating Costs), the Administrative Agent shall withdraw
such amount from the Revenue Account and deposit such funds into the
Astoria Generating Operating Account;
(ii) into the Erie Boulevard Operating Account, an amount equal to the
sum of (a) the Actual Operating Costs (including any Requested Operational
Prepayment but excluding amounts attributable to Allowance Purchases unless
100% of the amount on deposit in the Allowance Purchase Reserve Account has
been used to make Allowance Purchases) and Cash Collateral payments
actually incurred and paid by Erie Boulevard in such month on and as of
such date and as set forth in any Operating Distribution Notice delivered
by Erie Boulevard in respect of such month minus the expected Operating
Costs (including any Requested Operational Prepayment) and Requested Cash
Collateral applicable to such month (to the extent previously deposited by
the Administrative Agent into the Erie Boulevard Operating Account) plus
(b) an amount equal to (X) the Operating Costs and Requested Cash
Collateral payments reasonably expected to be paid by Erie Boulevard during
both the remainder of the current month and for the immediately succeeding
month (with regard to Operating Costs, including any Requested Operational
Prepayment) as specified in the applicable Notice of Monthly Operating
Costs minus (Y) the amount withdrawn pursuant to Section 5.2(a)(ii) in
respect of such month. If the calculation performed in accordance with the
preceding clause (a) shall yield a negative result, the amount to be
deposited pursuant to clause (b) of this subsection (ii) shall be reduced
accordingly. Upon receipt of an Officer's Certificate of
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Erie Boulevard (which shall be provided by Erie Boulevard to the
Administrative Agent at least three (3) Business Days prior to the date on
which any payment referred to in this sentence is proposed to be made)
certifying that an additional amount is required for Operating Costs in
respect of the NiMo Assets (excluding prepayments of Operating Costs), the
Administrative Agent shall withdraw such amount from the Revenue Account
and deposit such funds into the Erie Boulevard Operating Account; and
(iii) into the Carr Street Generating Operating Account, an amount
equal to the sum of (a) the Actual Operating Costs (including any Requested
Operational Prepayment but excluding amounts attributable to Allowance
Purchases unless 100% of the amount on deposit in the Allowance Purchase
Reserve Account has been used to make Allowance Purchases) and Cash
Collateral payments actually incurred and paid by Carr Street Generating in
such month on and as of the date of and as set forth in any Operating
Distribution Notice delivered by Carr Street Generating in respect of such
month minus the reasonably expected Operating Costs (including Requested
Operational Prepayments) and Requested Cash Collateral applicable to such
month (to the extent previously deposited by the Administrative Agent into
the Carr Street Generating Operating Account) plus (b) an amount equal to
(X) the Operating Costs and Requested Cash Collateral payments reasonably
expected to be paid by Carr Street Generating during both the remainder of
the current month and in the immediately succeeding month (with regard to
Operating Costs, including Requested Operational Prepayments) as specified
in the applicable Notice of Monthly Operating Costs minus (Y) the amount
withdrawn pursuant to Section 5.2(a)(iii) in respect of such month. If the
calculation performed in accordance with the preceding clause (a) shall
yield a negative result, the amount to be deposited pursuant to clause (b)
of this subsection (iii) shall be reduced accordingly. Upon receipt of an
Officer's Certificate of Carr Street Generating (which shall be provided by
Carr Street Generating to the Administrative Agent at least three (3)
Business Days prior to the date on which any payment referred to in this
sentence is proposed to be made) certifying that an additional amount is
required for Operating Costs in respect of the Carr Street Generating
Station (excluding prepayments of Operating Costs), the Administrative
Agent shall withdraw such amount from the Revenue Account and deposit such
funds into the Carr Street Generating Operating Account.
(c) On each Transfer Date, the Administrative Agent shall withdraw funds
from the Revenue Account and shall deposit into the Operating Account an amount
equal to the sum of (i) the Actual Operating Costs (including any Requested
Operational Prepayment but excluding amounts attributable to Allowance Purchases
unless 100% of the amount on deposit in the Allowance Purchase Reserve Account
has been used to make Allowance Purchases) and Cash Collateral costs actually
incurred and paid by the Borrower in such month as set forth in any Operating
Distribution Notice delivered by the Borrower in respect of such month minus the
reasonably expected Operating Costs (including Requested Operational
Prepayments) and Requested Cash Collateral applicable to such month (to the
extent previously deposited by the Administrative Agent into the Operating
Account) plus (ii) an amount equal to the Operating Costs and Requested Cash
Collateral reasonably expected to be paid by the Borrower during both
18
the remainder of the current month and for the immediately succeeding month
(with regard to Operating Costs, including Requested Operational Prepayments) as
specified in the applicable Notice of Monthly Operating Costs. If the
calculation performed in accordance with the preceding clause (i) shall yield a
negative result, the amount to be deposited pursuant to clause (ii) shall be
reduced to accordingly. Upon receipt of an Officer's Certificate of the Borrower
(which shall be provided by the Borrower to the Administrative Agent at least
three (3) Business Days prior to the date on which any payment referred to in
this sentence is proposed to be made) certifying that an additional amount is
required for Operating Costs of the Borrower (excluding prepayments of Operating
Costs), the Administrative Agent shall withdraw such amount from the Revenue
Account and deposit such funds into the Operating Account.
(d) On the Business Day specified in any Notice of Operational Prepayment
(which specified date shall be at least three (3) Business Days after the date
of such notice), the Administrative Agent shall withdraw the aggregate amount of
the Operational Prepayment specified in such Notice of Operational Prepayment
and deposit it in the Operating Account.
(e) On the Business Day specified in any Notice of Cash Collateral (which
specified date shall be at least three (3) Business Days after the date of such
notice), the Administrative Agent shall withdraw the amount of the Cash
Collateral specified in such Notice of Cash Collateral and deposit it in the
Operating Account.
(f) On the Business Day specified in a notice (which specified date shall
be at least five (5) Business Days after the date of such notice) provided by
the Borrower to the Administrative Agent pursuant to Section 2.08 of the Credit
Agreement, so long as the Borrower, contemporaneously with such notice, provides
to the Administrative Agent an Officer's Certificate certifying that the
Borrower intends to repay a stated amount of Working Capital Loans which stated
amount was used exclusively to pay Operating Costs, the Administrative Agent
shall withdraw such amount from the Revenue Account and pay it directly to the
Working Capital Lenders under and in accordance with Section 2.08 of the Credit
Agreement.
(g) On any Business Day that any Closing Expenses are due and payable and
there are insufficient funds on deposit in the Restructuring Cost Reserve
Account to pay in full such amount, the Administrative Agent shall withdraw
funds from the Revenue Account (after making any pending withdrawals required
under clause (a) through (f) of this Section 5.2) and distribute such amount to
the Collateral Agent for deposit in the Holdco Restructuring Cost Reserve
Account.
(h) On each Transfer Date, the Administrative Agent shall withdraw out of
funds then available in the Revenue Account and shall distribute to the
Collateral Agent for deposit in the Allowance Purchase Reserve Account
maintained pursuant to the Holdco Deposit Account Agreement funds up to an
amount equal to $16,000,000; provided, that, when the sum of all the
distributions made pursuant to this subsection (h) is equal to $16,000,000, no
further withdrawals or distributions shall be made or permitted under this
subsection (h);
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(i) On each Transfer Date, the Administrative Agent shall withdraw funds
out of funds then available in the Revenue Account (after making any pending
withdrawals required under clauses (a) through (h) of this Section 5.2) and
shall deposit such withdrawn funds into the Debt Service Account in an amount up
to the Scheduled Debt Service Deposit Amount applicable to the immediately
succeeding month; provided however, that in the event funds on deposit in the
Revenue Account on such Transfer Date are insufficient to fund the Scheduled
Debt Service Deposit Amount applicable to such succeeding month (any such
insufficiency together with any other similar insufficiencies from prior months,
the "Debt Service Account Shortfall"), the Borrower shall, to the extent funds
are available in the Revenue Account, deposit in such succeeding month, out of
funds then available in the Revenue Account (after making any pending
withdrawals required under clauses (a) through (h) of this Section 5.2) an
additional amount pursuant to this clause (i) up to such Debt Service Account
Shortfall on the Transfer Date of such succeeding month.
(j) On any Business Day that any amount (other than any amount referred to
in clauses (f) and (g) of this Section 5.2) is due and payable by the Borrower
to any Secured Party under any Financing Document, the Administrative Agent
shall withdraw funds from the Revenue Account (after making any pending
withdrawals required under clauses (a) through (i) of this Section 5.2) and pay
such amount to such Secured Party.
(k) On each Transfer Date, the Administrative Agent shall withdraw out of
funds then available in the Revenue Account (after making any pending
withdrawals required under subsections (a) through (j) of this Section 5.2) and
shall deposit into the Debt Service Reserve Account funds up to an amount equal
to any Debt Service Reserve Requirement Shortfall.
(l) On each Transfer Date, the Administrative Agent shall withdraw funds
from the Revenue Account (after making any pending withdrawals required under
subsections (a) through (k) of this Section 5.2) and shall transfer the
following amounts: (i) to OPOS Astoria, an amount equal to the OPOS Astoria O&M
Fees payable to OPOS Astoria pursuant to the Astoria Bundle O&M Agreement for
the month then ending; (ii) to OPOS Cold Water, an amount equal to the OPOS Cold
Water O&M Fees payable to OPOS Cold Water pursuant to the NiMo Assets O&M
Agreement for the month then ending; and (iii) to OPOS Carr Street, an amount
equal to the OPOS Carr Street O&M Fees payable to OPOS Carr Street pursuant to
the Carr Street Generating Station O&M Agreement for the month then ending, in
each case, as such amount shall have been certified from the Borrower to the
Administrative Agent on or prior to each such Transfer Date. If funds available
on any Transfer Date are insufficient to pay the entire OPOS Astoria O&M Fee,
OPOS Cold Water O&M Fee or OPOS Carr Street O&M Fee, as the case may be, on such
Transfer Date, the Administrative Agent shall transfer to OPOS Astoria, OPOS
Cold Water or OPOS Carr Street, as applicable, an additional amount on the
immediately succeeding Transfer Date(s) equal to such insufficiency.
(m) On each Transfer Date, the Administrative Agent shall withdraw out of
funds then available in the Revenue Account and shall deposit into the O&M
Reserve Account funds up to an amount equal to any O&M Reserve Requirement
Shortfall.
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(n) On each Transfer Date, the Administrative Agent shall withdraw out of
funds then available in the Revenue Account and shall distribute to the
Collateral Agent for deposit in the Allowance Purchase Reserve Account
maintained pursuant to the Holdco Deposit Account Agreement funds up to an
amount equal to the Allowance Purchase Shortfall Amount; provided, that when the
sum of all of the distributions made pursuant to this subsection (n) is equal to
$7,900,000, no further withdrawals or distributions shall be made or permitted
under this subsection (n).
(o) On each Transfer Date that (i) occurs during the continuation of a
Revenue Interruption Event, (ii) is the first Transfer Date immediately
succeeding any Revenue Interruption Event Termination Date, or (iii) occurs
while there is a Prepayment Shortfall Amount remaining due and payable by the
Borrower hereunder, the Administrative Agent shall withdraw out of funds then
available in the Revenue Account (after making any pending withdrawals required
under subsections (a) through (n) of this Section 5.2) and shall deposit into
the Prepayment Account the sum (without duplication) of the following amounts:
(X) in respect of clause (i) of this Section 5.2(o), an amount equal
to the Daily Prepayment Amount times the number of days from but excluding
the Revenue Interruption Event Commencement Date to and including such
Transfer Date minus the aggregate amounts, if any, paid in respect of such
Revenue Interruption Event on all preceding Transfer Dates;
(Y) in respect of clause (ii) of this Section 5.2(o), an amount equal
to the sum of (I) in respect of any Revenue Interruption Event commencing
prior to the immediately preceding Transfer Date, the Daily Prepayment
Amount times the number of days from the date immediately succeeding the
previous Transfer Date to and including the Revenue Interruption Event
Termination Date plus (II) in respect of any other Revenue Interruption
Event commencing after the immediately preceding Transfer Date, the Daily
Prepayment Amount times the number of days from the Revenue Interruption
Commencement Date to and including the Revenue Interruption Event
Termination Date relating to such Revenue Interruption Event;
(Z) in respect of clause (iii) of this Section 5.2(o), an amount equal
to the aggregate Prepayment Shortfall Amount outstanding on such Transfer
Date.
In the event that, as of any Transfer Date, funds on deposit in the Revenue
Account (after making any pending withdrawals required under subsections (a)
through (n) of this Section 5.2) are not sufficient to pay (without duplication)
all amounts described in clauses (X), (Y) or (Z) on such Transfer Date, the
Prepayment Shortfall Amount shall be increased to the extent of such
insufficiency; provided that in no event shall any amount payable with respect
to any Revenue Interruption Event exceed the product of the Daily Prepayment
Amount times the number of days from but excluding the Revenue Interruption
Event Commencement Date to and including the Revenue Interruption Event
Termination Date relating to such Revenue Termination Event.
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(p) Notwithstanding the terms of clauses (a) through (o) of this Section
5.2, in the event of an Emergency in respect of any Portfolio Asset, the
Administrative Agent shall, within three (3) Business Days of receipt of notice
from the Borrower requesting funds for the remediation of the conditions giving
rise to or the payment or reimbursement of any costs or expenses arising in
response of such Emergency, withdraw funds from the Revenue Account and shall
deposit into the relevant Operating Account the amount set forth in such notice
pursuant to, and to the extent permitted by, Section 5.11(e) of the Credit
Agreement. Each Borrower Entity hereby covenants to apply all such funds
exclusively for the payment of costs directly relating to the remediation of the
conditions giving rise to such Emergency.
(q) On each Holdco Distribution Date, the Administrative Agent shall
withdraw the Holdco Distribution from the Revenue Account and make any pending
deposits not already made during the current Transfer Period under subsections
(a) through (p) above.
(r) On each Transfer Date, the Administrative Agent shall withdraw funds
from the Revenue Account (after making any pending withdrawals required under
subsections (a) through (q) of this Section 5.2) and shall deposit into the
Holdco Collection Account an amount equal to 100% of the amount of Excess Cash
Flow on deposit in the Revenue Account on such date.
In addition, on the Restructuring Effective Date, the Administrative Agent
shall withdraw funds from the Revenue Account, the Distribution Account and the
Debt Service Reserve Account in accordance with the Restructuring Effective Date
Letter Agreement, and make the payments contemplated thereby, including the
deposit of the Initial Indenture Debt Service Deposit Amount into the Initial
Indenture Debt Service Reserve Account maintained under the Holdco Deposit
Account Agreement and the required deposits into the Allowance Purchase Reserve
Account.
Section 5.3 Allocations from Operating Account. The Borrower shall be
permitted to withdraw and transfer funds on deposit on any Business Day on which
there is a positive balance in the Operating Account. The Borrower hereby
covenants to apply all such withdrawn or transferred funds exclusively for the
payment of (i) Operating Costs (which, to the extent such costs are Operating
Costs of any Borrower Subsidiary, shall be deemed funded pursuant to the terms
of the Intercompany Working Capital Agreement), or (ii) Requested Cash
Collateral payments; provided, that, for so long as funds sufficient to make
Allowance Purchases are on deposit in the Allowance Purchase Reserve Account,
the Borrower shall not be permitted to withdraw from the Operating Account
amounts attributable to Allowance Purchases.
Section 5.4 Allocations From the Debt Service Account. On each Business Day
that Debt Service is due and payable by the Borrower, the Administrative Agent
shall withdraw funds from the Debt Service Account and shall on behalf of the
Borrower pay (i) to each Lender, such Lender's respective Pro Rata Share of such
Debt Service and (ii) to each Swap Bank, the amounts due and payable under the
Interest Hedge Contract to which such Swap Bank is a party.
22
Section 5.5 Allocations From the Extraordinary Proceeds Account. On any
Business Day on which the Extraordinary Proceeds Account shall have a positive
balance, the Administrative Agent shall withdraw all amounts on deposit in the
Extraordinary Proceeds Account and shall pay to each Acquisition Lender, such
Acquisition Lender's Pro Rata Share of such amount as a prepayment of its
outstanding Acquisition Loan Advance; provided, that if such payment would
result in the incurrence of Funding Breakage Costs, such amounts shall not be
released from the Prepayment Account until the earliest date on which such
amounts could be paid without causing such Funding Breakage Costs to be
incurred.
Section 5.6 Allocations from the Insurance Proceeds Account.
(a) Upon receipt of a notice from the Borrower pursuant to Section 7.1 (a)
below that the Borrower has elected to apply Insurance Proceeds to the
reinstatement, reconstruction, repair or replacement of damaged Portfolio
Asset(s), the Administrative Agent shall withdraw funds from the Insurance
Proceeds Account in the amount of, and as directed by, the Borrower for the
payment of the costs associated with such reinstatement, reconstruction, repair
or replacement. Upon receipt of a notice from the Borrower pursuant to Section
7.1 (a) below that the Borrower has elected not to apply the Insurance Proceeds
to the reinstatement, reconstruction, repair or replacement of the affected
Portfolio Asset(s), the Administrative Agent shall withdraw the Insurance
Proceeds from the Insurance Proceeds Account and deposit such funds into the
Prepayment Account.
(b) In the event that the Borrower has satisfied the requirements set forth
in Section 7. 1 (b) below, the Administrative Agent shall withdraw the
applicable Insurance Proceeds from the Insurance Proceeds Account in the amount
of, and as directed by, the Borrower for the payment of the costs associated
with the reconstruction, repair or replacement of the relevant Portfolio Assets.
If the Required Lenders direct the Administrative Agent to withhold consent to
the reconstruction, repair or replacement of any Portfolio Asset pursuant to
Section 7. 1 (b) (after giving effect to the Borrower's right of resubmission
contained in such Section), the Administrative Agent shall withdraw the
applicable Insurance Proceeds from the Insurance Proceeds Account and deposit
such funds into the Prepayment Account.
(c) Upon the occurrence of any event described in Section 7. 1 (c) below in
relation to any Portfolio Asset, the Administrative Agent shall withdraw the
Insurance Proceeds in respect of such Portfolio Asset from the Insurance
Proceeds Account and deposit such funds into the Prepayment Account.
Section 5.7 Allocations From the Major Maintenance Reserve Account. The
Administrative Agent shall from time to time withdraw funds from the Major
Maintenance Reserve Accounts and shall deposit into the applicable Operating
Account, amounts equal to the Capital Expenditures payable by the relevant
Borrower Subsidiary.
Section 5.8 Allocations From the Debt Service Reserve Account.
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(a) The Administrative Agent shall withdraw from the Debt Service Reserve
Account any amount due and payable with respect to Debt Service of the Borrower
to the extent that sufficient funds are not available in the Debt Service
Account to pay such amount pursuant to Section 5.4 (the amount of such
deficiency being the "Debt Service Shortfall Amount") and, on behalf of the
Borrower, transfer such Debt Service Shortfall Amount into the Debt Service
Account for application in accordance with Section 5.4 above.
(b) In the event that funds on deposit in the Debt Service Reserve Account
are less than the Debt Service Shortfall Amount, the Administrative Agent shall
apply the amount received by it in the following order of priority: first, to
the payment of any Fees that are due and payable by the Borrower to any Secured
Party under any Financing Document; second , to any interest payment that is due
and payable by the Borrower on the Obligations; and third, to any other amount
that is due and payable by the Borrower on the Obligations.
(c) On the Final Maturity Date, the Administrative Agent shall withdraw all
amounts then on deposit in the Debt Service Reserve Account and deposit such
funds into the Prepayment Account, for application in accordance with Section
5.9 below.
Section 5.9 Allocations From the Prepayment Account. On any Business Day on
which the Prepayment Account shall have a positive balance, the Administrative
Agent shall withdraw all amounts on deposit in the Prepayment Account and shall
pay to each Acquisition Lender, such Acquisition Lender's Pro Rata Share of such
amount; provided, that if such payment would result in the incurrence of Funding
Breakage Costs, such amounts shall not be released from the Prepayment Account
until the earliest date on which such amounts can be paid without causing such
Funding Breakage Costs to be incurred.
Section 5.10 Allocations From the O&M Reserve Account. (a) All amounts
deposited into the O&M Reserve Account pursuant to Section 6.11(b) of the Credit
Agreement ("Section 6.11(b) Deposits") which (i) are requested to be utilized by
a Borrower Entity to purchase replacement assets in accordance with such Section
6.11(b) shall be withdrawn from the O&M Reserve Account by the Administrative
Agent and paid to the Person designated in a notice from such Borrower Entity
describing such replacement asset purchase and providing appropriate payment
instructions or (ii) shall remain on deposit in the O&M Reserve Account for 120
days, shall be withdrawn from the O&M Reserve Account by the Administrative
Agent and deposited into the Prepayment Account.
(b) On any Transfer Date or other date that is three (3) Business Days
after receipt of a Notice of Cash Collateral and/or a Notice of Operational
Prepayments in accordance with Section 3.3, on which distributions from the
Revenue Account pursuant to Section 5.2(a) through (e) are not sufficient to pay
in full Operating Costs, Requested Cash Collateral and Requested Operational
Prepayments, the Administrative Agent shall withdraw funds from the O&M Reserve
Account and shall deposit the amount of such shortfall into the relevant
Operating Account or Subsidiary Operating Account, as the case may be. Amounts
available for
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distribution pursuant to this Section 5.10(b) shall exclude the amount of any
Section 6.11(b) Deposits on deposit in the O&M Reserve Account.
Section 5.11 Payments To Secured Parties. The Administrative Agent shall
pay any amounts due to any Secured Party by wire transfer in immediately
available funds pursuant to the payment instructions supplied by such Secured
Party. If the amounts required to be transferred by the Administrative Agent on
any Business Day have been deposited into the appropriate Account(s) by 10:00
a.m. (New York time) on such Business Day, the Administrative Agent shall make
the required transfers by 12:00 p.m. (New York time) on the same Business Day,
if such amounts are deposited after 10:00 a.m.(New York time), but before 12:00
p.m.(New York time), the Administrative Agent shall make the required transfers
by 4:00 p.m. (New York time)on the same Business Day, and if such amounts are
deposited after 12:00 p.m.(New York time), the Administrative Agent shall make
the required transfers by 12:00 p.m. (New York time) on the next succeeding
Business Day.
Section 5.12 Defaults. Notwithstanding any other provision contained in
this Agreement, upon receipt by the Administrative Agent of written notice from
the Borrower or any Secured Party that a Default or an Event of Default shall
have occurred and be continuing, the Administrative Agent may distribute the
funds in the Accounts in accordance with the terms of this Agreement until such
Default or Event of Default has been cured or otherwise is no longer continuing
or has been waived in accordance with the Credit Agreement.
ARTICLE VI
INVESTMENTS AND VALUATION
Section 6.1 Investments. Each Borrower Subsidiary hereby authorizes the
Borrower to elect Permitted Investments for the funds on deposit from time to
time in such Borrower Subsidiary's Sub-Accounts. Prior to the occurrence of any
Default or Event of Default, any amounts held by the Administrative Agent in any
of Accounts shall be invested by the Administrative Agent from time to time, at
the risk and expense of the relevant Borrower Entity, solely in such Permitted
Investments as the Borrower, shall direct (or, so long as any Default or Event
of Default shall have occurred and be continuing, as the Administrative Agent
may in its discretion select). The Borrower shall select Permitted Investments
having such maturities as shall cause each Account to have a cash balance as of
any day sufficient to cover the transfers to be made from such Account on such
day in accordance with this Agreement. In the event that the cash balance in any
Account is as of any day insufficient to cover the transfers to be made from
such Account on such day, the Administrative Agent may (but shall not be
obligated to) sell or liquidate the Permitted Investments held in such Account
(without regard to maturity date) in such manner as the Administrative Agent may
reasonably deem necessary in order to obtain cash at least sufficient to make
such transfers and to pay any expenses and charges incurred in connection with
effecting any such sale or liquidation, which expenses and charges the
Administrative Agent shall be authorized to pay with cash on deposit in such
Account. The
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Administrative Agent shall not be liable to any Person for any loss suffered
because of any such sale or liquidation other than by reason of its willful
misconduct or gross negligence.
Section 6.2 Income or Gain. Any interest, investment income or gain
realized as a result of any Permitted Investments held in the Accounts (net of
the expenses incurred in connection with making such Permitted Investments)
shall be deposited into the Revenue Account on each Transfer Date and applied or
reinvested as provided herein. The Administrative Agent shall have no liability
for any loss resulting from any such Permitted Investment other than by reason
of its willful misconduct or gross negligence.
Section 6.3 Value. Cash and securities on deposit from time to time in the
Accounts shall be valued by the Administrative Agent, as the case may be, as
follows:
(a) cash shall be valued at the face amount thereof, and
(b) securities shall be valued at market value thereof.
Section 6.4 Taxes. It is acknowledged by the parties hereto that all
interest and other investment income earned on amounts on deposit in the
Accounts for federal, state and local income tax purposes shall be attributed to
the Borrower. The Borrower shall be responsible for determining any requirements
for paying taxes or reporting or withholding any payments for tax purposes
hereunder. The Borrower shall prepare and file all tax information required with
respect to the Accounts and without limiting Section 2.12 of the Credit
Agreement, the Borrower agrees to indemnify and hold the Administrative Agent
harmless against all liability for tax withholding and/or reporting for any
payments. Such indemnities shall survive the termination or discharge of this
Agreement or resignation of the Administrative Agent. The Administrative Agent
shall not have any obligation with respect to the making of or the reporting of
any payments for tax purposes other than to the extent it is provided with
monies and/or the reports in respect thereof.
ARTICLE VII
APPLICATION OF INSURANCE PROCEEDS
Section 7.1 Insurance Failure. So long as the Credit Agreement is in effect
and any Lender shall have any Commitment outstanding thereunder, and until the
Notes, together with interest and all other Obligations are indefeasibly paid in
full and the ConEd Letter of Credit has been terminated:
(a) In the case of damage to any portion of the Portfolio Assets for which
any Borrower Entity receives, or has the right to receive, Insurance Proceeds in
an amount up to $10,000,000 per occurrence or, in respect of all Borrower
Entities, $20,000,000 in the aggregate, which shall have previously been
deposited in the Insurance Proceeds Account, the Borrower may elect to use such
Insurance Proceeds for the reinstatement, reconstruction, repair or replacement
of the damaged Portfolio Asset(s). The Borrower shall notify the Administrative
26
Agent of such election, and the Administrative Agent, when available for
disbursement, shall disburse the requested amount from the Insurance Proceeds
Account pursuant to Section 5.6(a) hereof. In the event that the Borrower shall
elect not to apply the Insurance Proceeds to the reinstatement, reconstruction,
repair or replacement of the damaged Portfolio Asset(s), the Administrative
Agent shall withdraw the available Insurance Proceeds from the Insurance
Proceeds Account and deposit such amount into the Prepayment Account in
accordance with Section 5.6(c).
(b) In the case of damage to any portion of the Portfolio Assets for which
any Borrower Entity receives, or has the right to receive, Insurance Proceeds in
an amount in excess of $10,000,000 per occurrence or, in respect of all Borrower
Entities, $20,000,000 in the aggregate, but less than $30,000,000 in the
aggregate in all instances, which shall have previously been deposited in the
Insurance Proceeds Account, the Borrower shall deliver to the Administrative
Agent within 45 days after any Borrower Entity shall have obtained actual
knowledge of such damage:
(i) a breakdown of the nature and extent of damage incurred in
reasonable detail;
(ii) a bona fide assessment from a contractor reasonably acceptable to
the Administrative Agent, (after consultation with the Independent
Engineer) estimating the costs and time frame necessary to repair the
damaged or affected portion of the Portfolio Assets in order for such
portion to operate at, or to be capable of operating at, substantially the
same level at which it operated prior to the loss;
(iii) a demonstration to the reasonable satisfaction of the
Administrative Agent (after consultation with the Independent Engineer)
that the Borrower has sufficient funds (from the proceeds of insurance and
any other sources) to pay for the proposed reconstruction, repair or
replacement;
(iv) evidence that none of the existing Project Contracts has been
terminated as a result of such damage (other than those which have been, or
are being, diligently replaced by other acceptable agreements in accordance
with the requirements set forth in the Credit Agreement) during such
reconstruction, repair or replacement (except for those Project Contracts
(A) which have expired pursuant to their terms or are otherwise not
intended to be in effect at such time and (B) whose termination would not
reasonably be expected to result in a Material Adverse Effect taking into
account any available sources of funds to the Borrower Entities (including
business interruption insurance) and efforts to replace such Project
Contract); provided, that all applicable Insurance Policies remain in full
force and effect; and
(v) a demonstration to the reasonable satisfaction of the
Administrative Agent, that at the completion of such reconstruction, repair
or replacement no Default or Event of Default would reasonably be expected
to occur or exist.
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The Administrative Agent may request confirmation or reports from the
Independent Engineer with respect to the information provided by the Borrower
pursuant to clauses (i), (ii) and (iii) above. The Administrative Agent, acting
at the direction of the Required Lenders in accordance with this Section 7.1,
will have the right to withhold its consent to any such proposed reconstruction,
repair or replacement, if the Borrower fails to satisfy any of the clauses (i)
through (v) above. In the event that such consent is withheld, the
Administrative Agent shall notify the Borrower as to the basis for withholding
such consent. The Borrower shall be entitled, within thirty (30) days after
receipt of such notification from the Administrative Agent to make a one-time
resubmission of the information and documentation required by this Section
7.1(b). If the Administrative Agent shall be directed by the Required Lenders in
accordance with this Section 7.1 to withhold consent to the resubmitted request,
the Administrative Agent shall apply such Insurance Proceeds in accordance with
Section 2.07 of the Credit Agreement.
In the event the Borrower receives the above-mentioned consent of the
Administrative Agent, the Borrower shall have the right to provide written
notice(s) to direct the Administrative Agent to transfer such Insurance Proceeds
in accordance with such written notice(s). The Borrower agrees to apply such
Insurance Proceeds as described above and to proceed diligently and in good
faith with the reinstatement, reconstruction, repair or replacement, as the case
may be, of the damaged part of the Portfolio Assets, and the Independent
Engineer, on behalf of the Lenders, will have the right to observe and inspect
such reconstruction, repair or replacement.
(c) If (i) the damage to the Portfolio Assets is in excess of $30,000,000
in the aggregate, (ii) the Borrower gives notice that it will not reinstate,
reconstruct, repair or replace the damaged Portfolio Assets, (iii) the Borrower
fails to obtain the consent of the Administrative Agent in accordance with
paragraph (b) above within 45 days of such damage (as such period may be
extended pursuant to the penultimate paragraph of this Section 7.1(c), (iv)
after receiving such consent, the Borrower does not proceed to reinstate,
reconstruct, repair or replace the damaged Portfolio Assets with diligence and
in accordance with the Project Contracts, the Financing Documents and applicable
Requirements of Law or (v) the Borrower terminates such reinstatement,
reconstruction, repair or replacement, the Administrative Agent shall, unless
otherwise directed by the Required Lenders, withdraw the Insurance Proceeds then
on deposit in the Insurance Proceeds Account in respect of such damaged
Portfolio Assets and deposit such amount into the Prepayment Account in
accordance with Section 5.6(c).
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.1 Representations and Warranties. The Borrower represents and
warrants as follows:
(a) The Borrower is the beneficial owner of the Account Collateral free and
clear of all Liens, except for Permitted Liens. No effective financing statement
or other document similar
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in effect covering all or any part of the Account Collateral made by, consented
to by or known by the Borrower is on file in any recording office, except such
as may have been filed (i) in favor of the Administrative Agent or (ii)
describing assets subject to a Permitted Lien.
(b) The Borrower conducts no business under any name or tradenames other
than its full name as specified in the preamble to this Agreement.
(c) The security interests purported to be created in the Account
Collateral by this Agreement in favor of the Administrative Agent (for the
benefit of the Secured Parties), upon making the filings and taking the other
actions contemplated by Section 3.01(s) and 4.14 of the Credit Agreement, will
constitute valid, first priority perfected Liens on and security interests in
all the Account Collateral (subject only to Permitted Liens).
(d) No Governmental Approvals or other approvals, registrations,
notarizations, recordings or filings are required which have not been obtained
or made in connection with (i) the creation in favor of the Administrative Agent
(for the benefit of the Secured Parties) of the Liens purported to be created
pursuant hereto or to the Borrower Security Agreement, (ii) the validity and
enforceability of this Agreement and such Liens, (iii) creation and maintenance
of the first priority and perfection of such Liens or (iv) the exercise by the
Secured Parties, in accordance with the Financing Documents, of their rights and
remedies under this Agreement.
ARTICLE IX
COVENANTS
Section 9.1 Covenants. Each Borrower Entity agrees that:
(a) Collections of Receivables and Payments Under Assigned Agreements.
(i) It shall notify each Project Party and each account debtor or
obligor under the Receivables of the assignment thereof to the
Administrative Agent, and instruct each of them that all payments due or to
become due and all amounts payable to such Borrower Entity under any
Project Contract or otherwise shall, until the Note, together with interest
and all other Obligations, is paid in full, be made, if made by wire
transfer, directly to the appropriate Account or Sub-Account specified in
this Agreement.
(ii) If such Person shall receive directly from a Project Party or
from any account debtor or other obligor under any Receivable any Revenues
or Receivables, such Borrower Entity shall receive such payments in
constructive trust for the benefit of the Administrative Agent as security
for the payment and performance of the Obligations, shall segregate such
payments from its other funds and shall promptly (and in any event within
three (3) Business Days of receipt thereof) transfer such payments to the
Administrative Agent in the same form as so received (with any necessary
endorsement).
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(b) Defense of Account Collateral. Such Borrower Entity shall defend its
Account Collateral against all claims and demands of all Persons (other than the
Administrative Agent and the other Secured Parties and any other Person holding
any Permitted Lien) claiming an interest in any of Account Collateral.
(c) Location of Office; Jurisdiction of Formation. Such Borrower Entity
shall keep its place of business and chief executive office and the office where
it keeps its records concerning the Account Collateral, at the address for the
Borrower specified in the Credit Agreement; or, upon 30 days' prior written
notice to the Administrative Agent, at such other location in a jurisdiction
where all action required by Section 2.4 shall have been taken with respect to
the Account Collateral. Such Borrower Entity shall provide the Administrative
Agent 30 days' prior written notice of any change in its jurisdiction of
formation.
(d) Disposition of Account Collateral. No Borrower Entity shall sell,
assign (by operation of law or otherwise) or otherwise dispose of any of the
Account Collateral, or create or suffer to exist any Lien upon or with respect
to any of the Account Collateral, except (i) for the security interest created
by this Agreement and (ii) as otherwise expressly permitted by this Agreement or
the Credit Agreement.
(e) Local Operating Accounts.
(i) The Borrower has closed each Local Operating Account listed on
Part A of Schedule I hereto. No Borrower Entity shall open or permit to
exist any Local Operating Account other than those set forth on Part B to
Schedule I hereto without the prior consent of the Administrative Agent.
(ii) No Borrower Entity shall permit the amount on deposit at any time
in the Local Operating Account to exceed (a) $15,000 for Carr Street
Generating Station, L.P. debit account; (b) $50,000 for the Erie Boulevard
Hydropower, L.P. debit account; (c) $25,000 for the Astoria Generating
Company, L.P. debit account or (d) $75,000 in the aggregate for all such
accounts.
ARTICLE X
ADMINISTRATIVE AGENT
Section 10.1 Administrative Agent Appointment. Bank of America, N.A. has
been appointed by the Secured Parties to act as the Administrative Agent
hereunder. With respect to matters relating to the Administrative Agent, the
provisions of Article VIII of the Credit Agreement with respect to the
Administrative Agent are incorporated herein mutatis mutandis as if fully set
forth herein.
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Section 10.2 Ambiguity or Inconsistency in Security Documents with Proposed
Actions. If, with respect to a proposed action to be taken by it, the
Administrative Agent shall determine in good faith that the provisions of this
Agreement or any other Security Document relating to the functions or
responsibilities or discretionary powers of the Administrative Agent are or may
be ambiguous or inconsistent, the Administrative Agent shall notify the Secured
Parties, identifying the proposed action and the provisions that it considers
are or may be ambiguous or inconsistent, and may decline either to perform such
function or responsibility or to exercise such discretionary power unless it has
received written confirmation that the Required Lenders concur in the
circumstances that the action proposed to be taken by the Administrative Agent
is consistent with the terms of this Agreement or is otherwise appropriate. The
Administrative Agent shall be fully protected in acting or refraining from
acting upon the confirmation of the Required Lenders in this respect, and such
confirmation shall be binding upon the Administrative Agent and the other
Secured Parties.
Section 10.3 Right and Duties. The Administrative Agent shall be protected
in acting and may rely exclusively upon any written notice, certificate,
instruction, request or other paper or document, as to the due execution thereof
and the validity and effectiveness of the provisions thereof and as to the truth
of any information therein contained. The Administrative Agent shall not be
liable for any error of judgment or for any act done or step taken or omitted
except in the case of its gross negligence or willful misconduct.
ARTICLE XI
EXERCISE OF RIGHTS UNDER SECURITY DOCUMENTS
Section 11.1 Actions Upon an Event of Default. Upon the occurrence and
during the continuance of an Event of Default and upon written request of the
Required Lenders, the Administrative Agent shall be permitted and is hereby
authorized to take any and all actions and to exercise any and all rights,
remedies and options which it may have under the Security Documents, in each
case, to the maximum extent permitted under Requirement of Law.
Section 11.2 Administration of Collateral. Each of the Secured Parties
hereby acknowledges and agrees that the Administrative Agent shall administer
the Collateral in the manner contemplated by this Agreement and the Security
Documents and the Administrative Agent shall exercise such rights and remedies
with respect to the Collateral as are granted to it under the Security Documents
in each case, to the maximum extent permitted under Requirements of Law. No
Secured Party and no class or classes of Secured Parties shall have any right
(a) to direct the Administrative Agent to take any action in respect of the
Collateral other than as provided in this Agreement or the Credit Agreement or
(b) to take any action with respect to the Collateral (i) independently of the
Administrative Agent or (ii) other than to direct the Administrative Agent to
take action in accordance with this Agreement or the Credit Agreement, to the
maximum extent permitted under Requirements of Law.
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Section 11.3 Application of Proceeds After Acceleration. If any Event of
Default shall have occurred and be continuing, and if the Administrative Agent
(at the direction of the Required Lenders) shall have declared all Loans and all
other Obligations under the Credit Agreement to be due and payable thereunder,
then, at the direction of the Required Lenders, all Collateral held by the
Administrative Agent (including, but not limited to, the Accounts, subject,
however, to the terms of Section 5.11 above)) and the proceeds of any sale,
disposition or other realization by the Administrative Agent or by any Secured
Party upon the Collateral (or any portion thereof) pursuant to the Security
Documents shall be distributed in whole or in part by the Administrative Agent
in the following order of priority:
First, to the Administrative Agent for the account of the Administrative
Agent in an amount equal to the Administrative Agent Claims due and payable as
of the date of such distribution;
Second, to the Secured Parties (other than the Administrative Agent),
ratably, in an amount equal to all costs and expenses incurred by such Secured
Parties in accordance with Section 9.04(iii) of the Credit Agreement; provided,
that prior to any such distribution, the Administrative Agent shall have
received a certificate signed by each such Secured Party, setting forth the
amount due and payable to such Secured Party as of the date of such
distribution;
Third, to the Lenders in an amount equal to all Fees and all interest on
the Advances due and payable as of the date of such distribution; provided, that
prior to any such distribution, the Administrative Agent shall have received
certificates signed by each of the Lenders, setting forth the amount due and
payable to such Lender as of the date of such distribution; in case such
proceeds shall be insufficient to pay in full all such Fees and interest, then
to the payment thereof to each Lender, ratably, in proportion to its percentage
of the sum of the aggregate amount of all such Fees and interest;
Fourth, to the Swap Banks in an amount equal to all Swap Claims (other than
principal payments) due and payable as of the date of such distribution;
provided, that prior to any such distribution, the Administrative Agent shall
have received certificates signed by each of the Swap Banks, setting forth the
amount due and payable to such Swap Bank, as of the date of such distribution;
and in case such proceeds shall be insufficient to pay in full all such Swap
Claims, then to the payment thereof to each Swap Bank, ratably, in proportion to
its percentage of the sum of the aggregate amount of all such Swap Claims;
Fifth, ratably, to the Lenders in an amount equal to all principal on the
Advances due and payable as of the date of such distribution and to the Swap
Banks in an amount equal to all principal due and payable under all Interest
Hedge Contracts as of the date of such distribution; provided, that prior to any
such distribution, the Administrative Agent shall have received certificates
signed by each of the Lenders, setting forth the amount due and payable to such
Lender, as of the date of such distribution; and in case such proceeds shall be
insufficient to pay in full all such principal, then to the payment thereof to
each Lender, ratably, in proportion to its percentage of the sum of the
aggregate amount of all such principal;
32
Sixth, to the Secured Parties in an amount equal to all other Obligations
(which amount shall not include any amounts payable pursuant to clauses First
through Fifth, above) due and payable as of the date of such distribution;
provided, that prior to any such distribution, the Administrative Agent shall
have received certificates signed by each of the Secured Parties, setting forth
the amount due and payable to such Secured Party as of the date of such
distribution; and in case such proceeds shall be insufficient to pay in full all
such Obligations, then to the payment thereof to each Secured Party, ratably, in
proportion to its percentage of the sum of the aggregate amount of all such
other Obligations;
Seventh, if the OPMW obligations have not been paid in full in cash, to the
extent of any surplus after application of the proceeds of the Collateral
contemplated by clauses First through Sixth above, to the OPMW Administrative
Agent for distribution in accordance wit the OPMW Deposit Account Agreement;
Eighth, to the Borrower to the extent of any surplus, after application of
the proceeds of the Collateral contemplated by clauses First through Seventh
above;
it being understood that the Borrower shall remain liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate of the sums referred to in clauses First through Sixth of this Section
11.3.
ARTICLE XII
INDEMNIFICATION
Section 12.1 Indemnification From Borrower. Without limiting the
obligations of the Borrower or the Secured Parties under the Credit Agreement,
the Borrower hereby agrees to indemnify and hold harmless the Administrative
Agent from and against any and all claims, losses and liabilities arising out of
or resulting from (i) any Security Document (including, without limitation,
enforcement of such Security Document, but excluding any such claims, losses or
liabilities resulting from the Administrative Agent's gross negligence or
willful misconduct) or (ii) without limiting Section 2.12 of the Credit
Agreement any refund or adjustment of any amount paid or payable to the
Administrative Agent under or in respect of any Transaction Document or any
other Collateral, or any interest thereon, which may taken by it while it was
Administrative Agent.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Agreement for Benefit of Parties Hereto. Nothing in this
Agreement, express or implied, is intended or shall be construed to confer upon,
or to give to, any Person other than the parties hereto and their respective
successors and assigns, any right, remedy or
33
claim under or by reason of this Agreement or any covenant, condition or
stipulation hereof; and the covenants, stipulations and agreements contained in
this Agreement are and shall be for the sole and exclusive benefit of the
parties hereto and their respective successors and assigns.
Section 13.2 No Warranties. Except as otherwise expressly provided herein,
the Secured Parties have not made to each other nor do they hereby or otherwise
make to each other any warranties, express or implied, nor do they assume any
liability to each other with respect to the enforceability, validity, value or
collectability of the Collateral (or any portion thereof). No Secured Party
shall be liable to any other Secured Party for any action or failure to act or
any error of judgment, negligence, or mistake, or oversight whatsoever on the
part of any Secured Party or any Secured Party's agents, officers, employees or
attorneys with respect to any transaction relating to any of the notes or
agreements evidencing or entered into with respect to any of the Obligations or
any security therefor.
Section 13.3 Reimbursement of Expenses. The Borrower will pay upon demand
to the Administrative Agent the amount of Fees and expenses as agreed between
the parties under the Credit Agreement.
Section 13.4 Severability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected and/or impaired thereby.
Section 13.5 Notices. All notices or other communications hereunder shall
be given in the manner and at such addresses as are set forth in the Credit
Agreement.
Section 13.6 Successors and Assigns. Whenever in this Agreement any of the
parties hereto is named or referred to, the successors and assigns of such party
shall be deemed to be included and all covenants, promises and agreements in
this Agreement by or on behalf of the respective parties hereto shall bind and
inure to the benefit of the respective successors and assigns of such parties,
whether so expressed or not.
Section 13.7 Counterparts. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
counterparts together constituting only one instrument.
Section 13.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY
SUCH REQUIREMENT OF LAWS THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY
APPLICABLE. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE BORROWER OR THE BORROWER
SUBSIDIARIES AND THE ADMINISTRATIVE AGENT (FOR THE BENEFIT OF THE
34
SECURED PARTIES) IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
Section 13.9 No Impairments of Other Rights. Nothing in this Agreement is
intended or shall be construed to impair, diminish or otherwise adversely affect
any other rights the Secured Parties may have or may obtain against the
Borrower.
Section 13.10 Amendment; Waiver. No amendment or waiver of any provision of
this Agreement shall be effective unless the same shall be undertaken and
accomplished in accordance with the requirements of Section 9.02 of the Credit
Agreement. No delay on the part of any Secured Party in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial waiver by such Secured Party of any right, power or remedy preclude
any further exercise thereof, or the exercise of any other right, power or
remedy.
Section 13.11 Separate Liability. The obligations of each Secured Party
under this Agreement shall be several and not joint, and no Secured party shall
be liable or responsible for the acts of any other Secured Party.
Section 13.12 Incumbency Certificates; Authorized Persons. The Borrower
shall furnish to the Administrative Agent on or prior to the Closing Date and
from time to time thereafter as may be necessary duly executed incumbency
certificates showing the names, titles and specimen signatures of the persons
authorized on behalf of such party to take the actions and give the officer's
certificates, notifications, approvals and payment instructions required by this
Agreement.
Section 13.13 Headings. Headings herein are for convenience only and shall
not be relied upon in interpreting or enforcing this Agreement.
Section 13.14 Termination; Release. This Agreement shall terminate when all
Obligations have been indefeasibly paid in full, the ConEd Letter of Credit and
all Commitments have been terminated and all OPMW Obligations have been
indefeasibly paid in full, and the Administrative Agent, at the written request
and expense of the Borrower, will promptly execute and deliver to the Borrower
the proper instruments (which may include Uniform Commercial Code termination
statements on form UCC-3) acknowledging the termination of this Agreement, and
will promptly duly assign, transfer and deliver to the Borrower (without
recourse and without any representation or warranty) free from any interest of
the Administrative Agent or Lien granted hereunder such of the Collateral as may
be in possession of the Administrative Agent and has not theretofore been sold
or otherwise applied or released pursuant to this Agreement together with such
notices to third parties as may be necessary to countermand any notices
previously sent to them pursuant hereto
35
Section 13.15 Entire Agreement. This Agreement, including the documents
referred to herein, embodies the entire agreement and understanding of the
parties hereto and supersedes all prior agreements and understandings of the
parties hereto relating to the subject matter herein contained.
Section 13.16 Limitation of Liability. Notwithstanding anything herein to
the contrary, recourse shall be limited as provided in the Credit Agreement and
the provisions of Section 9.16 of the Credit Agreement are incorporated herein,
mutatis mutandis, as if fully set forth herein.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date first above
written.
ORION POWER NEW YORK, L.P.
By: ORION POWER NEW YORK GP, INC.,
its general partner
By:______________________________________
Name:
Title:
ERIE BOULEVARD HYDROPOWER, L.P.
By: ORION POWER NEW YORK GP, INC.,
its general partner
By:______________________________________
Name:
Title:
CARR STREET GENERATING STATION, L.P.
By: ORION POWER NEW YORK GP, INC.,
its general partner
By:______________________________________
Name:
Title:
ASTORIA GENERATING COMPANY, L.P.
By: ORION POWER NEW YORK GP, INC.,
its general partner
By:______________________________________
Name:
Title:
BANK OF AMERICA, N.A., not in its
individual capacity but solely as
Administrative Agent
By:
--------------------------------------
Name:
Title:
Address for Notices:
Bank of America, N.A.
101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Telephone: 704-388-6833
Telecopier: 704-386-3324
EXHIBIT A
to
DEPOSIT ACCOUNT AGREEMENT
[Letterhead of Administrative Agent]
FORM OF MONTHLY NOTICE OF DEPOSITS AND WITHDRAWALS
, 20(1)
------ ---------
Orion Power New York, L.P.
[Insert Current Address]
[Lenders]
RE: ORION POWER NEW YORK, L.P.
This notice is made pursuant to the Second Amended and Restated Deposit
Account Agreement (as amended, supplemented or otherwise modified from time to
time, the "Deposit Account Agreement"), dated as of October 28, 2002 among Orion
Power New York, L.P. (the "Borrower"), Astoria Generating Company, L.P.
("Astoria Generating"), Erie Boulevard Hydropower, L.P. ("Erie Boulevard"), Carr
Street Generating Station, L.P. ("Carr Street Generating") and Bank of America,
N.A., as administrative agent (the "Administrative Agent"). Capitalized terms
used herein without definition shall have the meanings specified in the Credit
Agreement referred to in such Deposit Account Agreement.
Pursuant to Section 3.1 of the Deposit Account Agreement, the undersigned
representative of the Administrative Agent hereby notifies you that as of the
date hereof, attached is a schedule of all amounts deposited and withdrawn from
the Accounts (including any earnings thereon from Permitted Investments) during,
and for the month ending, ________________, 20_____.
BANK OF AMERICA, N.A., as
Administrative Agent
By
------------------------------------
Name:
Title:
Attachment
1. Schedule of Deposit to, Withdrawals from, and the earnings on Accounts
- --------------------
(1) Insert date which is on or before the tenth (10th) day of each month.
A-1
EXHIBIT B
to
DEPOSIT ACCOUNT AGREEMENT
[Letterhead of Orion Power New York, L.P.]
FORM OF NOTICE OF MONTHLY OPERATING COSTS
, 20(2)
------ ---------
Bank of America, N.A.,
As Administrative Agent
[Insert Current Address]
RE: ORION POWER NEW YORK, L.P.
This notice is made pursuant to the Second Amended and Restated Deposit
Account Agreement (as amended, supplemented or otherwise modified from time to
time, the "Deposit Account Agreement"), dated as of October 28, 2002 among Orion
Power New York, L.P. (the "Borrower"), Astoria Generating Company, L.P.
("Astoria Generating"), Erie Boulevard Hydropower, L.P. ("Erie Boulevard"), Carr
Street Generating Station, L.P. ("Carr Street Generating") and Bank of America,
N.A., as administrative agent (the "Administrative Agent"). Capitalized terms
used herein without definition shall have the meanings specified in the Credit
Agreement referred to in such Deposit Account Agreement.
Pursuant to Section 3.2 of the Deposit Account Agreement, the undersigned
Responsible Officer of the Borrower hereby notifies you that as of the date
hereof, attached is a schedule of (i) the Actual Operating Costs and Cash
Collateral amounts actually incurred by each Borrower Entity during the current
month as of the date hereof; (ii) the amount of Operator Labor Expenses due and
payable by such Borrower Entity in the immediately succeeding month (together
with wire instructions for the appropriate Operator account); (iii) the balance
on deposit in each such Borrower Entity's Local Operating Account as of the date
hereof; (iv) the good faith estimate of the Operating Costs (including Requested
Operational Prepayments) and the Requested Cash Collateral expected to be
incurred from and after the date hereof through the expiration of the month
hereof; and (v) the amount of funds necessary to pay Operating Costs (including
Requested Operational Prepayments) and the Requested Cash Collateral expected to
be incurred by each Borrower Entity in the immediately succeeding month.
- ------------------
(2) Insert date which is on or before the 10th day of each calendar month.
B-1
All amounts withdrawn from each Local Operating Account during, and for the
month ending, ________________, 20_____ have been used solely for the payment of
Operating Costs (excluding amounts attributable to Allowance Purchases unless
100% of the amount on deposit in the Allowance Purchase Reserve Account has been
used to make Allowance Purchases) in accordance with the Operating Budget
currently in effect (as administered pursuant to Section 5.11 of the Credit
Agreement) and Cash Collateral payments.
ORION POWER NEW YORK, L.P.,
By: Orion Power New York, GP, Inc.,
its General Partner
By
------------------------------------
Name:
Title:
Attachment
1. Schedule of (i) Actual Operating Costs and Cash Collateral actually paid
during such month, and (ii) a good faith estimate of Operating Costs and
Requested Cash Collateral for the remainder of such month and the
immediately succeeding month.
B-2
EXHIBIT C
to
DEPOSIT ACCOUNT AGREEMENT
[Letterhead of Orion Power New York, L.P.]
FORM OF NOTICE OF CASH COLLATERAL
, 20 (3)
------ ---------
Bank of America, N.A.,
As Administrative Agent
[Insert Current Address]
RE: ORION POWER NEW YORK, L.P.
This notice is made pursuant to the Second Amended and Restated Deposit
Account Agreement (as amended, supplemented or otherwise modified from time to
time, the "Deposit Account Agreement"), dated as of October 28, 2002 among Orion
Power New York, L.P. (the "Borrower"), Astoria Generating Company, L.P.
("Astoria Generating"), Erie Boulevard Hydropower, L.P. ("Erie Boulevard"), Carr
Street Generating Station, L.P. ("Carr Street Generating") and Bank of America,
N.A., as administrative agent (the "Administrative Agent"). Capitalized terms
used herein without definition shall have the meanings specified in the Credit
Agreement referred to in such Deposit Account Agreement.
Pursuant to Section 3.3 of the Deposit Account Agreement, the undersigned
Responsible Officer of the Borrower hereby requests that Cash Collateral in the
amount of $___________ be distributed pursuant to Section 5.2(e) of the Deposit
Account Agreement to the Operating Account. The undersigned Responsible Officer
of the Borrower hereby certifies that the conditions for obtaining Cash
Collateral as set forth in Section 6.07(c) of the Credit Agreement all have been
met.
- -------------------
(3) Insert date which does not occur during any calendar week in which a Notice
of Monthly Operating Costs is due.
C-1
ORION POWER NEW YORK, L.P.,
By: Orion Power New York, GP, Inc.,
its General Partner
By
--------------------------------------
Name:
Title:
C-2
EXHIBIT D
to
DEPOSIT ACCOUNT AGREEMENT
[Letterhead of Orion Power New York, L.P.]
FORM OF NOTICE OF OPERATIONAL PREPAYMENT
, 20 (4)
------ ---------
Bank of America, N.A.,
As Administrative Agent
[Insert Current Address]
RE: ORION POWER NEW YORK, L.P.
This notice is made pursuant to the Second Amended and Restated Deposit
Account Agreement (as amended, supplemented or otherwise modified from time to
time, the "Deposit Account Agreement"), dated as of October 28, 2002 among Orion
Power New York, L.P. (the "Borrower"), Astoria Generating Company, L.P.
("Astoria Generating"), Erie Boulevard Hydropower, L.P. ("Erie Boulevard"), Carr
Street Generating Station, L.P. ("Carr Street Generating") and Bank of America,
N.A., as administrative agent (the "Administrative Agent"). Capitalized terms
used herein without definition shall have the meanings specified in the Credit
Agreement referred to in such Deposit Account Agreement.
Pursuant to Section 3.3 of the Deposit Account Agreement, the undersigned
Responsible Officer of the Borrower hereby requests an Operational Prepayment in
the amount of $___________ be distributed pursuant to Section 5.2(d) of the
Deposit Account Agreement to the Operating Account. The undersigned Responsible
Officer of the Borrower hereby certifies that the conditions for obtaining
Operational Prepayments as set forth in Section 6.07(b) of the Credit Agreement
all have been met.
- --------------------
(1) Insert date which does not occur during any calendar week in which a Notice
of Monthly Operating Costs is due.
D-1
ORION POWER NEW YORK, L.P.,
By: Orion Power New York, GP, Inc.,
its General Partner
By
-----------------------------------
Name:
Title:
D-2
EXHIBIT G-1 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
[FORM OF]
AMENDED AND RESTATED SECURITIES ACCOUNT CONTROL AGREEMENT
This Amended and Restated Securities Account Control Agreement, dated as of
October 28, 2002 (this "Agreement"), among Orion Power New York, L.P. (the
"Debtor"), Bank of America, N.A., as OPNY Administrative Agent and as the senior
secured party (in such capacity, the "Senior Secured Party"), Bank of America,
N.A., as OPMW Administrative Agent and as the junior secured party (in such
capacity, the "Junior Secured Party"), and Bank of America, N.A., as the
securities intermediary (in such capacity, the "Securities Intermediary").
1. DEFINED TERMS. All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York. The following terms shall
have the following respective meanings:
"Accounts" shall have the meaning set forth in Section 2 hereof.
"Intercreditor Agreement" shall mean that certain Collateral Agency and
Intercreditor Agreement, dated as of even date herewith, among the Senior
Secured Party, the Junior Secured Party, Bank of America, N.A., as collateral
agent, the financial institutions from time to time party to the OPNY Credit
Agreement and the financial institutions from time to time party to the OPMW
Credit Agreement.
"OPMW Administrative Agent" shall mean Bank of America, N.A., in its
capacity as Administrative Agent to the Lenders (as defined in the OPMW Credit
Agreement) under the OPMW Credit Agreement.
"OPMW Credit Agreement" shall mean that certain Second Amended and Restated
Credit Agreement, dated as of even date herewith, among the Debtor, the OPMW
Administrative Agent, Banc of America Securities LLC and BNP Paribas as lead
arrangers and joint book runners, BNP Paribas, as syndication agent, Bank of
America, N.A., as issuing bank, The Bank of Nova Scotia, Mizuho Corporate Bank,
Ltd and Bayerische Hypo-Und Vereinsbank, AG New York Branch, as documentation
agents, and the financial institutions from time to time party thereto, as
lenders.
"OPMW Deposit Account Agreement" shall mean that certain Second Amended and
Restated Deposit Account Agreement, dated as of even date herewith, among Orion
Power MidWest, L.P., Twelvepole Creek, LLC, and the OPMW Administrative Agent.
"OPNY Administrative Agent" shall mean Bank of America, N.A., in its
capacity as Administrative Agent to the Lenders (as defined in the OPNY Credit
Agreement) under the OPNY Credit Agreement.
"OPNY Credit Agreement" shall mean that certain Amended and Restated Credit
Agreement, dated as of even date herewith, among the Debtor, the OPNY
Administrative Agent, Banc of America Securities LLC and BNP Paribas as lead
arrangers and joint book runners, BNP Paribas, as syndication agent, Bank of
America, N.A., as issuing bank, Union Bank of California, N.A., CoBank, ACB and
Bayerische Hypo-Und Vereinsbank AG, New York Branch as documentation agents, and
the financial institutions from time to time party thereto, as lenders.
"OPNY Deposit Account Agreement" shall mean that certain Second Amended and
Restated Deposit Account Agreement, dated as of even date herewith, among the
Debtor, Erie Boulevard Hydropower, L.P., Carr Street Generating Station, L.P.,
Astoria Generating Company, L.P., and the OPNY Administrative Agent.
"OPNY Financing Documents" shall have the meaning assigned to the term
"Financing Documents" in the OPNY Credit Agreement.
"OPNY Termination Event" shall mean the occurrence of an OPNY Obligation
Termination or an OPNY Note Exchange, as each such term is defined in the
Intercreditor Agreement.
2. ESTABLISHMENT OF SECURITIES ACCOUNT. The Securities Intermediary hereby
confirms that (i) the Securities Intermediary has established those accounts set
forth on Schedule 1 attached hereto (such accounts and any successor accounts
the "Accounts"), (ii) the Securities Intermediary has terminated those accounts
set forth on Schedule 2 attached hereto, (iii) each Account is a "securities
account" as such term is defined in ss. 8-501(a) of the UCC, (iv) the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Debtor as
entitled to exercise the rights that comprise any financial asset credited to
the Accounts, (v) all property delivered to the Securities Intermediary pursuant
to the OPNY Deposit Account Agreement or any other OPNY Financing Document will
be promptly credited to the Accounts, and (vi) all securities or other property
underlying any financial assets credited to the Accounts shall be registered in
the name of the Securities Intermediary, indorsed to the Securities Intermediary
or in blank or credited to another securities account maintained in the name of
the Securities Intermediary and in no case will any financial asset credited to
any Account be registered in the name of the Debtor, payable to the order of the
Debtor or specially indorsed to the Debtor except to the extent the foregoing
have been specially indorsed to the Securities Intermediary or in blank.
3. "FINANCIAL ASSETS" ELECTION. The parties hereto hereby agree that each
item of property (whether investment property, financial asset, security,
instrument or cash) credited to the Accounts shall be treated as a "financial
asset" within the meaning ofss.8-102(a)(9) of the UCC.
4. ENTITLEMENT ORDERS. If at any time the Securities Intermediary shall
receive an "entitlement order" (within the meaning of ss. 8-102(a) (8) of the
UCC) issued by the Senior Secured Party, or, upon notice from the OPNY
Administrative Agent to the Securities Intermediary of the occurrence of an OPNY
Termination Event, issued by the Junior Secured Party, relating to any Account,
the Securities Intermediary shall comply with such entitlement order without
further consent by the Debtor or any other person.
2
5. CHOICE OF LAW. Both this Agreement and the Accounts shall be governed by
the laws of the State of New York. Regardless of any provision in any other
agreement, for purposes of the UCC, the State of New York shall be deemed to be
the Securities Intermediary's jurisdiction and the Accounts (as well as the
securities entitlements related thereto) shall be governed by the laws of the
State of New York.
6. AMENDMENTS. No amendment or modification of this agreement or waiver of
any right hereunder shall be binding on any party hereto unless it is in writing
and is signed by all of the parties hereto.
7. NOTICE OF ADVERSE CLAIM . Except for the claims and interest of the
Senior Secured Party, the Junior Secured Party and of the Debtor in the
Accounts, the Securities Intermediary does not know of any claim to, or interest
in, the Accounts or in any "financial asset" (as defined in ss. 8-102(a)(9) of
the UCC) credited thereto. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against any Account or in any financial asset
carried therein, the Securities Intermediary will promptly notify the Senior
Secured Party, the Junior Secured Party and the Debtor thereof.
8. TAX REPORTING. All items of income, gain, expense and loss recognized in
the Accounts shall be reported to the Internal Revenue Service and all state and
local taxing authorities under the name and taxpayer identification number of
the Debtor.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES
INTERMEDIARY. The Securities Intermediary hereby makes the following
representations, warranties and covenants:
(a) The Accounts have been established as set forth in Section 2 above and
each Account will be maintained in the manner set forth herein until termination
of this Agreement. The Securities Intermediary shall not change the name or
account number of any Account without the prior written consent of the Senior
Secured Party.
(b) No financial asset is or will be registered in the name of Debtor,
payable to its order, or specially endorsed to it, except to the extent such
financial asset has been endorsed to the Securities Intermediary or in blank.
(c) The Securities Intermediary has not entered into, and until the
termination of this agreement will not enter into, any agreement with any other
person relating to any of the Accounts and/or any financial assets credited
thereto pursuant to which it has agreed, or will agree, to comply with
entitlement orders (as defined in ss. 8-102(a)(8) of the UCC) of such person.
The Securities Intermediary has not entered into any other agreement with the
Debtor, the Senior Secured Party or the Junior Secured Party purporting to limit
or condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in Section 4 hereof.
10. SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective corporate
successors or heirs and personal representatives.
3
11. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two days after being sent by certified or registered United States
mail, return receipt requested, postage prepaid, addressed to the party at the
address set forth below.
Debtor: Orion Power New York, L.P.
1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President - Finance
Ph.:(713)207-3160
Fax:(713)207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
Senior Secured Party,
Junior Secured Party,
the OPNY Administrative Agent
and Securities Intermediary:
Bank of America, N.A.
101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attention: Laura S. Ryan
Any party may change his address for notices in the manner set forth above.
12. TERMINATION. The rights and powers granted herein to each of the Senior
Secured Party and the Junior Secured Party have been granted in order to perfect
its security interests in the Accounts and all financial assets credited to the
Accounts, are powers coupled with an interest and will neither be affected by
the bankruptcy of Debtor nor by the lapse of time. The obligations of the
Securities Intermediary hereunder shall continue in effect until the Senior
Secured Party or the Junior Secured Party notifies the Securities Intermediary
in writing that the security interests of the Senior Secured Party and the
Junior Secured Party in the Accounts have been terminated pursuant to the terms
of the Intercreditor Agreement and the other Financing Documents.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
4
14. SECURITIES INTERMEDIARY'S JURISDICTION. This Agreement shall be the
only agreement entered into by the parties that governs both the Securities
Intermediary's jurisdiction and the Accounts.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A., as OPNY
Administrative Agent and
Senior Secured Party
By:
------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
BANK OF AMERICA, N.A., as OPMW
Administrative Agent and
Junior Secured Party
By:
------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
BANK OF AMERICA, N.A. as
Securities Intermediary
By:
------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
Schedule 1
To
Amended and Restated
Securities Account
Control Agreement
Accounts
Account Name Account Number
------------ --------------
Orion Power New York
Revenue Account 3751355962
Orion Power New York
Operating Account 3751355975
Orion Power New York
Debt Service Account 3751356039
Orion Power New York
Extraordinary Proceeds Account 3751356042
Orion Power New York
Insurance Proceeds Account 3751356055
Orion Power New York
Major Maintenance Reserve Account 3751356068
Orion Power New York
Debt Service Reserve Account 3751356071
Orion Power New York
Prepayment Account 3751356084
Orion Power New York
Distribution Account 3751356097
Orion Power New York
O&M Reserve Account 3751365538
Astoria Generating Revenue Account 3751356107
Erie Boulevard Revenue Account 3751356110
Carr Street Generating Revenue Account 3751356123
Astoria Generating Operating Account 3751356136
Erie Boulevard Operating Account 3751356149
Carr Street Generating Operating Account 3751356152
Erie Boulevard Loan Proceeds Sub-Account 3751355991
Carr Street Generating Loan Proceeds Sub-Account 3751356000
Astoria Generating Loan Proceeds Sub-Account 3751356013
Schedule 2
To
Amended and Restated
Securities Account
Control Agreement
Closed Accounts
Account Name Account Number
------------ --------------
Orion Power New York
Loan Proceeds Account 3751355988
Orion Power New York
Equity Proceeds Account 3751356026
i
EXHIBIT G-2 TO
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
[FORM OF]
SECURITIES ACCOUNT CONTROL AGREEMENT
This Securities Account Control Agreement, dated as of October 28, 2002
(this "Agreement"), among Orion Power Capital, LLC (the "Debtor" ), Bank of
America, N.A., as Collateral Agent and as the secured party (in such capacity,
the "Secured Party") and Bank of America, N.A., as the securities intermediary
(in such capacity, the "Securities Intermediary"). Capitalized terms used but
not defined herein shall have the meaning assigned in the Deposit Account
Agreement, dated as of October 28, 2002 (the "Deposit Account Agreement"),
between the Debtor and the Secured Party. All references herein to the "UCC"
shall mean the Uniform Commercial Code as in effect in the State of New York.
1. ESTABLISHMENT OF SECURITIES ACCOUNT. The Securities Intermediary
hereby confirms that (i) the Securities Intermediary has established those
accounts set forth on Schedule 1 attached hereto (such accounts and any
successor accounts the "Accounts"), (ii) each Account is a "securities account"
as such term is defined in ss. 8-501(a) of the UCC, (iii) the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Debtor as
entitled to exercise the rights that comprise any financial asset credited to
the Accounts, (iv) all property delivered to the Securities Intermediary
pursuant to the Deposit Account Agreement, or any other Subsidiary Financing
Document will be promptly credited to the Accounts, and (v) all securities or
other property underlying any financial assets credited to the Accounts shall be
registered in the name of the Securities Intermediary, indorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
financial asset credited to any Account be registered in the name of the Debtor,
payable to the order of the Debtor or specially indorsed to the Debtor except to
the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank.
2. "FINANCIAL ASSETS" ELECTION. The parties hereto hereby agree that
each item of property (whether investment property, financial asset, security,
instrument or cash) credited to the Accounts shall be treated as a "financial
asset" within the meaning of ss. 8-102(a) (9) of the UCC.
3. ENTITLEMENT ORDERS. If at any time the Securities Intermediary shall
receive an "entitlement order" (within the meaning of ss. 8-102(a) (8) of the
UCC) issued by the Secured Party and relating to any Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Debtor or any other person.
4. CHOICE OF LAW. Both this Agreement and the Accounts shall be
governed by the laws of the State of New York. Regardless of any provision in
any other agreement, for
purposes of the UCC, the State of New York shall be deemed to be the Securities
Intermediary's jurisdiction and the Accounts (as well as the securities
entitlements related thereto) shall be governed by the laws of the State of New
York.
5. AMENDMENTS. No amendment or modification of this agreement or waiver
of any right hereunder shall be binding on any party hereto unless it is in
writing and is signed by all of the parties hereto.
6. NOTICE OF ADVERSE CLAIM . Except for the claims and interest of the
Secured Party and of the Debtor in the Accounts, the Securities Intermediary
does not know of any claim to, or interest in, the Accounts or in any "financial
asset" (as defined in ss. 8-102(a) of the UCC) credited thereto. If any person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against any
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Secured Party and Debtor thereof.
7. TAX REPORTING. All items of income, gain, expense and loss
recognized in the Accounts shall be reported to the Internal Revenue Service and
all state and local taxing authorities under the name and taxpayer
identification number of the Debtor.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES
INTERMEDIARY. The Securities Intermediary hereby makes the following
representations, warranties and covenants:
(a) The Accounts have been established as set forth in Section 1 above
and each Account will be maintained in the manner set forth herein until
termination of this Agreement. The Securities Intermediary shall not change the
name or account number of any Account without the prior written consent of the
Secured Party.
(b) No financial asset is or will be registered in the name of Debtor,
payable to its order, or specially endorsed to it, except to the extent such
financial asset has been endorsed to the Securities Intermediary or in blank.
(c) The Securities Intermediary has not entered into, and until the
termination of this agreement will not enter into, any agreement with any other
person relating to any of the Accounts and/or any financial assets credited
thereto pursuant to which it has agreed, or will agree, to comply with
entitlement orders (as defined in ss. 8-102(a) (8) of the UCC) of such person.
The Securities Intermediary has not entered into any other agreement with the
Debtor or the Secured Party purporting to limit or condition the obligation of
the Securities Intermediary to comply with entitlement orders as set forth in
Section 3 hereof.
9. SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective corporate
successors or heirs and personal representatives.
2
10. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two days after being sent by certified or registered United States
mail, return receipt requested, postage prepaid, addressed to the party at the
address set forth below.
Debtor: Orion Power Capital, LLC
1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President -
Finance
Ph.:(713)207-3160
Fax:(713)207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
Secured Party
and Securities Intermediary: Bank of America, N.A.
101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attention: Laura S. Ryan
Any party may change his address for notices in the manner set forth above.
11. TERMINATION. The rights and powers granted herein to the Secured
Party have been granted in order to perfect its security interests in the
Accounts and all financial assets credited to the Accounts, are powers coupled
with an interest and will neither be affected by the bankruptcy of Debtor nor by
the lapse of time. The obligations of the Securities Intermediary hereunder
shall continue in effect until the security interests of the Secured Party in
the Accounts have been terminated pursuant to the terms of the Deposit Account
Agreement and the Secured Party has notified the Securities Intermediary of such
termination in writing.
12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
13. SECURITIES INTERMEDIARY'S JURISDICTION. This Agreement shall be the
only agreement entered into by the parties that governs both the Securities
Intermediary's jurisdiction and the Accounts.
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
ORION POWER CAPITAL, LLC
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A., as Collateral Agent
and Secured Party
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
BANK OF AMERICA, N.A. as Securities
Intermediary
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT H -1 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
AMENDED AND RESTATED
ASSIGNMENT AND SECURITY AGREEMENT
between
ORION POWER NEW YORK, L.P.
and
BANK OF AMERICA, N.A.,
as Administrative Agent
Dated as of October 28, 2002
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.....................................................................................2
SECTION 2. ASSIGNMENT; SECURITY INTERESTS; INSURANCE PROCEEDS..............................................5
2.01 PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTERESTS.................................................5
2.02 POWER OF ATTORNEY...............................................................................8
SECTION 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS..............................................10
3.01 NECESSARY FILINGS..............................................................................11
3.02 NO LIENS.......................................................................................11
3.03 OTHER FINANCING STATEMENTS.....................................................................11
3.04 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE, RECORDS..................................11
3.05 RECOURSE.......................................................................................12
3.06 CONSENTS.......................................................................................12
3.07 PLEDGED PERMITS................................................................................13
3.08 FARM PRODUCTS; TIMBER; AS-EXTRACTED COLLATERAL.................................................14
3.09 COMMERCIAL TORT CLAIMS.........................................................................14
3.10 LETTERS OF CREDIT..............................................................................14
3.11 CHATTEL PAPER..................................................................................14
3.12 BANK ACCOUNTS..................................................................................14
SECTION 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS........................14
4.01 ADDITIONAL REPRESENTATIONS AND WARRANTIES......................................................14
4.02 MAINTENANCE OF RECORDS.........................................................................15
4.03 PAYMENTS UNDER ASSIGNED AGREEMENTS, RECEIVABLES AND GENERAL INTANGIBLES........................15
4.04 DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC.........................................15
4.05 MODIFICATION OF TERMS, ETC.....................................................................15
4.06 COLLECTION.....................................................................................16
SECTION 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADEMARKS...............................16
5.01 INFRINGEMENTS..................................................................................16
5.02 OTHER PATENTS, COPYRIGHTS AND TRADEMARKS.......................................................17
5.03 REMEDIES.......................................................................................17
SECTION 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT COLLATERAL; INSURANCE.............17
6.01 PROTECTION OF THE ADMINISTRATIVE AGENT'S INTERESTS.............................................17
i
6.02 FURTHER ACTIONS................................................................................17
6.03 FINANCING STATEMENTS...........................................................................18
SECTION 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT...................................................18
7.01 REMEDIES; OBTAINING THE ASSIGNMENT COLLATERAL UPON DEFAULT.....................................18
7.02 REMEDIES, DISPOSITION OF THE ASSIGNMENT COLLATERAL.............................................19
7.03 WAIVER OF CLAIMS...............................................................................20
7.04 APPLICATION OF PROCEEDS........................................................................21
7.05 REMEDIES CUMULATIVE............................................................................21
7.06 DISCONTINUANCE OF PROCEEDINGS..................................................................21
7.07 GRANT OF LICENSE OR SUB-LICENSE TO USE PATENT, TRADEMARK, COPYRIGHT AND LICENSE COLLATERAL.....22
SECTION 8. INDEMNITY; EXPENSES............................................................................22
SECTION 9. MISCELLANEOUS..................................................................................22
9.01 NOTICES........................................................................................22
9.02 WAIVER, AMENDMENT; SEVERABILITY................................................................23
9.03 OBLIGATIONS ABSOLUTE...........................................................................23
9.04 SUCCESSORS AND ASSIGNS.........................................................................24
9.05 HEADINGS DESCRIPTIVE, ETC......................................................................24
9.06 GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE............................................24
9.07 THE BORROWER'S DUTIES..........................................................................26
9.08 TERMINATION; RELEASE...........................................................................26
9.09 EXECUTION IN COUNTERPARTS......................................................................26
9.10 APPLICABILITY OF DEPOSIT ACCOUNT AGREEMENT.....................................................27
9.11 LIMITATION OF RECOURSE.........................................................................27
9.12 AMENDMENT AND RESTATEMENT......................................................................27
Schedules
Schedule 1 Commercial Tort Claim Judgments
Schedule 2 Name; Jurisdiction of Organization; Location
Exhibits
Exhibit A Assignment of Security Interest in United States Patents
and Trademarks
Exhibit B Assignment of Security Interest in United States Copyrights
ii
AMENDED AND RESTATED
ASSIGNMENT AND SECURITY AGREEMENT
AMENDED AND RESTATED ASSIGNMENT AND SECURITY AGREEMENT, dated as of
October 28, 2002 (this "Agreement"), between ORION POWER NEW YORK, L.P., a
limited partnership organized under the laws of the State of Delaware (the
"Borrower"), and BANK OF AMERICA, N.A., as administrative agent (in such
capacity, together with any successors and assigns, the "Administrative Agent")
for the benefit of the Secured Parties (as defined in the Credit Agreement).
W I T N E S S E T H:
WHEREAS, the Borrower has entered into an Amended and Restated Credit
Agreement, dated as of the Restructuring Effective Date (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with the Administrative Agent, Banc of America Securities LLC and
BNP Paribas, as lead arrangers and joint book runners, Bank of America, N.A., as
issuing bank, BNP Paribas, as syndication agent, Union Bank of California, N.A.,
CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
documentation agents, and the Lenders named on the signature pages thereto and
from time to time parties thereto (the "Lenders"), pursuant to which the Lenders
have agreed, inter alia, to renew, modify and extend credit facilities that were
issued to the Borrower to finance a portion of the purchase price of the
Portfolio Assets (as defined in the Credit Agreement) and to provide working
capital availability to the Borrower;
WHEREAS, it is a condition precedent to the obligations of the Lenders
under the Credit Agreement that this Agreement shall have been entered into by
the parties hereto and shall be in full force and effect; and
WHEREAS, the Borrower, each Subsidiary of the Borrower and the
Administrative Agent have entered into that certain Amended and Restated Deposit
Account Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "Deposit
Account Agreement"), providing for, among other things, the establishment of the
Accounts (as defined in the Credit Agreement) and the application of the
proceeds of the Collateral (as hereinafter defined);
NOW, THEREFORE, in consideration of the benefits to the Borrower, the
receipt and sufficiency of which are hereby acknowledged, the Borrower hereby
makes the following assignments, representations and warranties to the
Administrative Agent, for the benefit of the Secured Parties, and hereby
covenants and agrees with the Administrative Agent, in each case, as follows:
Section 1. DEFINITIONS. (a) For all purposes of this Agreement, (i)
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement, (ii) unless otherwise specified or otherwise defined
herein or in the Credit Agreement, terms used in Article 9 of the UCC (as
hereinafter defined) are used herein as therein defined and (iii) the principles
of construction set forth in Section 1.04 of the Credit Agreement shall apply
hereto.
(b) In addition, the following terms shall have the meanings herein
specified:
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement.
"AGREEMENT" shall mean this Amended and Restated Assignment and
Security Agreement, as amended, supplemented or otherwise modified from time to
time.
"ASSIGNED AGREEMENTS" shall have the meaning provided in Section
2.01(a)(xi).
"ASSIGNMENT COLLATERAL" shall have the meaning provided in Section
2.01(a)(xiv).
"ASSIGNMENT REVENUES" shall have the meaning provided in Section
2.01(a)(i).
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"COLLATERAL" shall have the meaning provided in Section 2.01(a).
"CONTRACT RIGHTS" shall mean all rights of the Borrower (including all
rights to payment) under each Assigned Agreement.
"COPYRIGHT LICENSES" shall mean any written agreement (a) granting any
right to any third party under any Copyright of the Borrower or (b) granting any
right to the Borrower under any Copyright of any third party.
"COPYRIGHTS" shall mean all right, title and interest of any person in
and to all of the following, whether now owned or hereafter acquired:
(i) the federally registered United States and foreign copyrights
and any renewals thereof;
(ii) all other United States and foreign copyrights;
(iii) all registrations and applications for registration of any
such copyright in the United States or any other country,
including registrations, recordings, supplemental derivative or
collective work registrations and pending applications for
registrations in the United States Copyright Office;
2
(iv) all computer programs, computer data bases, computer program
flow diagrams, source codes and object codes related to any or
all of the foregoing; and
(v) all tangible property embodying or incorporating any or all of
the foregoing.
"CREDIT AGREEMENT" shall have the meaning provided in the Recitals of
this Agreement.
"DEPOSIT ACCOUNT AGREEMENT" shall have the meaning provided in the
Recitals of this Agreement.
"DOCUMENTS" shall mean all of the books, ledgers, records, computer
programs, tapes, discs, punch cards, data processing software, transaction
files, master files and related property and rights (including computer and
peripheral equipment) of the Borrower pertaining to or referencing the
Collateral.
"EQUIPMENT" shall have the meaning provided in Section 2.01(a)(ii).
"GENERAL INTANGIBLES" shall have the meaning provided in Section
2.01(a)(vi).
"INVENTORY" shall have the meaning provided in Section 2.01(a)(iii).
"LENDERS" shall have the meaning provided in the Recitals of this
Agreement.
"LICENSE" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense as to which the Borrower is now or
hereafter a party.
"NON-RECOURSE PARTY" shall have the meaning provided in Section 9.11.
"ORIGINAL AGREEMENT" shall have the meaning provided in Section 9.12.
"PATENT LICENSE" shall mean any written agreement (i) granting any
right to any third party under any Patent of the Borrower or (ii) granting any
right to the Borrower under any Patent of any third party.
"PATENTS" shall mean all right, title and interest of any person in and
to all of the following, whether now owned or hereafter acquired:
(i) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country;
(ii) all other letters patent of the United States or any other
country and all other applications for letters patent of the
United States or any other country; and
3
(iii) all reissues, continuations, divisions, continuations-in-part
or extensions thereof and the inventions disclosed therein,
including the right to make, use and/or sell the inventions
disclosed therein.
"PLEDGED PERMITS" shall have the meaning provided in Section
2.01(a)(vii).
"PROCEEDS" shall mean all proceeds, including (i) whatever is received
upon any collection, exchange, sale or other disposition of any of the
Collateral and any property into which any of the Collateral is converted,
whether cash or non-cash, (ii) any and all payments or other property (in
whatever form) made or due and payable on account of any insurance, indemnity,
warranty or guaranty payable to the Borrower with respect to any of the
Collateral, (iii) any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person or entity
as a result of the destruction, loss, theft or other involuntary conversion of
whatever nature of any asset or property which constitutes Collateral, (iv) any
and all payments (in any form whatsoever) made or due and payable in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Collateral by any Governmental Authority, (v) any claim of
the Borrower against third parties (A) for past, present or future infringement
of any Patent now or hereafter owned by the Borrower or licensed under a Patent
License, (B) for past, present or future infringement or dilution of any
Trademark now or hereafter owned by the Borrower or licensed under a Trademark
License or injury to the goodwill associated with any Trademark now or hereafter
owned by the Borrower, (C) for past, present or future infringement of any
Copyright now or hereafter owned by the Borrower or licensed under a Copyright
License and (D) for past, present or future breach of any License and (vi) any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
"RECEIVABLES" shall have the meaning provided in Section 2.01(a)(iv).
"RELATED CONTRACTS" shall have the meaning provided in Section
2.01(a)(v).
"SECURED OBLIGATIONS" shall mean the Obligations.
"TRADEMARK LICENSE" shall mean any written agreement (a) granting any
right to any third party under any Trademark of the Borrower or (b) granting any
right to the Borrower under any Trademark of any third party.
"TRADEMARKS" shall mean all of the following now or hereafter owned by
any person (i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications filed in connection
therewith, including registrations and applications in the United States Patent
and Trademark Office, any State of the United States or any other country or any
political subdivision thereof, and all extensions or renewals thereof and (ii)
all goodwill associated therewith.
4
"UCC" shall mean at any time the Uniform Commercial Code as the same
may from time to time be in effect in the State of New York; provided that if,
by reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
Section 2. ASSIGNMENT; SECURITY INTERESTS; INSURANCE PROCEEDS.
2.01 Pledge; Assignment; Grant of Security Interests. (a) To secure the
prompt and complete payment and performance when due by the Borrower of all of
the Obligations, including all amounts payable or to become payable to the
Secured Parties by the Borrower under the Financing Documents when and as the
same shall become due and payable (whether by acceleration or otherwise) in
accordance with the terms thereof, the Borrower hereby assigns and pledges to
the Administrative Agent for the benefit of the Secured Parties, and hereby
grants to the Administrative Agent for the benefit of the Secured Parties, a
security interest in, and lien on, all of the Borrower's right, title and
interest in and to the following, whether now owned or hereafter acquired (the
"Collateral"):
(i) all cash income and receipts derived from the ownership
and ordinary course of operation of the Portfolio Assets, including
revenues from the sale of energy and other products and services
(including electric capacity, ancillary services and transmission
services and products), payments received by the Borrower from any
Subsidiary pursuant to the Intercompany Notes, Proceeds of business
interruption insurance, interest and other income earned on amounts on
deposit in the Accounts and any amounts realized by the Borrower under
any Interest Hedge Contract (all of the above, collectively, the
"Assignment Revenues");
(ii) (A) all equipment, wherever located, now or hereafter
existing, (B) all fixtures, (C) to the extent not included in the
foregoing or in clause (iii), all goods, (D) all parts of any of the
foregoing items (A)-(C) and all attachments and accessions thereto,
including to the extent not included in the foregoing, all other
accessions and (E) all rights in any of the foregoing items (A)-(D) now
or hereafter owned or possessed by the Borrower for its benefit (the
property described in this clause (ii) being the "Equipment");
(iii) all inventory and other tangible personal property held
for sale by the Borrower, in all of it is forms, wherever located, and
rights therein owned or possessed by the Borrower or for its benefit
including but not limited to, (A) with respect to the generation of
electric power by the Borrower, raw materials and work in process
therefor, finished goods and by-products thereof, and materials used or
consumed in the manufacture or production thereof, (B) goods in which
the Borrower has an interest in mass or a joint or other interest or
right of any kind and (C) goods which are returned to or repossessed by
the Borrower, and all
5
accessions to any of the foregoing and products thereof and documents
relating thereto (the property described in this clause (iii) being the
"Inventory");
(iv) all accounts, Contract Rights, chattel paper, Documents,
instruments, letters of credit, letter-of-credit rights, documents and
other rights or obligations of every kind, now or hereafter existing,
whether or not arising out of or in connection with any sale, lease,
exchange or other disposition of electric power, or other Inventory,
goods or the provision or rendering of any service by or to the
Borrower and all tax refunds, tax refund claims or guarantee claims
held by or granted to the Borrower (any and all such accounts, Contract
Rights, chattel paper, Documents, instruments, obligations and other
property described in this clause (iv) being the "Receivables");
(v) all rights now or hereafter existing in and to all
security agreements, leases and other contracts securing or otherwise
relating to any Receivables (the property described in this clause (v)
being the "Related Contracts");
(vi) all general intangibles, intellectual or other property
of any kind or nature now owned or hereafter acquired by the Borrower,
including payment intangibles, software, permits, reversionary
interests in pension plan assets, inventions, designs, Patents,
Copyrights, Trademarks, Licenses and associated goodwill, trade
secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software,
customer lists, subscription lists, databases and related
documentation, registrations, franchises, and all other intellectual or
other similar property rights not otherwise described above, but
excluding Receivables (the property described in this clause (vi) being
the "General Intangibles");
(vii) all generating, electricity, environmental and other
licenses, permits and approvals of any federal, state, municipal or
other governmental department, commission, board, bureau, agency, court
or other instrumentality, domestic or foreign, now or hereafter held by
the Borrower or in which the Borrower may have an interest and relating
to the operation, maintenance, or use and occupancy of the Portfolio
Assets, except that any such license, permit or approval which as a
matter of law is not assignable is hereby excluded from such lien and
security interest to the extent that and for such time as the same
shall not be so assignable, and all rights (whether or not earned by
performance) under any franchises, documents, licenses, contracts or
agreements now owned or hereafter acquired with the rights to all
renewals thereof assignable by law (the property described in this
clause (vii) being the "Pledged Permits");
(viii) (A) all policies of insurance, now or hereafter held by
the Borrower (as required under Section 5.06 of the Credit Agreement
and the other Financing Documents), including casualty and liability,
business interruption and any title insurance, and including all
Proceeds therefrom, and (B) all rights, now
6
or hereafter held, by the Borrower to any warranties of any
manufacturer or contractor or any other Person;
(ix) all books, correspondence, credit files, records,
invoices and other Documents, now or hereafter in the possession or
control of the Borrower or any Person acting for the Borrower and
relating to the Portfolio Assets and all reports of the Independent
Engineer or any other Person and all other reports relating to the
acquisition, operations, viability, performance, maintenance and output
of the Portfolio Assets;
(x) all balances, credits, deposits, deposit and securities
accounts, investment property, money or moneys whether now existing or
hereafter held in the name or on behalf of the Borrower, whether (A) in
the possession or control of the Borrower, (B) in the possession or
control of, or in transit to, the Administrative Agent, or (C) held by
third parties; all monies, documents, instruments, investment property
and financial assets required to be deposited with or delivered to the
Administrative Agent or any securities intermediary pursuant to any
term of this Agreement or any of the other Financing Documents,
including all amounts held or deposited in or credited to the Accounts
and all cash and all monies and Permitted Investments and other
financial assets and investment property and instruments held in or
credited to such Accounts;
(xi) each Project Contract to which it is a party and each
other lease, power, fuel, transportation, management or other agreement
now existing or hereafter entered into by the Borrower relating to the
acquisition, operation, maintenance or use and occupancy of the
Portfolio Assets, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and of
this Agreement and the Credit Agreement (the agreements described in
this clause (xi), as so amended, supplemented or modified, being the
"Assigned Agreements"), including all rights of the Borrower (A) to
receive moneys due and to become due under or pursuant to the Assigned
Agreements, to compel performance and otherwise to exercise all
remedies thereunder, including all rights to make determinations, to
exercise any election or option contained in such agreements (including
termination thereof), to give or receive any notice or consent, to
demand and receive any property which is the subject of any of the
Assigned Agreements, to file any claims and generally to take any
action which (in the opinion of the Administrative Agent or any Secured
Party) may be necessary or advisable in connection with any of the
foregoing, and (B) to receive the Proceeds of any claim for damages
arising out of or for breach of any Assigned Agreement and Proceeds of
any insurance, indemnity, warranty or guaranty with respect to the
Assigned Agreements;
(xii) all commercial tort claims, including those more
particularly described in Schedule 1 hereto;
7
(xiii) to the extent not included in clauses (i) through (xii)
above, or excepted therein, all other personal property of the Borrower
of any kind or description whatsoever, wherever located, whether now
owned or hereafter acquired, tangible or intangible; and
(xiv) all accessions and additions to, substitutions for, and
all replacements, products and Proceeds of any and all of the
Collateral (including any proceeds which constitute property of the
types described in clauses (i)-(xiii), above) and, to the extent not
otherwise included, all (A) payments under insurance (whether or not
the Administrative Agent is the loss payee thereof or an additional
insured thereunder), and any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
Collateral, (B) any other amounts from time to time paid or payable
under or in connection with any of the Collateral, (C) cash and (D) all
supporting obligations (all of the foregoing items in clauses (ii) -
(xiii) above and in this clause (xiv), collectively, the "Assignment
Collateral").
(b) The sale, assignment, conveyance, setting over, pledge and transfer
to the Administrative Agent under this Agreement extends to all Assignment
Revenues which the Borrower may acquire at any time during the continuation of
this Agreement. The security interest of the Administrative Agent held under
this Agreement extends to all Assignment Collateral which the Borrower may
acquire at any time during the continuation of this Agreement.
(c) The Borrower agrees and confirms that the Consents constitute (i)
notice to each party to the Assigned Agreements that are the subject of a
Consent of (x) the sale assignment, conveyance, setting over, pledge and
transfer by the Borrower of the Assignment Revenues and the assignment, charge,
conveyance, setting over, pledge and transfer by the Borrower of all of the
Borrower's right, title and interest in and to the Assignment Revenues and (y)
the assignment, charge, conveyance, setting over, pledge and transfer by the
Borrower by way of security, of all the Borrower's right, title and interest in
and to the Assignment Collateral and (ii) unconditional and irrevocable
instructions from the Borrower to each such party, debtor or obligor that all
payments due or to become due and all amounts payable to the Borrower thereunder
shall, until the Obligations are indefeasibly paid in full in cash, be made
directly to the Revenue Account.
(d) The Assignment Revenues received pursuant to Section 2.01(a)(i)
above shall be applied in accordance with the provisions of the Holdco Deposit
Account Agreement and the Deposit Account Agreement.
2.02 Power of Attorney. The Borrower hereby irrevocably appoints the
Administrative Agent as its attorney-in-fact with right of substitution, so that
the Administrative Agent or any other Person empowered by the Administrative
Agent shall be authorized, without need of further authorization from the
Borrower, upon the occurrence and during the continuance of an Event of Default
and in preservation of the rights of the Administrative Agent and the Lenders
hereunder so long as such Event of Default is continuing and has not been waived
by an appropriate vote or other action by the Required Lenders (any action or
exercise of powers,
8
rights or remedies under this Section 2.02 to be subject to, and in accordance
with, the terms of the Credit Agreement and all applicable Requirements of Law):
(a) to effect the sale of any of the Assignment Collateral in
one or more transactions to the extent permitted by applicable
Requirements of Law and in any commercially reasonable manner as may be
determined by the attorney-in-fact, which, subject to the foregoing,
may include the direct sale without public auction of any such
Assignment Collateral at such price, and upon such terms as may be
determined by the attorney-in-fact;
(b) to enter upon any premises where the Assignment Collateral
or any part thereof may be located without the need for a court order
or other form of authority otherwise than upon the authority granted
herein;
(c) to take and retain actual possession and control of any
such Assignment Collateral as receivers without bond or otherwise, and
transport any of it to any location as determined by such
attorney-in-fact;
(d) to make any repairs, additions and improvements on the
Assignment Collateral as such attorney-in-fact shall reasonably deem
proper or necessary;
(e) to administer, manage and use any of the Assignment
Collateral;
(f) to conclude any agreement and collect any monies
thereunder or otherwise due to the Borrower in respect of, or generated
through the usage of, any of the Assignment Collateral;
(g) to exercise in any commercially reasonable manner any of
the rights of the Borrower arising under or in connection with the
Assigned Agreements and to designate or delegate to another Person or
entity, in substitution of such attorney-in-fact, the exercise in any
commercially reasonable manner of such rights of the Borrower, under
such terms as such attorney-in-fact shall deem proper or necessary;
(h) to collect, claim and receive all monies and avail of all
benefits that accrue, and that may become due and payable to the
Borrower under the Assigned Agreements and to hold the same as security
for the timely payment and discharge by the Borrower of the Secured
Obligations, and the faithful performance of the covenants and
obligations of the Borrower as set forth in any of the Financing
Documents;
(i) to send written notice to all the obligors, instructing
any or all of them to pay all monies due and owing to the Borrower from
time to time under the Assigned Agreements, to the Revenue Account or
such other account as may be required or contemplated by the Deposit
Account Agreement;
(j) to institute and maintain such suits and proceedings as
such attorney-in-fact shall deem expedient to prevent any impairment of
the Assignment Collateral or to preserve and protect such
attorney-in-fact's interest therein;
9
(k) to execute and deliver such deeds of conveyance or sale as
may be necessary or proper for the purpose of conveying full title and
ownership, free from any claims and rights of the Borrower, to any of
the Assignment Collateral, after foreclosure thereof; and
(l) in general, to sign such agreements and documents and
perform such acts and things required, necessary or, in the opinion of
such attorney-in-fact, advisable, to fully accomplish the purpose
hereof.
The Borrower hereby confirms and ratifies any and all actions and
things performed or done by the Administrative Agent as the Borrower's
attorney-in-fact or any of its representatives in each case pursuant to the
powers granted hereunder.
This special power of attorney shall be deemed coupled with an
interest, and cannot be revoked by the Borrower until no Lender shall have any
Commitment outstanding and until the Notes, together with interest, and all
other Obligations are indefeasibly paid in full in cash. Upon the occurrence and
during the continuance of any Event of Default, the Borrower shall abstain from
exercising any rights under any of the Assigned Agreements which shall be
inconsistent with the exercise of the rights and functions herein granted to the
Administrative Agent as the attorney-in-fact, including abstaining from
collecting, claiming and receiving any monies under the Assigned Agreements,
provided, that, nothing herein shall prevent the Borrower from, except during
the exercise by the Administrative Agent of any such rights and functions,
undertaking the Borrower's operations in the ordinary course of business in
accordance with the Assigned Agreements, including collecting, claiming and
receiving monies under the Assigned Agreements. To the extent that the Borrower
shall receive any monies in respect thereof, notwithstanding the provisions of
this Section 2.02, the Borrower shall be deemed to have received such funds for
the account of the Administrative Agent and shall hold the same in trust and
promptly pay the same to the Administrative Agent for deposit in the Revenue
Account (or other account as may be required or contemplated by the Deposit
Account Agreement) and application pursuant to the Deposit Account Agreement.
All reasonable costs, expenses, charges and fees paid or incurred by
the Administrative Agent in the exercise of any of the rights, remedies or
powers granted hereunder shall be for the account of the Borrower, and the
Borrower undertakes promptly on demand to pay the same or, as the case may be,
to reimburse the Administrative Agent and/or its agents, representatives,
successors and assignees as the case may be, for any monies paid by it with
interest thereon at the Default Rate from the date the same shall have been paid
by the Administrative Agent and/or its agents, representatives, successors and
assigns until actually paid by the Borrower to the extent that there are then
insufficient funds available in the Revenue Account for this purpose.
Section 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Borrower represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement
and the satisfaction of the Secured Obligations, as follows:
10
3.01 Necessary Filings. As of the Restructuring Effective Date, all
filings, registrations, recordings and control necessary or appropriate to
create, (i) the sale, assignment, conveyance, setting over and transfer of the
Assignment Revenues by the Borrower to the Administrative Agent and (ii) the
security interest granted by the Borrower to the Administrative Agent hereby in
respect of the Assignment Collateral have been made or accomplished, and (A) the
sale, assignment, conveyance, setting over and transfer of the Assignment
Revenues to the Administrative Agent pursuant to this Agreement constitutes a
valid and enforceable sale, assignment, conveyance, setting over and transfer
and (B) the security interest granted to the Administrative Agent pursuant to
this Agreement in and to the Assignment Collateral constitutes a valid,
enforceable, and upon the filing of (1) all Financing Statements in the filing
offices noted on Schedule 2 and (2) if applicable, fully executed Assignments of
Security Interests, substantially in the forms of Exhibits A and B hereto, as
applicable, by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17
U.S.C. ss.ss. 205, as applicable, to perfect the security interests granted to
the Administrative Agent and the Secured Parties in the federally registered
Copyrights, Patents, Trademarks and Licenses, perfected security interest in the
Assignment Revenues and Assignment Collateral (except in each case, for (x)
Assignment Collateral which is not material, and (y) vehicles and any emergency
response boat) superior and prior to the rights of all other Persons therein
and, in each case, subject to no other Liens, sales, assignments, conveyances,
settings over or transfers other than Permitted Liens.
3.02 No Liens. The Borrower is, as of the Restructuring Effective Date,
as to the Assignment Revenues and Assignment Collateral, and the Borrower is, or
will be, as the case may be, as to any Assignment Collateral acquired by it from
time to time after the date hereof, the owner of all such Assignment Revenues
and Assignment Collateral free from any Lien or other right, title or interest
of any Person (other than Permitted Liens) and the Borrower shall defend such
Assignment Revenues and Assignment Collateral against all claims and demands of
all Persons at any time claiming the same or any interest therein adverse to the
Administrative Agent. Without limiting the generality of the foregoing, the
Borrower shall not assign, charge, convey, sell, set over, transfer, or grant
any security interest in the Assigned Agreements, any of the other Assignment
Collateral or any of the Assignment Revenues other than pursuant to the Security
Documents or as expressly permitted by the Credit Agreement.
3.03 Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Assignment Revenues or the Assignment Collateral and so long as any of the
Secured Obligations remain unpaid or any Commitments remain outstanding, the
Borrower will not authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Assignment Revenues or the
Assignment Collateral, in each case, except financing statements filed or to be
filed in respect of and covering the security interests granted hereby, or by
the other Security Documents, by the Borrower or Permitted Liens.
3.04 Jurisdiction of Organization; Chief Executive Office, Records. (a)
The jurisdiction of organization of the Borrower, the exact legal name of the
Borrower, any other
11
names the Borrower has used in the last five years and the addresses of the
Borrower's chief executive office currently and for the last five years are set
forth on Schedule 2 hereto. The Borrower will not change its name or its
jurisdiction of organization or move its chief executive office except to such
new name, jurisdiction or location as may be permitted in accordance with
Section 3.04(b). The originals of all documents evidencing all Receivables,
General Intangibles and Contract Rights of the Borrower and the only original
books of account and records of the Borrower relating thereto are, and will
continue to be, kept at the locations disclosed in Schedule 2, or at such new
locations as the Borrower may establish in accordance with Section 3.04(b). All
Receivables, General Intangibles and Contract Rights of the Borrower are, and
will continue to be, maintained at, and controlled and directed (including for
general accounting purposes) from, such office locations shown above, or such
new locations as the Borrower may establish in accordance with Section 3.04(b).
(b) The Borrower shall not change its name or its jurisdiction of
organization or establish a new location for its offices until (i) it shall have
given to the Administrative Agent not less than thirty (30) days' prior written
notice of its intention so to do, clearly describing such new name, jurisdiction
or location and providing such other information in connection therewith as the
Administrative Agent may reasonably request and (ii) with respect to such new
name, jurisdiction or location, it shall have taken all action, reasonably
satisfactory to the Administrative Agent, to maintain the sale, assignment,
conveyance, setting over and transfer of the Assignment Revenues to the
Administrative Agent and the security interest of the Administrative Agent in
the Assignment Collateral intended to be granted hereby at all times fully
perfected, of first priority and in full force and effect.
3.05 Recourse. Without limitation of Section 9.11, this Agreement is
made with full recourse to the Borrower and pursuant to and in reliance upon all
the warranties, representations, covenants and agreements on the part of the
Borrower contained herein, in the Credit Agreement, in any of the other
Financing Documents and otherwise in writing in connection herewith or
therewith.
3.06 Consents. (a) Except as set forth on Schedule 3.06(a), no other
consent of any other Person and no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required as of
the date of the execution and delivery of this Agreement (i) for the sale,
assignment, conveyance, setting over and transfer of the Assignment Revenues to
the Administrative Agent (other than Assignment Revenue pursuant to contracts
that are not material or are not Project Contracts), (ii) for the grant by the
Borrower of the pledge, assignment and security interest granted hereby with
respect to the Assignment Collateral (other than contracts that are not material
or are not Project Contracts) or for the execution, delivery or performance of
this Agreement by the Borrower, (iii) for the perfection or maintenance of the
sale, assignment, conveyance, setting over and transfer effected hereby with
respect to the Assignment Revenues and the pledge, assignment and security
interest created hereby with respect to the Assignment Collateral (including the
first priority nature of such sale, assignment, conveyance, setting over and
transfer by way of security with respect to the Assignment Revenues and such
pledge, assignment and security interest with respect to the Assignment
Collateral) other than the filing of appropriate financing statements or similar
filings in respect of the Assignment Revenues and Assignment Collateral (in each
case other than
12
contracts that are not material or are not Project Contracts), or (iv) for the
exercise by the Administrative Agent of the rights provided for in this
Agreement or the remedies in respect of the Assignment Revenues and the
Assignment Collateral pursuant to this Agreement.
(b) Except as otherwise expressly provided in the Credit Agreement or
the Deposit Account Agreement, the Borrower shall obtain, after the date of the
execution and delivery of this Agreement, such other consents, authorizations,
and approvals and obtain such other actions, and provide such notices to or make
such filings with, any Governmental Authority as may be necessary or reasonably
requested by the Administrative Agent or any Secured Party, after the date of
this Agreement (i) for the sale, assignment conveyance, setting over and
transfer of the Assignment Revenues to the Administrative Agent, (ii) for the
grant by the Borrower of the pledge, assignment and security interest granted
hereby or for the execution, delivery or performance of this Agreement by the
Borrower, (iii) for the perfection or maintenance of the sale, assignment,
conveyance, setting over and transfer effected hereby with respect to the
Assignment Revenues and the pledge, assignment and security interest created
hereby with respect to the Assignment Collateral (including the first priority
nature of such sale, assignment, conveyance, setting over and transfer by way of
security with respect to the Assignment Revenues and such pledge, assignment and
security interest with respect to the Assignment Collateral) or (iv) for the
exercise by the Administrative Agent of the rights, remedies and powers provided
for in this Agreement or the remedies in respect of the Assignment Revenues and
the Assignment Collateral pursuant to this Agreement.
(c) Notwithstanding any provision of this Agreement, each of the
parties hereto acknowledges and agrees that (i) any reference to assignment of
any right, title or interest in and to any agreement, contract, Contract Right,
chattel paper, Document, instrument, letter of credit, document, lease,
Governmental Approval or other similar right (collectively "Contract
Collateral"), such assignment shall constitute only a grant of a collateral
security interest and not an absolute assignment of rights under any Contract
Collateral, and (ii) to the extent any grant of a collateral security interest
in and to any Contract Collateral would result in the breach of the instrument,
contract, agreement or other document evidencing or creating such Contract
Collateral security interest shall be deemed to be made subject to obtaining any
required consent and approval under such instrument, contract, agreement or
other document for such grant of a security interest.
3.07 Pledged Permits. Upon the occurrence and during the continuance of
an Event of Default and after notice to the Borrower that the Administrative
Agent intends to exercise remedies pursuant to the Financing Documents, the
Borrower shall, at the request of the Administrative Agent, take such steps
requested by the Administrative Agent that are necessary to assist and
cooperate, to the extent within the Borrower's control using commercially
reasonable efforts, in the transfer of the Pledged Permits to the Administrative
Agent or any other party or parties designated by the Administrative Agent
effective upon transfer of title to the applicable Portfolio Assets to which
such Pledged Permits relate, including the filing of a joint application by the
Borrower with the Administrative Agent or the Administrative Agent's designees,
for the transfer of the Pledged Permits pursuant to 18 C.F.R. Part 9 or any
successor or replacement regulations thereto, all pursuant to and to the extent
permitted by applicable Requirements of Law.
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3.08 Farm Products; Timber; As-Extracted Collateral. As of the
Restructuring Effective Date, none of the Assignment Revenues or the Assignment
Collateral constitutes, or is Proceeds of, farm products, timber to be cut or
as-extracted collateral. If at any time after the Restructuring Effective Date
any of the Assignment Revenues or the Assignment Collateral is farm products,
timber to be cut or as-extracted collateral, in each case with a value in excess
of $500,000 (as reasonably determined by the Borrower) the Borrower shall take
all actions required in accordance with Section 6.02.
3.09 Commercial Tort Claims. As to any judgment in respect of any
commercial tort claim having a value in excess of $500,000 of the Borrower which
may arise, the Borrower will notify the Administrative Agent within 45 days of
any such commercial tort claim judgment in favor of the Borrower being entered,
and the Borrower will execute and deliver to the Administrative Agent such
additional security agreements or amendments to this Agreement in form and
substance reasonably satisfactory to the Administrative Agent which identify and
assign, pledge and create a valid, perfected security interest in such judgments
in respect of commercial tort claims of the Borrower as they arise.
3.10 Letters of Credit. The Borrower will deliver to the Administrative
Agent each letter of credit having a stated amount in excess of $500,000 in
which it is the beneficiary thereof, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Administrative Agent. The Borrower will take any
and all actions within its control necessary (or requested by the Administrative
Agent), from time to time, to cause the Administrative Agent to obtain exclusive
control of any letter-of-credit rights which have a value exceeding $500,000
owned by the Borrower in a manner reasonably acceptable to the Administrative
Agent.
3.11 Chattel Paper. The Borrower will deliver to the Administrative
Agent all tangible chattel paper having a value in excess of $500,000 duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance reasonably satisfactory to the Administrative Agent.
The Borrower will also deliver to the Administrative Agent all security
agreements securing any such chattel paper and execute UCC financing statement
amendments assigning to the Administrative Agent any UCC financing statements
filed by such Grantor in connection with such security agreements. The Borrower
will mark conspicuously all such chattel paper with a legend, in form and
substance reasonably satisfactory to the Administrative Agent, indicating that
such chattel paper is subject to the security interests created hereunder.
3.12 Bank Accounts. The Borrower shall not maintain any deposit
accounts or securities accounts other than the Accounts.
Section 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS.
4.01 Additional Representations and Warranties: As of the time when
each Receivable and General Intangible arises, the Borrower shall be deemed to
have represented and warranted, to the knowledge of the Borrower and unless
otherwise promptly disclosed by the
14
Borrower in writing to the Administrative Agent upon the Borrower obtaining
actual knowledge thereof, that such Receivable or General Intangible, as the
case may be, and all records, papers and documents relating thereto (if any) are
genuine and in all respects what they purport to be, and that all records,
papers and documents (if any) relating thereto (i) will represent the genuine,
legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of
electricity or capacity, or any other merchandise listed therein, or both, and
(ii) are in compliance and will conform with all Requirements of Law, except to
the extent that the failure to comply or conform therewith could not reasonably
be expected to have a Material Adverse Effect.
4.02 Maintenance of Records. The Borrower will keep and maintain at its
own cost and expense records consistent with GAAP of the Assigned Agreements and
the Receivables, including the originals of all documentation (including each
Assigned Agreement) with respect thereto, records of all payments received, all
credits granted thereon, but subject in each case to customary record retention
policies, and all other dealings therewith. The Borrower will make the same
available to the Administrative Agent for inspection pursuant to Section 5.08 of
the Credit Agreement.
4.03 Payments Under Assigned Agreements, Receivables and General
Intangibles. (a) Non-Payment to the Administrative Agent. If the Borrower shall
receive payment directly from any party to an Assigned Agreement (including any
letter of credit issued for the benefit of the Borrower in accordance with the
terms thereof) or from any account debtor or other obligor under any Receivable,
General Intangible or any other payments under such Assigned Agreements,
Receivables and General Intangibles, the Borrower shall receive such payments in
a constructive trust for the benefit of the Lenders, shall segregate such
payments from such party's other funds, and shall promptly transmit and deliver
such payments to the Administrative Agent in the same form as so received (with
any necessary endorsement).
(b) Application of Funds. All amounts received by the Administrative
Agent pursuant to this Section 4.03 or Section 4.04 shall be deposited into the
Revenue Account and applied as set forth in the Deposit Account Agreement.
4.04 Direction to Account Debtors; Contracting Parties; etc. The
Borrower agrees that the Administrative Agent may, upon reasonable notice to the
Borrower of its failure to do so, directly notify the obligors with respect to
any Receivables, General Intangibles and/or under any Assigned Agreements to
make payments with respect thereto as provided in Sections 2.01(c) and 4.03.
Upon the occurrence and during the continuance of any Event of Default, the
Administrative Agent may apply, without notice to or assent by the Borrower, any
or all amounts then in, or thereafter deposited in, the Accounts in the manner
provided in the Deposit Account Agreement. The reasonable costs and expenses
(including reasonable attorneys' fees) of collection, whether incurred by the
Borrower or the Administrative Agent, shall be borne by the Borrower.
4.05 Modification of Terms, etc. Except as otherwise provided in the
Credit Agreement or as permitted in Section 4.06 hereof, (a) the Borrower shall
not rescind or cancel
15
any Indebtedness in any fiscal year in an amount, in the aggregate, in excess of
$500,000 for borrowed money, or modify in any manner adverse to the Borrower or
the Secured Parties any material term thereof, or make any adjustment materially
adverse to the Borrower or the Secured Parties with respect thereto, or grant
any extension for performance of the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable,
General Intangible or Assigned Agreements, or interest therein, without the
prior written consent of the Administrative Agent, which consent the
Administrative Agent will not unreasonably withhold, delay or condition, and (b)
the Borrower will duly fulfill all material obligations on its part to be
fulfilled under or in connection with the Receivables, the General Intangibles
and the Assigned Agreements and will do nothing to impair the security interests
of the Administrative Agent (including the creation, attachment and priority
thereof) in the Receivables, the General Intangibles or the Assigned Agreements.
4.06 Collection. The Borrower shall endeavor to cause to be collected
from the account debtor named in the Borrower's Receivables and General
Intangibles or obligor under any Assigned Agreements, and paid by such account
debtor directly to the Revenue Account, as and when due (including amounts which
are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Receivable, General Intangible or Assigned Agreements, and apply
promptly upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable, General Intangible or under such
Assigned Agreements, except that, unless an Event of Default shall have occurred
and be continuing (and shall not have been waived by an appropriate vote or
other action by the Required Lenders in accordance with Section 9.02 of the
Credit Agreement), the Borrower may allow in the ordinary course of business as
adjustments to amounts owing under the Borrower's Receivables, General
Intangibles and Assigned Agreements an extension or renewal of the time or times
of payment, or settlement, adjustment, release, compromise, settlement or other
similar action for less than the total unpaid balance, which the Borrower finds
appropriate to enhance collectibility in accordance with sound business
judgment. The reasonable costs and expenses (including reasonable attorneys
fees) of collection, whether incurred by the Borrower or the Administrative
Agent, shall be borne by the Borrower.
Section 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
TRADEMARKS.
5.01 Infringements. Within ten (10) Business Days after a Responsible
Officer of the Borrower obtains actual knowledge thereof, the Borrower shall
notify the Administrative Agent and the Lenders in writing of all pertinent
details available to it, with respect to any infringement or other violation of
the Borrower's rights in, or any claim of any such infringement of, any, Patent,
Copyright or Trademark, whether or not such right is presently held by the
Borrower or third party. As to each such instance, absent the Required Lenders'
authorization to proceed otherwise (as required pursuant to Section 9.02 of the
Credit Agreement), which authorization shall not be unreasonably withheld,
delayed or conditioned, and to the extent permitted by applicable Requirements
of Law, the Borrower shall use commercially reasonable efforts to pursue a
remedy.
16
5.02 Other Patents, Copyrights and Trademarks. If the Borrower
hereafter acquires rights in any Patent, Copyright or Trademark, the Borrower
shall deliver to the Administrative Agent and the Lenders within 60 days, a copy
of such Patent, Copyright or Trademark and a first priority perfected security
interest therein or a collateral assignment thereof, as appropriate.
5.03 Remedies. If an Event of Default shall occur and be continuing
(and shall not have been waived by an appropriate vote or other action as
required pursuant to Section 9.02 of the Credit Agreement), the Administrative
Agent, acting pursuant to and in accordance with the terms of the Deposit
Account Agreement, the other Financing Documents and applicable Requirements of
Law may (a) declare the entire right, title, and interest of the Borrower in any
Patents, Copyrights and Trademarks vested in the Administrative Agent, in which
event such right, title, and interest immediately shall vest in the
Administrative Agent; and (b) take and practice or use or sell any or all of
such Patents, Copyrights or Trademarks, or take and use or sell the Borrower's
rights in such Patents, Copyrights or Trademarks, along with the goodwill and
all other elements of the Borrower's ongoing business symbolized by such assets
and secured under this Agreement, and the right to carry on the business of the
Borrower in connection with which such assets have been used. The Borrower shall
execute any other and further documents which the Administrative Agent may
request further to confirm the foregoing and to transfer to the Administrative
Agent ownership of the Borrower's rights to such Trademarks, Patents and/or
Copyrights.
Section 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT
COLLATERAL; INSURANCE.
6.01 Protection of the Administrative Agent's Interests. The Borrower
will do nothing to impair the rights of the Administrative Agent or the Lenders
in the Assignment Revenues and the Assignment Collateral, provided, however,
that nothing herein shall prevent the Borrower, prior to the exercise by the
Administrative Agent of any such rights, from undertaking the Borrower's
operations in the ordinary course of business in accordance with the Assigned
Agreements. The Borrower assumes all liability and responsibility in connection
with the Assignment Revenues and the Assignment Collateral and the liability of
the Borrower with respect to the Secured Obligations shall in no way be affected
or diminished by reason of the fact that such Assignment Revenues and Assignment
Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever
unavailable to the Borrower.
6.02 Further Actions. The Borrower will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Administrative Agent
and the Lenders from time to time such lists, descriptions and designations of
the Assignment Revenues and the Assignment Collateral, warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, bailee and warehousemen acknowledgements, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps, relating to the Assignment Revenues and
the Assignment Collateral and other property or rights covered by the interests
hereby granted, which is necessary to perfect, preserve or protect its ownership
and security interests in the Assignment Revenues and the Assignment Collateral,
or
17
as-extracted collateral through filing, possession, control or otherwise or is
otherwise reasonably requested by the Administrative Agent; provided, that the
foregoing shall not require the Borrower to obtain any Additional Contract
Consent except as reasonably requested by the Administrative Agent, and, to the
extent so requested, the Borrower shall use commercially reasonable efforts to
obtain such Additional Contract Consent.
6.03 Financing Statements. The Borrower agrees to execute and deliver
to the Administrative Agent, on behalf of the Lenders, financing statements,
continuation statements, amendments thereto, filings with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country) or similar statements or
instruments of registration under the law of any jurisdiction, in form
reasonably acceptable to the Administrative Agent, as it may from time to time
reasonably request or as are necessary or desirable in its reasonable opinion to
establish, maintain, perfect, continue, enforce or protect the security
interests contemplated hereunder as valid, enforceable, first priority security
interests as provided herein and the other rights and security contemplated
herein, all in accordance with the UCC as enacted in any and all relevant
jurisdictions or any other applicable Requirement of Law. The Borrower
authorizes the Administrative Agent to authenticate and file any such financing
statements without the signature of the Borrower and naming the Borrower as
debtor and the Administrative Agent as secured party. The Borrower will pay any
applicable filing fees and related expenses under this Section 6.03. Unless
specifically permitted under applicable Requirements of Law, the Borrower shall
not file any amendments or terminations of financing statements filed to
establish and maintain the security interests contemplated hereunder without the
Administrative Agent's authorization, and any such filing made without the
Administrative Agent's authorization, is ineffective.
Section 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
7.01 Remedies; Obtaining the Assignment Collateral Upon Default. The
Borrower agrees that, if any Event of Default shall have occurred and be
continuing (and shall not have been waived by an appropriate vote or other
action by the Required Lenders), then and in every such case, subject to the
terms and provisions of the Credit Agreement and any applicable Requirement of
Law then in effect, the Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the UCC or any other applicable Requirement
of Law in all relevant jurisdictions and may, acting pursuant to and in
accordance with the terms of the Credit Agreement:
(a) personally, or by agents or attorneys, immediately retake
possession of the Assignment Collateral or any part thereof, from the
Borrower or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that purpose
may enter upon the Borrower's premises where any of the Assignment
Collateral is located and remove the same and use in connection with
such removal any and all services, supplies, aids and other facilities
of the Borrower; and
(b) instruct the obligor or obligors on any agreement,
instrument or other obligation (including any other Assigned Agreement,
the General Intangibles and the Receivables) constituting the
Assignment Revenues and Assignment Collateral to make
18
any payment required by the terms of such instrument or agreement
directly to the Administrative Agent for deposit in the Revenue Account
(or any other account required or contemplated by the Deposit Account
Agreement) and application pursuant to the Deposit Account Agreement;
and
(c) apply all monies, securities and instruments in the
Revenue Account, and each other Account, in accordance with the Deposit
Account Agreement; and
(d) sell, assign or otherwise liquidate, or direct the
Borrower to sell, assign or otherwise liquidate, any or all of the
Assignment Collateral or any part thereof, and take possession of the
proceeds of any such sale or liquidation for deposit in the Revenue
Account (or any other account required or contemplated by the Deposit
Account Agreement) and application pursuant to the Deposit Account
Agreement; and
(e) take possession of the Assignment Collateral or any part
thereof, by directing the Borrower in writing to deliver the same to
the Administrative Agent at any place or places designated by the
Administrative Agent as may be commercially reasonable, in which event
the Borrower shall at its own expense:
(i) promptly cause the same to be moved to the place
or places so designated by the Administrative Agent and there
delivered to the Administrative Agent,
(ii) store and keep any Assignment Collateral so
delivered to the Administrative Agent (to the extent not
physically delivered to the Administrative Agent) at such
place or places pending further action by the Administrative
Agent as provided in Section 7.02, and
(iii) while such Assignment Collateral shall be so
stored and kept, provide such guards and maintenance services
as shall be necessary to protect the same and to preserve and
maintain them in good condition;
it being understood that the Borrower's obligation to so deliver the
Assignment Collateral is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction,
the Administrative Agent shall be entitled to a decree requiring
specific performance by the Borrower of such obligation.
7.02 Remedies, Disposition of the Assignment Collateral. Any Assignment
Collateral repossessed by the Administrative Agent under or pursuant to Section
7.01, and any other Assignment Collateral whether or not so repossessed by the
Administrative Agent, may be sold, assigned, leased or otherwise disposed of
under one or more contracts or as an entirety, and without the necessity of
gathering at the place of sale the property to be sold, and in general in such
manner, at such time or times, at such place or places and on such terms as the
Administrative Agent, acting in good faith, may, upon written direction in
compliance with any applicable Requirement of Law, determine to be commercially
reasonable. Subject to the foregoing, any of the Assignment Collateral may be
sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Administrative Agent or after any
19
overhaul or repair which the Administrative Agent, acting in good faith, shall
determine to be commercially reasonable. Any such disposition which shall be a
private sale or other private proceeding permitted by such requirements shall be
made upon not less than 10 days' written notice to the Borrower (except that, if
the Administrative Agent shall determine, in its sole discretion, that any of
the Collateral threatens to decline quickly in value or to become worthless, any
such sale may be made upon three days' notice to the Borrower) specifying the
time at which such disposition is to be made and the intended sale price or
other consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of the Borrower or any nominee of the
Borrower to acquire the Assignment Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by applicable Requirements
of Law, the Administrative Agent on behalf of the Lenders may bid for and become
the purchaser of the Assignment Collateral or any item thereof, offered for sale
in accordance with this Section 7.02. If, under mandatory requirements of any
applicable Requirement of Law, the Administrative Agent shall be required to
make disposition of the Assignment Collateral within a period of time which does
not permit the giving of notice to the Borrower as hereinabove specified, the
Administrative Agent need give the Borrower only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of any
applicable Requirement of Law.
The Borrower hereby irrevocably appoints the Administrative Agent as
its attorney-in-fact, so that the Administrative Agent, or any Person empowered
by the Administrative Agent, shall, during the continuance of any Event of
Default, be authorized to sell, assign, lease or otherwise dispose of the
Assignment Collateral or any part thereof pursuant to the provisions of the
preceding paragraph, and, in general, to do or cause to be done all such acts
and things which are otherwise required to be done by the Borrower under this
Agreement.
7.03 Waiver of Claims. Except as otherwise provided in this Agreement
or in any other Financing Document, THE BORROWER HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN
CONNECTION WITH THE ADMINISTRATIVE AGENT TAKING POSSESSION OR THE ADMINISTRATIVE
AGENT'S DISPOSITION OF ANY OF THE ASSIGNMENT COLLATERAL, IN EACH CASE AS
PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE
BORROWER WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR ANY POLITICAL SUBDIVISION OF ANY SUCH JURISDICTION, and the
Borrower hereby further waives, to the extent permitted by applicable
Requirements of Law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the gross negligence or
willful misconduct of the Administrative Agent, any Lender, or any
Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder; and
20
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
Requirement of Law in order to prevent or delay the enforcement of this
Agreement (including any right to claim that such enforcement should be
stayed pending the outcome of any other action or proceeding (including
any arbitration proceeding)) or the absolute sale of the Assignment
Collateral or any portion thereof, and the Borrower, for itself and all
who may claim under it, insofar as it or they now or hereafter lawfully
may, hereby waives the benefit of all such applicable Requirements of
Law.
To the extent permitted under applicable Requirements of Law, any sale of, or
the grant of options to purchase, or any other realization upon, any Assignment
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the Borrower therein and thereto, and shall be a
perpetual bar both at law and in equity against the Borrower and against any and
all Persons claiming or attempting to claim the Assignment Collateral so sold,
optioned or realized upon, or any part thereof, from, through and under the
Borrower.
7.04 Application of Proceeds. Notwithstanding any other provision of
this Agreement, all payments made under or in connection with this Agreement,
and all moneys collected by the Administrative Agent upon any sale or other
disposition of the Collateral pursuant to this Agreement, including Sections
7.01 and 7.02 shall be applied in accordance with the Financing Documents,
including that any proceeds of Collateral which remains after payment in full in
cash of the Obligations will be paid to the Collateral Agent for the benefit of
the OPMW Secured Parties for distribution pursuant to the Intercreditor
Agreement and the OPMW Second Lien Documents, and such proceeds shall constitute
proceeds under the OPMW Second Lien Documents. For the avoidance of doubt, it is
understood that the Borrower shall remain liable to the extent of any deficiency
between the amount of the Proceeds of the Assignment Collateral and the
aggregate amount of the Secured Obligations.
7.05 Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Financing Document and no course of dealing between
the Borrower and the Administrative Agent or any Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Financing Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent or any Lender would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or any Lender to any other or further action in any circumstances without notice
or demand.
7.06 Discontinuance of Proceedings. In case the Administrative Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Administrative Agent, then and in every such case
the Borrower, the Administrative Agent and each holder of any of
21
the Obligations shall be restored to their former positions and rights hereunder
with respect to the Assignment Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the
Administrative Agent shall continue as if no such proceeding had been
instituted.
7.07 Grant of License or Sub-License to Use Patent, Trademark,
Copyright and License Collateral. For the purpose of enabling the Administrative
Agent to exercise rights and remedies under this Article VII at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, the Borrower hereby grants to the Administrative Agent an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Borrower) to use, license or sub-license any Patent,
Trademark, Copyright or License (to the extent the Borrower has authority to
sub-license any such License) now owned or licensed or hereafter acquired or
licensed by the Borrower, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license or sub-license by the
Administrative Agent shall be exercised, at the option of the Administrative
Agent, only upon the occurrence and during the continuation of an Event of
Default; provided that any license, sub-license or other transaction entered
into by the Administrative Agent while such Event of Default was continuing in
accordance herewith shall be binding upon the Borrower notwithstanding any
subsequent cure of an Event of Default. The Administrative Agent agrees to apply
the net Proceeds received from any such license as provided in Section 7.04
hereof.
Section 8. INDEMNITY; EXPENSES.
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Secured Party from and against any and all claims,
losses and liabilities arising out of or resulting from the Collateral or the
Borrower's pledge and assignment under this Agreement (including enforcement
against the Borrower of this Agreement), except claims, losses or liabilities
resulting from the gross negligence or willful misconduct of any Secured Party
or any other Person designated by any Secured Party to act on its behalf
pursuant to this Agreement.
(b) The Borrower will upon demand pay to the Administrative Agent or
any Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Administrative Agent or any Secured Party may incur in connection with (i)
the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of the Borrower, (iii) the
exercise or enforcement (whether through negotiations, legal proceedings or
otherwise) of any of the rights of the Administrative Agent or any Secured Party
hereunder against the Borrower or (iv) the failure by the Borrower to perform or
observe any of the provisions hereof.
Section 9. MISCELLANEOUS.
9.01 Notices. All notices hereunder, unless otherwise specified, shall
be provided as specified in Section 9.01 of the Credit Agreement. Promptly after
the execution of any and all material amendments, supplements and waivers, of
and to the Assignment Revenues
22
or Assignment Collateral, originals, if reasonably available and, if not, copies
of such amendments, supplements and waivers shall be delivered to the
Administrative Agent.
9.02 Waiver, Amendment; Severability. No amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction shall not in any way be affected or impaired thereby.
9.03 Obligations Absolute. To the extent permitted by applicable
Requirements of Law, the obligations of the Borrower under this Agreement are
independent of the Secured Obligations, and a separate action or actions may be
brought and prosecuted against the Borrower to enforce this Agreement,
irrespective of whether any action is brought against any other pledgor or any
guarantor of the Secured Obligations or whether any other pledgor or any
guarantor of the Secured Obligations is joined in any such action or actions.
All rights of the Administrative Agent and the assignment, hypothecation and
security interest hereunder, and all obligations of the Borrower hereunder,
shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of any Credit Party, the recovery of any judgment against the
Borrower or any other Credit Party, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Borrower;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of the Borrower or any
other Credit Party contained in this Agreement, the Credit Agreement or any
other Financing Document, (ii) any impairment, modification, release or
limitation of the liability of the Borrower or any other Credit Party or any of
their estates in bankruptcy, or any remedy for the enforcement thereof,
resulting from the operation of any present or future provision of any
applicable bankruptcy law, as amended, or other statute or from the decision of
any court, (iii) the assertion or exercise by the Borrower, the Administrative
Agent or any other Secured Party of any rights or remedies, (iv) the assignment
or the purported assignment of any property as security for the Secured
Obligations, including all or any part of the rights of the Borrower under this
Agreement, (v) the extension of the time for payment by the Borrower or any
other Credit Party or any other guarantor of any payments or other sums or any
part thereof owing or payable under any of the terms and provisions of any
Financing Document or of the time for performance by the Borrower or any other
Credit Party of any other obligations under or arising out of any terms or
provisions or the extension of the renewal of any thereof, (vi) the modification
or amendment (whether material or otherwise) of any duty, agreement or
23
obligation of the Borrower or any other Credit Party set forth in any Financing
Document, (vii) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of, or other similar proceeding affecting the Borrower or any other Credit Party
or any of their respective assets, or the disaffirmancy of this Agreement or any
Financing Document in any such proceeding, (viii) the release or discharge of
the Borrower or any other Credit Party from the performance or observance of any
agreement, covenant, term or condition contained in any of such instruments by
operation of law, (ix) the unenforceability of this Agreement or any Financing
Document or (x) any other circumstance which might otherwise constitute a legal
or equitable discharge of a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
9.04 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto and shall inure to the benefit of the Lenders;
provided, however, that the Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each of the Lenders. Any Lender may transfer, assign or
grant all or such relevant part of its rights hereunder in connection with an
assignment or transfer of all or any part of its interest in its Loans in
accordance with the provisions of the Credit Agreement, and such assignee shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. All agreements, statements, representations and
warranties made by the Borrower herein or in any certificate or other instrument
delivered by the Borrower or on its behalf under this Agreement shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of this Agreement, the Credit Agreement and the other
Financing Documents regardless of any investigation made by the Lenders or on
their behalf.
9.05 Headings Descriptive, etc. The headings of the several sections
and subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
9.06 Governing Law; Submission to Jurisdiction and Venue. (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE BORROWER
24
AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE BORROWER AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE BORROWER AND EACH
SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE BORROWER WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE BORROWER AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(d) THE BORROWER AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE BORROWER HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE BORROWER TO
RECEIVE FOR AND ON BEHALF OF THE BORROWER SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS
SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY
25
MAIL TO THE BORROWER AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 9.01.
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT
THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (I) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (II)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE SOLELY AS PERMITTED IN SUBSECTION (C) OF THIS
SECTION 9.06.
9.07 The Borrower's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that the Borrower shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Assignment Revenues or the Assignment Collateral and the Administrative Agent
and the Lenders shall have no obligations or liabilities (except obligations or
liabilities resulting from the gross negligence or willful misconduct of the
Administrative Agent and the Lenders) with respect to any Assignment Revenues or
Assignment Collateral by reason of or arising out of or in connection with this
Agreement, nor shall the Administrative Agent or the Lenders be required or
obligated in any manner to perform or fulfill any of the obligations of the
Borrower under or with respect to any Assignment Revenues or Assignment
Collateral.
9.08 Termination; Release. This Agreement shall create a continuing
pledge, assignment of hypothecation of and security interest in the Collateral
and shall remain in full force and effect until no Lender shall have any
Commitment outstanding and until the Notes, together with interest, and all
other Secured Obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the Administrative Agent,
at the written request and expense of the Borrower, will promptly authorize,
execute and deliver, as applicable, to the Borrower the proper instruments
(which may include Uniform Commercial Code termination statements on form UCC-3)
acknowledging the termination of this Agreement, and will promptly duly assign,
transfer and deliver, (without recourse and without any representation or
warranty) free from any interest of the Administrative Agent or Lien granted
hereunder such of the Assignment Revenues or Assignment Collateral as may be in
possession of the Administrative Agent, in accordance with the Intercreditor
Agreement or, if the OPMW Second Lien Documents shall have terminated pursuant
to the terms thereof, to the Borrower, and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement together with such
notices to third parties as may be necessary to countermand any notices
previously sent to them pursuant hereto.
9.09 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which
26
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
9.10 Applicability of Deposit Account Agreement. In amplification of,
and notwithstanding any other provisions of this Agreement, in connection with
its obligations hereunder, the Administrative Agent shall have all of the
rights, powers, privileges, exculpations, protections and indemnities as are
provided for or referred to in the Deposit Account Agreement.
9.11 Limitation of Recourse. The obligations of the Borrower hereunder
are obligations solely of the Borrower and shall not constitute a debt or
obligation of any direct or indirect, partner, shareholder or other equity owner
of the Borrower or any of their respective directors, officers, agents or
employees (each such Person, a "Non-Recourse Party"). No Non-Recourse Party
shall be liable for any amount payable by the Borrower under this Agreement and
the Secured Parties shall not seek a money judgment or deficiency or personal
judgment against any Non-Recourse Party for payment of the indebtedness payable
by the Borrower evidenced by this Agreement. No property or assets of any
Non-Recourse Party, other than as contemplated in the Financing Documents, shall
be sold, levied upon or otherwise used to satisfy any judgment rendered in
connection with any action brought against the Borrower with respect to this
Agreement or the other Financing Documents. The foregoing acknowledgments,
agreements and waivers shall be enforceable by any Non-Recourse Party.
Notwithstanding the foregoing, nothing in this Section shall limit or affect or
be construed to limit or affect the obligations and liabilities of any Credit
Party or any other Non-Recourse Party (a) in accordance with the terms of any
Transaction Document creating such liabilities and obligations to which such
Credit Party or Non-Recourse Party is a party, (b) arising from liability
pursuant to any applicable Requirement of Law for such Credit Party's or such
Non-Recourse Party's fraudulent actions, knowing misrepresentations or willful
misconduct or (c) with respect to amounts distributed to it in violation of
Section 6.10 of the Credit Agreement.
9.12 Amendment and Restatement. This Agreement is an amendment and
restatement of the Assignment and Security Agreement, dated as of July 28, 1999
(the "Original Agreement") between the Borrower and the Administrative Agent. It
is the intention of the parties that this Agreement amend, restate, extend and
renew the terms and conditions of the Original Agreement and the liens and
security interests created thereby, and is not intended to be a novation or
discharge of the obligations of the Borrower thereunder or the liens and
security interests created thereby. The liens and security interests of the
Original Agreement are hereby ratified, confirmed, renewed, extended, and
brought forward in full force and effect as security for the Obligations.
[Remainder of page intentionally left blank.]
27
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
BORROWER:
--------
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
----------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT:
--------------------
BANK OF AMERICA, N.A., as Administrative Agent
By:
----------------------------------------
Name:
Title:
EXHIBIT A
TO AMENDED AND RESTATED
ASSIGNMENT AND
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES PATENTS AND TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, ORION POWER NEW YORK, L.P., a Delaware limited
partnership (the "Assignor"), having its chief executive office at 1111
Louisiana Street, Houston, Texas 77002, hereby assigns and grants to BANK OF
AMERICA, N.A., as administrative agent (the "Administrative Agent"), with
offices at 101 North Tryon Street, Charlotte, NC 28255 a security interest in
(all of which are herein collectively referred to as the "PTO Collateral") (i)
all of the Assignor's right, title and interest in and to the United States
trademarks, trademark registrations and trademark applications set forth on
Schedule A attached hereto (the "Marks"), (ii) all of the Assignor's right,
title and interest in and to the United States patents set forth on Schedule B
attached hereto (the "Patents"), in each case together with (iii) all Proceeds
(as such term is defined in the Security Agreement referred to below) and
products of the Marks and Patents, (iv) the goodwill of the businesses
symbolized by the Marks and (v) all causes of action arising prior to or after
the date hereof for infringement of any of the Marks and Patents or unfair
competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all the Secured Obligations of the Assignor, as such term is defined
in the Amended and Restated Assignment and Security Agreement, dated as of
October 28, 2002, among the Assignor, the Administrative Agent and the other
parties thereto (as amended, supplemented or modified from time to time, the
"Security Agreement"). Upon the satisfaction of the conditions set forth in
Section 9.08 of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Administrative Agent an instrument in writing
releasing the security interest in the PTO Collateral acquired under this
Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security
interest granted to the Administrative Agent for the benefit of the Secured
Parties under the Security Agreement. The rights and remedies of the
Administrative Agent with respect to the security interest granted herein are
without prejudice to, and are in addition to, those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provision of this Assignment is deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the _____ day of _____________, 20__.
ORION POWER NEW YORK, L.P., as Assignor
By: Orion Power New York GP, Inc., its general
partner
By:
----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as Administrative Agent
By:
----------------------------------------
Name:
Title:
STATE OF _________________
________ OF ________
The foregoing instrument was acknowledged before me this ____ day of
__________, 20__ by ________________ as [title] of _______________________, a
________ corporation, on behalf of the corporation.
My commission expires:
Notarial Seal
-------------------------------
Notary Public
SCHEDULE A
TRADEMARKS AND TRADEMARK APPLICATIONS
Serial No. or Issue or
Registration No. Country Filing Date Mark
- ---------------- ------- ----------- ----
1
SCHEDULE B
PATENTS AND PATENT APPLICATIONS
Serial No. or Issue or
Patent No. Inventor Country Filing Date Title
---------- -------- ------- ----------- -----
1
EXHIBIT B
TO AMENDED AND RESTATED
ASSIGNMENT AND
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, ORION POWER NEW YORK, L.P., a Delaware limited
partnership corporation (the "Assignor"), having its chief executive office at
1111 Louisiana Street, Houston, Texas 77002, hereby assigns and grants to BANK
OF AMERICA, N.A., as administrative agent (the "Administrative Agent"), with
offices at 101 North Tryon Street, Charlotte, NC 28255, a security interest in
(all of which are herein collectively referred to as the "Copyright Collateral")
(i) all of the Assignor's right, title and interest in and to the United States
copyrights and associated United States copyright registrations and applications
for registration set forth in Schedule A attached hereto (the "Copyrights"),
(ii) all Proceeds (as such term is defined in the Security Agreement referred to
below) and products of the Copyrights, (iii) the goodwill of the businesses
symbolized by the Copyrights and (iv) all causes of action arising prior to or
after the date hereof for infringement of any of the Copyrights.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all of the Secured Obligations of the Assignor, as such term is
defined in the Amended and Restated Assignment and Security Agreement, dated as
of October 28, 2002 among the Assignor, the Administrative Agent and the other
parties thereto (as amended, supplemented or modified from time to time, the
"Security Agreement"). Upon the satisfaction of the conditions set forth in
Section 9.08 of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Assignor an instrument in writing releasing the
security interests of the Copyright Collateral acquired under this Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security
interest granted to the Administrative Agent for the benefit of the Secured
Parties under the Security Agreement. The rights and remedies of the
Administrative Agent with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the ____ day of _______, 20___.
ORION POWER NEW YORK, L.P., as Assignor
By: Orion Power New York GP, Inc., its general
partner
By:
----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as Administrative Agent
By:
----------------------------------------
Name:
Title:
STATE OF _________________
________ OF ________
The foregoing instrument was acknowledged before me this ____ day of
__________, 20__ by ________________ as [title] of _______________________, a
________ corporation, on behalf of the corporation.
My commission expires:
Notarial Seal
-----------------------------------
Notary Public
SCHEDULE A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Copyright
Registration No. Country Publication Date Title
- ---------------- ------- ---------------- -----
1
EXHIBIT H -2 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
SECOND LIEN ASSIGNMENT AND SECURITY AGREEMENT
between
ORION POWER MIDWEST, L.P.
and
BANK OF AMERICA, N.A.,
as OPNY Administrative Agent
-------------------------------------------------------------
Dated as of October 28, 2002
--------------------------------------------------------------
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS................................................................................... 2
SECTION 2. ASSIGNMENT; SECURITY INTERESTS; INSURANCE PROCEEDS............................................ 6
2.01 PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTERESTS............................................... 6
2.02 POWER OF ATTORNEY............................................................................. 9
SECTION 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS............................................. 12
3.01 NECESSARY FILINGS............................................................................. 12
3.02 NO LIENS...................................................................................... 12
3.03 OTHER FINANCING STATEMENTS.................................................................... 13
3.04 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE, RECORDS................................. 13
3.05 RECOURSE...................................................................................... 14
3.06 CONSENTS...................................................................................... 14
3.07 PLEDGED PERMITS............................................................................... 15
3.08 FARM PRODUCTS; TIMBER; AS-EXTRACTED COLLATERAL................................................ 15
3.09 COMMERCIAL TORT CLAIMS........................................................................ 15
3.10 LETTERS OF CREDIT............................................................................. 15
3.11 CHATTEL PAPER................................................................................. 16
3.12 BANK ACCOUNTS................................................................................. 16
SECTION 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS....................... 16
4.01 ADDITIONAL REPRESENTATIONS AND WARRANTIES..................................................... 16
4.02 MAINTENANCE OF RECORDS........................................................................ 17
4.03 PAYMENTS UNDER ASSIGNED AGREEMENTS, RECEIVABLES AND GENERAL INTANGIBLES....................... 17
4.04 DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC........................................ 17
4.05 MODIFICATION OF TERMS, ETC.................................................................... 18
4.06 COLLECTION.................................................................................... 18
SECTION 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADEMARKS.............................. 18
5.01 INFRINGEMENTS................................................................................. 18
5.02 OTHER PATENTS, COPYRIGHTS AND TRADEMARKS...................................................... 19
5.03 REMEDIES...................................................................................... 19
SECTION 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT COLLATERAL; INSURANCE............ 19
6.01 PROTECTION OF THE OPNY ADMINISTRATIVE AGENT'S INTERESTS....................................... 19
i
6.02 FURTHER ACTIONS............................................................................... 20
6.03 FINANCING STATEMENTS.......................................................................... 20
SECTION 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.................................................. 21
7.01 REMEDIES; OBTAINING THE ASSIGNMENT COLLATERAL UPON DEFAULT.................................... 21
7.02 REMEDIES, DISPOSITION OF THE ASSIGNMENT COLLATERAL............................................ 22
7.03 WAIVER OF CLAIMS.............................................................................. 23
7.04 APPLICATION OF PROCEEDS....................................................................... 24
7.05 REMEDIES CUMULATIVE........................................................................... 24
7.06 DISCONTINUANCE OF PROCEEDINGS................................................................. 24
7.07 GRANT OF LICENSE OR SUB-LICENSE TO USE PATENT, TRADEMARK, COPYRIGHT AND LICENSE COLLATERAL.... 24
SECTION 8. INDEMNITY; EXPENSES........................................................................... 25
SECTION 9. MISCELLANEOUS................................................................................. 25
9.01 NOTICES....................................................................................... 25
9.02 WAIVER, AMENDMENT; SEVERABILITY............................................................... 26
9.03 OBLIGATIONS ABSOLUTE.......................................................................... 26
9.04 SUCCESSORS AND ASSIGNS........................................................................ 27
9.05 HEADINGS DESCRIPTIVE, ETC..................................................................... 27
9.06 GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE........................................... 28
9.07 THE OPMW BORROWER'S DUTIES.................................................................... 29
9.08 TERMINATION; RELEASE.......................................................................... 29
9.09 EXECUTION IN COUNTERPARTS..................................................................... 30
9.10 [INTENTIONALLY DELETED.]...................................................................... 30
9.11 LIMITATION OF RECOURSE........................................................................ 30
9.12 SUBORDINATION................................................................................. 31
Schedules
Schedule 1 Commercial Tort Claim Judgments
Schedule 2 Name; Jurisdiction of Organization; Location
Exhibits
Exhibit A Assignment of Security Interest in United States Patents and Trademarks
Exhibit B Assignment of Security Interest in United States Copyrights
ii
SECOND LIEN ASSIGNMENT AND SECURITY AGREEMENT
SECOND LIEN ASSIGNMENT AND SECURITY AGREEMENT, dated as of October 28,
2002 (this "Agreement"), between ORION POWER MIDWEST, L.P., a limited
partnership organized under the laws of the State of Delaware (the "OPMW
Borrower"), and BANK OF AMERICA, N.A., as administrative agent (in such
capacity, together with any successors and assigns, the "OPNY Administrative
Agent") for the benefit of the Secured Parties (as defined in the OPNY Credit
Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Orion Power New York, L.P., a limited partnership organized
under the laws of the State of Delaware (the "OPNY Borrower") has entered into
an Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPNY Credit Agreement"), with the OPNY Administrative
Agent, as administrative agent and as issuing bank, Banc of America Securities
LLC and BNP Paribas, as lead arrangers and joint book runners, BNP Paribas, as
syndication agent, Union Bank of California, N.A., CoBank, ACB and Deutsche Bank
AG New York and/or Cayman Island Branch, as documentation agents, and the
Lenders named on the signature pages thereto and from time to time parties
thereto (the "OPNY Lenders"), pursuant to which the OPNY Lenders have agreed,
inter alia, to renew, modify and extend credit facilities that were issued to
the OPNY Borrower to finance a portion of the purchase price of the Portfolio
Assets and to provide working capital availability to the OPNY Borrower;
WHEREAS, the OPMW Borrower has entered into that certain Second Amended
and Restated Credit Agreement, dated as of the Restructuring Effective Date (as
the same may be amended, supplemented or otherwise modified from time to time,
the "OPMW Credit Agreement"), with Bank of America, N.A., as administrative
agent (the "OPMW Administrative Agent"), Banc of America Securities LLC and BNP
Paribas, as lead arrangers and joint book runners, Bank of America, N.A., as
issuing bank, BNP Paribas, as syndication agent, The Bank of Nova Scotia, Mizuho
Corporate Bank, Ltd, and Bayerische Hypo-Und Vereinsbank AG, New York Branch, as
documentation agents, and the Lenders named on the signature pages thereto and
from time to time parties thereto (the "OPMW Lenders"), pursuant to which the
OPMW Lenders have agreed, inter alia, to renew, modify and extend credit
facilities that were issued to the OPMW Borrower to finance a portion of the
purchase price of the Portfolio Assets and to provide working capital
availability to the OPMW Borrower;
WHEREAS, the OPMW Administrative Agent, the OPNY Administrative Agent,
the OPMW Lenders, the OPNY Lenders and Bank of America, N.A., as collateral
agent have entered into the Intercreditor Agreement (as defined in the OPMW
Credit Agreement);
WHEREAS, the OPNY Credit Agreement contemplates the execution, delivery
and the implementation of this Agreement; and
WHEREAS, it is a condition precedent to the obligations of the OPNY
Lenders under the OPNY Credit Agreement that this Agreement shall have been
entered into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the benefits to the OPMW Borrower,
the receipt and sufficiency of which are hereby acknowledged, the OPMW Borrower
hereby makes the following assignments, representations and warranties to the
OPNY Administrative Agent, for the benefit of the Secured Parties, and hereby
covenants and agrees with the OPNY Administrative Agent, in each case, as
follows:
Section 1. Definitions. (a) For all purposes of this Agreement, (i)
capitalized terms not otherwise defined herein shall have the meanings set forth
in the OPNY Credit Agreement, (ii) unless otherwise specified or otherwise
defined herein or in the OPNY Credit Agreement, terms used in Article 9 of the
UCC (as hereinafter defined) are used herein as therein defined and (iii) the
principles of construction set forth in Section 1.04 of the OPNY Credit
Agreement shall apply hereto.
(b) In addition, the following terms shall have the meanings herein
specified:
"ACCOUNTS" shall have the meaning assigned such term in the Deposit
Account Agreement.
"AGREEMENT" shall mean this Second Lien Assignment and Security
Agreement, as amended, supplemented or otherwise modified from time to time.
"ASSIGNED AGREEMENTS" shall have the meaning provided in Section
2.01(a)(xi).
"ASSIGNMENT COLLATERAL" shall have the meaning provided in Section
2.01(a)(xiv).
"ASSIGNMENT REVENUES" shall have the meaning provided in Section
2.01(a)(i).
"COLLATERAL" shall have the meaning provided in Section 2.01(a).
"CONTRACT RIGHTS" shall mean all rights of the OPMW Borrower (including
all rights to payment) under each Assigned Agreement.
"COPYRIGHT LICENSES" shall mean any written agreement (a) granting any
right to any third party under any Copyright of the OPMW Borrower or (b)
granting any right to the OPNY Borrower under any Copyright of any third party.
"COPYRIGHTS" shall mean all right, title and interest of any person in
and to all of the following, whether now owned or hereafter acquired:
(i) the federally registered United States and foreign copyrights
and any renewals thereof;
(ii) all other United States and foreign copyrights;
2
(iii) all registrations and applications for registration of any
such copyright in the United States or any other country,
including registrations, recordings, supplemental derivative
or collective work registrations and pending applications for
registrations in the United States Copyright Office;
(iv) all computer programs, computer data bases, computer program
flow diagrams, source codes and object codes related to any or
all of the foregoing; and
(v) all tangible property embodying or incorporating any or all of
the foregoing.
"DEPOSIT ACCOUNT AGREEMENT" shall have the meaning assigned such term
in the OPMW Credit Agreement.
"DOCUMENTS" shall mean all of the books, ledgers, records, computer
programs, tapes, discs, punch cards, data processing software, transaction
files, master files and related property and rights (including computer and
peripheral equipment) of the OPMW Borrower pertaining to or referencing the
Collateral.
"EQUIPMENT" shall have the meaning provided in Section 2.01(a)(ii).
"FIRST LIEN BORROWER SECURITY AGREEMENT" shall mean the Amended and
Restated Assignment and Security Agreement, dated as of the Restructuring
Effective Date, made by the OPMW Borrower to the OPMW Administrative Agent for
the benefit of the OPMW Secured Parties.
"GENERAL INTANGIBLES" shall have the meaning provided in Section
2.01(a)(vi).
"HOLDCO DEPOSIT ACCOUNT AGREEMENT" shall have the meaning assigned such
term in the OPMW Credit Agreement.
"INVENTORY" shall have the meaning provided in Section 2.01(a)(iii).
"LICENSE" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense as to which the OPMW Borrower is now or
hereafter a party.
"NON-RECOURSE PARTY" shall have the meaning provided in Section 9.11.
"OPMW ADMINISTRATIVE AGENT" shall have the meaning provided in the
first paragraph of this Agreement.
"OPMW BORROWER" shall have the meaning provided in the first paragraph
of this Agreement.
"OPMW CREDIT AGREEMENT" shall have the meaning provided in the Recitals
of this Agreement.
3
"OPMW CREDIT PARTIES" shall have the meaning assigned such term in the
OPMW Credit Agreement.
"OPMW LENDERS" shall have the meaning provided in the Recitals of this
Agreement.
"OPNY BORROWER" shall have the meaning provided in the Recitals of this
Agreement.
"OPNY CREDIT AGREEMENT" shall have the meaning provided in the Recitals
of this Agreement.
"OPNY DEPOSIT ACCOUNT AGREEMENT" shall have the meaning provided the
term "Deposit Account Agreement" in the OPNY Credit Agreement.
"OPNY LENDERS" shall have the meaning provided in the Recitals of this
Agreement.
"OPNY REVENUE ACCOUNT" shall have the meaning provided the term
"Revenue Account" in the OPNY Deposit Account Agreement.
"PATENT LICENSE" shall mean any written agreement (i) granting any
right to any third party under any Patent of the OPMW Borrower or (ii) granting
any right to the OPMW Borrower under any Patent of any third party.
"PATENTS" shall mean all right, title and interest of any person in and
to all of the following, whether now owned or hereafter acquired:
(i) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country;
(ii) all other letters patent of the United States or any other
country and all other applications for letters patent of the
United States or any other country; and
(iii) all reissues, continuations, divisions, continuations-in-part
or extensions thereof and the inventions disclosed therein,
including the right to make, use and/or sell the inventions
disclosed therein.
"PLEDGED PERMITS" shall have the meaning provided in Section
2.01(a)(vii).
"PROCEEDS" shall mean all proceeds, including (i) whatever is received
upon any collection, exchange, sale or other disposition of any of the
Collateral and any property into which any of the Collateral is converted,
whether cash or non-cash, (ii) any and all payments or other property (in
whatever form) made or due and payable on account of any insurance, indemnity,
warranty or guaranty payable to the OPMW Borrower with respect to any of the
Collateral, (iii) any value received as a consequence of the possession of any
Collateral and any
4
payment received from any insurer or other person or entity as a result of the
destruction, loss, theft or other involuntary conversion of whatever nature of
any asset or property which constitutes Collateral, (iv) any and all payments
(in any form whatsoever) made or due and payable in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority, (v) any claim of the OPMW
Borrower against third parties (A) for past, present or future infringement of
any Patent now or hereafter owned by the OPMW Borrower or licensed under a
Patent License, (B) for past, present or future infringement or dilution of any
Trademark now or hereafter owned by the OPMW Borrower or licensed under a
Trademark License or injury to the goodwill associated with any Trademark now or
hereafter owned by the OPMW Borrower, (C) for past, present or future
infringement of any Copyright now or hereafter owned by the OPMW Borrower or
licensed under a Copyright License and (D) for past, present or future breach of
any License and (vi) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"RECEIVABLES" shall have the meaning provided in Section 2.01(a)(iv).
"RELATED CONTRACTS" shall have the meaning provided in Section
2.01(a)(v).
"REVENUE ACCOUNT" shall have the meaning assigned such term in the
Deposit Account Agreement.
"SECURED OBLIGATIONS" shall have the meaning provided in Section
2.01(a).
"TRADEMARK LICENSE" shall mean any written agreement (a) granting any
right to any third party under any Trademark of the OPMW Borrower or (b)
granting any right to the OPMW Borrower under any Trademark of any third party.
"TRADEMARKS" shall mean all of the following now or hereafter owned by
any person (i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications filed in connection
therewith, including registrations and applications in the United States Patent
and Trademark Office, any State of the United States or any other country or any
political subdivision thereof, and all extensions or renewals thereof and (ii)
all goodwill associated therewith.
"UCC" shall mean at any time the Uniform Commercial Code as the same
may from time to time be in effect in the State of New York; provided that if,
by reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
5
Section 2. Assignment; Security Interests; Insurance Proceeds.
2.01 Pledge; Assignment; Grant of Security Interests. (a) To secure the
prompt and complete payment and performance of all obligations of the OPMW
Borrower under the OPMW Guarantee (collectively, the "Secured Obligations"), the
OPMW Borrower hereby assigns and pledges to the OPNY Administrative Agent for
the benefit of the Secured Parties, and hereby grants to the OPNY Administrative
Agent for the benefit of the Secured Parties, a second priority security
interest in, and second priority lien on, all of the OPMW Borrower's right,
title and interest in and to the following, whether now owned or hereafter
acquired (the "Collateral"; capitalized terms used in subsections 2.01(a)(i)
through 2.01(a)(xiv) not otherwise defined herein shall have the meaning set
forth in the OPMW Credit Agreement):
(i) all cash income and receipts derived from the ownership
and ordinary course of operation of the Portfolio Assets, including
revenues from the sale of energy and other products and services
(including electric capacity, ancillary services and transmission
services and products), payments received by the OPMW Borrower from any
Subsidiary pursuant to the Intercompany Notes, Proceeds of business
interruption insurance, interest and other income earned on amounts on
deposit in the Accounts and any amounts realized by the OPMW Borrower
under any Interest Hedge Contract (all of the above, collectively, the
"Assignment Revenues");
(ii) (A) all equipment, wherever located, now or hereafter
existing, (B) all fixtures, (C) to the extent not included in the
foregoing or in clause (iii), all goods, (D) all parts of any of the
foregoing items (A)-(C) and all attachments and accessions thereto,
including, to the extent not included in the foregoing, all other
accessions and (E) all rights in any of the foregoing items (A)-(D) now
or hereafter owned or possessed by the OPMW Borrower for its benefit
(the property described in this clause (ii) being the "Equipment");
(iii) all inventory and other tangible personal property held
for sale by the OPMW Borrower, in all of it is forms, wherever located,
and rights therein owned or possessed by the OPMW Borrower or for its
benefit including, but not limited to, (A) with respect to the
generation of electric power by the OPMW Borrower, raw materials and
work in process therefor, finished goods and by-products thereof, and
materials used or consumed in the manufacture or production thereof,
(B) goods in which the OPMW Borrower has an interest in mass or a joint
or other interest or right of any kind and (C) goods which are returned
to or repossessed by the OPMW Borrower, and all accessions to any of
the foregoing and products thereof and documents relating thereto (the
property described in this clause (iii) being the "Inventory");
(iv) all accounts, Contract Rights, chattel paper, Documents,
instruments, letters of credit, letter-of-credit rights, documents and
other rights or obligations of every kind, now or hereafter existing,
whether or not arising out of or in connection with any sale, lease,
exchange or other disposition of electric
6
power, or other Inventory, goods or the provision or rendering of any
service by or to the OPMW Borrower and all tax refunds, tax refund
claims or guarantee claims held by or granted to the OPMW Borrower (any
and all such accounts, Contract Rights, chattel paper, Documents,
instruments, obligations and other property described in this clause
(iv) being the "Receivables");
(v) all rights now or hereafter existing in and to all
security agreements, leases and other contracts securing or otherwise
relating to any Receivables (the property described in this clause (v)
being the "Related Contracts");
(vi) all general intangibles, intellectual or other property
of any kind or nature now owned or hereafter acquired by the OPMW
Borrower, including payment intangibles, software, permits,
reversionary interests in pension plan assets, inventions, designs,
Patents, Copyrights, Trademarks, Licenses and associated goodwill,
trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software,
customer lists, subscription lists, databases and related
documentation, registrations, franchises, and all other intellectual or
other similar property rights not otherwise described above, but
excluding Receivables (the property described in this clause (vi) being
the "General Intangibles");
(vii) all generating, electricity, environmental and other
licenses, permits and approvals of any federal, state, municipal or
other governmental department, commission, board, bureau, agency, court
or other instrumentality, domestic or foreign, now or hereafter held by
the OPMW Borrower or in which the OPMW Borrower may have an interest
and relating to the operation, maintenance, or use and occupancy of the
Portfolio Assets, except that any such license, permit or approval
which as a matter of law is not assignable is hereby excluded from such
lien and security interest to the extent that and for such time as the
same shall not be so assignable, and all rights (whether or not earned
by performance) under any franchises, documents, licenses, contracts or
agreements now owned or hereafter acquired with the rights to all
renewals thereof assignable by law (the property described in this
clause (vii) being the "Pledged Permits");
(viii) (A) all policies of insurance, now or hereafter held by
the OPMW Borrower (as required under Section 5.06 of the OPMW Credit
Agreement and the other Financing Documents), including casualty and
liability, business interruption and any title insurance, and including
all Proceeds therefrom, and (B) all rights, now or hereafter held, by
the OPMW Borrower to any warranties of any manufacturer or contractor
or any other Person;
(ix) all books, correspondence, credit files, records,
invoices and other Documents, now or hereafter in the possession or
control of the OPMW Borrower or any Person acting for the OPMW Borrower
and relating to the Portfolio Assets and all reports of the Independent
Engineer or any other Person and all other
7
reports relating to the acquisition, operations, viability,
performance, maintenance and output of the Portfolio Assets;
(x) all balances, credits, deposits, deposit and securities
accounts, investment property, money or moneys whether now existing or
hereafter held in the name or on behalf of the OPMW Borrower, whether
(A) in the possession or control of the OPMW Borrower, (B) in the
possession or control of, or in transit to, the OPNY Administrative
Agent, or (C) held by third parties; all monies, documents,
instruments, investment property and financial assets required to be
deposited with or delivered to the OPMW Administrative Agent or any
securities intermediary pursuant to any term of this Agreement or any
of the other Financing Documents, including all amounts held or
deposited in or credited to the Accounts and all cash and all monies
and Permitted Investments and other financial assets and investment
property and instruments held in or credited to such Accounts;
(xi) each Project Contract to which it is a party and each
other lease, power, fuel, transportation, management or other agreement
now existing or hereafter entered into by the OPMW Borrower relating to
the acquisition, operation, maintenance or use and occupancy of the
Portfolio Assets, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and of
this Agreement and the OPMW Credit Agreement (the agreements described
in this clause (xi), as so amended, supplemented or modified, being the
"Assigned Agreements"), including all rights of the OPMW Borrower (A)
to receive moneys due and to become due under or pursuant to the
Assigned Agreements, to compel performance and otherwise to exercise
all remedies thereunder, including all rights to make determinations,
to exercise any election or option contained in such agreements
(including termination thereof), to give or receive any notice or
consent, to demand and receive any property which is the subject of any
of the Assigned Agreements, to file any claims and generally to take
any action which (in the opinion of the OPNY Administrative Agent or
any Secured Party) may be necessary or advisable in connection with any
of the foregoing, and (B) to receive the Proceeds of any claim for
damages arising out of or for breach of any Assigned Agreement and
Proceeds of any insurance, indemnity, warranty or guaranty with respect
to the Assigned Agreements;
(xii) all commercial tort claims, including those more
particularly described in Schedule 1 hereto;
(xiii) to the extent not included in clauses (i) through (xii)
above, or excepted therein, all other personal property of the OPMW
Borrower of any kind or description whatsoever, wherever located,
whether now owned or hereafter acquired, tangible or intangible; and
(xiv) all accessions and additions to, substitutions for, and
all replacements, products and Proceeds of any and all of the
Collateral (including any proceeds which constitute property of the
types described in clauses (i)-(xiii),
8
above) and, to the extent not otherwise included, all (A) payments
under insurance (whether or not the OPNY Administrative Agent is the
loss payee thereof or an additional insured thereunder), and any
indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the Collateral, (B) any other
amounts from time to time paid or payable under or in connection with
any of the Collateral, (C) cash and (D) all supporting obligations (all
of the foregoing items in clauses (ii) - (xiii) above and in this
clause (xiv), collectively, the "Assignment Collateral").
(b) The sale, assignment, conveyance, setting over, pledge and transfer
to the OPNY Administrative Agent under this Agreement extends to all Assignment
Revenues which the OPMW Borrower may acquire at any time during the continuation
of this Agreement. The security interest of the OPNY Administrative Agent held
under this Agreement extends to all Assignment Collateral which the OPMW
Borrower may acquire at any time during the continuation of this Agreement.
(c) Upon the indefeasible payment in full in cash of the OPMW
Obligations, the OPMW Borrower shall take such actions under each Assigned
Agreement as are permitted under the terms and conditions of such Assigned
Agreement, and shall otherwise use commercially reasonable efforts, to grant or
to cause to be granted to the OPNY Administrative Agent the same rights as are
granted to, and benefits provided to, the OPMW Administrative Agent under the
Consents (as defined in the OPMW Credit Agreement) with regard to such Assigned
Agreement.
(d) The Assignment Revenues received pursuant to Section 2.01(a)(i)
above shall be applied in accordance with the provisions the Holdco Deposit
Account Agreement and the OPNY Deposit Account Agreement.
(e) Notwithstanding any provision of the Agreement, the OPMW Borrower
shall not be in breach or default of any obligation under this Agreement for any
failure by the OPMW Borrower to (i) notify any Person of the Lien and security
interest purported to be granted under this Agreement or to cause or direct any
cash, receipts or other monies to be paid to the OPNY Administrative Agent, (ii)
obtain any consent to assignment of any Collateral, or (iii) deliver to the OPNY
Administrative Agent any Collateral the possession or exclusive control of which
is required for the perfection of the Lien and security interest granted by this
Agreement during any period when the First Lien Borrower Security Agreement is
in effect.
2.02 Power of Attorney. The OPMW Borrower hereby irrevocably appoints
the OPNY Administrative Agent as its attorney-in-fact with right of
substitution, so that the OPNY Administrative Agent or any other Person
empowered by the OPNY Administrative Agent shall be authorized, without need of
further authorization from the OPMW Borrower, upon the occurrence and during the
continuance of an Event of Default and in preservation of the rights of the OPNY
Administrative Agent and the OPNY Lenders hereunder so long as such Event of
Default is continuing and has not been waived by an appropriate vote or other
action by the Required Lenders (any action or exercise of powers, rights or
remedies under this Section 2.02 to be subject to, and in accordance with, the
terms of the OPNY Credit Agreement and all applicable Requirements of Law):
9
(a) to effect the sale of any of the Assignment Collateral in
one or more transactions to the extent permitted by applicable
Requirements of Law and in any commercially reasonable manner as may be
determined by the attorney-in-fact, which, subject to the foregoing,
may include the direct sale without public auction of any such
Assignment Collateral at such price, and upon such terms as may be
determined by the attorney-in-fact;
(b) to enter upon any premises where the Assignment Collateral
or any part thereof may be located without the need for a court order
or other form of authority otherwise than upon the authority granted
herein;
(c) to take and retain actual possession and control of any
such Assignment Collateral as receivers without bond or otherwise, and
transport any of it to any location as determined by such
attorney-in-fact;
(d) to make any repairs, additions and improvements on the
Assignment Collateral as such attorney-in-fact shall reasonably deem
proper or necessary;
(e) to administer, manage and use any of the Assignment
Collateral;
(f) to conclude any agreement and collect any monies
thereunder or otherwise due to the OPMW Borrower in respect of, or
generated through the usage of, any of the Assignment Collateral;
(g) to exercise in any commercially reasonable manner any of
the rights of the OPMW Borrower arising under or in connection with the
Assigned Agreements and to designate or delegate to another Person or
entity, in substitution of such attorney-in-fact, the exercise in any
commercially reasonable manner of such rights of the OPMW Borrower,
under such terms as such attorney-in-fact shall deem proper or
necessary;
(h) to collect, claim and receive all monies and avail of all
benefits that accrue, and that may become due and payable to the OPMW
Borrower under the Assigned Agreements and to hold the same as security
for the timely payment and discharge by the OPMW Borrower of the
Secured Obligations, and the faithful performance of the covenants and
obligations of the OPMW Borrower as set forth in any of the Financing
Documents;
(i) to send written notice to all the obligors, instructing
any or all of them to pay all monies due and owing to the OPMW Borrower
from time to time under the Assigned Agreements, to the OPNY Revenue
Account or such other account as may be required or contemplated by the
OPNY Deposit Account Agreement;
(j) to institute and maintain such suits and proceedings as
such attorney-in-fact shall deem expedient to prevent any impairment of
the Assignment Collateral or to preserve and protect such
attorney-in-fact's interest therein;
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(k) to execute and deliver such deeds of conveyance or sale as
may be necessary or proper for the purpose of conveying full title and
ownership, free from any claims and rights of the OPMW Borrower, to any
of the Assignment Collateral, after foreclosure thereof; and
(m) in general, to sign such agreements and documents and
perform such acts and things required, necessary or, in the opinion of
such attorney-in-fact, advisable, to fully accomplish the purpose
hereof.
The OPMW Borrower hereby confirms and ratifies any and all actions and
things performed or done by the OPNY Administrative Agent as the OPMW Borrower's
attorney-in-fact or any of its representatives in each case pursuant to the
powers granted hereunder.
This special power of attorney shall be deemed coupled with an
interest, and cannot be revoked by the OPMW Borrower until no OPNY Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Obligations are indefeasibly paid in full in cash. Upon the occurrence
and during the continuance of any Event of Default, the OPMW Borrower shall
abstain from exercising any rights under any of the Assigned Agreements which
shall be inconsistent with the exercise of the rights and functions herein
granted to the OPNY Administrative Agent as the attorney-in-fact, including
abstaining from collecting, claiming and receiving any monies under the Assigned
Agreements, provided, that, nothing herein shall prevent the OPMW Borrower from,
except during the exercise by the OPNY Administrative Agent of any such rights
and functions, undertaking the OPMW Borrower's operations in the ordinary course
of business in accordance with the Assigned Agreements, including collecting,
claiming and receiving monies under the Assigned Agreements. To the extent that
the OPMW Borrower shall receive any monies in respect thereof, notwithstanding
the provisions of this Section 2.02, the OPMW Borrower shall be deemed to have
received such funds for the account of the OPNY Administrative Agent and shall
hold the same in trust and promptly pay the same to the OPNY Administrative
Agent for deposit in the OPNY Revenue Account (or other account as may be
required or contemplated by the OPNY Deposit Account Agreement) and application
pursuant to the OPNY Deposit Account Agreement.
All reasonable costs, expenses, charges and fees paid or incurred by
the OPNY Administrative Agent in the exercise of any of the rights, remedies or
powers granted hereunder shall be for the account of the OPMW Borrower, and the
OPMW Borrower undertakes promptly on demand to pay the same or, as the case may
be, to reimburse the OPNY Administrative Agent and/or its agents,
representatives, successors and assignees as the case may be, for any monies
paid by it with interest thereon at the Default Rate from the date the same
shall have been paid by the OPNY Administrative Agent and/or its agents,
representatives, successors and assigns until actually paid by the OPMW Borrower
to the extent that there are then insufficient funds available in the OPNY
Revenue Account for this purpose.
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Section 3. General Representations, Warranties and Covenants
The OPMW Borrower represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement and the satisfaction of the Secured Obligations, as follows:
3.01 Necessary Filings. (a) As of the Restructuring Effective Date, all
filings, registrations, recordings and control necessary or appropriate to
create, (i) the sale, assignment, conveyance, setting over and transfer of the
Assignment Revenues by the OPMW Borrower to the OPNY Administrative Agent and
(ii) the security interest granted by the OPMW Borrower to the OPNY
Administrative Agent hereby in respect of the Assignment Collateral have been
made or accomplished, and (A) the sale, assignment, conveyance, setting over and
transfer of the Assignment Revenues to the OPNY Administrative Agent pursuant to
this Agreement constitutes a valid and enforceable sale, assignment, conveyance,
setting over and transfer and (B) the security interest granted to the OPNY
Administrative Agent pursuant to this Agreement in and to the Assignment
Collateral constitutes a valid, enforceable, and upon the filing of (1) all
Financing Statements in the filing offices noted on Schedule 2 and (2) if
applicable, fully executed Assignments of Security Interests, substantially in
the forms of Exhibits A and B hereto, as applicable, by the United States Patent
and Trademark Office and the United States Copyright Office pursuant to 35
U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss.ss. 205, as applicable, to
perfect the security interests granted to the OPNY Administrative Agent and the
Secured Parties in the federally registered Copyrights, Patents, Trademarks and
Licenses, perfected security interest in the Assignment Revenues and Assignment
Collateral (except, in each case for (x) Assignment Collateral referenced in
Section 2.01(e) and other Assignment Collateral that is not material and (y)
vehicles and any emergency response boat) superior and prior to the rights of
all other Persons therein and, in each case, subject to no other Liens, sales,
assignments, conveyances, settings over or transfers other than Permitted Liens
(as defined in the OPMW Credit Agreement) and the security interests granted to
the OPMW Administrative Agent under the First Lien Borrower Security Agreement.
(b) It is acknowledged and agreed that, unless and until permitted in
accordance with the terms and conditions of Section 9.12 and the Intercreditor
Agreement, any certificates, instruments or other documents or things evidencing
Collateral shall be delivered and endorsed to, or be registered as a first Lien
in favor of, and shall remain in the possession of, the OPMW Administrative
Agent, and that notwithstanding any provision of any Financing Document, no
breach, Default or Event of Default shall occur or exist as a result thereof.
3.02 No Liens. The OPMW Borrower is, as of the Restructuring Effective
Date, as to the Assignment Revenues and Assignment Collateral, and the OPMW
Borrower is, or will be, as the case may be, as to any Assignment Collateral
acquired by it from time to time after the date hereof, the owner of all such
Assignment Revenues and Assignment Collateral free from any Lien or other right,
title or interest of any Person (other than Permitted Liens (as defined in the
OPMW Credit Agreement)) and the security interests granted to the OPMW
Administrative Agent under the First Lien Borrower Security Agreement) and the
OPMW Borrower shall defend such Assignment Revenues and Assignment Collateral
against all claims
12
and demands of all Persons (other than claims and demands of the OPMW
Administrative Agent or the Collateral Agent) at any time claiming the same or
any interest therein adverse to the OPNY Administrative Agent. Without limiting
the generality of the foregoing, the OPMW Borrower shall not assign, charge,
convey, sell, set over, transfer, or grant any security interest in the Assigned
Agreements, any of the other Assignment Collateral or any of the Assignment
Revenues other than pursuant to the Security Documents (as defined in the OPMW
Credit Agreement) or the OPNY Second Lien Documents or as expressly permitted by
the OPMW Credit Agreement.
3.03 Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Assignment Revenues or the Assignment Collateral and so long as any of the
Secured Obligations remain unpaid or any Commitments remain outstanding, the
OPMW Borrower will not authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Assignment Revenues or the
Assignment Collateral, in each case, except financing statements filed or to be
filed in respect of and covering the security interests granted hereby, or by
the other Security Documents (as defined in the OPMW Credit Agreement) or the
OPNY Second Lien Documents, by the OPMW Borrower or Permitted Liens (as defined
in the OPMW Credit Agreement).
3.04 Jurisdiction of Organization; Chief Executive Office, Records. (a)
The jurisdiction of organization of the OPMW Borrower, the exact legal name of
the OPMW Borrower, any other names the OPMW Borrower has used in the last five
years and the addresses of the OPMW Borrower's chief executive office currently
and for the last five years are set forth on Schedule 2 hereto. The OPMW
Borrower will not change its name or its jurisdiction of organization or move
its chief executive office except to such new name, jurisdiction or location as
may be permitted in accordance with Section 3.04(b). The originals of all
documents evidencing all Receivables, General Intangibles and Contract Rights of
the OPMW Borrower and the only original books of account and records of the OPMW
Borrower relating thereto are, and will continue to be, kept at the locations
disclosed in Schedule 2, or at such new locations as the OPMW Borrower may
establish in accordance with Section 3.04(b). All Receivables, General
Intangibles and Contract Rights of the OPMW Borrower are, and will continue to
be, maintained at, and controlled and directed (including for general accounting
purposes) from, such office locations shown above, or such new locations as the
OPMW Borrower may establish in accordance with Section 3.04(b).
(b) The OPMW Borrower shall not change its name or its jurisdiction of
organization or establish a new location for its offices until (i) it shall have
given to the OPNY Administrative Agent not less than thirty (30) days' prior
written notice of its intention so to do, clearly describing such new name,
jurisdiction or location and providing such other information in connection
therewith as the OPNY Administrative Agent may reasonably request and (ii) with
respect to such new name, jurisdiction or location, it shall have taken all
action, reasonably satisfactory to the OPNY Administrative Agent, to maintain
the sale, assignment, conveyance, setting over and transfer of the Assignment
Revenues to the OPNY Administrative Agent and the
13
security interest of the OPNY Administrative Agent in the Assignment Collateral
intended to be granted hereby at all times fully perfected, of second priority
and in full force and effect.
3.05 Recourse. Without limitation of Section 9.11, this Agreement is
made with full recourse to the OPMW Borrower and pursuant to and in reliance
upon all the warranties, representations, covenants and agreements on the part
of the OPMW Borrower contained herein, in the OPMW Credit Agreement, in any of
the other OPMW Financing Documents and otherwise in writing in connection
herewith or therewith.
3.06 Consents. (a) Except as provided in Section 2.01(e) or in the
Intercreditor Agreement and except as set forth on Schedule 3.06(a), no other
consent of any other Person and no authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority (as defined in the
OPMW Credit Agreement) is required as of the date of the execution and delivery
of this Agreement (i) for the sale, assignment, conveyance, setting over and
transfer of the Assignment Revenues to the OPNY Administrative Agent, (ii) for
the grant by the OPMW Borrower of the pledge, assignment and security interest
granted hereby with respect to the Assignment Collateral (other than contracts
that are not material or are not Project Contracts (as defined in the OPMW
Credit Agreement)) or for the execution, delivery or performance of this
Agreement by the OPMW Borrower, (iii) for the perfection or maintenance of the
sale, assignment, conveyance, setting over and transfer effected hereby with
respect to the Assignment Revenues and the pledge, assignment and security
interest created hereby with respect to the Assignment Collateral (including the
second priority nature of such sale, assignment, conveyance, setting over and
transfer by way of security with respect to the Assignment Revenues and such
pledge, assignment and security interest with respect to the Assignment
Collateral) other than the filing of appropriate financing statements or similar
filings in respect of the Assignment Revenues and Assignment Collateral, in each
case, or (iv) for the exercise by the OPNY Administrative Agent of the rights
provided for in this Agreement or the remedies in respect of the Assignment
Revenues and the Assignment Collateral pursuant to this Agreement.
(b) Except as otherwise expressly provided in the OPMW Credit Agreement
or the OPMW Deposit Account Agreement, the OPMW Borrower shall use commercially
reasonable efforts to obtain, after the date of the execution and delivery of
this Agreement, such other consents, authorizations, and approvals and obtain
such other actions, and provide such notices to or make such filings with, any
Governmental Authority (as defined in the OPMW Credit Agreement) as may be
necessary or reasonably requested by the OPNY Administrative Agent or any
Secured Party, after the date of this Agreement (i) for the sale, assignment
conveyance, setting over and transfer of the Assignment Revenues to the OPNY
Administrative Agent, (ii) for the grant by the OPMW Borrower of the pledge,
assignment and security interest granted hereby or for the execution, delivery
or performance of this Agreement by the OPMW Borrower, (iii) for the perfection
or maintenance of the sale, assignment, conveyance, setting over and transfer
effected hereby with respect to the Assignment Revenues and the pledge,
assignment and security interest created hereby with respect to the Assignment
Collateral (including the second priority nature of such sale, assignment,
conveyance, setting over and transfer by way of security with respect to the
Assignment Revenues and such pledge, assignment and security interest with
respect to the Assignment Collateral) or (iv) for the exercise by the OPNY
Administrative Agent of the rights, remedies and powers provided for in
14
this Agreement or the remedies in respect of the Assignment Revenues and the
Assignment Collateral pursuant to this Agreement.
3.07 Pledged Permits. Upon the occurrence and during the continuance of
an Event of Default and after notice to the OPMW Borrower that the OPNY
Administrative Agent intends to exercise remedies pursuant to the Financing
Documents, the OPMW Borrower shall, at the request of the OPNY Administrative
Agent, take such steps requested by the OPNY Administrative Agent that are
necessary to assist and cooperate, to the extent within the OPMW Borrower's
control using commercially reasonable efforts, in the transfer of the Pledged
Permits to the OPNY Administrative Agent or any other party or parties
designated by the OPNY Administrative Agent effective upon transfer of title to
the applicable Portfolio Assets (as defined in the OPMW Credit Agreement) to
which such Pledged Permits relate, including the filing of a joint application
by the OPMW Borrower with the OPNY Administrative Agent or the OPNY
Administrative Agent's designees, for the transfer of the Pledged Permits
pursuant to 18 C.F.R. Part 9 or any successor or replacement regulations
thereto, all pursuant to and to the extent permitted by applicable Requirements
of Law.
3.08 Farm Products; Timber; As-Extracted Collateral. As of the
Restructuring Effective Date, none of the Assignment Revenues or the Assignment
Collateral constitutes, or is Proceeds of, farm products, timber to be cut or
as-extracted collateral. If at any time after the Restructuring Effective Date
any of the Assignment Revenues or the Assignment Collateral is farm products,
timber to be cut or as-extracted collateral, in each case with a value in excess
of $500,000 (as reasonably determined by the OPMW Borrower), the OPMW Borrower
shall take all actions required in accordance with Section 6.02.
3.09 Commercial Tort Claims. As to any judgment in respect of any
commercial tort claim of the OPMW Borrower having a value in excess of $500,000
which may arise, the OPMW Borrower will notify the OPNY Administrative Agent
within 45 days of any such commercial tort claim judgment being entered in favor
of the OPMW Borrower, and the OPMW Borrower will execute and deliver to the OPNY
Administrative Agent such additional security agreements or amendments to this
Agreement in form and substance reasonably satisfactory to the OPMW
Administrative Agent which identify and assign, pledge and create a valid,
perfected security interest in such judgments in respect of commercial tort
claims of the OPMW Borrower as they arise.
3.10 Letters of Credit. The OPMW Borrower will deliver to the OPMW
Administrative Agent each letter of credit having a stated amount in excess of
$500,000 in which it is the beneficiary thereof, duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in accordance with
the terms of the Intercreditor Agreement and otherwise in form and substance
reasonably satisfactory to the OPNY Administrative Agent. The OPMW Borrower will
take any and all actions within its control necessary (or reasonably requested
by the OPNY Administrative Agent), from time to time, to cause the OPMW
Administrative Agent to obtain exclusive control of any letter-of-credit rights
which have a value in excess of $500,000 owned by the OPMW Borrower in a manner
reasonably acceptable to the OPNY Administrative Agent.
15
3.11 Chattel Paper. The OPMW Borrower will deliver to the OPMW
Administrative Agent all tangible chattel paper having a value in excess of
$500,000 duly endorsed and accompanied by duly executed instruments of transfer
or assignment, all in accordance with the terms of the Intercreditor Agreement
and otherwise in form and substance reasonably satisfactory to the OPMW
Administrative Agent. The OPMW Borrower will also deliver to the OPMW
Administrative Agent all security agreements securing any such chattel paper and
execute UCC financing statement amendments assigning to the OPMW Administrative
Agent any UCC financing statements filed by the OPMW Borrower in connection with
such security agreements. The OPMW Borrower will mark conspicuously all such
chattel paper with a legend in form and substance reasonably satisfactory to the
OPNY Administrative Agent, indicating that such chattel paper is subject to the
security interests created hereunder.
3.12 Bank Accounts. The OPMW Borrower shall not maintain any deposit
accounts or securities accounts other than the Accounts.
Section 4. Special Provisions Concerning Receivables; Contract Rights;
Instruments.
4.01 Additional Representations and Warranties: As of the time when
each Receivable and General Intangible arises, the OPMW Borrower shall be deemed
to have represented and warranted, to the knowledge of the OPMW Borrower and
unless otherwise promptly disclosed by the OPMW Borrower in writing to the OPNY
Administrative Agent upon the OPMW Borrower obtaining actual knowledge thereof,
that such Receivable or General Intangible, as the case may be, and all records,
papers and documents relating thereto (if any) are genuine and in all respects
what they purport to be, and that all records, papers and documents (if any)
relating thereto (i) will represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by the
respective account debtor arising out of the performance of labor or services or
the sale or lease and delivery of electricity or capacity, or any other
merchandise listed therein, or both, and (ii) are in compliance and will conform
with all Requirements of Law, except to the extent that the failure to comply or
conform therewith could not reasonably be expected to have a Material Adverse
Effect.
4.02 Maintenance of Records. The OPMW Borrower will keep and maintain
at its own cost and expense records consistent with GAAP of the Assigned
Agreements and the Receivables, including the originals of all documentation
(including each Assigned Agreement) with respect thereto, records of all
payments received, all credits granted thereon, but subject in each case to
customary record retention policies, and all other dealings therewith. The OPMW
Borrower will make the same available to the OPNY Administrative Agent for
inspection pursuant to Section 5.08 of the OPMW Credit Agreement.
4.03 Payments Under Assigned Agreements, Receivables and General
Intangibles. (a) Non-Payment to the OPNY Administrative Agent. Subject to the
OPMW Deposit Account Agreement, if the OPMW Borrower shall receive payment
directly from any party to an Assigned Agreement (including any letter of credit
issued for the benefit of the OPMW Borrower in accordance with the terms
thereof) or from any account debtor or other
16
obligor under any Receivable, General Intangible or any other payments under
such Assigned Agreements, Receivables and General Intangibles, the OPMW Borrower
shall receive such payments in a constructive trust for the benefit of the OPNY
Lenders, shall segregate such payments from such party's other funds, and shall
promptly transmit and deliver such payments to the OPNY Administrative Agent in
the same form as so received (with any necessary endorsement).
(b) Application of Funds. All amounts received by the OPNY
Administrative Agent pursuant to this Section 4.03 or Section 4.04 shall be
deposited into the Revenue Account and applied as set forth in the Deposit
Account Agreement.
4.04 Direction to Account Debtors; Contracting Parties; etc. The OPMW
Borrower agrees that the OPNY Administrative Agent may, upon reasonable notice
to the OPMW Borrower of its failure to do so, directly notify the obligors with
respect to any Receivables, General Intangibles and/or under any Assigned
Agreements to make payments with respect thereto as provided in Sections 2.01(c)
and 4.03. The reasonable costs and expenses (including reasonable attorneys'
fees) of collection, whether incurred by the OPMW Borrower or the OPNY
Administrative Agent, shall be borne by the OPMW Borrower.
4.05 Modification of Terms, etc. Except as otherwise provided in the
OPMW Credit Agreement or as permitted in Section 4.06 hereof, (a) the OPMW
Borrower shall not rescind or cancel any Indebtedness (as defined in the OPMW
Credit Agreement) in any fiscal year in an amount, in the aggregate, in excess
of $500,000 for borrowed money, or modify in any manner adverse to the OPMW
Borrower or the Secured Parties any material term thereof, or make any
adjustment materially adverse to the OPMW Borrower or the Secured Parties with
respect thereto, or grant any extension for performance of the same, or
compromise or settle any dispute, claim, suit or legal proceeding relating
thereto, or sell any Receivable, General Intangible or Assigned Agreements, or
interest therein, without the prior written consent of the OPNY Administrative
Agent, which consent the OPNY Administrative Agent will not unreasonably
withhold, delay or condition, and (b) the OPMW Borrower will duly fulfill all
material obligations on its part to be fulfilled under or in connection with the
Receivables, the General Intangibles and the Assigned Agreements and will do
nothing to impair the security interests of the OPNY Administrative Agent
(including the creation, attachment and priority thereof) in the Receivables,
the General Intangibles or the Assigned Agreements.
4.06 Collection. The OPMW Borrower shall endeavor to cause to be
collected from the account debtor named in the OPMW Borrower's Receivables and
General Intangibles or obligor under any Assigned Agreements, and paid by such
account debtor directly to the Revenue Account, as and when due (including
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) any and all amounts owing under
or on account of such Receivable, General Intangible or Assigned Agreements, and
apply promptly upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable, General Intangible or under such
Assigned Agreements, except that, unless an Event of Default shall have occurred
and be continuing (and shall not have been waived by an appropriate vote or
other action by the Required Lenders in accordance with Section 9.02 of the OPNY
Credit Agreement), the OPMW Borrower may allow in the ordinary
17
course of business as adjustments to amounts owing under the OPMW Borrower's
Receivables, General Intangibles and Assigned Agreements an extension or renewal
of the time or times of payment, or settlement, adjustment, release, compromise,
settlement or other similar action for less than the total unpaid balance, which
the OPMW Borrower finds appropriate to enhance collectibility in accordance with
sound business judgment. The reasonable costs and expenses (including reasonable
attorneys fees) of collection, whether incurred by the OPMW Borrower or the OPNY
Administrative Agent, shall be borne by the OPMW Borrower.
Section 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
TRADEMARKS.
5.01 Infringements. Within ten (10) Business Days after a Responsible
Officer of the OPMW Borrower obtains actual knowledge thereof, the OPMW Borrower
shall notify the OPNY Administrative Agent and the OPNY Lenders in writing of
all pertinent details available to it, with respect to any infringement or other
violation of the OPMW Borrower's rights in, or any claim of any such
infringement of, any, Patent, Copyright or Trademark, whether or not such right
is presently held by the OPMW Borrower or third party. As to each such instance,
absent the Required Lenders' authorization to proceed otherwise (as required
pursuant to Section 9.02 of the OPNY Credit Agreement), which authorization
shall not be unreasonably withheld, delayed or conditioned, and to the extent
permitted by applicable Requirements of Law, the OPMW Borrower shall use
commercially reasonable efforts to pursue a remedy.
5.02 Other Patents, Copyrights and Trademarks. If the OPMW Borrower
hereafter acquires rights in any Patent, Copyright or Trademark, the OPNY
Borrower shall deliver to the OPNY Administrative Agent and the OPNY Lenders
within 60 days, a copy of such Patent, Copyright or Trademark and a second
priority perfected security interest therein or a collateral assignment thereof,
as appropriate.
5.03 Remedies. If an Event of Default shall occur and be continuing
(and shall not have been waived by an appropriate vote or other action as
required pursuant to Section 9.02 of the OPNY Credit Agreement), the OPNY
Administrative Agent, acting pursuant to and in accordance with the terms of the
Financing Documents and applicable Requirements of Law may, (a) declare the
entire right, title, and interest of the OPMW Borrower in any Patents,
Copyrights and Trademarks vested in the OPNY Administrative Agent, in which
event such right, title, and interest immediately shall vest in the OPNY
Administrative Agent; and (b) take and practice or use or sell any or all of
such Patents, Copyrights or Trademarks, or take and use or sell the OPMW
Borrower's rights in such Patents, Copyrights or Trademarks, along with the
goodwill and all other elements of the OPMW Borrower's ongoing business
symbolized by such assets and secured under this Agreement, and the right to
carry on the business of the OPMW Borrower in connection with which such assets
have been used. The OPMW Borrower shall execute any other and further documents
which the OPNY Administrative Agent may request further to confirm the foregoing
and to transfer to the OPNY Administrative Agent ownership of the OPMW
Borrower's rights to such Trademarks, Patents and/or Copyrights.
18
Section 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT
COLLATERAL; INSURANCE.
6.01 Protection of the OPNY Administrative Agent's Interests. The OPMW
Borrower will do nothing to impair the rights of the OPNY Administrative Agent
or the OPNY Lenders in the Assignment Revenues and the Assignment Collateral,
provided, however, that nothing herein shall prevent the OPMW Borrower, prior to
the exercise by the OPNY Administrative Agent of any such rights, from
undertaking the OPMW Borrower's operations in the ordinary course of business in
accordance with the Assigned Agreements and the OPMW Credit Agreement. The OPMW
Borrower assumes all liability and responsibility in connection with the
Assignment Revenues and the Assignment Collateral and the liability of the OPMW
Borrower with respect to the Secured Obligations shall in no way be affected or
diminished by reason of the fact that such Assignment Revenues and Assignment
Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever
unavailable to the OPMW Borrower.
6.02 Further Actions. Except as provided for in the Intercreditor
Agreement, the OPMW Borrower will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the OPNY Administrative Agent and the OPNY
Lenders from time to time such lists, descriptions and designations of the
Assignment Revenues and the Assignment Collateral, warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title, bailee
and warehousemen acknowledgements, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps, relating to the Assignment Revenues and the Assignment
Collateral and other property or rights covered by the interests hereby granted,
which is necessary to perfect, preserve or protect its ownership and security
interests in the Assignment Revenues and the Assignment Collateral, or
as-extracted collateral through filing, possession, control or otherwise or is
otherwise reasonably requested by the OPNY Administrative Agent; provided, that
the foregoing shall not require the OPMW Borrower to obtain any Additional
Contract Consent except to the extent reasonably requested by the OPNY
Administrative Agent, and, to the extent so requested, the OPMW Borrower shall
use commercially reasonable efforts to obtain such Additional Contract Consent.
6.03 Financing Statements. The OPMW Borrower agrees to execute and
deliver to the OPNY Administrative Agent, on behalf of the OPNY Lenders,
financing statements, continuation statements, amendments thereto, filings with
the United States Patent and Trademark Office or United States Copyright Office
(or any successor office or any similar office in any other country) or similar
statements or instruments of registration under the law of any jurisdiction, in
form reasonably acceptable to the OPNY Administrative Agent, as it may from time
to time reasonably request or as are necessary or desirable in its reasonable
opinion to establish, maintain, perfect, continue, enforce or protect the
security interests contemplated hereunder as valid, enforceable, second priority
security interests as provided herein and the other rights and security
contemplated herein, all in accordance with the UCC as enacted in any and all
relevant jurisdictions or any other applicable Requirement of Law. The OPMW
Borrower authorizes the OPNY Administrative Agent to authenticate and file any
such financing statements without the signature of the OPMW Borrower and naming
the OPMW Borrower as debtor and the OPNY Administrative Agent as secured party.
The OPMW Borrower will pay
19
any applicable filing fees and related expenses under this Section 6.03. Unless
specifically permitted under applicable Requirements of Law, the OPMW Borrower
shall not file any amendments or terminations of financing statements filed to
establish and maintain the security interests contemplated hereunder without the
OPNY Administrative Agent's authorization, and any such filing made without the
OPNY Administrative Agent's authorization, is ineffective.
Section 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
7.01 Remedies; Obtaining the Assignment Collateral Upon Default. The
OPMW Borrower agrees that, if any Event of Default shall have occurred and be
continuing (and shall not have been waived by an appropriate vote or other
action by the Required Lenders), then and in every such case, subject to the
terms and provisions of the OPNY Credit Agreement and any applicable Requirement
of Law then in effect, the OPNY Administrative Agent, in addition to any rights
now or hereafter existing under any applicable Requirement of Law, shall have
all rights as a secured creditor under the UCC or any other applicable
Requirement of Law in all relevant jurisdictions and may, acting pursuant to and
in accordance with the terms of the OPNY Credit Agreement:
(a) personally, or by agents or attorneys, immediately retake
possession of the Assignment Collateral or any part thereof, from the
OPMW Borrower or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that purpose
may enter upon the OPMW Borrower's premises where any of the Assignment
Collateral is located and remove the same and use in connection with
such removal any and all services, supplies, aids and other facilities
of the OPMW Borrower; and
(b) instruct the obligor or obligors on any agreement,
instrument or other obligation (including any other Assigned Agreement,
the General Intangibles and the Receivables) constituting the
Assignment Revenues and Assignment Collateral to make any payment
required by the terms of such instrument or agreement directly to the
OPNY Administrative Agent for deposit in the OPNY Revenue Account (or
any other account required or contemplated by the OPNY Deposit Account
Agreement) and application pursuant to the OPNY Deposit Account
Agreement; and
(c) apply all monies, securities and instruments in the OPNY
Revenue Account, and each other Account, in accordance with the OPNY
Deposit Account Agreement; and
(d) sell, assign or otherwise liquidate, or direct the OPMW
Borrower to sell, assign or otherwise liquidate, any or all of the
Assignment Collateral or any part thereof and take possession of the
proceeds of any such sale or liquidation for deposit in the OPNY
Revenue Account (or any other account required or contemplated by the
OPNY Deposit Account Agreement) and application pursuant to the OPNY
Deposit Account Agreement; and
(e) take possession of the Assignment Collateral or any part
thereof, by directing the OPMW Borrower in writing to deliver the same
to the OPNY
20
Administrative Agent at any place or places designated by the OPNY
Administrative Agent, in which event the OPMW Borrower shall at its own
expense:
(i) promptly cause the same to be moved to the place
or places so designated by the OPNY Administrative Agent and
there delivered to the OPNY Administrative Agent,
(ii) store and keep any Assignment Collateral so
delivered to the OPNY Administrative Agent (to the extent not
physically delivered to the OPNY Administrative Agent) at such
place or places pending further action by the OPNY
Administrative Agent as provided in Section 7.02, and
(iii) while such Assignment Collateral shall be so
stored and kept, provide such guards and maintenance services
as shall be necessary to protect the same and to preserve and
maintain them in good condition;
it being understood that the OPMW Borrower's obligation to so deliver the
Assignment Collateral is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction, the
OPNY Administrative Agent shall be entitled to a decree requiring specific
performance by the OPMW Borrower of such obligation.
7.02 Remedies, Disposition of the Assignment Collateral. Any Assignment
Collateral repossessed by the OPNY Administrative Agent under or pursuant to
Section 7.01, and any other Assignment Collateral whether or not so repossessed
by the OPNY Administrative Agent, may be sold, assigned, leased or otherwise
disposed of under one or more contracts or as an entirety, and without the
necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as the OPNY Administrative Agent, acting in good faith, may, upon
written direction in compliance with any applicable Requirement of Law,
determine to be commercially reasonable. Subject to the foregoing, any of the
Assignment Collateral may be sold, leased or otherwise disposed of, in the
condition in which the same existed when taken by the OPNY Administrative Agent
or after any overhaul or repair which the OPNY Administrative Agent, acting in
good faith, shall determine to be commercially reasonable. Any such disposition
which shall be a private sale or other private proceeding permitted by such
requirements shall be made upon not less than 10 days' written notice to the
OPMW Borrower (except that, if the OPNY Administrative Agent shall determine, in
its sole discretion, that any of the other Collateral threatens to decline
quickly in value or to become worthless, any such sale may be made upon three
days' notice to OPMW Borrower) specifying the time at which such disposition is
to be made and the intended sale price or other consideration therefor, and
shall be subject, for the 10 days after the giving of such notice, to the right
of the OPMW Borrower or any nominee of the OPMW Borrower to acquire the
Assignment Collateral involved at a price or for such other consideration at
least equal to the intended sale price or other consideration so specified. To
the extent permitted by applicable Requirements of Law, the OPNY Administrative
Agent on behalf of the OPNY Lenders may bid for and become the purchaser of the
Assignment Collateral or any item thereof, offered for sale in accordance with
this Section 7.02. If, under mandatory requirements of any applicable
Requirement of Law, the OPNY Administrative Agent shall be required to make
disposition of the Assignment Collateral within a period of time which does not
permit the giving of notice to
21
the OPMW Borrower as hereinabove specified, the OPMW Administrative Agent need
give the OPMW Borrower only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of any applicable Requirement
of Law.
The OPMW Borrower hereby irrevocably appoints the OPNY Administrative
Agent as its attorney-in-fact, so that the OPNY Administrative Agent, or any
Person empowered by the OPNY Administrative Agent, shall, during the continuance
of an Event of Default, be authorized to sell, assign, lease or otherwise
dispose of the Assignment Collateral or any part thereof pursuant to the
provisions of the preceding paragraph, and, in general, to do or cause to be
done all such acts and things which are otherwise required to be done by the
OPMW Borrower under this Agreement.
7.03 Waiver of Claims. Except as otherwise provided in this Agreement
or in any other Financing Document, THE OPMW BORROWER HEREBY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING
IN CONNECTION WITH THE OPNY ADMINISTRATIVE AGENT TAKING POSSESSION OR THE OPNY
ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF THE ASSIGNMENT COLLATERAL, IN EACH
CASE AS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT
WHICH THE OPMW BORROWER WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY
STATUTE OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF ANY SUCH
JURISDICTION, and the OPMW Borrower hereby further waives, to the extent
permitted by applicable Requirements of Law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the gross negligence or
willful misconduct of the OPNY Administrative Agent, any OPNY Lender,
or any Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the OPNY
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
Requirement of Law in order to prevent or delay the enforcement of this
Agreement (including any right to claim that such enforcement should be
stayed pending the outcome of any other action or proceeding (including
any arbitration proceeding)) or the absolute sale of the Assignment
Collateral or any portion thereof, and the OPMW Borrower, for itself
and all who may claim under it, insofar as it or they now or hereafter
lawfully may, hereby waives the benefit of all such applicable
Requirements of Law.
To the extent permitted under applicable Requirements of Law, any sale of, or
the grant of options to purchase, or any other realization upon, any Assignment
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the OPMW Borrower therein and thereto, and shall
be a perpetual bar both at law and in equity against the
22
OPMW Borrower and against any and all Persons claiming or attempting to claim
the Assignment Collateral so sold, optioned or realized upon, or any part
thereof, from, through and under the OPMW Borrower.
7.04 Application of Proceeds. Notwithstanding any other provision of
this Agreement, all payments made under or in connection with this Agreement,
and all moneys collected by the OPNY Administrative Agent upon any sale or other
disposition of the Collateral pursuant to this Agreement, including Sections
7.01 and 7.02, shall be applied in accordance with the Financing Documents. For
the avoidance of doubt, it is understood that the OPMW Borrower shall remain
liable to the extent of any deficiency between the amount of the Proceeds of the
Assignment Collateral and the aggregate amount of the Secured Obligations.
7.05 Remedies Cumulative. No failure or delay on the part of the OPNY
Administrative Agent or any OPNY Lender in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between the OPMW Borrower and the OPNY Administrative Agent or any OPNY
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Financing
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the OPNY
Administrative Agent or any OPNY Lender would otherwise have. No notice to or
demand on the OPMW Borrower in any case shall entitle the OPMW Borrower to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the OPNY Administrative Agent or any OPNY
Lender to any other or further action in any circumstances without notice or
demand.
7.06 Discontinuance of Proceedings. In case the OPNY Administrative
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the OPNY Administrative Agent, then and in
every such case the OPMW Borrower, the OPNY Administrative Agent and each holder
of any of the Obligations shall be restored to their former positions and rights
hereunder with respect to the Assignment Collateral subject to the security
interest created under this Agreement, and all rights, remedies and powers of
the OPNY Administrative Agent shall continue as if no such proceeding had been
instituted.
7.07 Grant of License or Sub-License to Use Patent, Trademark,
Copyright and License Collateral. For the purpose of enabling the OPNY
Administrative Agent to exercise rights and remedies under this Article VII at
such time as the OPNY Administrative Agent shall be lawfully entitled to
exercise such rights and remedies, the OPMW Borrower hereby grants to the OPNY
Administrative Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the OPMW Borrower) to use, license
or sub-license any Patent, Trademark, Copyright or License (to the extent the
OPMW Borrower has authority to sub-license any such License) now owned or
licensed or hereafter acquired or licensed by the OPMW Borrower, and wherever
the same may be located, and including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof. The
use of
23
such license or sub-license by the OPNY Administrative Agent shall be exercised,
at the option of the OPNY Administrative Agent, only upon the occurrence and
during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the OPNY Administrative Agent
while such Event of Default was continuing in accordance herewith shall be
binding upon the OPMW Borrower notwithstanding any subsequent cure of an Event
of Default. The OPNY Administrative Agent agrees to apply the net Proceeds
received from any such license as provided in Section 7.04 hereof.
Section 8. INDEMNITY; EXPENSES.
(a) The OPMW Borrower agrees to indemnify and hold harmless the OPNY
Administrative Agent and each Secured Party from and against any and all claims,
losses and liabilities arising out of or resulting from the Collateral or the
OPMW Borrower's pledge and assignment under this Agreement (including
enforcement against the OPMW Borrower of this Agreement), except claims, losses
or liabilities resulting from the gross negligence or willful misconduct of any
Secured Party or any other Person designated by any Secured Party to act on its
behalf pursuant to this Agreement.
(b) The OPMW Borrower will upon demand pay to the OPNY Administrative
Agent or any Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the OPNY Administrative Agent or any Secured Party may incur in
connection with (i) the administration of this Agreement, (ii) the sale of,
collection from, or other realization upon, any of the Collateral of the OPMW
Borrower, (iii) the exercise or enforcement (whether through negotiations, legal
proceedings or otherwise) of any of the rights of the OPNY Administrative Agent
or any Secured Party hereunder against the OPMW Borrower or (iv) the failure by
the OPMW Borrower to perform or observe any of the provisions hereof.
Section 9. MISCELLANEOUS.
9.01 Notices. All notices hereunder, unless otherwise specified, shall
be provided as specified in Section 9.01 of the OPNY Credit Agreement; provided,
that notices to the OPMW Borrower shall be to the address specified in Section
9.01 of the OPMW Credit Agreement. Promptly after the execution of any and all
material amendments, supplements and waivers, of and to the Assignment Revenues
or Assignment Collateral, originals, if reasonably available and, if not, copies
of such amendments, supplements and waivers shall be delivered to the OPNY
Administrative Agent.
9.02 Waiver, Amendment; Severability. No amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the OPNY Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining
24
provisions or obligations in any other jurisdiction shall not in any way be
affected or impaired thereby.
9.03 Obligations Absolute. To the extent permitted by applicable
Requirements of Law, the obligations of the OPMW Borrower under this Agreement
are independent of the Secured Obligations, and a separate action or actions may
be brought and prosecuted against the OPMW Borrower to enforce this Agreement,
irrespective of whether any action is brought against the OPNY Borrower, any
other pledgor or any guarantor of the Secured Obligations or whether the OPNY
Borrower, any other pledgor or any guarantor of the Secured Obligations is
joined in any such action or actions. All rights of the OPNY Administrative
Agent and the assignment, hypothecation and security interest hereunder, and all
obligations of the OPMW Borrower hereunder, shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of this Agreement, the OPMW
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of the OPMW Borrower, any Credit Party or any other OPMW
Credit Party, the recovery of any judgment against the OPMW Borrower, any Credit
Party or any other OPMW Credit Party, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the OPMW Borrower;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of the OPMW Borrower,
any Credit Party or any other OPMW Credit Party contained in this Agreement, the
OPMW Credit Agreement or any other Financing Document, (ii) any impairment,
modification, release or limitation of the liability of the OPMW Borrower, any
Credit Party or any other OPMW Credit Party or any of their estates in
bankruptcy, or any remedy for the enforcement thereof, resulting from the
operation of any present or future provision of any applicable bankruptcy law,
as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by the OPMW Borrower, the OPNY Administrative Agent or any
other Secured Party of any rights or remedies, (iv) the assignment or the
purported assignment of any property as security for the Secured Obligations,
including all or any part of the rights of the OPMW Borrower under this
Agreement, (v) the extension of the time for payment by the OPMW Borrower, any
Credit Party, any other OPMW Credit Party or any other guarantor of any payments
or other sums or any part thereof owing or payable under any of the terms and
provisions of any Financing Document or of the time for performance by the OPMW
Borrower, any Credit Party or any other OPMW Credit Party of any other
obligations under or arising out of any terms or provisions or the extension of
the renewal of any thereof, (vi) the modification or amendment (whether material
or otherwise) of any duty, agreement or obligation of the OPMW Borrower, any
Credit Party or any other OPMW Credit Party set forth in any Financing Document,
(vii) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting the OPMW Borrower, any Credit Party or any other
OPMW Credit Party or any of their respective assets, or the disaffirmancy of
this Agreement or any Financing Document in any
25
such proceeding, (viii) the release or discharge of the OPMW Borrower, any
Credit Party or any other OPMW Credit Party from the performance or observance
of any agreement, covenant, term or condition contained in any of such
instruments by operation of law, (ix) the unenforceability of this Agreement or
any Financing Document or (x) any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
9.04 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto and shall inure to the benefit of the OPNY
Lenders; provided, however, that the OPMW Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of
the OPNY Administrative Agent and each of the OPNY Lenders. Any OPNY Lender may
transfer, assign or grant all or such relevant part of its rights hereunder in
connection with an assignment or transfer of all or any part of its interest in
its Loans in accordance with the provisions of the OPNY Credit Agreement, and
such assignee shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise. All agreements, statements,
representations and warranties made by the OPMW Borrower herein or in any
certificate or other instrument delivered by the OPMW Borrower or on its behalf
under this Agreement shall be considered to have been relied upon by the OPNY
Lenders and shall survive the execution and delivery of this Agreement, the OPNY
Credit Agreement and the other Financing Documents regardless of any
investigation made by the OPNY Lenders or on their behalf.
9.05 Headings Descriptive, etc. The headings of the several sections
and subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
9.06 Governing Law; Submission to Jurisdiction and Venue. (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE OPMW BORROWER AND EACH SECURED PARTY IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE
OF NEW YORK.
26
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE OPMW BORROWER AND
EACH SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE
OPMW BORROWER AND EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK.
THE OPNY BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE OPMW BORROWER AGREES THAT ANY SECURED PARTY SHALL HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED
AGAINST THE OPNY BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY
SELECTED IN GOOD FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED
PARTY. THE OPMW BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN
THIS PARAGRAPH INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS
(d) THE OPMW BORROWER AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE OPMW BORROWER HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE OPMW BORROWER
TO RECEIVE FOR AND ON BEHALF OF THE OPMW BORROWER SERVICE OF PROCESS IN SUCH
RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE OPMW
BORROWER AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 9.01. THE OPMW
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
27
PREPAID, TO THE OPMW BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (ii)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE, IN EITHER CASE, SOLELY AS PERMITTED
IN SUBSECTION (c) OF THIS SECTION 9.06.
9.07 The OPMW Borrower's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that the OPMW Borrower shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Assignment Revenues or the Assignment Collateral and the OPNY
Administrative Agent and the OPNY Lenders shall have no obligations or
liabilities (except obligations or liabilities resulting from the gross
negligence or willful misconduct of the OPNY Administrative Agent and the OPNY
Lenders) with respect to any Assignment Revenues or Assignment Collateral by
reason of or arising out of or in connection with this Agreement, nor shall the
OPNY Administrative Agent or the OPNY Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of the OPMW Borrower under
or with respect to any Assignment Revenues or Assignment Collateral.
9.08 Termination; Release. This Agreement shall create a continuing
pledge, assignment of hypothecation of and security interest in the Collateral
and shall remain in full force and effect until no OPNY Lender shall have any
Commitment outstanding and until the Notes, together with interest, and all
other Secured Obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the OPNY Administrative
Agent, at the written request and expense of the OPMW Borrower, will promptly
authorize, execute and deliver, as applicable, to the OPMW Borrower the proper
instruments (which may include Uniform Commercial Code termination statements on
form UCC-3) acknowledging the termination of this Agreement, and will promptly
duly assign, transfer and deliver to the OPMW Borrower (without recourse and
without any representation or warranty) free from any interest of the OPNY
Administrative Agent or Lien granted hereunder such of the Assignment Revenues
or Assignment Collateral as may be in possession of the OPNY Administrative
Agent and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement together with such notices to third parties as may be
necessary to countermand any notices previously sent to them pursuant hereto.
9.09 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
9.10 [Intentionally Deleted.]
9.11 Limitation of Recourse. Except as otherwise expressly provided in
the OPMW Financing Documents and the OPNY Financing Documents, the obligations
of the OPMW Borrower hereunder are obligations solely of the OPMW Borrower and
shall not
28
constitute a debt or obligation of any direct or indirect, partner, shareholder
or other equity owner of the OPMW Borrower or any of their respective directors,
officers, agents or employees (each such Person, a "Non-Recourse Party"). No
Non-Recourse Party shall be liable for any amount payable by the OPMW Borrower
under this Agreement and the Secured Parties shall not seek a money judgment or
deficiency or personal judgment against any Non-Recourse Party for payment of
the indebtedness payable by the OPMW Borrower evidenced by this Agreement. No
property or assets of any Non-Recourse Party, other than as contemplated in the
Financing Documents (as defined in the OPMW Credit Agreement) or Financing
Documents (as defined in the OPNY Credit Agreement), shall be sold, levied upon
or otherwise used to satisfy any judgment rendered in connection with any action
brought against the OPMW Borrower with respect to this Agreement or the other
OPMW Financing Documents or OPNY Financing Documents. The foregoing
acknowledgments, agreements and waivers shall be enforceable by any Non-Recourse
Party. Notwithstanding the foregoing, nothing in this Section shall limit or
affect or be construed to limit or affect the obligations and liabilities of any
Credit Party or any other Non-Recourse Party (a) in accordance with the terms of
any Transaction Document creating such liabilities and obligations to which such
Credit Party or Non-Recourse Party is a party, (b) arising from liability
pursuant to any applicable Requirement of Law for such Credit Party's or such
Non-Recourse Party's fraudulent actions, knowing misrepresentations or willful
misconduct or (c) with respect to amounts distributed to it in violation of
Section 6.10 of the OPNY Credit Agreement.
9.12 Subordination. Notwithstanding any provision of this Agreement or
any other Financing Document to the contrary, (i) the security interests created
and granted hereby are subject to, subordinate and inferior to the security
interests created by the First Lien Borrower Security Agreement, in accordance
with, and all rights, powers and remedies granted to, the OPMW Administrative
Agent thereunder, are subject in all respects to the terms and conditions of the
Intercreditor Agreement, including restrictions on the right of the OPNY
Administrative Agent to give notices, exercise power of attorney rights direct
or receive payments, hold, control or receive delivery of any Assignment
Collateral or other possessory collateral or to exercise powers or remedies and
to apply proceeds of Collateral; provided, that if and to the extent the
Intercreditor Agreement is amended, supplemented or modified at any time from
time to time and such amendment, supplement or modification could reasonably be
expected to have any adverse effect on the OPMW Borrower's rights, duties or
obligations hereunder or under any other Financing Document, such amendment,
supplement or modification shall not be effective as to the OPMW Borrower
without the OPMW Borrower's prior written acknowledgment (which acknowledgment
shall not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or supplement shall be effective for purposes of this Agreement and
the other Financing Documents, (ii) the OPNY Administrative Agent on behalf of
each of the Secured Parties hereby acknowledges and agrees that the Pledgor
shall not have any duty and obligation with respect to the perfection or
priority of the security interest granted hereunder in and to any of the
Collateral (and no Default or Event of Default shall result or occur) to the
extent (a) such Collateral is in the possession or control of the OPMW
Administrative Agent, (b) such collateral is not transferred by the OPMW
Administrative Agent to the OPNY Administrative Agent as required pursuant to
the Intercreditor Agreement, (c) such perfection or priority requires any
consent, approval or other action of the OPMW Administrative Agent, or (d) the
OPMW Administrative Agent then
29
maintains a perfected, first priority security interest in and to the Collateral
and (iii) no obligations contained in this Agreement shall require the OPMW
Borrower to take or omit to take any action inconsistent with the terms and
conditions of the OPMW Deposit Account Agreement and/or the Holdco Deposit
Account Agreement and no Default or Event of Default shall arise or result from
the taking or omitting of such action.
[Remainder of page intentionally left blank.]
30
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
OPMW BORROWER:
ORION POWER MIDWEST, L.P.
By: Orion Power MidWest GP, Inc.,
its general partner
By: ______________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
OPNY ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as OPNY
Administrative Agent
By:_______________________________________
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
1
EXHIBIT A
TO SECOND LIEN
ASSIGNMENT AND
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES PATENTS AND TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, ORION POWER MIDWEST, L.P., a Delaware limited
partnership (the "Assignor"), having its chief executive office at 1111
Louisiana Street, Houston, TX 77002, hereby assigns and grants to BANK OF
AMERICA, N.A., as administrative agent (the "OPNY Administrative Agent"), with
offices at 101 North Tryon Street, Charlotte, NC 28255 a second priority
security interest in (all of which are herein collectively referred to as the
"PTO Collateral") (i) all of the Assignor's right, title and interest in and to
the United States trademarks, trademark registrations and trademark applications
set forth on Schedule A attached hereto (the "Marks"), (ii) all of the
Assignor's right, title and interest in and to the United States patents set
forth on Schedule B attached hereto (the "Patents"), in each case together with
(iii) all Proceeds (as such term is defined in the Security Agreement referred
to below) and products of the Marks and Patents, (iv) the goodwill of the
businesses symbolized by the Marks and (v) all causes of action arising prior to
or after the date hereof for infringement of any of the Marks and Patents or
unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all the Secured Obligations of the Assignor, as such term is defined
in the Second Lien Assignment and Security Agreement, dated as of October 28,
2002, among the Assignor, the OPNY Administrative Agent and the other parties
thereto (as amended, supplemented or modified from time to time, the "Security
Agreement"). Upon the satisfaction of the conditions set forth in Section 9.08
of the Security Agreement, the OPNY Administrative Agent shall execute,
acknowledge, and deliver to the OPNY Administrative Agent an instrument in
writing releasing the security interest in the PTO Collateral acquired under
this Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security
interest granted to the OPNY Administrative Agent for the benefit of the Secured
Parties under the Security Agreement. The rights and remedies of the OPNY
Administrative Agent with respect to the security interest granted herein are
without prejudice to, and are in addition to, those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provision of this Assignment is deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
1
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the _____ day of _____________, 20__.
ORION POWER MIDWEST, L.P., as Assignor
By: Orion Power MidWest GP, Inc., its
general partner
By:
---------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as OPNY
Administrative Agent
By:
---------------------------------------
Name:
Title:
1
STATE OF _________________
________ OF ________
The foregoing instrument was acknowledged before me this ____ day of
__________, 20__ by ________________ as [title] of _______________________, a
________ corporation, on behalf of the corporation.
My commission expires:
Notarial Seal
-------------------------------
Notary Public
1
SCHEDULE A
TRADEMARKS AND TRADEMARK APPLICATIONS
Serial No. or Issue or
Registration No. Country Filing Date Mark
- ---------------- ------- ----------- ----
1
SCHEDULE B
PATENTS AND PATENT APPLICATIONS
Serial No. or Issue or
Patent No. Inventor Country Filing Date Title
- ------------- -------- ------- ----------- -----
1
EXHIBIT B
TO SECOND LIEN
ASSIGNMENT AND
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, ORION POWER MIDWEST, L.P., a Delaware limited
partnership corporation (the "Assignor"), having its chief executive office at
1111 Louisiana Street, Houston, TX 77002, hereby assigns and grants to BANK OF
AMERICA, N.A., as administrative agent (the "OPNY Administrative Agent"), with
offices at 101 North Tryon Street, Charlotte, NC 28255, a second priority
security interest in (all of which are herein collectively referred to as the
"Copyright Collateral") (i) all of the Assignor's right, title and interest in
and to the United States copyrights and associated United States copyright
registrations and applications for registration set forth in Schedule A attached
hereto (the "Copyrights"), (ii) all Proceeds (as such term is defined in the
Security Agreement referred to below) and products of the Copyrights, (iii) the
goodwill of the businesses symbolized by the Copyrights and (iv) all causes of
action arising prior to or after the date hereof for infringement of any of the
Copyrights.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all of the Secured Obligations of the Assignor, as such term is
defined in the Second Lien Assignment and Security Agreement, dated as of
October 28, 2002 among the Assignor, the OPNY Administrative Agent and the other
parties thereto (as amended, supplemented or modified from time to time, the
"Security Agreement"). Upon the satisfaction of the conditions set forth in
Section 9.08 of the Security Agreement, the OPNY Administrative Agent shall
execute, acknowledge, and deliver to the Assignor an instrument in writing
releasing the security interests of the Copyright Collateral acquired under this
Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security
interest granted to the OPNY Administrative Agent for the benefit of the Secured
Parties under the Security Agreement. The rights and remedies of the OPNY
Administrative Agent with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the ____ day of _______, 20___.
ORION POWER MIDWEST, L.P., as Assignor
By: Orion Power MidWest GP, Inc., its
general partner
By:
-------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as OPNY
Administrative Agent
By:
-------------------------------------
Name:
Title:
STATE OF _________________
________ OF ________
The foregoing instrument was acknowledged before me this ____ day of
__________, 20__ by ________________ as [title] of _______________________, a
________ corporation, on behalf of the corporation.
My commission expires:
Notarial Seal
-------------------------------
Notary Public
SCHEDULE A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Copyright
Registration No. Country Publication Date Title
- ---------------- ------- ---------------- ---------
EXHIBIT H-3
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
SECOND LIEN
ASSIGNMENT AND SECURITY AGREEMENT
between
TWELVEPOLE CREEK, LLC
and
BANK OF AMERICA, N.A.,
as OPNY Administrative Agent
--------------------------------------------------------------
Dated as of October 28, 2002
---------------------------------------------------------------
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.......................................................2
SECTION 2. ASSIGNMENT; SECURITY INTERESTS; INSURANCE PROCEEDS................6
2.01 PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTERESTS...................6
2.02 POWER OF ATTORNEY................................................10
SECTION 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS................12
3.01 NECESSARY FILINGS................................................12
3.02 NO LIENS.........................................................12
3.03 OTHER FINANCING STATEMENTS.......................................13
3.04 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE, RECORDS....13
3.05 RECOURSE.........................................................14
3.06 CONSENTS.........................................................14
3.07 PLEDGED PERMITS..................................................15
3.08 FIXTURE LOCATIONS................................................15
3.09 CEREDO BONDS.....................................................15
3.10 FARM PRODUCTS; TIMBER; AS-EXTRACTED COLLATERAL...................15
3.11 COMMERCIAL TORT CLAIMS...........................................15
3.12 LETTERS OF CREDIT................................................15
3.13 CHATTEL PAPER....................................................16
3.14 BANK ACCOUNTS....................................................16
SECTION 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS......................................................16
4.01 ADDITIONAL REPRESENTATIONS AND WARRANTIES........................16
4.02 MAINTENANCE OF RECORDS...........................................16
4.03 PAYMENTS UNDER ASSIGNED AGREEMENTS, RECEIVABLES AND GENERAL
INTANGIBLES......................................................17
4.04 DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC...........17
4.05 MODIFICATION OF TERMS, ETC.......................................17
4.06 COLLECTION.......................................................17
SECTION 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
TRADEMARKS.......................................................18
5.01 INFRINGEMENTS....................................................18
5.02 OTHER PATENTS, COPYRIGHTS AND TRADEMARKS.........................18
5.03 REMEDIES.........................................................18
SECTION 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT
COLLATERAL; INSURANCE............................................19
6.01 PROTECTION OF THE OPNY ADMINISTRATIVE AGENT'S INTERESTS..........19
i
6.02 FURTHER ACTIONS..................................................19
6.03 FINANCING STATEMENTS.............................................19
SECTION 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.....................20
7.01 REMEDIES; OBTAINING THE ASSIGNMENT COLLATERAL UPON DEFAULT.......20
7.02 REMEDIES, DISPOSITION OF THE ASSIGNMENT COLLATERAL...............21
7.03 WAIVER OF CLAIMS.................................................22
7.04 APPLICATION OF PROCEEDS..........................................23
7.05 REMEDIES CUMULATIVE..............................................23
7.06 DISCONTINUANCE OF PROCEEDINGS....................................23
7.07 GRANT OF LICENSE OR SUB-LICENSE TO USE PATENT, TRADEMARK,
COPYRIGHT AND LICENSE COLLATERAL.................................23
SECTION 8. INDEMNITY; EXPENSES..............................................24
SECTION 9. MISCELLANEOUS....................................................24
9.01 NOTICES..........................................................24
9.02 WAIVER, AMENDMENT; SEVERABILITY..................................24
9.03 OBLIGATIONS ABSOLUTE.............................................25
9.04 SUCCESSORS AND ASSIGNS...........................................26
9.05 HEADINGS DESCRIPTIVE, ETC........................................26
9.06 GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE..............26
9.07 THE GRANTOR'S DUTIES.............................................28
9.08 TERMINATION; RELEASE.............................................28
9.09 EXECUTION IN COUNTERPARTS........................................28
9.10 [INTENTIONALLY DELETED.].........................................28
9.11 LIMITATION OF RECOURSE...........................................28
9.12 SUBORDINATION....................................................29
Schedules
Schedule 1 Commercial Tort Claims
Schedule 2 Name; Jurisdiction of Organization; Location
Schedule 3 Project Contracts
Schedule 4 Filing Locations
Exhibits
Exhibit A Assignment of Security Interest in United States Patents and
Trademarks
Exhibit B Assignment of Security Interest in United States Copyrights
ii
SECOND LIEN
ASSIGNMENT AND SECURITY AGREEMENT
SECOND LIEN ASSIGNMENT AND SECURITY AGREEMENT, dated as of October
28, 2002 (this "Agreement"), between TWELVEPOLE CREEK, LLC, a limited liability
company organized under the laws of the State of Delaware (the "Grantor"), and
BANK OF AMERICA, N.A., as administrative agent (in such capacity, together with
any successors and assigns, the "OPNY Administrative Agent") for the benefit of
the Secured Parties (as defined in the OPNY Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Orion Power New York, L.P., a limited partnership organized
under the laws of the State of Delaware (the "OPNY Borrower"), has entered into
an Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPNY Credit Agreement"), with the OPNY Administrative
Agent, Banc of America Securities LLC and BNP Paribas, as lead arrangers and
joint book runners, Bank of America, N.A., as issuing bank, BNP Paribas, as
syndication agent, Union Bank of California, N.A., CoBank, ACB and Deutsche Bank
AG New York and/or Cayman Island Branch, as documentation agents, and the
Lenders named on the signature pages thereto and from time to time parties
thereto (the "OPNY Lenders"), pursuant to which the OPNY Lenders have agreed,
inter alia, to renew, modify and extend credit facilities that were issued to
the OPNY Borrower to finance a portion of the purchase price of the Portfolio
Assets and to provide working capital availability to the OPNY Borrower;
WHEREAS, Orion Power MidWest, L.P., a limited partnership organized
under the laws of the State of Delaware (the "OPMW Borrower"), has entered into
a Second Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPMW Credit Agreement"), with Bank of America, N.A., as
administrative agent and issuing bank, Banc of America Securities LLC and BNP
Paribas, as lead arrangers and joint book runners, BNP Paribas, as syndication
agent, The Bank of Nova Scotia, Mizuho Corporate Bank, Ltd, and Bayerische
Hypo-Und Vereinsbank AG, New York Branch, as documentation agents, and the
Lenders named on the signature pages thereto and from time to time parties
thereto (the "OPMW Lenders"), pursuant to which the OPMW Lenders have agreed,
inter alia, to renew, modify and extend credit facilities that were issued to
the OPMW Borrower to finance a portion of the purchase price of the Portfolio
Assets (as defined in the OPMW Credit Agreement) and to provide working capital
availability to the Borrower;
WHEREAS, the OPNY Administrative Agent, the OPMW Administrative
Agent, the OPNY Lenders, the OPMW Lenders and Bank of America, N.A., as
collateral agent have entered into the Intercreditor Agreement (as defined in
the OPMW Credit Agreement);
WHEREAS, the OPNY Credit Agreement contemplates the execution,
delivery and the implementation of this Agreement;
WHEREAS, the Grantor has entered into a Guarantee Agreement dated as
of the Restructuring Effective Date (as the same may be amended, supplemented or
otherwise modified from time to time, the "Twelvepole Guarantee"), with the OPMW
Borrower and the OPNY Administrative Agent, pursuant to which the Grantor has
agreed to guarantee the Obligations of the OPNY Borrower;
WHEREAS, the OPNY Credit Agreement contemplates execution, delivery
and the implementation of this Agreement; and
WHEREAS, it is a condition precedent to the obligations of the OPNY
Lenders under the OPNY Credit Agreement that this Agreement shall have been
entered into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the benefits to the Grantor, the
receipt and sufficiency of which are hereby acknowledged, the Grantor hereby
makes the following assignments, representations and warranties to the OPNY
Administrative Agent, for the benefit of the Secured Parties, and hereby
covenants and agrees with the OPNY Administrative Agent, in each case, as
follows:
Section 1. DEFINITIONS. (a) For all purposes of this Agreement, (i)
capitalized terms not otherwise defined herein shall have the meanings set forth
in the OPNY Credit Agreement, (ii) unless otherwise specified or otherwise
defined herein or in the OPNY Credit Agreement, terms used in Article 9 of the
UCC (as hereinafter defined) are used herein as therein defined and (iii) the
principles of construction set forth in Section 1.04 of the OPNY Credit
Agreement shall apply hereto.
(b) In addition, the following terms shall have the meanings herein
specified:
"AGREEMENT" shall mean this Second Lien Assignment and Security
Agreement, as amended, supplemented or otherwise modified from time to time.
"ASSIGNED AGREEMENTS" shall have the meaning provided in Section
2.01(a)(xi).
"ASSIGNMENT COLLATERAL" shall have the meaning provided in Section
2.01(a)(xiv).
"ASSIGNMENT REVENUES" shall have the meaning provided in
Section 2.01(a)(i).
"COLLATERAL" shall have the meaning provided in Section 2.01(a).
"CONTRACT RIGHTS" shall mean all rights of the Grantor (including all
rights to payment) under each Assigned Agreement.
"COPYRIGHT LICENSES" shall mean any written agreement (a) granting
any right to any third party under any Copyright of the Grantor or (b) granting
any right to the Grantor under any Copyright of any third party.
2
"COPYRIGHTS" shall mean all right, title and interest of any person
in and to all of the following, whether now owned or hereafter acquired:
(i) the federally registered United States and foreign
copyrights and any renewals thereof;
(ii) all other United States and foreign copyrights;
(iii) all registrations and applications for registration of any
such copyright in the United States or any other country,
including registrations, recordings, supplemental derivative
or collective work registrations and pending applications
for registrations in the United States Copyright Office;
(iv) all computer programs, computer data bases, computer program
flow diagrams, source codes and object codes related to any
or all of the foregoing; and
(v) all tangible property embodying or incorporating any or all
of the foregoing.
"DEPOSIT ACCOUNT AGREEMENT" shall have the meaning assigned such term
in the OPMW Credit Agreement.
"DOCUMENTS" shall mean all of the books, ledgers, records, computer
programs, tapes, discs, punch cards, data processing software, transaction
files, master files and related property and rights (including computer and
peripheral equipment) of the Grantor pertaining to or referencing the
Collateral.
"EQUIPMENT" shall have the meaning provided in Section 2.01(a)(ii).
"FIRST LIEN TWELVEPOLE SECURITY AGREEMENT" shall mean the Amended and
Restated Assignment and Security Agreement, dated as of the Restructuring
Effective Date, made by the Grantor to the OPMW Administrative Agent for the
benefit of the OPMW Secured Parties.
"GENERAL INTANGIBLES" shall have the meaning provided in Section
2.01(a)(vi).
"GRANTOR" shall have the meaning provided in the first paragraph of
this Agreement.
"HOLDCO DEPOSIT ACCOUNT AGREEMENT" shall have the meaning assigned
such term in the OPMW Credit Agreement.
"INVENTORY" shall have the meaning provided in Section 2.01(a)(iii).
"LICENSE" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense as to which the Grantor is now or
hereafter a party.
3
"NON-RECOURSE PARTY" shall have the meaning provided in Section 9.11.
"OPMW ADMINISTRATIVE AGENT" shall have the meaning provided in the
Recitals of this Agreement.
"OPMW BORROWER" shall have the meaning provided in the first
paragraph of this Agreement.
"OPMW CREDIT AGREEMENT" shall have the meaning provided in the
Recitals of this Agreement.
"OPMW CREDIT PARTIES" shall have the meaning assigned such term in
the OPNY Credit Agreement.
"OPMW LENDERS" shall have the meaning provided in the Recitals of
this Agreement.
"OPNY BORROWER" shall have the meaning provided in the Recitals of
this Agreement.
"OPNY CREDIT AGREEMENT" shall have the meaning provided in the
Recitals of this Agreement.
"OPNY DEPOSIT ACCOUNT AGREEMENT" shall have the meaning provided the
term "Deposit Account Agreement" in the OPNY Credit Agreement.
"OPNY LENDERS" shall have the meaning provided in the Recitals of
this Agreement.
"OPNY REVENUE ACCOUNT" shall have the meaning provided the term
"Revenue Account" in the OPNY Deposit Account Agreement.
"ORIGINAL AGREEMENT" shall have the meaning provided in Section 9.12.
"PATENT LICENSE" shall mean any written agreement (i) granting any
right to any third party under any Patent of the Grantor or (ii) granting any
right to the Grantor under any Patent of any third party.
"PATENTS" shall mean all right, title and interest of any person in
and to all of the following, whether now owned or hereafter acquired:
(i) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all
applications for letters patent of the United States or any
other country;
(ii) all other letters patent of the United States or any other
country and all other applications for letters patent of the
United States or any other country; and
4
(iii) all reissues, continuations, divisions, continuations-in-part
or extensions thereof and the inventions disclosed therein,
including the right to make, use and/or sell the inventions
disclosed therein.
"PLEDGED PERMITS" shall have the meaning provided in Section
2.01(a)(vii).
"PROCEEDS" shall mean all proceeds, including (i) whatever is
received upon any collection, exchange, sale or other disposition of any of the
Collateral and any property into which any of the Collateral is converted,
whether cash or non-cash, (ii) any and all payments or other property (in
whatever form) made or due and payable on account of any insurance, indemnity,
warranty or guaranty payable to the Grantor with respect to any of the
Collateral, (iii) any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person or entity
as a result of the destruction, loss, theft or other involuntary conversion of
whatever nature of any asset or property which constitutes Collateral, (iv) any
and all payments (in any form whatsoever) made or due and payable in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Collateral by any Governmental Authority, (v) any claim of
the Grantor against third parties (A) for past, present or future infringement
of any Patent now or hereafter owned by the Grantor or licensed under a Patent
License, (B) for past, present or future infringement or dilution of any
Trademark now or hereafter owned by the Grantor or licensed under a Trademark
License or injury to the goodwill associated with any Trademark now or hereafter
owned by the Grantor, (C) for past, present or future infringement of any
Copyright now or hereafter owned by the Grantor or licensed under a Copyright
License and (D) for past, present or future breach of any License and (vi) any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
"RECEIVABLES" shall have the meaning provided in Section 2.01(a)(iv).
"RELATED CONTRACTS" shall have the meaning provided in Section
2.01(a)(v).
"REVENUE ACCOUNT" shall have the meaning assigned such term in the
Deposit Account Agreement.
"SECURED OBLIGATIONS" shall have the meaning provided in Section
2.01(a).
"TRADEMARK LICENSE" shall mean any written agreement (a) granting any
right to any third party under any Trademark of the Grantor or (b) granting any
right to the Grantor under any Trademark of any third party.
"TRADEMARKS" shall mean all of the following now or hereafter owned
by any person (i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications filed in connection
therewith, including registrations and applications in the United States Patent
and Trademark Office, any State of the United States or any other country or any
political
5
subdivision thereof, and all extensions or renewals thereof and (ii) all
goodwill associated therewith.
"TWELVEPOLE GUARANTEE" shall have the meaning provided in the
Recitals of this Agreement.
"UCC" shall mean at any time the Uniform Commercial Code as the same
may from time to time be in effect in the State of New York; provided that if,
by reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
Section 2. ASSIGNMENT; SECURITY INTERESTS; INSURANCE PROCEEDS.
2.01 Pledge; Assignment; Grant of Security Interests. (a) To secure
the prompt and complete payment and performance of the obligations of the
Grantor under the OPMW Guarantee (collectively, the "Secured Obligations"), the
Grantor hereby assigns and pledges to the OPNY Administrative Agent for the
benefit of the Secured Parties, and hereby grants to the OPNY Administrative
Agent for the benefit of the Secured Parties, a security interest in, and lien
on, all of the Grantor's right, title and interest in and to the following,
whether now owned or hereafter acquired (the "Collateral"); capitalized terms
used in subsections 2.01(a)(i) through 2.01(a)(xiv) not otherwise defined herein
shall have the meaning set forth in the OPMW Credit Agreement:
(i) all cash income and receipts derived from the ownership and
ordinary course of operation of the Portfolio Assets, including
revenues from the sale of energy and other products and services
(including electric capacity, ancillary services and transmission
services and products), Proceeds of business interruption insurance,
interest and other income earned on amounts on deposit in the
Accounts and any amounts realized by the Grantor under any Interest
Hedge Contract (all of the above, collectively, the "Assignment
Revenues");
(ii) (A) all equipment, wherever located, now or hereafter
existing, (B) all fixtures, (C) to the extent not included in the
foregoing or in clause (iii), all goods, (D) all parts of any of the
foregoing items (A)-(C) and all attachments and accessions thereto,
including, to the extent not included in the foregoing, all other
accessions and (E) all rights in any of the foregoing items (A)-(D)
now or hereafter owned or possessed by the Grantor for its benefit
(the property described in this subclause (ii) being the
"Equipment");
(iii) all inventory and other tangible personal property held
for sale by the Grantor, in all of it is forms, wherever located, and
rights therein owned or possessed by the Grantor or for its benefit
including, but not limited to, (A) with respect to the generation of
electric power by the Grantor, raw materials and work in process
therefor, finished goods and by-products thereof, and materials used
or
6
consumed in the manufacture or production thereof, (B) goods in
which the Grantor has an interest in mass or a joint or other
interest or right of any kind and (C) goods which are returned to or
repossessed by the Grantor, and all accessions to any of the
foregoing and products thereof and documents relating thereto (the
property described in this subclause (iii) being the "Inventory");
(iv) all accounts, Contract Rights, chattel paper, Documents,
instruments, letters of credit, letter-of-credit rights, documents
and other rights or obligations of every kind, now or hereafter
existing, whether or not arising out of or in connection with any
sale, lease, exchange or other disposition of electric power, or
other Inventory, goods or the provision or rendering of any service
by or to the Grantor and all tax refunds, tax refund claims or
guarantee claims held by or granted to the Grantor (any and all such
accounts, Contract Rights, chattel paper, Documents, instruments,
obligations and other property described in this subclause (iv) being
the "Receivables");
(v) all rights now or hereafter existing in and to all security
agreements, leases and other contracts securing or otherwise relating
to any Receivables (the property described in this subclause (v)
being the "Related Contracts");
(vi) all general intangibles, intellectual or other property of
any kind or nature now owned or hereafter acquired by the Grantor,
including payment intangibles, software, permits, reversionary
interests in pension plan assets, inventions, designs, Patents,
Copyrights, Trademarks, Licenses and associated goodwill, trade
secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information,
software, customer lists, subscription lists, databases and related
documentation, registrations, franchises, and all other intellectual
or other similar property rights not otherwise described above, but
excluding Receivables (the property described in this subclause (vi)
being the "General Intangibles");
(vii) all generating, electricity, environmental and other
licenses, permits and approvals of any federal, state, municipal or
other governmental department, commission, board, bureau, agency,
court or other instrumentality, domestic or foreign, now or hereafter
held by the Grantor or in which the Grantor may have an interest and
relating to the operation, maintenance, or use and occupancy of
Ceredo, except that any such license, permit or approval which as a
matter of law is not assignable is hereby excluded from such lien and
security interest to the extent that and for such time as the same
shall not be so assignable, and all rights (whether or not earned by
performance) under any franchises, documents, licenses, contracts or
agreements now owned or hereafter acquired with the rights to all
renewals thereof assignable by law (the property described in this
subclause (vii) being the "Pledged Permits");
7
(viii) (A) all policies of insurance, now or hereafter held by
the Grantor (as required under Section 5.06 of the Credit Agreement
and the other Financing Documents), including casualty and liability,
business interruption and any title insurance, and including all
Proceeds therefrom, and (B) all rights, now or hereafter held, by the
Grantor to any warranties of any manufacturer or contractor or any
other Person;
(ix) all books, correspondence, credit files, records, invoices
and other Documents, now or hereafter in the possession or control of
the Grantor or any Person acting for the Grantor and relating to
Ceredo and all reports of the Independent Engineer or any other
Person and all other reports relating to the acquisition, operations,
viability, performance, maintenance and output of Ceredo;
(x) all balances, credits, deposits, deposit and securities
accounts, investment property or moneys whether now existing or
hereafter held in the name or on behalf of the Grantor, whether (A)
in the possession or control of the Grantor, (B) in the possession or
control of, or in transit to, the OPMW Administrative Agent, or (C)
held by third parties; all monies, documents, instruments, investment
property and financial assets required to be deposited with or
delivered to the OPMW Administrative Agent or any securities
intermediary pursuant to any term of this Agreement or any of the
other Financing Documents, including all amounts held or deposited in
or credited to the Accounts and all cash and all monies and Permitted
Investments and other financial assets and investment property and
instruments held in or credited to such Accounts;
(xi) each Project Contract to which it is a party, and each
other lease, power, fuel, transportation, management or other
agreement now existing or hereafter entered into by the Grantor
relating to the acquisition, operation, maintenance or use and
occupancy of Ceredo, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms
thereof and of this Agreement and the Credit Agreement (the
agreements described in this subclause (xi), as so amended,
supplemented or modified, being the "Assigned Agreements"), including
all rights of the Grantor (A) to receive moneys due and to become due
under or pursuant to the Assigned Agreements, to compel performance
and otherwise to exercise all remedies thereunder, including all
rights to make determinations, to exercise any election or option
contained in such agreements (including termination thereof), to give
or receive any notice or consent, to demand and receive any property
which is the subject of any of the Assigned Agreements, to file any
claims and generally to take any action which (in the opinion of the
OPNY Administrative Agent or any Secured Party) may be necessary or
advisable in connection with any of the foregoing, and (B) to receive
the Proceeds of any claim for damages arising out of or for breach of
any Assigned Agreement and Proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Assigned Agreements;
8
(xii) all commercial tort claims, including those more
particularly described in Schedule 1 hereto;
(xiii) to the extent not included in subclauses (i) through
(xii) above, or excepted therein, all other personal property of the
Grantor of any kind or description whatsoever, wherever located,
whether now owned or hereafter acquired, tangible or intangible; and
(xiv) all accessions and additions to, substitutions for, and
all replacements, products and Proceeds of any and all of the
Collateral (including any proceeds which constitute property of the
types described in clauses (i) - (xiii), above) and, to the extent
not otherwise included, all (A) payments under insurance (whether or
not the OPNY Administrative Agent is the loss payee thereof or an
additional insured thereunder), and any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the Collateral, (B) any other amounts from time to
time paid or payable under or in connection with any of the
Collateral, (C) cash and (D) all supporting obligations (all of the
foregoing items in clauses (ii) - (xiii) above and in this clause
(xiv), collectively, the "Assignment Collateral").
(b) The sale, assignment, conveyance, setting over, pledge and
transfer to the OPNY Administrative Agent under this Agreement extends to all
Assignment Revenues which the Grantor may acquire at any time during the
continuation of this Agreement. The security interest of the OPNY Administrative
Agent held under this Agreement extends to all Assignment Collateral which the
Grantor may acquire at any time during the continuation of this Agreement.
(c) Upon the indefeasible payment in full in cash of the OPMW
Obligations, the Grantor shall take such actions under each Assigned Agreement
as are permitted under the terms and conditions of such Assigned Agreement, and
shall otherwise use commercially reasonable efforts, to grant or to cause to be
granted to the OPNY Administrative Agent the same rights as are granted to, and
benefits provided to, the OPMW Administrative Agent under the Consents (as
defined in the OPMW Credit Agreement) with regard to such Assigned Agreement.
(d) The Assignment Revenues received pursuant to Section 2.01(a)(i)
above shall be applied in accordance with the provisions of the Holdco Deposit
Account Agreement and the OPNY Deposit Account Agreement.
(e) Notwithstanding any provision of the Agreement, the Grantor shall
not be in breach or default of any obligation under this Agreement for any
failure by the Grantor to (i) notify any Person of the Lien and security
interest purported to be granted under this Agreement or to cause or direct any
cash, receipts or other monies to be paid to the OPNY Administrative Agent, (ii)
obtain any consent to assignment of any Collateral, or (iii) deliver to the OPNY
Administrative Agent any Collateral the possession or exclusive control of which
is required for the perfection of the Lien and security interest granted by this
Agreement during any period when the First Lien Twelvepole Security Agreement is
in effect.
9
2.02 Power of Attorney. The Grantor hereby irrevocably appoints the
OPNY Administrative Agent as its attorney-in-fact with right of substitution, so
that the OPNY Administrative Agent or any other Person empowered by the OPNY
Administrative Agent shall be authorized, without need of further authorization
from the Grantor, upon the occurrence and during the continuance of an Event of
Default and in preservation of the rights of the OPNY Administrative Agent and
the OPNY Lenders hereunder so long as such Event of Default is continuing and
has not been waived by an appropriate vote or other action by the Required
Lenders (any action or exercise of powers, rights or remedies under this Section
2.02 to be subject to, and in accordance with, the terms of the OPNY Credit
Agreement and all applicable Requirements of Law):
(a) to effect the sale of any of the Assignment Collateral in one or
more transactions to the extent permitted by applicable Requirements of
Law and in any commercially reasonable manner as may be determined by the
attorney-in-fact, which, subject to the foregoing, may include the direct
sale without public auction of any such Assignment Collateral at such
price, and upon such terms as may be determined by the attorney-in-fact;
(b) to enter upon any premises where the Assignment Collateral or any
part thereof may be located without the need for a court order or other
form of authority otherwise than upon the authority granted herein;
(c) to take and retain actual possession and control of any such
Assignment Collateral as receivers without bond or otherwise, and
transport any of it to any location as determined by such
attorney-in-fact;
(d) to make any repairs, additions and improvements on the Assignment
Collateral as such attorney-in-fact shall reasonably deem proper or
necessary;
(e) to administer, manage and use any of the Assignment Collateral;
(f) to conclude any agreement and collect any monies thereunder or
otherwise due to the Grantor in respect of, or generated through the usage
of, any of the Assignment Collateral;
(g) to exercise in any commercially reasonable manner any of the
rights of the Grantor arising under or in connection with the Assigned
Agreements and to designate or delegate to another Person or entity, in
substitution of such attorney-in-fact, the exercise in any commercially
reasonable manner of such rights of the Grantor, under such terms as such
attorney-in-fact shall deem proper or necessary;
(h) to collect, claim and receive all monies and avail of all
benefits that accrue, and that may become due and payable to the Grantor
under the Assigned Agreements and to hold the same as security for the
timely payment and discharge by the Grantor of the Secured Obligations,
and the faithful performance of the covenants and obligations of the
Grantor as set forth in any of the Financing Documents;
10
(i) to send written notice to all the obligors, instructing any or
all of them to pay all monies due and owing to the Grantor from time to
time under the Assigned Agreements, to the OPNY Revenue Account or such
other account as may be required or contemplated by the OPNY Deposit
Account Agreement;
(j) to institute and maintain such suits and proceedings as such
attorney-in-fact shall deem expedient to prevent any impairment of the
Assignment Collateral or to preserve and protect such attorney-in-fact's
interest therein;
(k) to execute and deliver such deeds of conveyance or sale as may be
necessary or proper for the purpose of conveying full title and ownership,
free from any claims and rights of the Grantor, to any of the Assignment
Collateral, after foreclosure thereof; and
(m) in general, to sign such agreements and documents and perform
such acts and things required, necessary or, in the opinion of such
attorney-in-fact, advisable, to fully accomplish the purpose hereof.
The Grantor hereby confirms and ratifies any and all actions and
things performed or done by the OPNY Administrative Agent as the Grantor's
attorney-in-fact or any of its representatives in each case pursuant to the
powers granted hereunder.
This special power of attorney shall be deemed coupled with an
interest, and cannot be revoked by the Grantor until no OPNY Lender shall have
any Commitment outstanding and until the Notes, together with interest, and all
other Obligations are indefeasibly paid in full in cash. Upon the occurrence and
during the continuance of any Event of Default, the Grantor shall abstain from
exercising any rights under any of the Assigned Agreements which shall be
inconsistent with the exercise of the rights and functions herein granted to the
OPNY Administrative Agent as the attorney-in-fact, including abstaining from
collecting, claiming and receiving any monies under the Assigned Agreements,
provided, that, nothing herein shall prevent the Grantor from, except during the
exercise by the OPNY Administrative Agent of any such rights and functions,
undertaking the Grantor's operations in the ordinary course of business in
accordance with the Assigned Agreements. To the extent that the Grantor shall
receive any monies in respect thereof, notwithstanding the provisions of this
Section 2.02, the Grantor shall be deemed to have received such funds for the
account of the OPNY Administrative Agent and shall hold the same in trust and
promptly pay the same to the OPNY Administrative Agent for deposit in the OPNY
Revenue Account (or other account as may be required or contemplated by the OPNY
Deposit Account Agreement) and application pursuant to the OPNY Deposit Account
Agreement, including collecting, claiming and receiving monies under the
Assigned Agreements.
All reasonable costs, expenses, charges and fees paid or incurred by
the OPNY Administrative Agent in the exercise of any of the rights, remedies or
powers granted hereunder shall be for the account of the Grantor, and the
Grantor undertakes promptly on demand to pay the same or, as the case may be, to
reimburse the OPNY Administrative Agent and/or its agents, representatives,
successors and assignees as the case may be, for any monies paid by it with
interest thereon at the Default Rate from the date the same shall have been paid
by the OPNY
11
Administrative Agent and/or its agents, representatives, successors and assigns
until actually paid by the Grantor to the extent that there are then
insufficient funds available in the OPNY Revenue Account for this purpose.
Section 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Grantor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement and the satisfaction of the Secured Obligations, as follows:
3.01 Necessary Filings. As of the Restructuring Effective Date, all
filings, registrations, recordings and control necessary or appropriate to
create, (i) the sale, assignment, conveyance, setting over and transfer of the
Assignment Revenues by the Grantor to the OPNY Administrative Agent and (ii) the
security interest granted by the Grantor to the OPNY Administrative Agent hereby
in respect of the Assignment Collateral have been made or accomplished, and (A)
the sale, assignment, conveyance, setting over and transfer of the Assignment
Revenues to the OPNY Administrative Agent pursuant to this Agreement constitutes
a valid and enforceable sale, assignment, conveyance, setting over and transfer
and (B) the security interest granted to the OPNY Administrative Agent pursuant
to this Agreement in and to the Assignment Collateral constitutes a valid,
enforceable, and upon the filing of (1) all Financing Statements in the filing
offices noted on Schedule 4 and (2) if applicable, fully executed Assignments of
Security Interests, substantially in the forms of Exhibits A and B hereto, as
applicable, by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section
1060 or 17 U.S.C. Sections 205, as applicable, to perfect the security interests
granted to the OPNY Administrative Agent and the Secured Parties in the
federally registered Copyrights, Patents, Trademarks and Licenses, perfected
security interest in the Assignment Revenues and Assignment Collateral (except
in each case, for (x) Assignment Collateral referred in Section 2.01(e) and
other Assignment Collateral that is not material and (y) vehicles and boats)
superior and prior to the rights of all other Persons therein and, in each case,
subject to no other Liens, sales, assignments, conveyances, settings over or
transfers other than Permitted Liens (as defined in the OPMW Credit Agreement)
and the security interests granted to the OPMW Administrative Agent under the
First Lien Twelvepole Security Agreement.
(b) It is acknowledged and agreed that, unless and until permitted in
accordance with the terms and conditions of Section 9.12 and the Intercreditor
Agreement, any certificates, instruments or other documents or things evidencing
Collateral shall be delivered and endorsed to, or be registered as a second Lien
in favor of, and shall remain in the possession of, the OPMW Administrative
Agent, and that notwithstanding any provision of any Financing Document, no
breach, Default or Event of Default shall occur or exist as a result thereof.
3.02 No Liens. The Grantor is, as of the Restructuring Effective
Date, as to the Assignment Revenues and Assignment Collateral, and as to any
Assignment Collateral acquired by it from time to time after the date hereof,
the Grantor will be, the owner of all such Assignment Revenues and Assignment
Collateral free from any Lien or other right, title or interest of any Person
(other than Permitted Liens (as defined in the OPMW Credit Agreement)
12
and the security interests granted to the OPMW Administrative Agent under the
First Lien Twelvepole Security Agreement) and the Grantor shall defend such
Assignment Revenues and Assignment Collateral against all claims and demands of
all Persons (other than claims and demands of the OPMW Administrative Agent or
the Collateral Agent) at any time claiming the same or any interest therein
adverse to the OPNY Administrative Agent. Without limiting the generality of the
foregoing, the Grantor shall not assign, charge, convey, sell, set over,
transfer, or grant any security interest in the Assigned Agreements, any of the
other Assignment Collateral or any of the Assignment Revenues other than
pursuant to the Security Documents (as defined in the OPMW Credit Agreement) or
the OPNY Second Lien Documents or as expressly permitted by the OPMW Credit
Agreement.
3.03 Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Assignment Revenues or the Assignment Collateral and so long as any of the
Secured Obligations remain unpaid or any Commitments remain outstanding, the
Grantor will not authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Assignment Revenues or the
Assignment Collateral, in each case, except financing statements filed or to be
filed in respect of and covering the security interests granted hereby, or by
the other Security Documents (as defined in the OPMW Credit Agreement) or the
OPNY Second Lien Documents, by the Grantor or Permitted Liens (as defined in the
OPMW Credit Agreement).
3.04 Jurisdiction of Organization; Chief Executive Office, Records.
(a) The jurisdiction of organization of the Grantor, the exact legal name of the
Grantor, any other names the Grantor has used in the last five years and the
addresses of the Grantor's chief executive office currently and for the last
five years are set forth on Schedule 2 hereto. The Grantor will not change its
name or its jurisdiction of organization or move its chief executive office
except to such new name, jurisdiction or location as may be permitted in
accordance with Section 3.04(b). The originals of all documents evidencing all
Receivables, General Intangibles and Contract Rights of the Grantor and the only
original books of account and records of the Grantor relating thereto are, and
will continue to be, kept at the locations disclosed in Schedule 2, or at such
new locations as the Grantor may establish in accordance with Section 3.04(b).
All Receivables, General Intangibles and Contract Rights of the Grantor are, and
will continue to be, maintained at, and controlled and directed (including for
general accounting purposes) from, such office locations shown above, or such
new locations as the Grantor may establish in accordance with Section 3.04(b).
(b) The Grantor shall not change its name or its jurisdiction of
organization or establish a new location for its offices until (i) it shall have
given to the OPNY Administrative Agent not less than thirty (30) days' prior
written notice of its intention so to do, clearly describing such new name,
jurisdiction or location and providing such other information in connection
therewith as the OPNY Administrative Agent may reasonably request and (ii) with
respect to such new name, jurisdiction or location, it shall have taken all
action, reasonably satisfactory to the OPNY Administrative Agent, to maintain
the sale, assignment, conveyance, setting over and transfer of the Assignment
Revenues to the OPNY Administrative Agent and the
13
security interest of the OPNY Administrative Agent in the Assignment Collateral
intended to be granted hereby at all times fully perfected, of second priority
and in full force and effect.
3.05 Recourse. Without limitation of Section 9.11, this Agreement is
made with full recourse to the Grantor and pursuant to and in reliance upon all
the warranties, representations, covenants and agreements on the part of the
Grantor contained herein, in the Credit Agreement, in any of the other Financing
Documents and otherwise in writing in connection herewith or therewith.
3.06 Consents. (a) Except as provided in Section 2.01(e) or in the
Intercreditor Agreement, no other consent of any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority (as defined in the OPMW Credit Agreement) is required as
of the date of the execution and delivery of this Agreement (i) for the sale,
assignment, conveyance, setting over and transfer of the Assignment Revenues to
the OPNY Administrative Agent, (ii) for the grant by the Grantor of the pledge,
assignment and security interest granted hereby with respect to the Assignment
Collateral (other than contracts that are not material or are not Project
Contracts (as defined in the OPMW Credit Agreement)) or for the execution,
delivery or performance of this Agreement by the Grantor, (iii) for the
perfection or maintenance of the sale, assignment, conveyance, setting over and
transfer effected hereby with respect to the Assignment Revenues and the pledge,
assignment and security interest created hereby with respect to the Assignment
Collateral (including the second priority nature of such sale, assignment,
conveyance, setting over and transfer by way of security with respect to the
Assignment Revenues and such pledge, assignment and security interest with
respect to the Assignment Collateral) other than the filing of appropriate
financing statements or similar filings in respect of the Assignment Revenues
and Assignment Collateral, in each case, or (iv) for the exercise by the OPNY
Administrative Agent of the rights provided for in this Agreement or the
remedies in respect of the Assignment Revenues and the Assignment Collateral
pursuant to this Agreement.
(b) Except as otherwise expressly provided in the OPMW Credit
Agreement or the OPMW Deposit Account Agreement, the Grantor shall use
commercially reasonable efforts to obtain, after the date of the execution and
delivery of this Agreement, such other consents, authorizations, and approvals
and obtain such other actions, and provide such notices to or make such filings
with, any Governmental Authority (as defined in the OPMW Credit Agreement) as
may be necessary or reasonably requested by the OPNY Administrative Agent or any
Secured Party, after the date of this Agreement (i) for the sale, assignment
conveyance, setting over and transfer of the Assignment Revenues to the OPNY
Administrative Agent, (ii) for the grant by the Grantor of the pledge,
assignment and security interest granted hereby or for the execution, delivery
or performance of this Agreement by the Grantor, (iii) for the perfection or
maintenance of the sale, assignment, conveyance, setting over and transfer
effected hereby with respect to the Assignment Revenues and the pledge,
assignment and security interest created hereby with respect to the Assignment
Collateral (including the second priority nature of such sale, assignment,
conveyance, setting over and transfer by way of security with respect to the
Assignment Revenues and such pledge, assignment and security interest with
respect to the Assignment Collateral) or (iv) for the exercise by the OPNY
Administrative Agent of the rights,
14
remedies and powers provided for in this Agreement or the remedies in respect of
the Assignment Revenues and the Assignment Collateral pursuant to this
Agreement.
3.07 Pledged Permits. Upon the occurrence and during the continuance
of an Event of Default and after notice to the Grantor that the OPNY
Administrative Agent intends to exercise remedies pursuant to the Financing
Documents, the Grantor shall, at the request of the OPNY Administrative Agent,
take such steps requested by the OPNY Administrative Agent that are necessary to
assist and cooperate, to the extent within the Grantor's control using
commercially reasonable efforts, in the transfer of the Pledged Permits to the
OPNY Administrative Agent or any other party or parties designated by the OPNY
Administrative Agent effective upon transfer of title to the applicable
Portfolio Assets to which such Pledged Permits relate, including the filing of a
joint application by the Grantor with the OPNY Administrative Agent or the OPNY
Administrative Agent's designees, for the transfer of the Pledged Permits
pursuant to 18 C.F.R. Part 9 or any successor or replacement regulations
thereto, all pursuant to and to the extent permitted by applicable Requirements
of Law.
3.08 Fixture Locations. Schedule 4 hereto sets forth a true and
complete list of all locations where fixtures exist for Ceredo (as defined in
the OPMW Credit Agreement).
3.09 Ceredo Bonds. Upon and in the event of any future issuance of
bonds pursuant to Ceredo Bond Indenture, Grantor shall execute and deliver to
the OPMW Administrative Agent a collateral assignment in respect of such bonds,
together with appropriate assignments executed in blank with respect thereto in
accordance with the terms of the Intercreditor Agreement and otherwise in form
and substance reasonably satisfactory to the OPNY Administrative Agent.
3.10 Farm Products; Timber; As-Extracted Collateral. As of the
Restructuring Effective Date, none of the Assignment Revenues or the Assignment
Collateral constitutes, or is Proceeds of, farm products, timber to be cut or
as-extracted collateral. If at any time after the Restructuring Effective Date
any of the Assignment Revenues or the Assignment Collateral is farm products,
timber to be cut or as-extracted collateral, in each case with a value in excess
of $500,000 (as reasonably determined by the Grantor), the Grantor shall take
all actions required in accordance with Section 6.02.
3.11 Commercial Tort Claims. As to any judgment in respect of any
commercial tort claim of the Grantor having a value in excess of $500,000 of the
Grantor which may arise, the Grantor will notify the OPNY Administrative Agent
within 45 days of any such commercial tort claim judgment being entered in favor
of the Grantor, and the Grantor will execute and deliver to the OPMW
Administrative Agent such additional security agreements or amendments to this
Agreement in form and substance reasonably satisfactory to the OPNY
Administrative Agent which identify and assign, pledge and create a valid,
perfected security interest in such judgments in respect of commercial tort
claims of the Grantor as they arise.
3.12 Letters of Credit. The Grantor will deliver to the OPMW
Administrative Agent each letter of credit having a stated amount in excess of
$500,000 in which it is the beneficiary thereof, duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in accordance with
the terms of the Intercreditor Agreement and otherwise in
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form and substance reasonably satisfactory to the OPNY Administrative Agent. The
Grantor will take any and all actions necessary (or reasonably requested by the
OPMW Administrative Agent), from time to time, to cause the OPMW Administrative
Agent to obtain exclusive control of any letter-of-credit rights which have a
value in excess of $500,000 owned by the Grantor in a manner reasonably
acceptable to the OPNY Administrative Agent.
3.13 Chattel Paper. The Grantor will deliver to the OPMW
Administrative Agent all tangible chattel paper having a value in excess of
$500,000 duly endorsed and accompanied by duly executed instruments of transfer
or assignment, all in accordance with the terms of the Intercreditor Agreement
and otherwise in form and substance reasonably satisfactory to the OPNY
Administrative Agent. The Grantor will also deliver to the OPMW Administrative
Agent all security agreements securing any such chattel paper and execute UCC
financing statement amendments assigning to the OPMW Administrative Agent any
UCC financing statements filed by the Grantor in connection with such security
agreements. The Grantor will mark conspicuously all such chattel paper with a
legend, in form and substance reasonably satisfactory to the OPNY Administrative
Agent, indicating that such chattel paper is subject to the security interests
created hereunder.
3.14 Bank Accounts. The Grantor shall not maintain any deposit
accounts or securities accounts other than the Accounts.
Section 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
RIGHTS; INSTRUMENTS.
4.01 Additional Representations and Warranties: As of the time when
each Receivable and General Intangible arises, the Grantor shall be deemed to
have represented and warranted, to the knowledge of the Grantor and unless
otherwise promptly disclosed by the Grantor in writing to the OPNY
Administrative Agent upon the Grantor obtaining actual knowledge thereof, that
such Receivable or General Intangible, as the case may be, and all records,
papers and documents relating thereto (if any) are genuine and in all respects
what they purport to be, and that all records, papers and documents (if any)
relating thereto (i) will represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by the
respective account debtor arising out of the performance of labor or services or
the sale or lease and delivery of electricity or capacity, or any other
merchandise listed therein, or both, and (ii) are in compliance and will conform
with all Requirements of Law, except to the extent that the failure to comply or
conform therewith could not reasonably be expected to have a Material Adverse
Effect.
4.02 Maintenance of Records. The Grantor will keep and maintain at
its own cost and expense records consistent with GAAP of the Assigned Agreements
and the Receivables, including the originals of all documentation (including
each Assigned Agreement) with respect thereto, records of all payments received,
all credits granted thereon, but subject in each case to customary record
retention policies, and all other dealings therewith. The Grantor will make the
same available to the OPNY Administrative Agent for inspection pursuant to
Section 5.08 of the OPMW Credit Agreement.
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4.03 Payments Under Assigned Agreements, Receivables and General
Intangibles. (a) Non-Payment to the OPNY Administrative Agent. Subject to the
OPMW Deposit Account Agreement, if the Grantor shall receive payment directly
from any party to an Assigned Agreement (including any letter of credit issued
for the benefit of the Grantor in accordance with the terms thereof) or from any
account debtor or other obligor under any Receivable, General Intangible or any
other payments under such Assigned Agreements, Receivables and General
Intangibles, the Grantor shall receive such payments in a constructive trust for
the benefit of the OPNY Lenders, shall segregate such payments from such party's
other funds, and shall promptly transmit and deliver such payments to the OPNY
Administrative Agent in the same form as so received (with any necessary
endorsement).
(b) Application of Funds. All amounts received by the OPNY
Administrative Agent pursuant to this Section 4.03 or Section 4.04 shall be
deposited into the Revenue Account and applied as set forth in the Deposit
Account Agreement.
4.04 Direction to Account Debtors; Contracting Parties; etc. The
Grantor agrees that the OPNY Administrative Agent may, upon reasonable notice to
the Grantor of its failure to do so, directly notify the obligors with respect
to any Receivables, General Intangibles and/or under any Assigned Agreements to
make payments with respect thereto as provided in Sections 2.01(c) and 4.03. The
reasonable costs and expenses (including reasonable attorneys' fees) of
collection, whether incurred by the Grantor or the OPNY Administrative Agent,
shall be borne by the Grantor.
4.05 Modification of Terms, etc. Except as otherwise provided in the
OPMW Credit Agreement or as permitted in Section 4.06 hereof, (a) the Grantor
shall not rescind or cancel any Indebtedness (as defined in the OPMW Credit
Agreement) in any fiscal year in an amount, in the aggregate, in excess of
$500,000 for borrowed money, or modify in any manner adverse to the Grantor or
the Secured Parties any material term thereof, or make any adjustment materially
adverse to the Grantor or the Secured Parties with respect thereto, or grant any
extension for performance of the same, or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable,
General Intangible or Assigned Agreements, or interest therein, without the
prior written consent of the OPNY Administrative Agent, which consent the OPNY
Administrative Agent will not unreasonably withhold, delay or condition, and (b)
the Grantor will duly fulfill all material obligations on its part to be
fulfilled under or in connection with the Receivables, the General Intangibles
and the Assigned Agreements and will do nothing to impair the security interests
of the OPNY Administrative Agent (including the creation, attachment and
priority thereof) in the Receivables, the General Intangibles or the Assigned
Agreements.
4.06 Collection. The Grantor shall endeavor to cause to be collected
from the account debtor named in the Grantor's Receivables and General
Intangibles or obligor under any Assigned Agreements, and paid by such account
debtor directly to the Revenue Account, as and when due (including amounts which
are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Receivable, General Intangible or Assigned Agreements, and apply
promptly upon receipt thereof all such amounts as are so collected to the
outstanding balance of such
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Receivable, General Intangible or under such Assigned Agreements, except that,
unless an Event of Default shall have occurred and be continuing (and shall not
have been waived by an appropriate vote or other action by the Required Lenders
in accordance with Section 9.02 of the OPNY Credit Agreement), the Grantor may
allow in the ordinary course of business as adjustments to amounts owing under
the Grantor's Receivables, General Intangibles and Assigned Agreements an
extension or renewal of the time or times of payment, or settlement adjustment,
release, compromise, settlement or other similar action for less than the total
unpaid balance, which the Grantor finds appropriate to enhance collectibility in
accordance with sound business judgment. The reasonable costs and expenses
(including reasonable attorneys fees) of collection, whether incurred by the
Grantor or the OPNY Administrative Agent, shall be borne by the Grantor.
Section 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
TRADEMARKS.
5.01 Infringements. Within ten (10) Business Days after a Responsible
Officer of the Borrower obtains actual knowledge thereof, the Grantor shall
notify the OPNY Administrative Agent and the OPNY Lenders in writing of all
pertinent details available to it, with respect to any infringement or other
violation of the Grantor's rights in, or any claim of any such infringement of,
any, Patent, Copyright or Trademark, whether or not such right is presently held
by the Grantor or third party. As to each such instance, absent the Required
Lenders' authorization to proceed otherwise (as required pursuant to Section
9.02 of the OPNY Credit Agreement), which authorization shall not be
unreasonably withheld, delayed or conditioned, and to the extent permitted by
applicable Requirements of Law, the Grantor shall use commercially reasonable
efforts to pursue a remedy.
5.02 Other Patents, Copyrights and Trademarks. If the Grantor
hereafter acquires rights in any Patent, Copyright or Trademark, the Grantor
shall deliver to the OPNY Administrative Agent and the OPNY Lenders within 60
days, a copy of such Patent, Copyright or Trademark and a second priority
perfected security interest therein or a collateral assignment thereof, as
appropriate.
5.03 Remedies. If an Event of Default shall occur and be continuing
(and shall not have been waived by an appropriate vote or other action as
required pursuant to Section 9.02 of the OPNY Credit Agreement), the OPNY
Administrative Agent, acting pursuant to and in accordance with the terms of the
Financing Documents and applicable Requirements of Law may (a) declare the
entire right, title, and interest of the Grantor in any Patents, Copyrights and
Trademarks vested in the OPNY Administrative Agent, in which event such right,
title, and interest immediately shall vest in the OPNY Administrative Agent; and
(b) take and practice or use or sell any or all of such Patents, Copyrights or
Trademarks, or take and use or sell the Grantor's rights in such Patents,
Copyrights or Trademarks, along with the goodwill and all other elements of the
Grantor's ongoing business symbolized by such assets and secured under this
Agreement, and the right to carry on the business of the Grantor in connection
with which such assets have been used. The Grantor shall execute any other and
further documents which the OPNY Administrative Agent may request further to
confirm the foregoing and to transfer to the
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OPNY Administrative Agent ownership of the Grantor's rights to such Trademarks,
Patents and/or Copyrights.
Section 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND
ASSIGNMENT COLLATERAL; INSURANCE.
6.01 Protection of the OPNY Administrative Agent's Interests. The
Grantor will do nothing to impair the rights of the OPNY Administrative Agent or
the OPNY Lenders in the Assignment Revenues and the Assignment Collateral,
provided, however, that nothing herein shall prevent the Grantor, prior to the
exercise by the OPNY Administrative Agent of any such rights, from undertaking
the Grantor's operations in the ordinary course of business in accordance with
the Assigned Agreements and the OPMW Credit Agreement. The Grantor assumes all
liability and responsibility in connection with the Assignment Revenues and the
Assignment Collateral and the liability of the Grantor with respect to the
Secured Obligations shall in no way be affected or diminished by reason of the
fact that such Assignment Revenues and Assignment Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to the
Grantor.
6.02 Further Actions. Except as provided for in the Intercreditor
Agreement, the Grantor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the OPNY Administrative Agent and the OPNY
Lenders from time to time such lists, descriptions and designations of the
Assignment Revenues and the Assignment Collateral, warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title, bailee
and warehousemen acknowledgements, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps, relating to the Assignment Revenues and the Assignment
Collateral and other property or rights covered by the interests hereby granted,
which is necessary to perfect, preserve or protect its ownership and security
interests in the Assignment Revenues and the Assignment Collateral, or
as-extracted collateral, through filing, possession, control or otherwise or is
otherwise reasonably requested by the OPNY Administrative Agent; provided, that
the foregoing shall not require the Grantor to obtain any Additional Contract
Consent except to the extent reasonably requested by the OPNY Administrative
Agent, and, to the extent so requested, the Grantor shall use commercially
reasonable efforts to obtain such Additional Contract Consent.
6.03 Financing Statements. The Grantor agrees to execute and deliver
to the OPNY Administrative Agent, on behalf of the OPNY Lenders, financing
statements, continuation statements, amendments thereto, filings with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) or similar
statements or instruments of registration under the law of any jurisdiction, in
form reasonably acceptable to the OPNY Administrative Agent, as it may from time
to time reasonably request or as are necessary or desirable in its reasonable
opinion to establish, maintain, perfect, continue, enforce or protect the
security interests contemplated hereunder as valid, enforceable, second priority
security interests as provided herein and the other rights and security
contemplated herein, all in accordance with the UCC as enacted in any and all
relevant jurisdictions or any other applicable Requirement of Law. The Grantor
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authorizes the OPNY Administrative Agent to authenticate and file any such
financing statements without the signature of the Grantor and naming the Grantor
as debtor and the OPNY Administrative Agent as secured party. The Grantor will
pay any applicable filing fees and related expenses under this Section 6.03.
Unless specifically permitted under applicable Requirements of Law, the Grantor
shall not file any amendments or terminations of financing statements filed to
establish and maintain the security interests contemplated hereunder without the
OPNY Administrative Agent's authorization, and any such filing made without the
OPNY Administrative Agent's authorization, is ineffective.
Section 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
7.01 Remedies; Obtaining the Assignment Collateral Upon Default. The
Grantor agrees that, if any Event of Default shall have occurred and be
continuing (and shall not have been waived by an appropriate vote or other
action by the Required Lenders), then and in every such case, subject to the
terms and provisions of the Credit Agreement and any applicable Requirement of
Law then in effect, the OPNY Administrative Agent, in addition to any rights now
or hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the UCC or any other applicable Requirement
of Law in all relevant jurisdictions and may, acting pursuant to and in
accordance with the terms of the Credit Agreement:
(a) personally, or by agents or attorneys, immediately retake
possession of the Assignment Collateral or any part thereof, from the
Grantor or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may enter
upon the Grantor's premises where any of the Assignment Collateral is
located and remove the same and use in connection with such removal any and
all services, supplies, aids and other facilities of the Grantor; and
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including any other Assigned Agreement, the General
Intangibles and the Receivables) constituting the Assignment Revenues and
Assignment Collateral to make any payment required by the terms of such
instrument or agreement directly to the OPNY Administrative Agent for
deposit in the OPNY Revenue Account (or any other account required or
contemplated by the OPNY Deposit Account Agreement) and application
pursuant to the OPNY Deposit Account Agreement; and
(c) apply all monies, securities and instruments in the OPNY Revenue
Account, and each other Account, in accordance with the OPNY Deposit
Account Agreement; and
(d) sell, assign or otherwise liquidate, or direct the Grantor to
sell, assign or otherwise liquidate, any or all of the Assignment
Collateral or any part thereof, and take possession of the proceeds of any
such sale or liquidation for deposit in the Revenue Account (or any other
account required or contemplated by the Deposit Account Agreement) and
application pursuant to the Deposit Account Agreement; and
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(e) take possession of the Assignment Collateral or any part thereof,
by directing the Grantor in writing to deliver the same to the OPNY
Administrative Agent at any place or places designated by the OPNY
Administrative Agent, in which event the Grantor shall at its own expense:
(i) forthwith cause the same to be moved to the place or places
so designated by the OPNY Administrative Agent and there delivered to
the OPNY Administrative Agent,
(ii) store and keep any Assignment Collateral so delivered to the
OPNY Administrative Agent (to the extent not physically delivered to
the OPNY Administrative Agent) at such place or places pending
further action by the OPNY Administrative Agent as provided in
Section 7.02, and
(iii) while such Assignment Collateral shall be so stored and
kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in
good condition;
it being understood that the Grantor's obligation to so deliver the
Assignment Collateral is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction, the
OPNY Administrative Agent shall be entitled to a decree requiring specific
performance by the Grantor of such obligation.
7.02 Remedies, Disposition of the Assignment Collateral. Any
Assignment Collateral repossessed by the OPNY Administrative Agent under or
pursuant to Section 7.01, and any other Assignment Collateral whether or not so
repossessed by the OPNY Administrative Agent, may be sold, assigned, leased or
otherwise disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as the OPNY Administrative Agent, acting in good faith, may, upon
written direction in compliance with any applicable Requirement of Law,
determine to be commercially reasonable. Subject to the foregoing, any of the
Assignment Collateral may be sold, leased or otherwise disposed of, in the
condition in which the same existed when taken by the OPNY Administrative Agent
or after any overhaul or repair which the OPNY Administrative Agent, acting in
good faith, shall determine to be commercially reasonable. Any such disposition
which shall be a private sale or other private proceeding permitted by such
requirements shall be made upon not less than 10 days' written notice to the
Grantor (except that, if the OPNY Administrative Agent shall determine, in its
sole discretion, that any of the Collateral threatens to decline quickly in
value or to become worthless, any such sale may be made upon three days' notice
to the Grantor) specifying the time at which such disposition is to be made and
the intended sale price or other consideration therefor, and shall be subject,
for the 10 days after the giving of such notice, to the right of the Grantor or
any nominee of the Grantor to acquire the Assignment Collateral involved at a
price or for such other consideration at least equal to the intended sale price
or other consideration so specified. To the extent permitted by applicable
Requirements of Law, the OPNY Administrative Agent on behalf of the OPNY Lenders
may bid for and become the purchaser of the Assignment Collateral or any item
thereof, offered for sale in accordance with this Section 7.02. If, under
mandatory requirements of any applicable Requirement of Law, the
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OPNY Administrative Agent shall be required to make disposition of the
Assignment Collateral within a period of time which does not permit the giving
of notice to the Grantor as hereinabove specified, the OPNY Administrative Agent
need give the Grantor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of any applicable Requirement
of Law.
The Grantor hereby irrevocably appoints the OPNY Administrative Agent
as its attorney-in-fact, so that OPNY Administrative Agent, or any Person
empowered by the OPNY Administrative Agent, shall, during the continuance of an
Event of Default, be authorized to sell, assign, lease or otherwise dispose of
the Assignment Collateral or any part thereof pursuant to the provisions of the
preceding paragraph, and, in general, to do or cause to be done all such acts
and things which are otherwise required to be done by the Grantor under this
Agreement.
7.03 Waiver of Claims. Except as otherwise provided in this Agreement
or in any other Financing Document, THE GRANTOR HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN
CONNECTION WITH THE OPNY ADMINISTRATIVE AGENT TAKING POSSESSION OR THE OPNY
ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF THE ASSIGNMENT COLLATERAL, IN EACH
CASE AS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT
WHICH THE GRANTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF
THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF ANY SUCH JURISDICTION, and the
Grantor hereby further waives, to the extent permitted by applicable
Requirements of Law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the gross negligence or willful
misconduct of the OPNY Administrative Agent, any OPNY Lender, or any Person
acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the OPNY
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
Requirement of Law in order to prevent or delay the enforcement of this
Agreement (including any right to claim that such enforcement should be
stayed pending the outcome of any other action or proceeding (including
any arbitration proceeding)) or the absolute sale of the Assignment
Collateral or any portion thereof, and the Grantor, for itself and all
who may claim under it, insofar as it or they now or hereafter lawfully
may, hereby waives the benefit of all such applicable Requirements of
Law.
To the extent permitted under applicable Requirements of Law, any sale of, or
the grant of options to purchase, or any other realization upon, any Assignment
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the Grantor therein
22
and thereto, and shall be a perpetual bar both at law and in equity against the
Grantor and against any and all Persons claiming or attempting to claim the
Assignment Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under the Grantor.
7.04 Application of Proceeds. Notwithstanding any other provision of
this Agreement, all payments made under or in connection with this Agreement,
and all moneys collected by the OPNY Administrative Agent upon any sale or other
disposition of the Collateral pursuant to this Agreement, including Sections
7.01 and 7.02 shall be applied in accordance with the Financing Documents. For
the avoidance of doubt, it is understood that the Grantor shall remain liable to
the extent of any deficiency between the amount of the Proceeds of the
Assignment Collateral and the aggregate amount of the Secured Obligations.
7.05 Remedies Cumulative. No failure or delay on the part of the OPNY
Administrative Agent or any OPNY Lender in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between the Grantor and the OPNY Administrative Agent or any OPNY Lender
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the OPNY
Administrative Agent or any OPNY Lender would otherwise have. No notice to or
demand on the Grantor in any case shall entitle the Grantor to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the OPNY Administrative Agent or any OPNY Lender to any
other or further action in any circumstances without notice or demand.
7.06 Discontinuance of Proceedings. In case the OPNY Administrative
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the OPNY Administrative Agent, then and in
every such case the Grantor, the OPNY Administrative Agent and each holder of
any of the Obligations shall be restored to their former positions and rights
hereunder with respect to the Assignment Collateral subject to the security
interest created under this Agreement, and all rights, remedies and powers of
the OPNY Administrative Agent shall continue as if no such proceeding had been
instituted.
7.07 Grant of License or Sub-License to Use Patent, Trademark,
Copyright and License Collateral. For the purpose of enabling the OPNY
Administrative Agent to exercise rights and remedies under this Article VII at
such time as the OPNY Administrative Agent shall be lawfully entitled to
exercise such rights and remedies, the Grantor hereby grants to the
Administrative Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantor) to use, license or
sub-license any Patent, Trademark, Copyright or License (to the extent the
Grantor has authority to sub-license any such License) now owned or licensed or
hereafter acquired or licensed by the Grantor, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such
license or sub-license by the OPNY
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Administrative Agent shall be exercised, at the option of the OPNY
Administrative Agent, only upon the occurrence and during the continuation of an
Event of Default; provided that any license, sub-license or other transaction
entered into by the OPNY Administrative Agent while such Event of Default was
continuing in accordance herewith shall be binding upon the Grantor
notwithstanding any subsequent cure of an Event of Default. The OPNY
Administrative Agent agrees to apply the net Proceeds received from any such
license as provided in Section 7.04 hereof.
Section 8. INDEMNITY; EXPENSES.
(a) The Grantor agrees to indemnify and hold harmless the OPNY
Administrative Agent and each Secured Party from and against any and all claims,
losses and liabilities arising out of or resulting from the Collateral or the
Grantor's pledge and assignment under this Agreement (including enforcement
against the Grantor of this Agreement), except claims, losses or liabilities
resulting from the gross negligence or willful misconduct of any Secured Party
or any other Person designated by any Secured Party to act on its behalf
pursuant to this Agreement.
(b) The Grantor will upon demand pay to the OPNY Administrative Agent or
any Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the OPNY Administrative Agent or any Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of the Grantor, (iii) the exercise
or enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the OPNY Administrative Agent or any Secured Party
hereunder against the Grantor or (iv) the failure by the Grantor to perform or
observe any of the provisions hereof.
Section 9. MISCELLANEOUS.
9.01 Notices. All notices hereunder, unless otherwise specified,
shall be given in the manner provided for in Section 9.01 of the OPNY Credit
Agreement; provided, that notices to the Grantor shall be at the address
specified in the Twelvepole Guarantee. Promptly after the execution of any and
all material amendments, supplements and waivers, of and to the Assignment
Revenues or Assignment Collateral, originals, if reasonably available and, if
not, copies of such amendments, supplements and waivers shall be delivered to
the OPNY Administrative Agent.
9.02 Waiver, Amendment; Severability. No amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions of such provision in any other jurisdiction shall
not in any way be affected or impaired thereby.
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9.03 Obligations Absolute. To the extent permitted by applicable
Requirements of Law, the obligations of the Grantor under this Agreement are
independent of the Secured Obligations, and a separate action or actions may be
brought and prosecuted against the Grantor to enforce this Agreement,
irrespective of whether any action is brought against the Borrower, any other
pledgor or any guarantor of the Secured Obligations or whether the Borrower, any
other pledgor or any guarantor of the Secured Obligations is joined in any such
action or actions. All rights of the OPNY Administrative Agent and the
assignment, hypothecation and security interest hereunder, and all obligations
of the Grantor hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the OPMW
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of the Grantor, any Credit Party or any other OPMW Credit
Party, the recovery of any judgment against the Grantor, any Credit Party or any
other OPMW Credit Party, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Grantor;
(b) any occurrence or condition whatsoever, including (i) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of,
or any change in, any of the obligations of the Grantor, any Credit Party or any
other OPMW Credit Party contained in this Agreement, the OPMW Credit Agreement
or any other Financing Document, (ii) any impairment, modification, release or
limitation of the liability of the Grantor, any Credit Party or any other OPMW
Credit Party or any of their estates in bankruptcy, or any remedy for the
enforcement thereof, resulting from the operation of any present or future
provision of any applicable bankruptcy law, as amended, or other statute or from
the decision of any court, (iii) the assertion or exercise by the Grantor, the
OPNY Administrative Agent or any other Secured Party of any rights or remedies,
(iv) the assignment or the purported assignment of any property as security for
the Secured Obligations, including all or any part of the rights of the Grantor
under this Agreement, (v) the extension of the time for payment by the Grantor,
any Credit Party or any other OPMW Credit Party or any other guarantor of any
payments or other sums or any part thereof owing or payable under any of the
terms and provisions of any Financing Document or of the time for performance by
the Grantor, any Credit Party or any other OPMW Credit Party of any other
obligations under or arising out of any terms or provisions or the extension of
the renewal of any thereof, (vi) the modification or amendment (whether material
or otherwise) of any duty, agreement or obligation of the Grantor, any Credit
Party or any other OPMW Credit Party set forth in any Financing Document, (vii)
the voluntary or involuntary liquidation, dissolution, sale or other disposition
of all or substantially all of the assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting the Grantor, any Credit Party or any other OPMW
Credit Party or any of their respective assets, or the disaffirmancy of this
Agreement or any Financing Document in any such proceeding, (viii) the release
or discharge of the Grantor, any Credit Party or any other OPMW Credit Party
from the performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of this
25
Agreement or any Financing Document or (x) any other circumstance which might
otherwise constitute a legal or equitable discharge of a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
9.04 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto and shall inure to the benefit of the OPNY
Lenders; provided, however, that the Grantor may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
OPNY Administrative Agent and each of the OPNY Lenders. Any OPNY Lender may
transfer, assign or grant all or such relevant part of its rights hereunder in
connection with an assignment or transfer of all or any part of its interest in
its Loans in accordance with the provisions of the OPNY Credit Agreement, and
such assignee shall thereupon become vested with all the benefits in respect
thereof granted to such OPNY Lender herein or otherwise. All agreements,
statements, representations and warranties made by the Grantor herein or in any
certificate or other instrument delivered by the Grantor or on its behalf under
this Agreement shall be considered to have been relied upon by the OPNY Lenders
and shall survive the execution and delivery of this Agreement, the OPNY Credit
Agreement and the other Financing Documents regardless of any investigation made
by the OPNY Lenders or on their behalf.
9.05 Headings Descriptive, etc. The headings of the several sections
and subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
9.06 Governing Law; Submission to Jurisdiction and Venue. (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE GRANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE GRANTOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE
26
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT THE GRANTOR AND EACH SECURED PARTY ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK, NEW YORK. THE GRANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(c) THE GRANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST THE
GRANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. THE GRANTOR
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) THE GRANTOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE GRANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE GRANTOR TO
RECEIVE FOR AND ON BEHALF OF THE GRANTOR SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS
SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE GRANTOR AT ITS
ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 9.01. THE GRANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE GRANTOR AT ITS SAID
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
27
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (I) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (II)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE, IN EITHER CASE, SOLELY AS PERMITTED
IN SUBSECTION (C) OF THIS SECTION 9.06.
9.07 The Grantor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that the Grantor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Assignment Revenues or the Assignment Collateral and the OPNY Administrative
Agent and the OPNY Lenders shall have no obligations or liabilities (except
obligations or liabilities resulting from the gross negligence or willful
misconduct of the OPNY Administrative Agent and the OPNY Lenders) with respect
to any Assignment Revenues or Assignment Collateral by reason of or arising out
of or in connection with this Agreement, nor shall the Administrative Agent or
OPNY Lenders be required or obligated in any manner to perform or fulfill any of
the obligations of the Grantor under or with respect to any Assignment Revenues
or Assignment Collateral.
9.08 Termination; Release. This Agreement shall create a continuing
pledge, assignment of hypothecation of and security interest in the Collateral
and shall remain in full force and effect until no OPNY Lender shall have any
Commitment outstanding and until the Notes, together with interest, and all
other secured obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the OPNY Administrative
Agent, at the written request and expense of the Grantor, will promptly
authorize, execute and deliver, as applicable, to the Grantor the proper
instruments (which may include Uniform Commercial Code termination statements on
form UCC-3) acknowledging the termination of this Agreement, and will promptly
duly assign, transfer and deliver to the Grantor (without recourse and without
any representation or warranty) free from any interest of the OPNY
Administrative Agent or Lien granted hereunder such of the Assignment Revenues
or Assignment Collateral as may be in possession of the OPNY Administrative
Agent and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement, together with such notices to third parties as may
be necessary to countermand any notices previously sent to them pursuant hereto.
9.09 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
9.10 [Intentionally Deleted.]
9.11 Limitation of Recourse. Except as otherwise expressly provided
in the OPNY Financing Documents and the OPMW Financing Documents, the
obligations of the Grantor hereunder are obligations solely of the Grantor and
shall not constitute a debt or obligation of any direct or indirect, partner,
shareholder or other equity owner of the Grantor or any of their respective
directors, officers, agents or employees (each such Person, a "Non-Recourse
Party"). No Non-Recourse Party shall be liable for any amount payable by the
Grantor
28
under this Agreement and the Secured Parties shall not seek a money judgment or
deficiency or personal judgment against any Non-Recourse Party for payment of
the indebtedness payable by the Grantor evidenced by this Agreement. No property
or assets of any Non-Recourse Party, other than as contemplated in the OPNY
Financing Documents or OPMW Financing Documents, shall be sold, levied upon or
otherwise used to satisfy any judgment rendered in connection with any action
brought against the Grantor with respect to this Agreement or the other OPNY
Financing Documents or OPMW Financing Documents. The foregoing acknowledgments,
agreements and waivers shall be enforceable by any Non-Recourse Party.
Notwithstanding the foregoing, nothing in this Section shall limit or affect or
be construed to limit or affect the obligations and liabilities of any Credit
Party or any other Non-Recourse Party (a) in accordance with the terms of any
Transaction Document creating such liabilities and obligations to which such
Credit Party or Non-Recourse Party is a party, (b) arising from liability
pursuant to any applicable Requirement of Law for such Credit Party's or such
Non-Recourse Party's fraudulent actions, knowing misrepresentations or willful
misconduct or (c) with respect to amounts distributed to it in violation of
Section 6.10 of the Credit Agreement.
9.12 Subordination. Notwithstanding any provision of this Agreement
or any other Financing Document to the contrary, (i) the security interests
created and granted hereby are subject to, subordinate and inferior to the
security interests created by the First Lien Twelvepole Security Agreement, in
accordance with, and all rights, powers and remedies granted to, the OPMW
Administrative Agent thereunder, are subject in all respects to the terms and
conditions of the Intercreditor Agreement, including restrictions on the right
of the OPNY Administrative Agent to give notices, exercise power of attorney
rights direct or receive payments, hold, control or receive delivery of any
Assignment Collateral or other possessory collateral or to exercise powers or
remedies and to apply proceeds of Collateral; provided, that if and to the
extent the Intercreditor Agreement is amended, supplemented or modified at any
time from time to time and such amendment, supplement or modification could
reasonably be expected to have any adverse effect on the Grantor's rights,
duties or obligations hereunder or under any other Financing Document, such
amendment, supplement or modification shall not be effective as to the Grantor
without the Grantor's prior written acknowledgment (which acknowledgment shall
not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or supplement shall be effective for purposes of this Agreement and
the other Financing Documents, (ii) the OPNY Administrative Agent on behalf of
each of the Secured Parties hereby acknowledges and agrees that the Pledgor
shall not have any duty and obligation with respect to the perfection or
priority of the security interest granted hereunder in and to any of the
Collateral (and no Default or Event of Default shall result or occur) to the
extent (a) such Collateral is in the possession or control of the OPMW
Administrative Agent, (b) such collateral is not transferred by the OPMW
Administrative Agent to the OPNY Administrative Agent as required pursuant to
the Intercreditor Agreement, (c) such perfection or priority requires any
consent, approval or other action of the OPMW Administrative Agent, or (d) the
OPMW Administrative Agent then maintains a perfected, second priority security
interest in and to the Collateral and (iii) no obligations contained in this
Agreement shall require the Grantor to take or omit to take any action
inconsistent with the terms and conditions of the OPMW Deposit Account Agreement
and/or the Holdco Deposit Account Agreement and no Default or Event of Default
shall arise or result from the taking or omitting of such action.
29
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
GRANTOR:
TWELVEPOLE CREEK, LLC
By:
-------------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as OPNY Administrative
Agent
By:
-------------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT A
TO SECOND LIEN
ASSIGNMENT AND
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES PATENTS AND TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, TWELVEPOLE, LLC, a Delaware limited liability company
(the "Assignor"), having its chief executive office at 1111 Louisiana Street,
Houston, Texas 77002, hereby assigns and grants to BANK OF AMERICA, N.A., as
administrative agent (the "OPNY Administrative Agent"), with offices at 101
North Tryon Street, Charlotte, NC 28255 a second priority security interest in
(all of which are herein collectively referred to as the "PTO Collateral") (i)
all of the Assignor's right, title and interest in and to the United States
trademarks, trademark registrations and trademark applications set forth on
Schedule A attached hereto (the "Marks"), (ii) all of the Assignor's right,
title and interest in and to the United States patents set forth on Schedule B
attached hereto (the "Patents"), in each case together with (iii) all Proceeds
(as such term is defined in the Security Agreement referred to below) and
products of the Marks and Patents, (iv) the goodwill of the businesses
symbolized by the Marks and (v) all causes of action arising prior to or after
the date hereof for infringement of any of the Marks and Patents or unfair
competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all the Secured Obligations of the Assignor, as such term is defined
in the Amended and Restated Assignment and Security Agreement, dated as of
October 28, 2002, among the Assignor, the OPNY Administrative Agent and the
other parties thereto (as amended, supplemented or modified from time to time,
the "Security Agreement"). Upon the satisfaction of the conditions set forth in
Section 9.08 of the Security Agreement, the OPNY Administrative Agent shall
execute, acknowledge, and deliver to the OPNY Administrative Agent an instrument
in writing releasing the security interest in the PTO Collateral acquired under
this Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security
interest granted to the OPNY Administrative Agent for the benefit of the Secured
Parties under the Security Agreement. The rights and remedies of the OPNY
Administrative Agent with respect to the security interest granted herein are
without prejudice to, and are in addition to, those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provision of this Assignment is deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the _____ day of _____________, 20__.
TWELVEPOLE CREEK, LLC
By:
-------------------------
Name:
Title:
BANK OF AMERICA, N.A., as OPNY
Administrative Agent
By:
-------------------------
Name:
Title:
STATE OF _________________
________ OF ________
The foregoing instrument was acknowledged before me this ____ day of
__________, 20__ by ________________ as [title] of _______________________, a
________ corporation, on behalf of the corporation.
My commission expires:
Notarial Seal
------------------------------
Notary Public
SCHEDULE A
TRADEMARKS AND TRADEMARK APPLICATIONS
Serial No. or Issue or
Registration No. Country Filing Date Mark
---------------- ------- ----------- ----
SCHEDULE B
PATENTS AND PATENT APPLICATIONS
Serial No. or Issue or
Patent No. Inventor Country Filing Date Title
---------- -------- ------- ----------- -----
EXHIBIT B
TO SECOND LIEN
ASSIGNMENT AND
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, TWELVEPOLE CREEK, LLC, a Delaware limited liability
company (the "Assignor"), having its chief executive office at 1111 Louisiana
Street, Houston, Texas 77002, hereby assigns and grants to BANK OF AMERICA,
N.A., as administrative agent (the "OPNY Administrative Agent"), with offices at
101 North Tryon Street, Charlotte, NC 28255, a second priority security interest
in (all of which are herein collectively referred to as the "Copyright
Collateral") (i) all of the Assignor's right, title and interest in and to the
United States copyrights and associated United States copyright registrations
and applications for registration set forth in Schedule A attached hereto (the
"Copyrights"), (ii) all Proceeds (as such term is defined in the Security
Agreement referred to below) and products of the Copyrights, (iii) the goodwill
of the businesses symbolized by the Copyrights and (iv) all causes of action
arising prior to or after the date hereof for infringement of any of the
Copyrights.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all of the Secured Obligations of the Assignor, as such term is
defined in the Amended and Restated Assignment and Security Agreement, dated as
of October 28, 2002 among the Assignor, the OPNY Administrative Agent and the
other parties thereto (as amended, supplemented or modified from time to time,
the "Security Agreement"). Upon the satisfaction of the conditions set forth in
Section 9.08 of the Security Agreement, the OPNY Administrative Agent shall
execute, acknowledge, and deliver to the Assignor an instrument in writing
releasing the security interests of the Copyright Collateral acquired under this
Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security
interest granted to the OPNY Administrative Agent for the benefit of the Secured
Parties under the Security Agreement. The rights and remedies of the OPNY
Administrative Agent with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the ____ day of _______, 20___.
TWELVEPOLE CREEK, LLC
By:
------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as OPNY
Administrative Agent
By:
------------------------------------
Name:
Title:
STATE OF _________________
________ OF ________
The foregoing instrument was acknowledged before me this ____ day of
__________, 20__ by ________________ as [title] of _______________________, a
________ corporation, on behalf of the corporation.
My commission expires:
Notarial Seal
---------------------------
Notary Public
SCHEDULE A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Copyright
Registration No. Country Publication Date Title
---------------- ------- ---------------- -----
EXHIBIT I-1
TO
[SECOND] AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
[FORM OF]
MEMBERSHIP INTEREST PLEDGE AGREEMENT
between
ORION POWER HOLDINGS, INC.,
as Pledgor,
and
BANK OF AMERICA, N.A.,
as Collateral Agent
October 28, 2002
================================================================================
TABLE OF CONTENTS
Section Page
1. Definitions; Construction................................................3
2. Security.................................................................9
3. Pledge of Stock..........................................................9
3.1. Pledge; Assignment; Grant of Security Interest..................9
3.2. Uncertificated Stock...........................................10
4. Pledgor Remains Liable..................................................11
5. Delivery of Pledged Collateral..........................................11
6. Appointment of Agents; Endorsements, etc................................11
7. Representations, Warranties and Covenants...............................11
7.1. Company Status.................................................11
7.2. Authorization; Execution and Delivery; Enforceability..........12
7.3. Consents and Approvals.........................................12
7.4. Operating Agreement............................................12
7.5. Litigation.....................................................13
7.6. No Defenses....................................................13
7.7. [Intentionally omitted.].......................................13
7.8. Regulation.....................................................13
7.9. Existence......................................................13
7.10. Maintenance of Register...........................................13
7.11. Jurisdiction of Organization......................................14
7.12. Rights and Franchises.............................................14
7.13. Compliance with Requirements of Law...............................14
7.14. Share Transfer Restrictions.......................................14
7.15. Place of Incorporation; Chief Executive Office....................14
7.16. Payment of Taxes..................................................15
7.17. [Intentionally omitted.]..........................................15
7.18. Pledged Shares....................................................15
7.19. Bankruptcy........................................................17
7.20. Independent Analysis..............................................18
7.21. Reliance by Lenders...............................................18
7.22. Governing Documents...............................................18
7.23. Financial Compliance..............................................18
7.24. Indenture Payment Reserve Shortfall...............................19
7.25. Conditions Precedent..............................................19
8. Voting Rights; Distributions, Etc.......................................19
9. Remedies Upon Default...................................................20
10. Remedies Cumulative: Indemnification of the Collateral Agent and the
Other Secured Parties...................................................23
11. Obligations Absolute....................................................24
12. Application of Proceeds.................................................25
13. Purchasers of Pledged Collateral........................................25
i
14. Continuing Obligation...................................................25
15. Collateral Agent........................................................25
16. Waiver of Subrogation...................................................26
17. Successors and Assigns..................................................26
18. Severability............................................................26
19. Notices.................................................................27
20. Headings Descriptive, Etc...............................................27
21. Governing Law; Submission to Jurisdiction...............................27
22. Survival of Agreements..................................................28
23. Termination.............................................................29
24. Execution of Counterparts...............................................29
25. Amendment; Waiver.......................................................29
26. Further Assurances......................................................29
27. Applicability of the Credit Agreement...................................30
28. Limitation on Recourse..................................................30
ANNEXES
Annex A - Pledged Shares
Annex B - [Intentionally Omitted]
Annex C - Form of Stock Power
ii
MEMBERSHIP INTEREST PLEDGE AGREEMENT
MEMBERSHIP INTEREST PLEDGE AGREEMENT (this "Agreement"), dated as of
October 28, 2002, between ORION POWER HOLDINGS, INC., a Delaware corporation
("Pledgor"), and BANK OF AMERICA, N.A., as collateral agent for the benefit of
the Secured Parties under (and defined in) the Intercreditor Agreement (defined
below) (in such capacity, together with any successor and assigns, the
"Collateral Agent").
WITNESSETH:
WHEREAS, Pledgor is the owner of all the issued and outstanding
shares of the Capital Stock of Orion Power Capital, LLC, a limited liability
company organized and existing under the laws of the State of Delaware
("Holdco"); such shares consisting of [___] shares of Capital Stock of Holdco
more fully described on Annex A hereto (the "Pledged Shares");
WHEREAS, Holdco is the owner of (a) all the issued and outstanding
shares of the Capital Stock of Orion Power New York GP, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "OPNY GP
Company"); such shares consisting of 100 shares of common stock and (b) all the
issued and outstanding shares of the Capital Stock of Orion Power New York LP,
Inc., a corporation organized and existing under the laws of the State of
Delaware (the "OPNY LP Company", and together with the OPNY GP Company, the
"OPNY Companies"); such shares consisting of 100 shares of common stock;
WHEREAS, Holdco is the owner of (a) all the issued and outstanding
shares of the Capital Stock of Orion Power MidWest GP, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "OPMW GP
Company"), such shares consisting of 100 shares of common stock and (b) all the
issued and outstanding shares of the Capital Stock of Orion Power MidWest LP,
Inc., a corporation organized and existing under the laws of the State of
Delaware (the "OPMW LP Company", and together with the OPMW GP Company, the
"OPMW Companies", and together with the OPNY Companies, the "Companies"), such
shares consisting of 100 shares of common stock;
WHEREAS, the OPNY GP Company is the sole general partner in Orion
Power New York, L.P., a Delaware limited partnership (the "OPNY Borrower") and
each of the OPNY Operating Subsidiaries, and the OPNY LP Company is the sole
limited partner of the OPNY Borrower;
WHEREAS, the OPMW GP Company is the sole general partner in Orion
Power MidWest, L.P., a Delaware limited partnership (the "OPMW Borrower", and
together with the OPNY Borrower, the "Borrowers") and the OPMW LP Company is the
sole limited partner of the OPMW Borrower;
WHEREAS, the OPNY Borrower has entered into an Amended and Restated
Credit Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "OPNY
Credit Agreement"), with Banc of America Securities LLC and BNP Paribas, as lead
arrangers and joint book runners, Bank of America, N.A., as issuing bank, BNP
Paribas, as syndication agent, Union Bank of
California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island
Branch, as documentation agents, the lenders named on the signature pages
thereto and from time to time parties thereto (the "OPNY Lenders") and Bank of
America, N.A., as administrative agent on behalf of the OPNY Lenders (the "OPNY
Administrative Agent"), pursuant to which the OPNY Lenders have agreed, inter
alia, to renew, modify and extend credit facilities previously made available to
the OPNY Borrower to finance a portion of the purchase price of the Portfolio
Assets (as defined in the OPNY Credit Agreement) and to provide working capital
availability to the OPNY Borrower;
WHEREAS, the OPMW Borrower has entered into a Second Amended and
Restated Credit Agreement, dated as of the Restructuring Effective Date (as the
same may be amended, supplemented or otherwise modified from time to time, the
"OPMW Credit Agreement" and, together with the OPNY Credit Agreement, the
"Credit Agreements"), with Banc of America Securities LLC and BNP Paribas, as
lead arrangers and joint book runners, Bank of America, N.A., as issuing bank,
BNP Paribas, as syndication agent, The Bank of Nova Scotia, Mizuho Corporate
Bank, Ltd, and Bayerische Hypo-Und Vereinsbank AG, New York Branch, as
documentation agents, the lenders named on the signature pages thereto and from
time to time parties thereto (the "OPMW Lenders" and, together with the OPNY
Lenders, the "Lenders") and Bank of America, N.A., as administrative agent on
behalf of the OPMW Lenders (the "OPMW Administrative Agent"), pursuant to which
the OPMW Lenders have agreed, inter alia, to renew, modify and extend credit
facilities previously made available to the OPMW Borrower to finance a portion
of the purchase price of the Portfolio Assets (as defined in the OPMW Credit
Agreement) and to provide revolving credit availability to the OPMW Borrower;
WHEREAS, the OPNY Administrative Agent, the OPNY Lenders, the OPMW
Administrative Agent, the OPMW Lenders and the Collateral Agent have entered
into a Collateral Agency and Intercreditor Agreement, dated as of the
Restructuring Effective Date (as the same may be amended, supplemented or
otherwise modified from time to time, the "Intercreditor Agreement");
WHEREAS, Holdco and the Collateral Agent have entered into that
certain Deposit Account Agreement, dated as of the Restructuring Effective Date
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Holdco Deposit Account Agreement"), providing for, among other
things, the establishment of the Holdco Accounts (defined below); and
WHEREAS, it is a condition precedent to the obligations of the
Lenders under the Credit Agreements that this Agreement shall have been entered
into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
2
1. Definitions; Construction.
(a) Wherever used in this Agreement and unless the context otherwise
requires, the following terms shall have the following meanings:
"ACCEPTABLE RESERVES" shall have the meaning assigned such term in
each of the Credit Agreements.
"AGREEMENT" shall mean this Membership Interest Pledge Agreement.
"BORROWERS" shall have the meaning provided in the Recitals to this
Agreement.
"BUSINESS DAY" shall have the meaning assigned such term in each of
the Credit Agreements.
"CAPITAL LEASE" shall mean, with respect to any Person, any lease of
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" shall mean, with respect to any Person, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interest in (however designated) the common or
preference share capital of such Person, including partnership interests and
limited liability company interests.
"COLLATERAL" shall mean the collective reference to all, or any part
of, the "Collateral" as such term is defined in each of the Credit Agreements
and each other Financing Document.
"COLLATERAL AGENT" shall have the meaning provided in the first
paragraph of this Agreement.
"COMMITMENTS" shall mean the collective reference to the OPNY
Commitments and the OPMW Commitments.
"COMPANIES" shall have the meaning provided in the Recitals to this
Agreement.
"CONTRACTUAL OBLIGATION" shall mean, with respect to any Person, any
provision of any securities issued by such Person or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
subject.
"CREDIT AGREEMENTS" shall have the meaning provided in the Recitals
to this Agreement.
"DELAWARE UCC" shall have the meaning specified in Section 7.18(l).
"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements with any
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Governmental Authority issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release, or threatened Release, of any
Hazardous Material or to health and safety matters.
"EVENT OF DEFAULT" shall have the meaning assigned such term in each
of the Credit Agreements.
"FINANCING DOCUMENTS" shall mean the collective reference to the OPNY
Financing Documents and the OPMW Financing Documents.
"GAAP" shall mean generally accepted accounting principles in effect
from time to time in the United States of America.
"GOVERNMENTAL APPROVALS" shall mean any action, authorization,
certificate, consent, waiver, approval, license, franchise, lease, ruling,
permit, variance, order, right, tariff, rate, certification, exemption of or
from, and any filing or registration with, any Governmental Authority (including
all environmental permits) relating to the ownership, operation or maintenance
of the Portfolio Assets or to the execution, delivery or performance of any
Project Contract by any Person party thereto.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state, county, city or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, government.
"HAZARDOUS MATERIALS" shall mean all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"HOLDCO" shall have the meaning provided in the Recitals to this
Agreement.
"HOLDCO ACCOUNTS" shall have the meaning assigned to the term
"Accounts" in the Holdco Deposit Account Agreement.
"HOLDCO DEPOSIT ACCOUNT AGREEMENT" shall have the meaning provided in
the Recitals to this Agreement.
"HOLDCO INDENTURE DEBT SERVICE RESERVE ACCOUNT" shall have the
meaning assigned such term in the Holdco Deposit Account Agreement.
"INDENTURE PAYMENT OFFSET AMOUNT" shall have the meaning assigned
such term in the Holdco Deposit Account Agreement.
"INDENTURE PAYMENT RESERVE SHORTFALL" shall have the meaning assigned
such term in the Holdco Deposit Account Agreement.
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"INDENTURE PAYMENT RESERVE SHORTFALL DEPOSIT" shall have the meaning
assigned such term in the Holdco Deposit Account Agreement.
"INTERCREDITOR AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
"INVESTMENT GRADE RATING" shall mean, in respect of any nationally
recognized statistical rating organization (as such term is defined in the Rules
under the Securities Exchange Act of 1934, as amended), one of such
organization's generic categories that signifies investment grade.
"LIEN" shall mean any mortgage, deed of trust, pledge, security
interest, encumbrance, lien, option, restriction, charge or deposit arrangement
or other arrangement having the practical effect of the foregoing or other
preferential arrangement of any other kind and shall include the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement.
"LENDERS" shall have the meaning provided in the Recitals to this
Agreement.
"MATERIAL ADVERSE EFFECT" shall mean the collective reference to
"Material Adverse Effect" as such term is defined in each of the Credit
Agreements.
"NOTES" shall mean the collective reference to the OPNY Notes and the
OPMW Notes.
"OPERATING AGREEMENT" shall have the meaning specified in Section
3.1(iii).
"OPERATIONAL PLANS" shall mean the collective reference to
"Operational Plans" as such term is defined in each of the Credit Agreements.
"OPH NET CASH FLOWS" shall have the meaning assigned such term in the
Holdco Deposit Account Agreement.
"OPMW ADMINISTRATIVE AGENT" shall have the meaning provided in the
Recitals to this Agreement.
"OPMW BORROWER" shall have the meaning in the Recitals to this
Agreement.
"OPMW COMMITMENTS" shall mean the "Commitments" as such term is
defined in the OPMW Credit Agreement.
"OPMW COMPANIES" shall have the meaning provided in the Recitals to
this Agreement.
"OPMW CREDIT AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
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"OPMW FINANCING DOCUMENTS" shall have the meaning provided for the
term "Financing Documents" in the OPMW Credit Agreement
"OPMW GP COMPANY" shall have the meaning provided in the Recitals to
this Agreement.
"OPMW GP PARTNERSHIP INTEREST PLEDGE AGREEMENT" shall mean that
certain Amended and Restated Partnership Interest Pledge Agreement, dated as of
the Restructuring Effective Date, between the OPMW GP Company and the OPMW
Administrative Agent (for the benefit of the OPMW Secured Parties).
"OPMW LENDERS" shall have the meaning provided in the Recitals to
this Agreement.
"OPMW LP COMPANY" shall have the meaning provided in the Recitals to
this Agreement.
"OPMW NOTES" shall mean the "Notes" as such term is defined in the
OPMW Credit Agreement.
"OPMW OBLIGATIONS" shall mean the "Obligations" as such term is
defined in the OPMW Credit Agreement.
"OPMW OPERATING SUBSIDIARY" shall mean Twelvepole Creek, LLC, a
Delaware limited liability company.
"OPMW REQUIRED LENDERS" shall mean the "Required Lenders" as such
term is defined in the OPMW Credit Agreement.
"OPMW SECURED PARTIES" shall have the meaning set forth in the OPNY
Credit Agreement.
"OPMW TRANSACTION DOCUMENTS" shall have the meaning provided for the
term "Transaction Document" in the OPMW Credit Agreement.
"OPNY ADMINISTRATIVE AGENT" shall have the meaning provided in the
Recitals to this Agreement.
"OPNY BORROWER" shall have the meaning provided in the Recitals to
this Agreement.
"OPNY COMMITMENTS" shall mean the "Commitments" as such term is
defined in the OPNY Credit Agreement.
"OPNY COMPANIES" shall have the meaning provided in the Recitals to
this Agreement.
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"OPNY CREDIT AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
"OPNY FINANCING DOCUMENTS" shall have the meaning provided for the
term "Financing Documents" in the OPNY Credit Agreement.
"OPNY GP COMPANY" shall have the meaning provided in the Recitals to
this Agreement.
"OPNY GP PARTNERSHIP INTEREST PLEDGE AGREEMENT" shall mean that
certain Amended and Restated Partnership Interest Pledge Agreement, dated as of
the Restructuring Effective Date, between the OPNY GP Company and the OPNY
Administrative Agent (for the benefit of the OPNY Secured Parties).
"OPNY LENDERS" shall have the meaning provided in the Recitals to
this Agreement.
"OPNY LP COMPANY" shall have the meaning provided in the Recitals to
this Agreement.
"OPNY NOTES" shall mean the "Notes" as such term is defined in the
OPNY Credit Agreement.
"OPNY OBLIGATIONS" shall mean the "Obligations" as such term is
defined in the OPNY Credit Agreement.
"OPNY OPERATING SUBSIDIARIES" shall mean Astoria Generating Company,
L.P., a Delaware limited partnership, Erie Boulevard Hydropower, L.P., a
Delaware limited partnership, and Carr Street Generating Station, L.P., a
Delaware limited partnership.
"OPNY REQUIRED LENDERS" shall mean the "Required Lenders" as such
term is defined in the OPNY Credit Agreement.
"OPNY SECURED PARTIES" shall have the meaning set forth in the OPMW
Credit Agreement.
"OPNY TRANSACTION DOCUMENTS" shall have the meaning provided for the
term "Transaction Documents" in the OPNY Credit Agreement.
"PERSON" shall mean an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority, limited liability company or other entity of whatever
nature.
"PLEDGED COLLATERAL" shall have the meaning specified in Section 3.1.
"PLEDGED SHARES" shall have the meaning specified in the Recitals.
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"PLEDGOR" shall have the meaning provided in the first paragraph of
this Agreement.
"PORTFOLIO ASSETS" shall mean the collective reference to the
"Portfolio Assets" as such term is defined in each of the Credit Agreements.
"PROJECT CONTRACTS" shall mean the collective reference to the
"Project Contracts" as such term is defined in each of the Credit Agreements.
"RELEASE" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"REQUIRED LENDERS" shall mean the collective reference to the OPNY
Required Lenders and the OPMW Required Lenders.
"REQUIREMENT OF LAW" shall mean any foreign, federal, state, local or
municipal laws, rules, orders, judgments, regulations, statutes, ordinances,
codes, or published decrees of any Governmental Authority (including any
determination of an arbitration or a court or other Governmental Authority) and
including all Environmental Laws.
"RESTRUCTURING EFFECTIVE DATE" shall mean the date on which all
conditions precedent to the effectiveness of both the OPNY Credit Agreement and
the OPMW Credit Agreement have been satisfied or waived.
"SCHEDULED INDENTURE DEBT SERVICE DEPOSIT AMOUNT" shall have the
meaning assigned such term in the Holdco Deposit Account Agreement.
"SCHEDULED INDENTURE DEBT SERVICE PAYMENT AMOUNT" shall have the
meaning assigned such term in the Holdco Deposit Account Agreement.
"SECURED OBLIGATIONS" shall have the meaning provided in Section
2(a).
"SECURED PARTIES" shall mean the collective reference to the OPNY
Secured Parties and the OPMW Secured Parties.
"TRANSACTION DOCUMENTS" shall mean the collective reference to the
OPNY Transaction Documents and the OPMW Transaction Documents.
"TRANSACTION PARTIES" shall have the meaning specified in Section
2(a).
(b) When used in this Agreement: (i) "or" is not exclusive; (ii) a
reference to a Requirement of Law includes any amendment or modification to such
Requirement of Law; (iii) a reference to a Person includes its permitted
successors and permitted assigns; (iv) a reference to an agreement, instrument
or document shall include such agreement, instrument or document and all
exhibits and schedules thereto as the same may be amended, modified or
supplemented
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from time to time in accordance with its terms and as permitted by the Financing
Documents; and (v) the words "include," "includes," and "including" mean
"including without limitation".
2. Security.
(a) This Agreement is for the benefit of the Collateral Agent and the
Secured Parties to secure (i) the prompt and complete payment and performance
when due by the OPNY Borrower of all of the OPNY Obligations, including all
amounts payable or to become payable to the OPNY Secured Parties by the OPNY
Borrower under the OPNY Financing Documents when and as the same shall become
due and payable (whether by acceleration or otherwise) in accordance with the
terms thereof, (ii) the prompt and complete payment and performance when due by
the OPMW Borrower of all OPMW Obligations, including all amounts payable or to
become payable to the OPMW Secured Parties by the OPMW Borrower under the OPMW
Financing Documents when and as the same shall become due and payable (whether
by acceleration or otherwise) in accordance with the terms thereof, (iii) the
prompt and complete payment and performance when due of all other obligations of
any OPNY Operating Subsidiary under any of the OPNY Financing Documents, (iv)
the prompt and complete payment and performance when due of all other
obligations of the OPMW Operating Subsidiary under any of the OPMW Financing
Documents, (v) the prompt and complete payment and performance when due of all
other obligations of the OPNY Companies, the OPMW Companies and Holdco under any
OPNY Financing Document or OPMW Financing Document to which any of the OPNY
Companies, the OPMW Companies or Holdco is a party, and (vi) the due performance
and compliance by Pledgor with the terms hereof, each other OPNY Financing
Document and each of the OPMW Financing Documents to which it is a party
(collectively, the "Secured Obligations"). Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Secured Obligations and would be owed to the Secured
Parties by any of Holdco, the OPNY Companies, the OPMW Companies, the OPNY
Borrower, each OPNY Operating Subsidiary, the OPMW Borrower and the OPMW
Operating Subsidiary (collectively, the "Transaction Parties") but for the fact
that such Secured Obligations are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving any
Transaction Party.
(b) Pledgor understands, agrees and confirms that the Collateral
Agent may enforce this Agreement against it without proceeding against any of
the Transaction Parties or against any other credit or security for payment of
the Secured Obligations.
3. Pledge of Stock.
3.1. Pledge; Assignment; Grant of Security Interest. As collateral
security for the prompt and complete payment and performance when due of the
Secured Obligations, Pledgor hereby pledges, hypothecates, assigns, transfers
and sets over to the Collateral Agent, grants, pledges and assigns to the
Collateral Agent a security interest of first priority in, and hereby delivers
unto the Collateral Agent (in each case for the benefit of the Secured Parties)
the following (collectively, the "Pledged Collateral"):
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(i) the Pledged Shares and any certificates or instruments
representing the Pledged Shares, accompanied by duly executed stock
powers in blank, and all cash, securities, dividends and other
property at any time in the future and from time to time received,
receivable or otherwise distributed, in respect of or in exchange for
any or all of the Pledged Shares;
(ii) all securities hereafter delivered to the Collateral Agent
in substitution for or in addition to any of the foregoing, any
certificates representing or evidencing such securities, and all
cash, securities, dividends and other property, at any, time and from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the foregoing;
(iii) all other claims of any kind or nature, and any
instruments, certificates, chattel paper or other writings evidencing
such claims, including the limited liability company agreement
relating to Holdco (the "Operating Agreement"), whether in contract
or tort, and whether arising by operation of law, consensual
agreement or otherwise, at any time acquired by Pledgor in respect of
any or all of the foregoing collateral against Holdco, including,
without limitation, (A) all claims of Pledgor for damages arising out
of or for breach of or default under the Operating Agreement, (B) the
right of Pledgor to terminate the Operating Agreement, to perform and
exercise consensual or voting rights thereunder and to compel
performance and otherwise exercise all remedies thereunder, (C) all
rights of Pledgor as a member of Holdco, to any property and assets
of Holdco (whether real property, inventory, equipment, contract
rights, accounts, receivables, general intangibles, securities,
instruments, chattel paper, documents, chooses in action or
otherwise) ; and
(iv) all proceeds of any of the foregoing including (A) all
rights of Pledgor to receive monies, distributions, cash, instruments
and other property due and to become due under or pursuant to the
foregoing collateral and the Holdco Deposit Account Agreement, (B)
all rights of Pledgor to receive a return of any insurance premiums
or Insurance Proceeds or other proceeds of any indemnity, warranty or
guarantee with respect to the foregoing collateral, (C) to the extent
not included in the foregoing, all additions to and replacements of
the foregoing collateral and all proceeds receivable or received when
any and all of the foregoing collateral is sold, collected, exchanged
or otherwise disposed whether voluntarily or involuntarily.
3.2. Uncertificated Stock. Notwithstanding anything to the contrary
contained in Section 3.1, if any Pledged Share (whether now owned or hereafter
acquired) is evidenced by an uncertificated security, the Pledgor shall promptly
notify the Collateral Agent thereof and shall promptly take all actions required
to perfect the security interest of the Collateral Agent under applicable law
(including under the Uniform Commercial Code as adopted in any appropriate
jurisdiction). The Pledgor further agrees to take such actions as the Collateral
Agent deems necessary or desirable to effect the foregoing and to permit the
Collateral Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel
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reasonably satisfactory to the Collateral Agent with respect to any such pledge
of uncertificated Pledged Shares promptly upon written request of the Collateral
Agent.
4. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under the Operating Agreement
and the other contracts and agreements included in the Pledged Collateral to the
extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise
by any Secured Party of any of the rights hereunder shall not release Pledgor
from any of its duties or obligations under the contracts and agreements
included in the Pledged Collateral and (c) neither the Collateral Agent nor any
Secured Party shall have any obligation or liability under the contracts and
agreements included in the Pledged Collateral or otherwise by reason of this
Agreement, nor shall the Collateral Agent or any Secured Party be obligated to
perform any of the obligations or duties of Pledgor thereunder or to take any
action to collect or enforce any claim assigned hereunder.
5. Delivery of Pledged Collateral. All certificates or instruments
representing or evidencing the Pledged Collateral at any time shall be delivered
to and held by or on behalf of the Collateral Agent pursuant hereto 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. The Collateral Agent
shall have the right, upon the occurrence and continuance of an Event of
Default, in its discretion and without notice to Pledgor, to transfer to or to
register in the name of the Collateral Agent or any of its nominees any or all
of the Pledged Collateral, subject only to compliance with Requirements of Law,
the terms and conditions of the Credit Agreements and the Intercreditor
Agreement and the revocable rights specified in Section 8. In addition, the
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
6. Appointment of Agents; Endorsements, etc. The Collateral Agent
shall have the right to appoint one or more agents for the purpose of retaining
physical possession of the Pledged Shares and other Pledged Collateral, which
may be held (in the discretion of the Collateral Agent) in the name of Pledgor,
endorsed or assigned in blank or in favor of the Collateral Agent or any nominee
or nominees of the Collateral Agent or an agent appointed by the Collateral
Agent.
7. Representations, Warranties and Covenants. In order to induce each
of the Secured Parties to enter into the Financing Documents, Pledgor makes the
following representations, warranties and covenants, which representations,
warranties and covenants shall survive the execution and delivery of this
Agreement:
7.1. Company Status. Pledgor (i) is a corporation, duly formed,
validly existing and in good standing under the laws of the State of Delaware,
(ii) has all requisite power and authority to own its property and assets, and
to transact the business in which it is presently engaged and in which it
proposes to be engaged, (iii) has duly qualified and is authorized to do
business and is in good standing in every jurisdiction where the character of
its properties or the
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nature of its activities makes such qualification necessary except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (iv) is in full compliance with its
Governing Documents, all material Contractual Obligations, all applicable
Requirements of Law and all Governmental Approvals, except in each case of this
clause (iv), to the extent that the failure to comply with any of the foregoing
could not reasonably be expected to have a Material Adverse Effect. Pledgor is
the sole owner of all of the issued and outstanding shares of the Capital Stock
of Holdco.
7.2. Authorization; Execution and Delivery; Enforceability. (a) The
execution, delivery and performance by Pledgor of this Agreement and the
consummation of the transactions contemplated hereby (i) are within its powers,
(ii) have been duly authorized by all necessary corporate action, (iii) do not
and will not contravene (A) its Governing Documents or (B) any material
Requirement of Law, any material Contractual Obligation or any material
Governmental Approval binding on or affecting it and (iv) do not and will not
conflict with or be inconsistent with or result in any breach of any of the
material terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of its properties or assets pursuant to, the terms
of any material Contractual Obligation binding on or affecting it.
(b) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
7.3. Consents and Approvals. No consent of any Person other than any
Governmental Authority (except as such as have been duly obtained, made or
given, and are in full force and effect) is required to authorize, or is
required in connection with (i) the execution, delivery or performance by
Pledgor of this Agreement, (ii) the legality, validity, binding effect or
enforceability hereof or thereof or the consummation of any of the transactions
contemplated hereby or (iii) subject to the terms of the Intercreditor
Agreement, the exercise by the Collateral Agent of the voting or other rights
provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement, except for any approval of any such
Person the absence of which could not reasonably be expected to have a material
adverse effect on the ability of the Collateral Agent to exercise voting rights
or remedies in respect of the Pledged Collateral).
7.4. Operating Agreement. (a) The Operating Agreement, a true and
complete copy of which has been furnished to the Collateral Agent, has been duly
authorized, executed and delivered by Pledgor and is in full force and effect
and is binding upon and enforceable against Pledgor in accordance with its
terms, except as enforcement thereof may be subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of equity.
There exists no default under the Operating Agreement.
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(b) Pledgor shall at its expense perform and observe all the terms
and provisions to be performed or observed by it under the Operating Agreement,
maintain the Operating Agreement in full force and effect, enforce the Operating
Agreement in accordance with its terms, and take all such action to such end as
may be from time to time reasonably requested by the Collateral Agent.
(c) Pledgor shall not:
(i) cancel or terminate the Operating Agreement or consent to or
accept any cancellation or termination thereof;
(ii) amend or otherwise modify in a material respect the
Operating Agreement; or
(iii) waive any material default under or material breach of the
Operating Agreement.
7.5. Litigation. Except as set forth on Schedule 4.05 of the Credit
Agreement, there is no (i) injunction, writ, preliminary restraining order or
order of any nature issued by an arbitrator, court or other Governmental
Authority against Pledgor in connection with the transactions provided for
herein or in the other OPNY Financing Documents, the OPMW Financing Documents or
the Operational Plans, or (b) action, suit, arbitration, litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority pending against Pledgor or, to Pledgor's knowledge, threatened against
Pledgor, in each case, which would reasonably be expected to materially
adversely affect the Pledged Collateral or the right or ability of Pledgor to
fulfill its obligations hereunder.
7.6. No Defenses. Pledgor's obligations under this Agreement are not
subject to any offsets or defenses against the Borrowers, the other Transaction
Parties, the Collateral Agent or the Secured Parties of any kind.
7.7. [Intentionally omitted.]
7.8. Regulation. Pledgor is not (i) an "investment company" or a
company "controlled" by an "investment company" within the meaning of the United
States of America Investment Company Act of 1940, as amended, or an "investment
advisor" within the meaning of the United States of America Investment Advisors
Act of 1940, as amended or (ii) subject to regulation by the Securities and
Exchange Commission under PUHCA as a "public-utility company," an "electric
utility company," a "holding company," or a "subsidiary" or "affiliate" of any
of the foregoing. No certification of a state public utility commission pursuant
to Section 33(a)(2) of PUHCA is required as a result of the investment of
Pledgor in the Companies.
7.9. Existence. Pledgor shall preserve and maintain its existence as
a Person as specified in Section 7. 1.
7.10. Maintenance of Register. Pledgor shall cause Holdco to maintain
at all times a register at its chief place of business and chief executive
office in which the security
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interest in the Pledged Collateral granted hereby to the Collateral Agent, to
the extent that the same constitutes "uncertificated securities" (as defined in
the Delaware UCC), shall be evidenced.
7.11. Jurisdiction of Organization. Except in accordance with the
conversion of the OPNY LP Company and the OPMW LP Company to limited liability
companies in accordance with Section 7 of the LP Guarantee (as defined in the
OPNY Credit Agreement) and Section 7 of the LP Guarantee (as defined in the OPMW
Credit Agreement), as the case may be, Pledgor shall cause (a) each Transaction
Party which at the time of the Restructuring Effective Date is a limited
liability company at all times to be a limited liability company organized under
the laws of the State of Delaware, (b) the Companies at all times to be
corporations organized under the laws of the State of Delaware, and (c) each
Transaction Party which at the time of the Restructuring Effective Date is a
limited partnership at all times to be a limited partnership organized under the
laws of the State of Delaware.
7.12. Rights and Franchises. Pledgor shall preserve and maintain all
of its rights, privileges and franchises necessary in the normal conduct of its
business, except where the failure to maintain any such right, privilege or
franchise could not reasonably be expected to have a Material Adverse Effect.
7.13. Compliance with Requirements of Law. Pledgor shall comply with
all Requirements of Law and Governmental Approvals applicable to it, including
all material Environmental Laws, except when any such Requirement of Law or
Governmental Approval is being contested in good faith and by appropriate
proceedings and for which Acceptable Reserves have been established, or except
in each case where the failure to so comply could not reasonably be expected to
have a material adverse effect on any Portfolio Asset.
7.14. Share Transfer Restrictions. Pledgor shall not sell, assign,
transfer or permit to be sold, assigned or transferred any of its interests in
Holdco, whether directly or indirectly (but excluding transfers of Capital Stock
of Reliant), except pursuant to the terms of this Agreement, the Credit
Agreements and the Intercreditor Agreement. Except as set forth in Section 7.09
of the Credit Agreement, nothing in this Agreement or the other Financing
Documents is intended to impose a restriction on the ability of the holders of
the Capital Stock of Pledgor to sell, assign or transfer such Capital Stock of
Pledgor.
7.15. Place of Incorporation; Chief Executive Office. Pledgor is
incorporated in the State of Delaware and Pledgor's exact legal name is Orion
Power Holdings, Inc. Pledgor has no trade name. The chief executive office of
Pledgor and the office where Pledgor keeps it records concerning the Pledged
Collateral is located at the address set forth in Section 9.01 of the Credit
Agreement. Pledgor shall keep its place of business and chief executive office
and the office where it keeps its records concerning the Pledged Collateral, and
original copies of the Operating Agreement and of all other chattel paper which
evidence the Pledged Collateral, at its address specified in Section 19 hereto.
Pledgor will hold and preserve such records and will permit representatives of
the Collateral Agent at any time, upon reasonable prior notice, during normal
business hours to inspect and make abstracts from such records. Pledgor shall
not change
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its jurisdiction of incorporation or its name or establish a new location for
its chief executive office until (i) it shall have given to the Collateral Agent
not less than thirty (30) days prior written notice of its intention so to do,
clearly describing such new jurisdiction, name or location and providing such
other information in connection therewith as the Collateral Agent may
reasonably, request and (ii) with respect to such new jurisdiction, name or
location, it shall have taken all action, if any, reasonably satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Pledged Collateral intended to be granted hereby at all times fully
perfected, of first priority and in full force and effect.
7.16. Payment of Taxes. Pledgor will, or will cause the Transaction
Parties to, timely pay and discharge or cause to be paid or discharged all
taxes, assessments and governmental charges or levies lawfully imposed upon it,
any of the Transaction Parties or upon any of their respective income or profits
or upon any of the Portfolio Assets or the Collateral and all such lawful claims
or obligations that, if unpaid, would become a Lien upon any Collateral whether
real or personal, the Pledged Collateral or upon any part thereof; provided,
that Pledgor or the applicable Transaction Party shall have the right to contest
in good faith the validity or amount of any such tax, assessment, charge, levy,
claim or obligation by proper proceedings, and may permit the taxes,
assessments, charges, levies, claims or obligations so contested to remain
unpaid during the period of such contest if: (a) the Pledgor or such Transaction
Party diligently prosecutes such contest in good faith and by appropriate
proceedings and for which Acceptable Reserves have been established; (b) during
the period of such contest, the enforcement of any contested item is effectively
stayed; (c) no Lien has been imposed on any of the Pledged Collateral consisting
of certificate securities, and (d) the failure to pay or comply with the
contested item could not reasonably be expected to result in a material adverse
effect on the Collateral.
7.17. [Intentionally omitted.]
7.18. Pledged Shares.
(a) The Pledged Shares consist of the number and type of shares of
the Capital Stock of Holdco, as described in Annex A. All of the Pledged Shares
are certificated securities.
(b) The Pledged Shares are, and along with any securities pledged in
substitution therefor or in addition thereto will be, duly and validly issued,
fully paid and nonassessable and duly and validly pledged hereunder in
accordance with all applicable Requirements of Law, and Pledgor warrants,
covenants and agrees to defend the Collateral Agent's right, title and interest
in and to the Pledged Shares and all other Pledged Collateral against the claims
and demands of all Persons whomsoever.
(c) Pledgor is the record, legal and beneficial owner of, and has
good title to all of the Pledged Shares and all other Pledged Collateral
purported to be pledged and assigned by it hereunder, free and clear of all
Liens and other claims, security interests, mortgages, pledges and other
encumbrances of every nature whatsoever other than Liens created under this
15
Agreement, and it has the right to pledge the Pledged Shares and all other
Pledged Collateral as herein provided.
(d) The Pledged Shares constitute, and any securities pledged in
substitution therefor, or in addition thereto shall as of the date hereof
constitute, and shall, except as otherwise permitted hereby or by the Credit
Agreements, at all times constitute, one hundred percent (100%) of all the
issued and outstanding Capital Stock of Holdco. Holdco does not have outstanding
(i) any securities convertible into or exchangeable for their Capital Stock or
(ii) any rights to subscribe for or to purchase, or any options for the purchase
of, or any agreement, or any options for the purchase of, or any agreement,
arrangements or understandings providing for the issuance of its Capital Stock.
(e) Pledgor will not authorize the issuance by Holdco of any
additional membership or other ownership interests, certificates or stock of
Holdco, unless concurrently with such issuance all such membership or other
ownership interests, certificates or stock is owned by Pledgor and made subject
to the pledge of its interests hereunder. If Pledgor shall acquire (by purchase,
stock dividend or otherwise) any additional shares in Holdco at any time or from
time to time after the date hereof, Pledgor will forthwith pledge and deposit or
cause to be deposited such shares with the Collateral Agent and deliver or cause
to be delivered to the Collateral Agent certificates therefor, accompanied by
stock powers duly executed in blank by Pledgor, and will promptly thereafter
deliver to the Collateral Agent a certificate executed by any Responsible
Officer of Pledgor describing such shares and certifying that the same have been
duly pledged with the Collateral Agent hereunder.
(f) Each certificate evidencing the Pledged Shares is, and any
security pledged in substitution therefor or in addition thereto will be, issued
in the name of Pledgor and each such certificate has been, or when issued will
then have been duly executed in blank or has, or when issued will then have,
attached thereto a stock power substantially in the form of Annex C duly signed
in blank by the appropriate officer of Pledgor. Each such stock power will give
the Collateral Agent the rights and authority it purports to give.
(g) Upon receipt by the Collateral Agent of the stock certificates
representing the Pledged Shares (which either have been duly executed in blank
or have attached thereto stock powers substantially in the form of Annex C duly
signed in blank by the appropriate officer of Pledgor), the security interest
described in this Agreement will represent a valid and perfected first priority
lien on, and security interest in, the Pledged Collateral, in favor of the
Collateral Agent for the benefit of the Secured Parties.
(h) Pledgor has not executed or authorized, and there does not
currently exist, any effective financing statement or other instrument similar
in effect that has been executed or authorized by Pledgor or, is on file in any
recording office, covering all or any part of Pledgor's interest in the Pledged
Collateral, except such as may have been filed pursuant to this Agreement or the
other Financing Documents, and, so long as any of the Secured Obligations remain
unpaid or any Commitments remain outstanding, Pledgor will not execute or
authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Pledged Collateral, except financing
16
statements filed or to be filed in respect of and covering the security
interests granted hereby by Pledgor. Upon the completion of all filings and
recordings described in Exhibit B, no filings or recordings (including under the
Uniform Commercial Code as adopted in the State of New York) will be necessary
to be made in order to perfect, protect and preserve the lien on and first
priority security interest in the Pledged Collateral created by this Agreement.
(i) Pledgor will not hereafter sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Pledged Collateral, or create or
permit to exist any Lien, security interest or other charge, encumbrance or
other security arrangement upon or with respect to, any of the Pledged
Collateral (other than Liens created under this Agreement), until the Secured
Obligations are indefeasibly paid or otherwise discharged in full.
(j) None of the Pledged Shares constitutes margin stock, as defined
in Regulation U of the Board of Governors of the Federal Reserve System.
(k) This Agreement creates a valid security interest in the Pledged
Collateral purported to be pledged and assigned by Pledgor hereunder securing
the payment of the Secured Obligations.
(l) The security interest created by this Agreement in the Pledged
Collateral described in Section 3 hereof has been, and will be, registered in
the name of the Collateral Agent in the register maintained for such purpose at
the chief executive office and principal place of business of Holdco, as
applicable, and, to the extent that such Pledged Collateral is not certified in
accordance with Section 7.18(e) or otherwise constitutes "uncertificated
securities" (as defined in the Uniform Commercial Code as in effect in the State
of Delaware (the "Delaware UCC")), such security interest is perfected under the
Delaware UCC and, as so perfected, is a first priority security interest.
(m) No part of the Pledged Collateral is subject to the terms of any
agreement restricting the sale or transfer of such Pledged Collateral, except
for the Operating Agreement and the Financing Documents.
7.19. Bankruptcy. (a) Proceedings. Pledgor will not file a voluntary
petition or otherwise initiate proceedings or join any other Person in
instituting proceedings to have any of the Transaction Parties adjudicated
bankrupt or insolvent, or to seek liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of any of the
Transaction Parties or any of their respective debts under any laws relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any of the Transaction Parties or for
any substantial part of any of their respective property, or consent to any
voluntary commencement by any of the Transaction Parties of any such proceeding,
or consent to the institution of bankruptcy or insolvency proceedings against
any of the Transaction Parties, or file a petition seeking or consenting to
reorganization or relief of any of the Transaction Parties as debtor under any
applicable federal or state law relating to bankruptcy, insolvency, or other
relief for debtors with respect to any of the Transaction Parties; or seek or
consent to the appointment of any trustee, receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other
17
similar official) of any of the Transaction Parties or of all or any substantial
part of the properties and assets of any of the Transaction Parties, or make any
general assignment for the benefit of creditors of any of the Transaction
Parties, or admit in writing the inability of any of the Transaction Parties to
pay its debts generally as they become due or declare or effect a moratorium on
the debt of any of the Transaction Parties or take any action in furtherance of
any action.
(b) Agreement Not to Seek Substantive Consolidation. Pledgor agrees
that it will not, in any bankruptcy proceeding where Pledgor is the debtor, or
in any other bankruptcy proceeding of any of the Transaction Parties, file any
motion, or support any motion filed by any other party in interest, seeking (a)
to substantively consolidate any of the Transaction Parties with Pledgor or any
other Subsidiary of Pledgor or (b) to take such other actions as would cause any
of the Transaction Parties to breach any of the terms or conditions contained in
Section 6.10 of each of the Credit Agreements or Sections 12(f) and 12(h) of the
OPNY GP Partnership Interest Pledge Agreement and the OPMW GP Partnership
Interest Pledge Agreement, as applicable. Pledgor agrees that the Lenders have
relied on this Agreement in order to provide the consent to the issuance of the
Notes and that each such Lender would not have provided such consent without
Pledgor's agreement to the foregoing.
7.20. Independent Analysis. Pledgor has, independently and without
reliance upon the Collateral Agent and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement.
7.21. Reliance by Lenders. Pledgor acknowledges that in providing the
Advances to the Borrowers under the Credit Agreements, the Lenders have relied
and will rely on Pledgor remaining a separate legal entity and that none of the
Transaction Parties would be substantively consolidated with Pledgor in any
bankruptcy proceeding of Pledgor. Pledgor acknowledges and agrees that it would
be inequitable for the bankruptcy court in any bankruptcy proceeding of Pledgor
to substantively consolidate any of the Transaction Parties with Pledgor.
7.22. Governing Documents. Pledgor will cause each of the Transaction
Parties to abide by the terms of their respective Governing Documents and
Pledgor shall not take any action inconsistent therewith.
7.23. Financial Compliance. (a) As soon as available, but in any
event, within 60 days after the end of each fiscal quarter of Pledgor,
Pledgor shall deliver to the Collateral Agent the unaudited consolidated
balance sheet of the Pledgor and its Subsidiaries as at the end of each
such quarter and the related unaudited statement of income and cash flows
for such quarter and the portion of the fiscal year through the end of each
such quarter, prepared in accordance with GAAP, certified by a Responsible
Officer of Pledgor as being fairly stated in all material respects;
(b) As soon as available, but in any event, within 120 days after the
end of each fiscal year of Pledgor, Pledgor shall deliver to the Collateral
Agent the consolidated balance sheet of Pledgor and its Subsidiaries as at
the end of such year and the related statement of income and cash flows and
a statement of sources and uses of all funds for
18
such year, prepared in accordance with GAAP and audited by Deloitte &
Touche LLP or any other independent certified public accountants of
recognized standing in the United States of America reasonably satisfactory
to the Collateral Agent and setting forth in each case in comparative form
the figures for the previous year, and a certificate as to compliance with
the Financing Documents;
(c) Each time the financial statements of Pledgor are delivered under
this Section 7.23, a certificate signed by a Responsible Officer of Pledgor
shall be delivered along with such financial statements, certifying that
such Responsible Officer has made or caused to be made a review of the
transactions and financial condition of Pledgor during the relevant fiscal
period and that such review has not, to the best of such Responsible
Officer's knowledge, disclosed the existence of any event or condition
which constitutes a Default or an Event of Default under any Financing
Document to which Pledgor is a party, or if any such event or condition
existed or exists, the nature thereof and the corrective actions that the
Pledgor has taken or proposes to take with respect thereto, and also
certifying that Pledgor is in compliance in all material respects with its
obligations under the Financing Documents to which it is a party or, if
such is not the case, stating the nature of such non-compliance and the
corrective actions which the Pledgor has taken or proposes to take with
respect thereto; and
(d) Pledgor shall deliver, or cause Holdco to deliver on Pledgor's
behalf, to the Collateral Agent as and when required by the Holdco Deposit
Account Agreement, calculations of, and financial reports supporting
calculations of, (i) OPH Net Cash Flows, (ii) Scheduled Indenture Debt
Service Deposit Amount, (iii) Scheduled Indenture Debt Service Payment
Amount, (iv) the Indenture Payment Offset Amount and (v) any other
financial information required to be delivered pursuant to the terms and
conditions of the Holdco Deposit Account Agreement.
7.24. Indenture Payment Reserve Shortfall. In the event of an
Indenture Payment Reserve Shortfall in connection with which Holdco certifies
that Pledgor will deposit the amount of such shortfall, Pledgor shall cause the
Indenture Payment Reserve Shortfall Deposit amount to be deposited into the
Holdco Indenture Debt Service Reserve Account in accordance with the terms and
conditions of the Holdco Deposit Account Agreement.
7.25. Conditions Precedent. There are no conditions precedent to the
effectiveness of this Agreement that have not been satisfied or waived.
8. Voting Rights; Distributions, Etc. (a) Pledgor shall not be
entitled to receive any payments or other distributions receivable by it under
the Operating Agreement except as expressly provided in the Holdco Deposit
Account Agreement. Unless and until an Event of Default shall have occurred and
be continuing and Pledgor shall have been notified by the Collateral Agent of
the Secured Parties' written election to exercise remedies hereunder, but,
subject nevertheless, at all times to the restrictions imposed by the terms and
conditions of the Credit Agreement, Pledgor shall be entitled to exercise any
and all management, voting and other membership rights with respect to any
Pledged Collateral, including any securities pledged in substitution therefor or
in addition thereto for any purpose, and in any manner, not inconsistent
19
with the terms of this Agreement or any other Financing Document; provided,
however, no vote shall be cast or any consent, waiver or ratification given or
any action taken which would violate or be inconsistent with any of the terms of
this Agreement, the Credit Agreements or another Financing Document, and
provided, further, that, that Pledgor shall not exercise, or refrain from
exercising, any such voting and other rights if it could reasonably be
anticipated that such action or inaction would have an adverse effect on the
creation, attachment, perfection, or priority of the security interests herein
granted in the Pledged Collateral to the Collateral Agent (or any part thereof).
Upon Pledgor's receipt of a notice in accordance with the first sentence of this
Section 8, and during the continuance of an Event of Default, all such rights of
Pledgor to vote and to give consents, waivers and ratifications shall be
exercisable solely by the Collateral Agent in accordance with Section 9.
(b) Pledgor shall not be entitled to receive any cash or non-cash
dividends or distributions otherwise payable in respect of the Pledged Shares,
except cash distributions expressly permitted pursuant to the terms and
conditions of the Holdco Deposit Account Agreement. Non-cash dividends or
distributions, and dividends and distributions paid or payable in cash in
respect of any such Pledged Collateral, in connection with a partial or total
liquidation or dissolution of Holdco, shall be, and shall be promptly delivered
to the Collateral Agent to hold as Pledged Collateral and shall, if received by
Pledgor, be received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of Pledgor and be forthwith
delivered to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement or assignment). The Collateral Agent
shall also be entitled at all times to receive directly, and to retain as part
of the Pledged Collateral all other or additional stock or other securities or
property (including cash) issued paid or distributed for any reason in respect
of the Pledged Shares or other Pledged Collateral.
(c) Subject to the terms and conditions of the Holdco Deposit Account
Agreement, upon the occurrence and during the continuance of an Event of Default
and immediately upon Pledgor's receipt of written notice from the Collateral
Agent that the Collateral Agent intends to act pursuant to this clause (c), all
rights of Pledgor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise shall
thereupon become exercisable by the Collateral Agent, acting in good faith, who
shall have the sole right to exercise or refrain from exercising such voting and
other consensual rights unless and until such Event of Default ceases to exist.
9. Remedies Upon Default. If an Event of Default shall have occurred
and be continuing, the Collateral Agent, acting pursuant to and in accordance
with the terms and conditions of the Intercreditor Agreement and the direction
of the Required Lenders, shall be entitled to exercise any and all rights,
powers and remedies vested in the Collateral Agent (whether vested in it by this
Agreement, the Credit Agreements or any other Financing Document or by law) for
the protection and enforcement of its rights in respect of the Pledged
Collateral and, without limitation of the foregoing, may cause all or any of the
Pledged Shares or other Pledged Collateral to be transferred into its name or
that of a nominee or nominees, and Pledgor shall, upon the request of the
Collateral Agent, execute such additional instruments and documents as are
necessary to effect such transfer.
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(a) In addition, if an Event of Default shall have occurred and be
continuing, the Collateral Agent, acting pursuant to and in accordance with the
terms and conditions of the Intercreditor Agreement and the direction of the
Required Lenders without being required to give any notice to Pledgor or Holdco
(except in respect of actions taken pursuant to Section 9(a)(i) or Section
9(a)(ii), shall be entitled to exercise the following rights, which, Pledgor
agrees, are commercially reasonable:
(i) to exercise any and all voting rights with respect to the
Pledged Shares and other Pledged Collateral, including the
appointment and removal of any proxy or proxies or substitute or
substitutes;
(ii) to receive and retain, as collateral security for the
Secured Obligations, any and all dividends at any time and from time
to time declared or paid upon any of the Pledged Shares and other
Pledged Collateral otherwise payable to Pledgor;
(iii) to accept rights issues;
(iv) to prove in any liquidation or scheme of arrangement or any
other composition or arrangement with or for creditors whether
secured or unsecured and whether formed pursuant to the order of any
court or otherwise, and to give any consent on behalf of Pledgor in
relation thereto;
(v) to attend meetings of creditors and vote;
(vi) to compromise claims in relation to or arising out of the
Pledged Collateral;
(vii) to give sufficient receipts and discharges for all monies
to which Pledgor is or may become entitled in respect of the Pledged
Collateral or any part thereof or which shall come into the hands of
the Collateral Agent, which receipts and discharges shall, to the
maximum extent permitted by Requirements of Law, exonerate the
Collateral Agent from all liability to see to the application thereof
or from being answerable for the loss or misapplication thereof;
(viii) to execute any documents which it may consider expedient,
in good faith, in relation to the foregoing as it shall in its
absolute discretion determine (but without any obligation to consult
with Pledgor) in relation to any exercise of any such right, power or
privilege; and
(ix) to institute, prosecute and defend any proceedings in any
court or tribunal in respect of any act or transaction referred to in
this Section 9(a).
(b) Without obligation to resort to other security or marshal assets
for disposition in any particular order or priority whatsoever, the Collateral
Agent shall have the right at any time and from time to time upon the occurrence
and during the continuance of an Event of Default to sell, resell, assign and
deliver, all or any of the Pledged Shares or other
21
Pledged Collateral, in one or more parcels at the same or different times, and
all rights, titles and interests, claims and demands therein and right of
redemption thereof, on any securities exchange on which the Pledged Shares, any
security pledged in substitution therefor or in addition thereto or any of them
may then be listed, or at public or private sale, for cash, upon credit or for
future delivery, and at such price or prices, on such terms as the Secured
Parties (acting pursuant to the Credit Agreements) may determine and in
compliance with such conditions as the Secured Parties (acting pursuant to the
Credit Agreements) may in their absolute discretion deem advisable, provided
such sale is conducted in a commercially reasonable manner in accordance with
applicable law. Pledgor hereby agrees that upon such sale, any and all equity or
right of redemption, stay or approval of Pledgor shall be automatically waived
and released without any further action on the part of Pledgor, all without
either demand, advertisement or notice (except as required by Requirements of
Law), all of which (to the extent permitted by Requirements of Law) are hereby
expressly waived by Pledgor.
(ii) In the event of any such sale, the Collateral Agent shall, at
least ten (10) Business Days before the sale, give Pledgor notice of its
intention to sell except that, if any Secured Party shall determine, in its sole
discretion, that any of the Pledged Shares or other Pledged Collateral threatens
to decline quickly in value or to become worthless, any such sale may be made
upon three days' notice to Pledgor.
(iii) The Collateral Agent agrees that upon the indefeasible payment
and performance in full of the Secured Obligations and the termination of all
Commitments, prior to any such sale, such sale shall be cancelled.
(iv) Upon each such sale, the Collateral Agent or any other Secured
Party may purchase all or any of the Pledged Shares or other Pledged Collateral
being sold, free from any equity or right of redemption, which upon each such
sale shall, to the extent permitted by Requirements of Law, be waived and
released.
(v) The proceeds of each such sale shall be applied by the Collateral
Agent as provided in Section 12.
(vi) For the purposes of this Section 9(b), an agreement to sell any
or all of the Pledged Shares or other Pledged Collateral entered into during the
continuation of any Event of Default shall, to the extent permitted by
Requirements of Law, be treated as a sale thereof, and the Collateral Agent
shall be free to carry out such sale pursuant to such agreement and Pledgor
shall not be entitled to the return of any of the Pledged Shares or other
Pledged Collateral subject thereto notwithstanding the fact that, after the
Collateral Agent shall have entered into any such agreement, the Secured
Obligations shall have been paid in full.
(vii) The Collateral Agent shall not be obligated to make any sale of
the Pledged Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Pledged Collateral may have been given.
(viii) The Collateral Agent, may without notice, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place
22
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned.
(ix) In case sale of all or any part of the Pledged Collateral is
made on credit or for future delivery, the Pledged Collateral so sold may be
retained until the sale price is paid by the purchaser or purchasers thereof,
but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Pledged Collateral
so sold and, in case of any such failure, such Pledged Collateral may be sold
again upon like notice.
(x) Neither the Collateral Agent nor any other Secured Party shall be
liable for failure to collect or realize upon any or all of the Pledged
Collateral or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto.
(xi) Upon any sale of the Pledged Collateral by the Collateral Agent
hereunder (whether by virtue of the power of sale herein, granted, pursuant to
judicial process or otherwise), the receipt of the Collateral Agent or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Pledged Collateral so sold, and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase
money paid over to the Collateral Agent or such officer or be answerable in any
way for the misapplication or nonapplication thereof.
(xii) As an alternative to exercising the power of sale herein
conferred upon it, the Collateral Agent may proceed by a suit or suits at law or
in equity to foreclose this Agreement and to sell the Pledged Collateral, or any
portion thereof, pursuant to a judgment or decree of a court or courts of
competent jurisdiction.
(c) The Collateral Agent shall have the right, for and in the name,
place and stead of Pledgor, to execute endorsements, assignments or other
instruments of conveyance or transfer with respect to all or any of the Pledged
Shares and other Pledged Collateral in connection with any sale thereof in
accordance with Section 9(a) or (b).
10. Remedies Cumulative: Indemnification of the Collateral Agent and
the Other Secured Parties. (a) No failure or delay on the part of the Collateral
Agent or any Secured Party in exercising any right, power or privilege hereunder
or under any other Financing Document and no course of dealing between Pledgor
and the Collateral Agent or any Secured Party shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Financing Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Financing Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Collateral Agent or any Secured Party would
otherwise have. No notice to or demand on Pledgor in any case shall entitle
Pledgor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Collateral Agent or
any Secured Party to any other or further action in any circumstances without
notice or demand.
23
(b) Pledgor hereby agrees to indemnify and hold harmless the
Collateral Agent and each other Secured Party from and against any loss,
liability or expense (including reasonable fees and disbursements of counsel for
the Collateral Agent and each other Secured Party) which may be incurred by the
Collateral Agent or any other Secured Party (except as a result of the gross
negligence or willful misconduct of any Secured Party) as a result of or in
connection with:
(i) any failure of Pledgor to fulfill its obligations under this
Agreement, upon demand by the Collateral Agent, including costs and
expenses of enforcement of any obligation of Pledgor to make any such
payment hereunder and any other obligation, covenant or agreement of
Pledgor hereunder,
(ii) the enforcement, discharge, improvement and protection of
the interest of the Collateral Agent hereby created;
(iii) the exercise or attempted exercise of any right, authority,
power or remedy conferred on the Collateral Agent under or by virtue
of this Agreement, or by statute, and
(iv) the assisting or defending of any right, title or interest
of Pledgor or the Collateral Agent or any other Secured Party in
connection with the Pledged Collateral.
11. Obligations Absolute. (a) The obligations of Pledgor hereunder
shall not be altered or affected by the validity, regularity or enforceability
of any provision of the Credit Agreements or any other Transaction Document, any
compromise, alteration, amendment, modification, extension, renewal, release or
other chance of, or any waiver, consent or other action in respect of, any of
the terms, covenants or conditions of any of such agreements, the recovery of
any judgment against any Person or any action to enforce the same, any failure
or delay in the enforcement of the obligations of the Borrowers under any of the
Financing Documents or any other circumstances. Pledgor hereby expressly and
irrevocably, waives all defenses, setoffs, counterclaims, recoupments,
terminations or impairments whether arising hereunder or otherwise. Pledgor
hereby covenants that this Agreement shall not be discharged except by payment
and performance in full of the Secured Obligations.
(b) Without limiting the generality of the foregoing, the obligations
of Pledgor hereunder and the rights of the Collateral Agent to enforce the same
by proceedings whether by action at law, suit in equity or otherwise, shall not
be in any way affected by (x) any insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, dissolution, winding up or other
proceeding, involving or affecting the Borrowers, the Companies, Pledgor or any
other Person or (y) any change in the ownership of the Borrowers, the Companies,
Pledgor or any other Person. To the fullest extent permitted by law, Pledgor
releases and waives any legal or equitable defenses to the enforceability of its
obligations hereunder, and Pledgor agrees that its obligations shall be absolute
and unconditional and shall not be affected or discharged by any circumstance,
act or event except the indefeasible payment in full of the Secured Obligations
and
24
termination of all Commitments under each of (and as defined in each of) the
OPNY Credit Agreement and the OPMW Credit Agreement, including the following:
(i) the exchange, sale or release of any security for the Secured
Obligations;
(ii) the failure to enforce any guaranty or security given or
promised by any other Person or the waiver, compromise or release of
such other guaranty or security;
(iii) the extension of time for the performance of any
obligations in respect of the Secured Obligations or Pledgor's
obligations hereunder; or
(iv) the failure to give notice to Pledgor of any nonpayment or
other breach in respect of the Secured Obligations.
(c) Pledgor hereby expressly and irrevocably waives notice of
acceptance of this Agreement, notice of any liability to which it may apply,
presentment, demand, protest, notice of dishonor, non-payment, or
nonperformance, any proceeding to enforce any provision of any Transaction
Document and any right to require a proceeding prior to payment hereunder
against the Borrowers or any other Person.
12. Application of Proceeds. Notwithstanding any other provision of
this Agreement, all payments made under or in connection with, or proceeds
realized from, the Operating Agreement, the Pledged Shares, or otherwise in
respect of the Pledged Collateral and received by the Collateral Agent hereunder
shall be applied in whole or in part by the Collateral Agent against all or any
part of the Secured Obligations in accordance with the terms of the Holdco
Deposit Account Agreement and the Intercreditor Agreement.
13. Purchasers of Pledged Collateral. Upon any sale of the Pledged
Collateral by the Collateral Agent hereunder (whether by virtue of the power of
sale herein, granted, pursuant to judicial process or otherwise), the receipt of
the Collateral Agent or the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Pledged Collateral so sold, and
such purchaser or purchasers shall not be obligated to see to the application of
any part of the purchase money paid over to the Collateral Agent or such officer
or be answerable in any way for the misapplication or nonapplication thereof.
14. Continuing Obligation. This Agreement is a continuing obligation
of Pledgor and shall (a) be binding upon Pledgor, and upon the successor and
assigns of Pledgor, (b) inure to the benefit of and be enforceable by the
Collateral Agent and the other Secured Parties and their respective successors
and assigns and (c) remain in full force and effect until no OPNY Lender shall
have any OPNY Commitment outstanding and no OPMW Lender shall have any OPMW
Commitment outstanding and until the OPNY Notes and the OPMW Notes, together
with interest, and all other Secured Obligations are indefeasibly paid in full
in cash.
15. Collateral Agent. (a) Bank of America, N.A. (or any
successor) has been appointed by the Secured Parties to act as the Collateral
Agent hereunder. The Collateral Agent
25
is hereby appointed, which appointment is irrevocable and coupled with an
interest, the attorney-in-fact of Pledgor for the purpose of carrying out the
provisions hereof and taking any action and executing any instruments which the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof and to do all acts and things which under any of the covenants and
agreements herein contained or implied ought to be done by Pledgor or which the
Collateral Agent is hereby or by virtue hereof or by statute authorized or
empowered to do.
(b) The powers conferred on the Collateral Agent hereunder are solely
to protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Pledged
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Pledged Collateral and no
such duties shall be implied as arising hereunder.
16. Waiver of Subrogation. Without limiting the generality of the
foregoing, while this Agreement is in effect, Pledgor hereby irrevocably waives
(a) any rights which it may acquire by way of subrogation under this Agreement,
whether such subrogation rights arise by any payment made hereunder or any
set-off or application of funds of Pledgor by the Collateral Agent or otherwise,
and (b) any right of reimbursement or contribution against any of the
Transaction Parties or any other security or guarantee or right of offset held
by the Collateral Agent therefor. If, notwithstanding the preceding sentence,
any amount shall be paid to Pledgor on account of any subrogation rights in
connection with this Agreement at any time when any OPNY Lender shall have any
OPNY Commitment outstanding and any OPMW Lender shall have any OPMW Commitment
outstanding and the OPNY Notes and the OPMW Notes, together with interest, and
all other Secured Obligations shall not have been paid in full, such amount
shall be held by Pledgor in trust for the Collateral Agent for the benefit of
the Secured Parties, segregated from other funds of Pledgor, and shall,
forthwith upon receipt by Pledgor, be turned over to the Collateral Agent in the
exact form received by Pledgor (duly endorsed by, Pledgor to the Collateral
Agent, if required), to be applied as provided in Section 12.
17. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto and shall inure to the benefit of the Secured
Parties and their respective successors and assigns; provided, that, Pledgor may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of each of the Lenders. The Collateral Agent may transfer,
assign or grant its rights hereunder in connection with an assignment or
transfer of all or any part of its interest in and rights under the Credit
Agreements.
18. Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable. To the extent permitted
by applicable law, the
26
parties hereto hereby waive any provision of law which renders any term or
provision invalid or unenforceable in any respect.
19. Notices. All notices hereunder, unless otherwise specified, shall
be given in the manner provided for in Section 9.01 of the Credit Agreement, and
shall be given to such party at its address or telecopy number set forth on the
signature page hereof or at any address or telecopy number which such party
shall have specified.
20. Headings Descriptive, Etc.. The section and subsection headings
used in this Agreement, and the Table of Contents are for convenience only and
shall not affect the construction of this Agreement.
21. Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW
THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE
LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS OTHERWISE DEFINED HEREIN
OR IN THE CREDIT AGREEMENTS, TERMS USED IN ARTICLE 9 OF THE UNIFORM COMMERCIAL
CODE AS ADOPTED IN THE STATE OF NEW YORK ARE USED HEREIN AS THEREIN DEFINED. ANY
DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN PLEDGOR AND EACH SECURED PARTY IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER OPNY FINANCING DOCUMENTS AND OPMW FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER OPNY FINANCING DOCUMENTS AND OPMW
FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK,
NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY
27
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED AGENTS,
INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW YORK, NEW
YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF PLEDGOR TO RECEIVE FOR AND ON
BEHALF OF PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENTS
RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH
AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO PLEDGOR AT ITS ADDRESS IN ACCORDANCE
WITH SECTION 19. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF
RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (I) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (II)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE SOLELY AS PERMITTED IN SUBSECTION (C) OF THIS
SECTION 21.
22. Survival of Agreements. All agreements, statements,
representations and warranties made by Pledgor herein or in any certificate or
other instrument delivered by Pledgor or on its behalf under this Agreement
shall be deemed to have been relied upon by the Secured
28
Parties and shall survive the execution and delivery of this Agreement, the
Credit Agreements, the other Transaction Documents regardless of any
investigation made by the Secured Parties or on their behalf.
23. Termination. On the date of the termination of Pledgor's
obligations hereunder as contemplated by Section 14(c) hereof, this Agreement
shall (except for the provisions of Section 10(b)) terminate, and the Collateral
Agent, at the written request and expense of Pledgor, will promptly execute and
deliver the proper instruments acknowledging the satisfaction and termination of
this Agreement, and will promptly duly assign, transfer and deliver to Pledgor
(without recourse and without any representation or warranty) free from any Lien
granted hereunder all of the Pledged Shares and other Pledged Collateral which
has previously been delivered to the Collateral Agent, in accordance with the
Intercreditor Agreement or, if the OPMW Second Lien Documents shall have
terminated pursuant to the terms thereof, to the Pledgor, except for any which
has been sold or otherwise applied or released pursuant to this Agreement.
24. Execution of 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 but all of
which shall together constitute one and the same instrument.
25. Amendment; Waiver. No amendment or waiver of any provision of
this Agreement shall be effective unless the same shall be undertaken and
accomplished in accordance with the requirements of each Section 9.02 of the
Credit Agreements, as applicable. No delay on the part of any Secured Party in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial waiver by such Secured Party of any right, power
or remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy.
26. Further Assurances. (a) Pledgor hereby agrees, at its own
expense, to execute and deliver, from time to time, any and all further or other
instruments and to perform such acts as the Collateral Agent or any other
Secured Party may reasonably request to effect the purposes of this Agreement
and to secure to the Collateral Agent and the other Secured Parties the benefits
of all rights, powers and remedies conferred upon the Collateral Agent by the
terms of this Agreement. Without limiting the generality of the foregoing,
Pledgor (i) will execute 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 may reasonably request, in order to perfect and
preserve the assignment, hypothecation and security interest granted or
purported to be granted hereby; and (ii) will, and will cause Holdco to mark
conspicuously, at the request of the Collateral Agent, each of its records
pertaining to the Pledged Collateral with a legend, in form and substance
satisfactory to the Collateral Agent, indicating that the Operating Agreement
and such chattel paper have been assigned and are subject to the security
interest pursuant hereto. If any Pledged Collateral is evidenced by an
uncertificated security, Pledgor shall promptly notify the Collateral Agent
thereof and shall promptly take all actions required to perfect the security
interest in such uncertificated security of the Collateral Agent under
29
applicable law (including under the Uniform Commercial Code as adopted in any
appropriate jurisdiction).
(b) Pledgor hereby further authorizes the Collateral Agent to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Pledged Collateral without the signature of
Pledgor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Pledged Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
27. Applicability of the Credit Agreement. Notwithstanding any other
provision of this Agreement, in connection with its obligations hereunder the
Collateral Agent has all of the rights, powers, privileges, exculpations,
protections, and indemnities as are provided for or referred to in the Credit
Agreements and the Intercreditor Agreement.
28. Limitation on Recourse. The obligations of Pledgor hereunder are
obligations solely of Pledgor and shall not constitute a debt or obligation of
any direct or indirect partner or shareholder of Pledgor or any of their
respective directors, officers, agents or employees (each such Person, a
"Non-Recourse Party"). No Non-Recourse Party shall be liable for any amount
payable by Pledgor under this Agreement and the Secured Parties shall not seek a
money judgment or deficiency or personal judgment against any Non-Recourse Party
for payment of the indebtedness payable by Pledgor evidenced by this Agreement.
No property or assets of any Non-Recourse Party, other than as contemplated in
the Financing Documents, shall be sold, levied upon or otherwise used to satisfy
any judgment rendered in connection with any action brought against Pledgor with
respect to this Agreement or the other Financing Documents. The foregoing
acknowledgements, agreements and waivers shall be enforceable by any
Non-Recourse Party. Notwithstanding the foregoing, nothing in this Section 28
shall limit or affect or be construed to limit or affect the obligations and
liabilities of any Transaction Party or any other Non-Recourse Party (a) in
accordance with the terms of any Financing Document or other Transaction
Document creating such liabilities and obligations to which such Transaction
Party or Non-Recourse Party is a party, (b) arising from liability pursuant to
any applicable Requirement of Law for such Transaction Party's or such
Non-Recourse Party's fraudulent actions, knowing misrepresentations or willful
misconduct or (c) with respect to amounts distributed to it in violation of each
Section 6.10 of the Credit Agreements.
[Remainder of page intentionally left blank.]
30
IN WITNESS WHEREOF, this Membership Interest Pledge Agreement has been
executed and delivered as of the date and year first above written.
ORION POWER HOLDINGS, INC.,
as Pledgor
By:
----------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A., as
Collateral Agent
By:
----------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT I-2 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
[FORM OF]
STOCK PLEDGE AGREEMENT
made by
ORION POWER CAPITAL, LLC
to
BANK OF AMERICA, N.A.,
as Administrative Agent
Dated as of : October 28, 2002
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS: CONSTRUCTION.........................................2
SECTION 2. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST.....................4
SECTION 3. SECURITY FOR SECURED OBLIGATIONS...................................5
SECTION 4. NO SUBROGATION.....................................................5
SECTION 5. DELIVERY OF COLLATERAL.............................................5
SECTION 6. REINSTATEMENT......................................................6
SECTION 7. REPRESENTATIONS AND WARRANTIES.....................................6
SECTION 8. FURTHER ASSURANCES................................................10
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC.................................10
SECTION 10. PLACE OF ORGANIZATION; PLACE OF PERFECTION; RECORDS...............11
SECTION 11. COVENANTS.........................................................11
SECTION 12. ADMINISTRATIVE AGENT..............................................16
SECTION 13. ADMINISTRATIVE AGENT MAY PERFORM..................................16
SECTION 14. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR, THE COMPANIES
AND THE BORROWER ENTITIES.........................................16
SECTION 15. REMEDIES..........................................................17
SECTION 16. APPLICATION OF PROCEEDS...........................................20
SECTION 17. REMEDIES CUMULATIVE...............................................20
SECTION 18. DISCONTINUANCE OF PROCEEDINGS.....................................21
SECTION 19. INDEMNITY AND EXPENSES............................................21
SECTION 20. WAIVER, AMENDMENT; SEVERABILITY...................................21
SECTION 21. SECURITY INTEREST ABSOLUTE........................................22
SECTION 22. ADDRESSES FOR NOTICES.............................................23
i
SECTION 23. SUCCESSORS AND ASSIGNS............................................23
SECTION 24. TERMINATION; RELEASE..............................................23
SECTION 25. HEADINGS DESCRIPTIVE, ETC.........................................23
SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE...............23
SECTION 27. EXECUTION IN COUNTERPARTS.........................................25
SECTION 28. LIMITATION OF RECOURSE............................................25
Annexes
Annex A - Pledged Stock
Annex B - Form of Power
Annex C - Filings and Recordings
ii
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of October 28, 2002 (this
"Agreement"), made by ORION POWER CAPITAL, LLC, a Delaware limited liability
company ("Pledgor"), as the obligor hereunder, to BANK OF AMERICA, N.A., as
administrative agent (in such capacity, together with any successors and
assigns, the "Administrative Agent") for the benefit of the Secured Parties (as
defined in the Credit Agreement defined below).
W I T N E S S E T H:
WHEREAS, Pledgor is the owner of (a) all the issued and outstanding
shares of the Capital Stock of Orion Power New York GP, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "GP
Company"); such shares consisting of 100 shares of common stock more fully
described on Annex A hereto (the "GP Pledged Shares") and (b) all the issued and
outstanding shares of the Capital Stock of Orion Power New York LP, Inc., a
corporation organized and existing under the laws of the State of Delaware
(together with any successor limited liability company, the "LP Company", and
together with the GP Company, the "Companies"); such shares consisting of 100
shares of Capital Stock more fully described on Annex A hereto (including any
membership interests of a limited liability company successor to Orion Power New
York L.P., Inc., the "LP Pledged Shares", and, together with the GP Pledged
Shares, the "Pledged Shares");
WHEREAS, the GP Company is the sole general partner of (a) Orion
Power New York, L.P., a Delaware limited partnership (the "Borrower") and (b)
Astoria Generating Company, L.P., a Delaware limited partnership, Carr Street
Generating Station, L.P., a Delaware limited partnership, and Erie Boulevard
Hydropower, L.P., a Delaware limited partnership (each an "Operating Subsidiary"
and together with the Borrower, the "Borrower Entities"), and the LP Company is
the sole limited partner of the Borrower;
WHEREAS, the Borrower is the sole limited partner of the Operating
Subsidiaries;
WHEREAS, the Borrower has entered into an Amended and Restated Credit
Agreement, dated as of the Restructuring Effective Date (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with the Administrative Agent, Banc of America Securities LLC and
BNP Paribas, as lead arrangers and joint book runners, Bank of America, N.A., as
issuing bank, BNP Paribas, as syndication agent, Union Bank of California, N.A.,
CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
documentation agents, and the lenders named on the signature pages thereto and
from time to time parties thereto (the "Lenders"), pursuant to which the Lenders
have agreed, inter alia, to renew, modify and extend credit facilities
previously made available to the Borrower to finance a portion of the purchase
price of the Portfolio Assets and to provide working capital availability to the
Borrower;
WHEREAS, Pledgor and the Collateral Agent have entered into that
certain Deposit Account Agreement, dated as of the Restructuring Effective Date
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Holdco Deposit Account Agreement");
WHEREAS, the Administrative Agent, the OPMW Administrative Agent, the
Lenders, the OPMW Lenders and the Collateral Agent have entered into that
certain Collateral Agency and Intercreditor Agreement, dated as of the
Restructuring Effective Date (as the same may be amended, supplemented or
otherwise modified from time to time, the "Intercreditor Agreement"); and
WHEREAS, it is a condition precedent to the obligations of the
Lenders under the Credit Agreement that this Agreement shall have been entered
into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the Lenders to enter into the Credit Agreement, to continue to make
available to the Borrower the credit facilities evidenced by the Credit
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions: Construction.
(a) For the purposes of this Agreement, the following terms shall have
the meaning assigned to them in Article I of the Credit Agreement: Acceptable
Reserves; Affiliate; Capital Stock; Collateral Agent; Commitments; Contractual
Obligations; Credit Party; Events of Default; Financing Documents; Governing
Documents; Governmental Approval; Holdco Guarantee; Holdco MidWest Second Lien
Stock Pledge Agreement; Insurance Proceeds; Lead Arrangers; Lien; Notes;
Obligations; Person; Portfolio Assets; Operational Plans; OPMW Administrative
Agent; OPMW Guarantee; OPMW Lenders; OPMW Obligations; OPMW Restated Credit
Agreement; Requirement of Law; Restructuring Effective Date; Secured Parties;
Sponsor; and Transaction Documents.
(b) When used in this Agreement: (i) "or" is not exclusive; (ii) a
reference to a Requirement of Law includes any amendment or modification to such
Requirement of Law; (iii) a reference to a Person includes its permitted
successors and permitted assigns; (iv) a reference to an agreement, instrument
or document shall include such agreement, instrument or document and all
exhibits and schedules thereto as the same may be amended, modified or
supplemented from time to time in accordance with its terms and as permitted by
the Financing Documents; and (v) the words "include," "includes," and
"including" mean "including without limitation".
(c) In addition, wherever used in this Agreement and unless the context
otherwise requires, the following terms shall have the following meanings:
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement.
2
"AGREEMENT" shall mean this Stock Pledge Agreement.
"BORROWER" shall have the meaning provided in the Recitals to this
Agreement.
"BORROWER ENTITIES" shall have the meaning provided in the Recitals
to this Agreement.
"COLLATERAL" shall have the meaning specified in Section 2.
"COMPANIES" shall have the meaning provided in the Recitals to this
Agreement.
"CREDIT AGREEMENT" shall have the meaning provided in the Recitals to
this Agreement.
"GP COMPANY" shall have the meaning provided in the Recitals to this
Agreement.
"GP PLEDGED SHARES" shall have the meaning provided in the Recitals
to this Agreement.
"HOLDCO ACCOUNTS" shall have the meaning assigned the term "Accounts"
in the Holdco Deposit Account Agreement.
"HOLDCO DEPOSIT ACCOUNT AGREEMENT" shall have the meaning provided in
the Recitals to this Agreement.
"HOLDCO OPERATING AGREEMENT" shall mean the limited liability company
agreement for the Pledgor in effect as of the Restructuring Effective Date.
"INTERCREDITOR AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
"LENDERS" shall have the meaning provided in the Recitals to this
Agreement.
"LP COMPANY" shall have the meaning provided in the Recitals to this
Agreement.
"LP PLEDGED SHARES" shall have the meaning provided in the Recitals
to this Agreement.
"NON-RECOURSE PARTY" shall have the meaning provided in Section 28.
"OPERATING AGREEMENT" shall have the meaning specified in Section
2(a)(iii).
"OPERATING SUBSIDIARY" shall have the meaning provided in the
Recitals to this Agreement.
3
"PLEDGED SHARES" shall have the meaning provided in the Recitals to
this Agreement.
"PLEDGOR" shall have the meaning provided in the first paragraph of
this Agreement.
"SECURED OBLIGATIONS" shall have the meaning provided in Section 3.
SECTION 2. Pledge; Assignment; Grant of Security Interest(a) . (a) To
secure the payment of the Secured Obligations, Pledgor hereby pledges, grants,
hypothecates, assigns, transfers and sets over to the Administrative Agent, and
hereby grants to the Administrative Agent a security interest of first priority
in, and hereby delivers unto, endorses to, and registers a Lien in favor of the
Administrative Agent (in each case for the benefit of the Secured Parties) in
the following (collectively, the "Collateral"):
(i) the Pledged Shares and any certificates or instruments
representing the Pledged Shares, accompanied by duly executed powers in
blank, and all cash, securities, dividends and other property at any time
in the future and from time to time received, receivable or otherwise
distributed, in respect of or in exchange for any or all of the Pledged
Shares;
(ii) all securities hereafter delivered to the Administrative Agent
in substitution for or in addition to any of the foregoing, any
certificates representing or evidencing such securities, and all cash,
securities, dividends and other property, at any time and from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing;
(iii) all other claims of any kind or nature, and any instruments,
certificates, chattel paper or other writings evidencing such claims,
including, upon the conversion of the LP Company to a limited liability
company, the limited liability company agreement relating to the LP
Company (the "Operating Agreement"), whether in contract or tort, and
whether arising by operation of law, consensual agreement or otherwise,
at any time acquired by Pledgor in respect of any or all of the foregoing
collateral against the LP Company, including (A) all claims of Pledgor
for damages arising out of or for breach of or default under the
Operating Agreement, (B) the right of Pledgor to terminate the Operating
Agreement, to perform and exercise consensual or voting rights thereunder
and to compel performance and otherwise exercise all remedies thereunder,
(C) all rights of Pledgor as a member of the LP Company, to any property
and assets of the LP Company (whether real property, inventory,
equipment, contract rights, accounts, receivables, general intangibles,
securities, instruments, chattel paper, documents, chooses in action or
otherwise) ; and
(iv) all proceeds of any of the foregoing including (A) all rights of
Pledgor to receive monies due and to become due under or pursuant to the
foregoing collateral, (B) all rights of Pledgor to receive a return of
any insurance premiums or Insurance Proceeds or other proceeds of any
indemnity, warranty or guarantee with respect to the foregoing
4
collateral, and (C) to the extent not included in the foregoing, all
additions to and replacements of the foregoing collateral and all
proceeds (including proceeds that constitute property of the types
described above) receivable or received when any and all of the
foregoing collateral is sold, collected, exchanged or otherwise disposed
whether voluntarily or involuntarily.
(b) Notwithstanding anything to the contrary contained in Section 2(a),
if any Pledged Share (whether now owned or hereafter acquired) is evidenced by
an uncertificated security, Pledgor shall promptly notify the Administrative
Agent thereof and shall promptly take all actions required to perfect the
security interest of the Administrative Agent under applicable law (including
under the Uniform Commercial Code as adopted in any appropriate jurisdiction).
Pledgor further agrees to take such actions as the Administrative Agent deems
necessary or desirable to effect the foregoing and to permit the Administrative
Agent to exercise any of its rights and remedies hereunder, and agrees to
provide an opinion of counsel reasonably satisfactory to the Administrative
Agent with respect to any such pledge of uncertificated Pledged Shares promptly
upon written request of the Administrative Agent.
SECTION 3. Security for Secured Obligations. This Agreement is for the
benefit of the Administrative Agent and the other Secured Parties to secure (i)
the prompt and complete payment and performance when due by the Borrower of all
of the Obligations, including all amounts payable or to become payable to the
Secured Parties by the Borrower under the Financing Documents when and as the
same shall become due and payable (whether by acceleration or otherwise) in
accordance with the terms thereof, and (ii) the due performance and compliance
by Pledgor with the terms hereof, the Holdco Guarantee and each other Financing
Document to which it is a party (collectively, the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by the Companies or the Borrower Entities to the Secured Parties
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving any
Credit Party.
SECTION 4. No Subrogation. Pledgor shall not exercise any rights which it
may acquire by way of subrogation, reimbursement, contribution, or offset under
this Agreement, by any payments made hereunder or otherwise, until all Secured
Obligations and all the Notes, together with interest, shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such subrogation rights at any
time when all Secured Obligations and the Notes, together with interest shall
not have been indefeasibly paid in full in cash (whether pursuant to a claim in
any bankruptcy or similar proceeding or otherwise) or when any Commitment shall
remain outstanding, such amount shall be held in trust for the benefit of the
Administrative Agent and the Secured Parties and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Secured Obligations,
whether matured or unmatured, in accordance with Section 16.
SECTION 5. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the Administrative Agent pursuant hereto 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
5
and substance satisfactory to the Administrative Agent. The Administrative Agent
shall have the right, upon the occurrence and continuance of an Event of
Default, in its discretion and without notice to Pledgor, to transfer to or to
register in the name of the Administrative Agent or any of its nominees any or
all of the Collateral, subject only to compliance with Requirements of Law, the
terms and conditions of the Credit Agreement and the Intercreditor Agreement and
the revocable rights specified in Section 9. In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 6. Reinstatement. This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor or any other Credit Party,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, Pledgor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is a limited liability company, duly formed, validly
existing and in good standing under the laws of the State of Delaware, (ii) has
all requisite power and authority to own its property and assets, to borrow
money and to transact the business in which it is presently engaged and in which
it proposes to be engaged, (iii) has duly qualified and is authorized to do
business and is in good standing in every jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified could not reasonably be
expected to have a material adverse effect on any Portfolio Asset, and (iv) is
in full compliance with its Governing Documents, all Contractual Obligations,
all applicable material Requirements of Law and all Governmental Approvals,
except in each case of this clause (iv), to the extent that the failure to
comply with any of the foregoing could not reasonably be expected to have a
Material Adverse Effect. As of the date hereof, Pledgor is the owner of all the
issued and outstanding shares of the Capital Stock of each of the Companies.
(b) The execution, delivery and performance by Pledgor of this Agreement
and the consummation of the transactions contemplated hereby (i) are within its
powers, (ii) have been duly authorized by all necessary limited liability
company action, (iii) do not and will not contravene (A) its Governing Documents
or (B) any material Requirement of Law, any material Contractual Obligation or
any material Governmental Approval binding on or affecting it, and (iv) do not
and will not conflict with or be inconsistent with or result in any breach of
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of its properties or assets pursuant to the
terms of any material Contractual Obligation binding on or affecting it.
6
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(d) No approval of any Person other than a Governmental Authority (except
such as have been duly obtained, made or given, and are in full force and
effect) is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the first
priority nature of such security interest) or (iii) subject to the terms of the
Intercreditor Agreement, for the exercise by the Administrative Agent of the
voting or other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement except, in each case, for any
approval of any such Person the absence of which could not reasonably be
expected to have a material adverse effect on the ability of the Administrative
Agent to exercise voting rights or remedies in respect of the Collateral.
(e) This Agreement creates a valid security interest in the Collateral
purported to be pledged and assigned by Pledgor hereunder securing the payment
of the Secured Obligations.
(f) The Pledged Shares consist of the number and type of shares of the
Capital Stock of the Companies, as described in Annex A. All of the Pledged
Shares are certificated securities.
(g) The Pledged Shares are, and along with any securities pledged in
substitution therefor or in addition thereto will be, duly and validly issued,
fully paid and nonassessable and duly and validly pledged hereunder in
accordance with all applicable Requirements of Law, and Pledgor warrants,
covenants and agrees to defend the Collateral Agent's right, title and interest
in and to the Pledged Shares and all other Collateral against the claims and
demands of all Persons whomsoever.
(h) Pledgor is the record, legal and beneficial owner of, and has good
title to all of the Pledged Shares and all other Collateral purported to be
pledged and assigned by it hereunder, free and clear of all Liens and other
claims, security interests, mortgages, pledges and other encumbrances of every
nature whatsoever, except Liens in favor of the Administrative Agent and the
OPMW Administrative Agent, and it has the right to pledge the Pledged Shares and
all other Collateral as herein provided.
(i) The Pledged Shares constitute and any securities pledged in
substitution therefor, or in addition thereto shall as of the date thereof
constitute one hundred percent (100%) of all the issued and outstanding Capital
Stock of the Companies. The Companies do not have outstanding (i) any securities
convertible into or exchangeable for their Capital Stock or (ii) any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement, or any options for the purchase of, or any agreement, arrangements or
understandings providing for the issuance of its Capital Stock.
7
(j) Each certificate evidencing the Pledged Shares is issued in the name
of Pledgor and each such certificate has been duly endorsed and executed in
blank or has attached thereto a power substantially in the form of Annex B duly
signed in blank by the appropriate officer of Pledgor. Each such power will give
the Administrative Agent the rights and authority it purports to give.
(k) Upon receipt by the Administrative Agent of the stock certificates
representing the Pledged Shares (which either have been duly executed in blank
or have attached thereto powers substantially in the form of Annex B duly signed
in blank by the appropriate officer of Pledgor), the security interest described
in this Agreement will represent a valid and perfected first priority lien on,
and security interest in, the Collateral, in favor of the Administrative Agent
for the benefit of the Secured Parties.
(l) Pledgor has not executed, or authorized and there does not currently
exist, any effective financing statement or other instrument similar in effect
that is on file in any recording office covering all or any part of Pledgor's
interest in the Collateral, except such as may have been filed pursuant to this
Agreement or the other Financing Documents. Upon the completion of all filings
and recordings described in Annex C, no filings or recordings (including under
the Uniform Commercial Code as adopted in the State of New York and in the State
of Delaware) will be necessary to be made in order to perfect, protect and
preserve the lien on and security interest in the Collateral created by this
Agreement.
(m) None of the Pledged Shares constitutes margin stock, as defined in
Regulation U of the Board of Governors of the Federal Reserve System.
(n) The Holdco Operating Agreement, a true and complete copy of which has
been furnished to the Administrative Agent, has been duly authorized, executed
and delivered by Pledgor and is in full force and effect and is binding upon and
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditor's
rights generally and (ii) general principles of equity. There exists no default
under the Holdco Operating Agreement.
(o) The chief place of business and chief executive office of Pledgor and
the office where Pledgor keeps its records concerning the Collateral is set
forth under its name on the signature page hereof.
(p) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(q) No part of the Collateral is subject to the terms of any agreement
restricting the sale or transfer of such Collateral, except for the Operating
Agreement, Holdco Operating Agreement and the Financing Documents.
(r) Except as set forth on Schedule 4.05 of the Credit Agreement, there
is no (i) injunction, writ, preliminary restraining order or order of any nature
issued by an arbitrator, court
8
or other Governmental Authority against Pledgor in connection with the
transactions provided for herein, the other Transaction Documents or the
Operational Plans, or (ii) action, suit, arbitration, litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority pending
against Pledgor or, to Pledgor's knowledge, threatened against Pledgor which
would reasonably be expected to adversely affect the right or ability of Pledgor
to fulfill its obligations under this Agreement.
(s) Pledgor's obligations under this Agreement are not subject to any
offsets or defenses of any kind against the Borrower, the Administrative Agent
or the Secured Parties.
(t) Pledgor has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
(u) Pledgor is not (i) an "investment company" or a company "controlled"
by an "investment company" within the meaning of the United States of America
Investment Company Act of 1940, as amended, or an "investment advisor" within
the meaning of the United States of America Investment Advisors Act of 1940, as
amended or (ii) subject to regulation by the Securities and Exchange Commission
under PUHCA as a "public-utility company," an "electric utility company," a
"holding company," or a subsidiary or affiliate of any of the foregoing. No
certification of a state public utility commission pursuant to Section 33(a)(2)
of PUHCA is required as a result of the investment of Pledgor in the Companies.
(v) (i) Upon its execution and delivery, the Operating Agreement, a
true and complete copy of which will be furnished to the Administrative
Agent, will have been duly authorized, executed and delivered by Pledgor
and will be in full force and effect and is binding upon and enforceable
against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity.
(ii) Pledgor shall at its expense perform and observe all the terms
and provisions to be performed or observed by it under the Operating
Agreement, maintain the Operating Agreement in full force and effect,
enforce the Operating Agreement in accordance with its terms, and take
all such action to such end as may be from time to time reasonably
requested by the Administrative Agent.
(iii) Pledgor shall not:
(A) cancel or terminate the Operating Agreement or consent to
or accept any cancellation or termination thereof;
(B) amend or otherwise modify in a material respect the
Operating Agreement; or
(C) waive any material default under or material breach of the
Operating Agreement.
9
SECTION 8. Further Assurances(a). (a) Pledgor agrees that from time to
time, at the expense of Pledgor, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Administrative Agent may reasonably request, in order to
perfect and protect the pledge, assignment, hypothecation and security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral, including entering into any amendment or restatement of this
Agreement in connection with the conversion of the LP Company to a limited
liability company in accordance with Section 7 of the LP Guarantee, filing
financing statements, paying fees, charges and expenses related thereto, and
causing the LP Company to register the security interests hereunder in the name
of the Administrative Agent in the register maintained for such purpose at the
chief executive office and principal place of business of such Company. Without
limiting the generality of the foregoing, Pledgor will (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary, or as the Administrative Agent may
reasonably request, in order to perfect and preserve the assignment,
hypothecation and security interest granted or purported to be granted hereby;
and (ii) mark conspicuously, at the request of the Administrative Agent, each of
its records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to the Administrative Agent, indicating that the
Collateral has been assigned and is subject to the security interest pursuant
hereto.
(b) Pledgor hereby further authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc(a). (a) Pledgor shall not
be entitled to receive any payments or other distributions receivable by it
under the Operating Agreement except as expressly permitted for deposit in the
Holdco Accounts pursuant to the terms and conditions of the Holdco Deposit
Account Agreement. Unless and until an Event of Default shall have occurred and
be continuing, and Pledgor shall have been notified by the Administrative Agent
of the Secured Parties' written election to exercise remedies hereunder, but
subject, nevertheless, at all times to the restrictions imposed by the terms and
conditions of the Credit Agreement, Pledgor shall be entitled to exercise any
voting and other corporate rights with respect to the Pledged Shares or any
securities pledged in substitution therefor or in addition thereto for any
purpose, and in any manner, not in violation of or inconsistent with the terms
of this Agreement or any other Financing Document; provided, however, that,
Pledgor shall not exercise or refrain from exercising any such voting and other
rights if it could reasonably be anticipated that such action or inaction would
have an adverse effect on the creation, attachment, perfection or priority of
the security interests herein granted. Upon Pledgor's receipt of a notice in
accordance with the first sentence of this Section 9, and during the continuance
of an Event of Default, all such rights of Pledgor to vote and to give consents,
waivers and ratifications shall be exercisable solely by the Administrative
Agent in accordance with Section 15.
10
(b) Pledgor shall not be entitled to receive any cash or non-cash
dividends or distributions otherwise payable in respect of the Pledged Shares,
except any cash distributions expressly permitted for deposit in the Holdco
Accounts pursuant to the terms and conditions of the Holdco Deposit Account
Agreement. Non-cash dividends or distributions and dividends and distributions
paid or payable in cash in respect of any such Collateral in connection with a
partial or total liquidation or dissolution of any of the Companies or the
Borrower Entities, shall be, and shall be forthwith delivered to the
Administrative Agent to hold as Collateral and shall, if received by Pledgor, be
received in trust for the benefit of the Administrative Agent, be segregated
from the other property or funds of Pledgor and be promptly delivered to the
Administrative Agent as Collateral in the same form as so received (with any
necessary endorsement or assignment). The Administrative Agent shall also be
entitled at all times to receive directly, and to retain as part of the
Collateral all other or additional stock or other securities or property
(including cash) issued, paid or distributed for any reason in respect of the
Pledged Shares or other Collateral.
(c) Subject to the terms and conditions of the Holdco Deposit Account
Agreement, upon the occurrence and during the continuance of an Event of
Default, immediately upon Pledgor's receipt of written notice from the
Administrative Agent that the Administrative Agent intends to act pursuant to
this clause (c), all rights of Pledgor to exercise or refrain from exercising
the voting and other corporate rights which it would otherwise be entitled to
exercise shall thereupon become exercisable by the Administrative Agent, acting
in good faith, who shall have the sole right to exercise or refrain from
exercising such voting and other corporate rights unless and until such Event of
Default ceases to exist.
SECTION 10. Place of Organization; Place of Perfection; Records. Pledgor
is organized in the State of Delaware, and Pledgor's exact legal name is Orion
Power Capital, LLC. Pledgor has no trade name. Pledgor will not change its
jurisdiction of organized or its name without having given the Administrative
Agent not less than thirty (30) days' prior written notice of its intention to
do so, clearly describing to the Administrative Agent such new jurisdiction or
name and providing such other information and taking any action in connection
therewith as the Administrative Agent may reasonably request, including all
action necessary or requested by the Administrative Agent to maintain the
security interest of the Administrative Agent in the Collateral intended to be
granted hereby at all times fully perfected, of first priority and in full force
and effect. Pledgor shall keep its place of business and chief executive office
and the office where it keeps its records concerning the Collateral, and of all
other chattel paper which evidence the Collateral, at its address specified on
the signature pages hereof, or, upon thirty (30) days' prior written notice to
the Administrative Agent, at such other location in a jurisdiction where all
action required by Section 8 shall have been taken with respect to the
Collateral. Pledgor will hold and preserve such records and will permit
representatives of the Administrative Agent at any time, upon reasonable prior
notice, during normal business hours to inspect and make abstracts from such
records.
SECTION 11. Covenants. Pledgor covenants and agrees that so long as any
Lender shall have any Commitment outstanding, and until the Notes, together with
interest, and all other Secured Obligations are indefeasibly paid in full in
cash, unless the Administrative Agent shall otherwise consent in writing:
11
(a) Maintenance of Register. Pledgor shall cause each Company to maintain
at all times a register at its chief place of business and chief executive
office in which the security interest in the Collateral granted hereby to the
Administrative Agent, to the extent that the same constitutes "uncertificated
securities" (as defined in the Delaware Uniform Commercial Code), shall be
evidenced.
(b) Preservation of Existence, Etc. Except in connection with the
conversion of the LP Company into a limited liability company, Pledgor shall
preserve and maintain, and shall cause each of the Companies and each Borrower
Entity to preserve and maintain, its lawful existence under the laws of the
state of organization and its qualification to do business in every jurisdiction
where the character of its properties or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect on any Portfolio Asset.
Pledgor shall preserve and maintain all of its rights (charter and statutory),
privileges and franchises necessary or desirable for the conduct of its business
in accordance with the Transaction Documents.
(c) Compliance with Law. Pledgor shall comply with all Requirements of
Law and Governmental Approvals applicable to it, except when any such
Requirement of Law or Governmental Approval is being contested in good faith and
by appropriate proceedings and for which Acceptable Reserves have been
established, or except in each case where the failure to so comply could not
reasonably be expected to have a material adverse effect on any Portfolio Asset.
(d) Change in Nature of Business. Pledgor shall not engage in any
business other than being the sole shareholder of the Companies, Orion Power
MidWest GP, Inc. and Orion Power MidWest LP, Inc., and maintaining, and
distributing cash to and from, the Holdco Accounts pursuant to the Holdco
Deposit Account Agreement. Except in accordance with a conversion of the LP
Company to limited liability company as contemplated by the LP Guarantee,
Pledgor shall not cause or permit either Company to change its legal form or
Governing Documents (other than to (i) change its name, (ii) add, replace or
eliminate offices and/or officers, and/or (iii) replace any director, or add to
or reduce the number of directors comprising the board so long as such addition,
replacement or reduction does not eliminate the independent director or modify
the nature or extent of the independent director's powers in any way), change
its fiscal year or engage in any business other than, with regard to Orion Power
New York GP, Inc., being a general partner of the Borrower Entities, and with
regard to Orion Power New York LP, Inc., being a limited partner or other equity
owner of the Borrower.
(e) Jurisdiction of Organization. Except in accordance with the
conversion of the LP Company to a limited liability company in the manner
contemplated and permitted under Section 7 of the LP Guarantee, Pledgor shall
cause each of the Companies at all times to be a corporation organized under the
laws of the State of Delaware. Pledgor shall at all times be a limited liability
company organized under the laws of the State of Delaware.
(f) Bankruptcy. Pledgor shall not file a voluntary petition concerning
itself, or commence proceedings to have either of the Companies or any Borrower
Entity adjudicated bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings
12
against itself, either of the Companies or any Borrower Entity, or file a
petition seeking or consenting to reorganization or relief of itself, either of
the Companies or any Borrower Entity as debtor under any applicable federal or
state law relating to bankruptcy, insolvency, or other relief from debtors, if
any, with respect to itself, either of the Companies or any Borrower Entity, or
seek or consent to the appointment of any trustee, receiver, conservator,
assignee, sequestrator, custodian, liquidator (or other similar official) of
either of the Companies or any Borrower Entity or of all or any substantial part
of the properties and assets of itself, either of the Companies or any Borrower
Entity, or make any general assignment for the benefit of creditors, if any, of
itself, either of the Companies or any Borrower Entity, or admit in writing the
inability of itself, either of the Companies or any Borrower Entity to pay its
debts generally as they become due or declare or effect a moratorium on the
debt, if any, of itself, either of the Companies or any Borrower Entity or take
any action in furtherance of any of the foregoing.
(g) Taxes. Pledgor shall cause to be paid or discharged (whether by it or
any of its Affiliates, or otherwise) all taxes, assessments and governmental
charges or levies lawfully imposed upon it, either of the Companies or any
Borrower Entity or upon any of their respective income or profits or upon any of
the Portfolio Assets or the Collateral and all lawful claims or obligations
that, if unpaid, would become a Lien upon the Collateral (as defined in the
Credit Agreement), whether real or personal, the Collateral (as defined in this
Agreement) or upon any part thereof. Pledgor or the applicable Company or
Borrower Entity shall have the right, however, to contest in good faith the
validity or amount of any such tax, assessment, charge, levy, claim or
obligation by proper proceedings, and may permit the taxes, assessments,
charges, levies, claims or obligations so contested to remain unpaid during the
period of such contest if: (i) Pledgor or such Company or Borrower Entity
diligently prosecutes such contest in good faith and by appropriate proceedings
and for which Acceptable Reserves have been established; (ii) during the period
of such contest, the enforcement of any contested item is effectively stayed;
and (iii) the failure to pay or comply with the contested item could not
reasonably be expected to result in an adverse effect on the Collateral taking
into account the existence of such Acceptable Reserves.
(h) Operations Matters. In the conduct its business and operations,
Pledgor shall, and shall cause each of the Companies to:
(i) maintain books and records, separate from those of any other
Person;
(ii) maintain its bank accounts and all its other assets separate
from those of any other Person;
(iii) hold regular member, partnership or shareholder meetings, as
appropriate, to conduct its business, and observe all other limited
liability company, partnership or corporate formalities, as the case may
be;
(iv) hold itself out to creditors and the public as a legal entity
separate and distinct from any other Person;
13
(v) prepare separate financial statements, or if part of a
consolidated or combined group, then it shall be shown as a separate
member of such group, including in a footnote(s) to the relevant
financial statements disclosing its separate existence and identity and
the existence of its own assets;
(vi) allocate and charge fairly and reasonably any common employee or
overhead shared with Affiliates;
(vii) transact all business with Affiliates on an arm's-length basis
and to enter into transactions with Affiliates on an arm's-length basis;
(viii) conduct business in its own name;
(ix) with regard to each Company, maintain a sufficient number of
employees in light of such Company's contemplated business operations;
(x) correct any misunderstanding regarding its separate identity of
which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of any other
Person; and
(xii) maintain adequate capital in light of its contemplated business
operations.
(i) Assets. Pledgor shall not own or acquire ownership interest in any
Person other than the Companies, Orion Power MidWest GP, Inc. and Orion Power
Midwest LP, Inc. and other assets having an aggregate value in excess of
$50,000, and shall not sell, assign (by operation of law or otherwise) or
otherwise dispose of any interest in any of the Collateral.
(j) Indebtedness. Pledgor shall not incur Indebtedness, other than
pursuant to the Holdco Guarantees, or make any loan or advances to any other
Person except loans or advances permitted under the Holdco Deposit Account
Agreement.
(k) Distributions. Pledgor shall not declare any dividends or make any
distributions to any Person, except strictly in accordance with the Holdco
Deposit Account Agreement.
(l) Merger. Pledgor shall not merge or be consolidated with any Person.
(m) Holdco Operating Agreement. Pledgor shall not change its legal form
or amend, or otherwise modify, the Holdco Operating Agreement or any of its
other Governing Documents (other than to (i) change its name, (ii) add, replace
or eliminate offices or officers, if any, or (iii) replace any Manager or add to
or reduce the number of Managers so long as such addition, replacement or
reduction does not eliminate the independent Manager or modify the nature or
extent of the independent Manager's powers in any way) or cancel or terminate
the Holdco Operating Agreement or consent to or accept any cancellation or
termination thereof, nor shall it change its fiscal year.
14
(n) Contributions. Pledgor shall not make any equity investment or
contributions of capital to any Subsidiary except in accordance with the Holdco
Deposit Account Agreement.
(o) Pledged Shares.
(i) Pledgor shall defend the Administrative Agent's right, title and
interest in and to the Pledged Shares and all other Collateral against
the claims and demands of all Persons whomsoever.
(ii) The Pledged Shares, and any securities pledged in substitution
therefor or in addition thereto, shall at all times constitute, one
hundred percent (100%) of all the issued and outstanding Capital Stock of
the Companies.
(iii) Pledgor shall not authorize the issuance by the Companies of
any additional membership interests or stock of the Companies, (whether
common or preferred and whether of a class now or hereafter existing)
unless concurrently with such issuance all such stock is owned by Pledgor
and made subject to the pledge of shares hereunder. If Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional
membership interests or stock in the Companies at any time or from time
to time after the date hereof, Pledgor will promptly pledge and deposit
or cause to be deposited such membership interests or stock with the
Administrative Agent and deliver or cause to be delivered to the
Administrative Agent certificates therefor, accompanied by powers duly
executed in blank by Pledgor, and will promptly thereafter deliver to the
Administrative Agent a certificate executed by any Responsible Officer of
Pledgor describing such shares and certifying that the same have been
duly pledged with the Administrative Agent hereunder.
(iv) Any security pledged in substitution of the Pledged Shares or in
addition to the Pledged Shares will be (A) duly and validly issued, fully
paid and nonassessable and duly and validly pledged hereunder in
accordance with all applicable Requirements of Law and (B) issued in the
name of Pledgor and when issued will then have been duly endorsed and
executed in blank or when issued will then have, attached thereto a power
substantially in the form of Annex B duly signed in blank by the
appropriate officer of Pledgor. Each such power will give the
Administrative Agent the rights and authority it purports to give. Upon
receipt by the Administrative Agent of such new certificates (which
either will have been duly executed in blank or will have attached
thereto such powers), the security interest described in this Agreement
will attach thereto and will represent a valid and perfected first
priority on and security interest in such Collateral, in favor of the
Administrative Agent for the benefit of the Secured Parties.
(v) Pledgor shall not execute or authorize to be filed in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to
the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by Pledgor
or granted by Pledgor in the Holdco Midwest Second Lien Stock Pledge
Agreement.
15
(vi) Pledgor shall not hereafter create or permit to exist any Lien,
security interest or other charge, encumbrance or other security
arrangement upon or with respect to, any of the Collateral (other than
Liens created under this Agreement or the Holdco Midwest Second Lien
Stock Pledge Agreement).
(p) Share Transfer Restrictions. Pledgor shall not sell, assign, transfer
or permit to be sold, assigned or transferred any of its interests in the
Companies, whether directly or indirectly.
SECTION 12. Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the Administrative Agent hereunder.
Pledgor hereby appoints the Administrative Agent as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of Pledgor
or otherwise, from time to time in the Administrative Agent's discretion at any
time that an Event of Default shall have occurred and be continuing, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including
to ask, demand, collect, sue for, recover, compound, receive and give acceptance
and receipts for moneys due and to become due under or in connection with the
Collateral, to receive, indorse, and collect any drafts or other instruments,
documents and chattel paper in connection therewith, and to file any claims or
take any action or institute any proceedings which the Administrative Agent may
deem to be necessary or desirable for the collection thereof. Such appointment
is coupled with an interest and is irrevocable. The Administrative Agent shall
have the right to appoint one or more agents for the purpose of retaining
physical possession of the Pledged Shares and other Collateral, which may be
held (in the discretion of the Administrative Agent) in the name of Pledgor,
endorsed or assigned in blank or in favor of the Administrative Agent or any
nominee or nominees of the Administrative Agent or an agent appointed by the
Administrative Agent.
SECTION 13. Administrative Agent May Perform. If Pledgor fails to perform
any agreement contained herein, the Administrative Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by Pledgor under Section
19(b).
SECTION 14. Duties of the Administrative Agent, Pledgor, the Companies
and the Borrower Entities. (a) The powers conferred on the Administrative Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral, and no such
duties shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the contrary
notwithstanding, that Pledgor, each Company and each Borrower Entity shall
remain liable to perform all of their respective obligations, if any, assumed by
them with respect to the Collateral and the Administrative Agent and the Lenders
shall have no obligations or liabilities (other than obligations or liabilities
resulting from the Administrative Agent's or any Lender's gross negligence or
willful misconduct) with respect to any Collateral by reason of or arising out
of or in connection with this Agreement, nor shall the Administrative Agent or
the Lenders be required
16
or obligated in any manner to perform or fulfill any of the obligations of
Pledgor, either Company or any Borrower Entity under or with respect to any
Collateral.
SECTION 15. Remedies. If any Event of Default shall have occurred and be
continuing, subject to the terms and conditions of the Credit Agreement and
Section 9 hereof and in compliance with Requirements of Law:
(a) The Administrative Agent shall be entitled to exercise all the
rights, powers and remedies vested in it (whether vested in it by this
Agreement, the Credit Agreement or any other Financing Document or by law) for
the protection and enforcement of its rights in respect of the Collateral and,
without limitation of the foregoing, may cause all or any of the Pledged Shares
or other Collateral to be transferred into its name or that of a nominee or
nominees, and Pledgor shall, upon the request of the Administrative Agent,
execute such additional instruments and documents as are necessary to effect
such transfer;
(b) The Administrative Agent, without being required to give any notice
to Pledgor or the Companies (except in respect of actions taken pursuant to
Section 9(a)), shall be entitled to exercise the following rights, which,
Pledgor agrees, are commercially reasonable:
(i) to exercise any and all voting rights with respect to the Pledged
Shares and other Collateral, including the appointment and removal of any
proxy or proxies or substitute or substitutes;
(ii) to receive and retain, as collateral security for the Secured
Obligations, any and all dividends at any time and from time to time
declared or paid upon any of the Pledged Shares and other Collateral
otherwise payable to Pledgor;
(iii) to accept rights issues;
(iv) approve any liquidation or scheme of arrangement or any other
composition or arrangement with or for creditors, whether secured or
unsecured and whether formed pursuant to the order of any court or
otherwise, and to give any consent on behalf of Pledgor in relation
thereto;
(v) to attend meetings of creditors and vote;
(vi) to compromise claims in relation to or arising out of the
Pledged Shares;
(vii) to give sufficient receipts and discharges for all monies to
which Pledgor is or may become entitled in respect of the Pledged Shares
or any part thereof or which shall come into the hands of the
Administrative Agent, which receipts and discharges shall, to the maximum
extent permitted by Requirements of Law, exonerate the Administrative
Agent from all liability to see to the application thereof or from being
answerable for the loss or misapplication thereof;
17
(viii) to execute any documents which it may consider expedient, in
good faith, in relation to the foregoing as it shall in its absolute
discretion determine (but without any obligation to consult with Pledgor)
in relation to any exercise of any such right, power or privilege; and
(ix) to institute, prosecute and defend any proceedings in any court
or tribunal in respect of any act or transaction referred to in this
Section 15(a).
(c) (i) Any Collateral repossessed by the Administrative Agent under or
pursuant to this Section 15 or any other provision hereof, and any other
Collateral whether or not so repossessed by the Administrative Agent, may be
sold, assigned, leased, delivered or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place
of sale the property to be sold, and in general in such manner, at such time or
times, at such place or places and on such terms as the Administrative Agent
may, upon written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable, including sale on
any securities exchange on which the Pledged Shares, any security pledged in
substitution therefor or in addition thereto or any of them may then be listed.
(ii) Any disposition pursuant to subsection (i) above which shall be
a private sale or other private proceeding permitted by such requirements
shall be made upon not less than 10 days' written notice to Pledgor
(except that, if the Administrative Agent shall determine, in its sole
discretion, that any of the Pledged Shares or other Collateral threatens
to decline quickly in value or to become worthless, any such sale may be
made upon three days' notice to Pledgor) specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of Pledgor or any nominee of Pledgor
to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of
Law, the Administrative Agent on behalf of the Lenders may bid for and
become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section 15.
(iii) If, under mandatory requirements of any Requirement of Law, the
Administrative Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of
notice to Pledgor as hereinabove specified, the Administrative Agent need
give Pledgor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of any Requirement of
Law.
(iv) The Administrative Agent, may without notice, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same
was so adjourned.
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(v) For the purposes of this Section 15(c), an agreement to sell any
or all of the Pledged Shares or other Collateral entered into following
any Event of Default shall, to the extent permitted by Requirements of
Law, be treated as a sale thereof, and the Administrative Agent shall be
free to carry out such sale pursuant to such agreement and Pledgor shall
not be entitled to the return of any of the Pledged Shares or other
Collateral subject thereto notwithstanding the fact that, the
Administrative Agent shall have entered into any such agreement, the
Secured Obligations shall have been paid in full in cash.
(vi) In any event, the Administrative Agent shall not be obligated to
make any sale of the Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of the Collateral may have
been given.
(d) In case sale of all or any part of the Collateral is made on credit
or for future delivery, the Collateral so sold may be retained until the sale
price is paid by the purchaser or purchasers thereof, but the Administrative
Agent shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may be sold again upon like notice.
(e) The Administrative Agent shall have the right, for and in the name,
place and stead of Pledgor, to execute endorsements, assignments or other
instruments of conveyance or transfer with respect to all or any of the Pledged
Shares and other Collateral in connection with any sale thereof in accordance
with Section 15(b) or (c). Neither the Administrative Agent nor any other
Secured Party shall be liable for failure to collect or realize upon any or all
of the Collateral or for any delay in so doing nor shall any of them be under
any obligation to take any action whatsoever with regard thereto.
(f) Upon any sale of the Collateral by the Administrative Agent hereunder
(whether by virtue of the power of sale herein, granted, pursuant to judicial
process or otherwise), the receipt of the Administrative Agent or the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold, and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Administrative Agent or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
(g) The Administrative Agent shall have the right, during the occurrence
and continuation of any Event of Default, upon the indefeasible payment in full
in cash of the Obligations, and otherwise in accordance with the terms and
conditions of the Intercreditor Agreement, to transfer its interest in (and to
the extent such Collateral is in the possession of the Administrative Agent,
transfer possession of) the Collateral to the OPMW Administrative Agent.
(h) Waiver of Claims. Except as otherwise provided in this Agreement,
PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE ADMINISTRATIVE AGENT
TAKING POSSESSION OR THE ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
INCLUDING ANY AND ALL
19
PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE
OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF ANY SUCH JURISDICTION, and
Pledgor hereby further waives:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the gross negligence or willful
misconduct of either of the Administrative Agent or any Person acting on
its behalf or instruction;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any Requirements
of Law in order to prevent or delay the enforcement of this Agreement
(including any right to claim that such enforcement should be stayed
pending the outcome of any other action or proceeding (including any
arbitration proceeding)) or the absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such Requirements of Law.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall, to the extent permitted by Requirements of Law, operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under Pledgor.
SECTION 16. Application of Proceeds. Notwithstanding any other provision
of this Agreement, all payments made under or in connection with this Agreement,
and all moneys collected by the Administrative Agent upon any sale or other
disposition of the Collateral pursuant to Section 15, together with all other
moneys received by the Administrative Agent hereunder, shall be applied in
accordance with the Holdco Deposit Account Agreement and the Intercreditor
Agreement. For the avoidance of doubt, it is understood that Pledgor shall
remain liable to the extent of any deficiency between the amount of all moneys
collected by the Administrative Agent upon any such sale or other disposition of
the Collateral and the aggregate amount of the Secured Obligations.
SECTION 17. Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the Administrative Agent or any Secured Party shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other
20
Financing Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent or any Secured Party
would otherwise have. No notice to or demand on Pledgor in any case shall
entitle Pledgor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or any Secured Party to any other or further action in any circumstances without
notice or demand.
SECTION 18. Discontinuance of Proceedings. In case the Administrative
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Administrative Agent, then and in every such case
Pledgor, the Administrative Agent and each holder of any of the Secured
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Administrative Agent
shall continue as if no such proceeding had been instituted.
SECTION 19. Indemnity and Expenses(a) . (a) Pledgor agrees to indemnify
and hold harmless the Administrative Agent and each Secured Party from and
against any and all claims, losses and liabilities arising out of or resulting
from the Collateral or Pledgor's pledge and assignment under this Agreement
(including enforcement against Pledgor of this Agreement), except claims, losses
or liabilities resulting from the Administrative Agent's or any Secured Party's
gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the Administrative Agent or any
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Administrative Agent or any Secured Party may incur in connection with (i)
the administration of this Agreement, including the exercise or attempted
exercise of any right conferred on the Administrative Agent under or by virtue
of this Agreement or by statute, (ii) the sale of, collection from, or other
realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the Administrative Agent or any Secured Party hereunder
against Pledgor or (iv) the failure by Pledgor to perform or observe any of the
provisions hereof.
SECTION 20. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
21
SECTION 21. Security Interest Absolute. The obligations of Pledgor under
this Agreement are independent of the Secured Obligations, and a separate action
or actions may be brought and prosecuted against Pledgor to enforce this
Agreement, irrespective of whether any action is brought against the Borrower,
any other pledgor or any guarantor of the Secured Obligations or whether the
Borrower, any other pledgor or any guarantor of the Secured Obligations is
joined in any such action or actions. All rights of the Administrative Agent and
the assignment, hypothecation and security interest hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional, to the
extent permitted by applicable law, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the Credit
Agreement, any other Financing Document or any other agreement or instrument
relating to any thereof, the absence of any action to enforce the same, any
release of Pledgor or any other Credit Party, the recovery of any judgment
against Pledgor or any other Credit Party, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including, (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor or any
other Credit Party contained in this Agreement, the Credit Agreement or any
other Financing Document, (ii) any impairment, modification, release or
limitation of the liability of Pledgor or any other Credit Party or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable bankruptcy
law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by Pledgor, the Administrative Agent or any other Secured
Party of any rights or remedies, (iv) the assignment or the purported assignment
of any property as security for the Secured Obligations, including all or any
part of the rights of Pledgor under this Agreement, (v) the extension of the
time for payment by Pledgor or any other Credit Party or any other guarantor of
any payments or other sums or any part thereof owing or payable under any of the
terms and provisions of any Financing Document or of the time for performance by
Pledgor or any other Credit Party of any other obligations under or arising out
of any terms or provisions or the extension of the renewal of any thereof, (vi)
the modification or amendment (whether material or otherwise) of any duty,
agreement or obligation of Pledgor or any other Credit Party set forth in any
Financing Document, (vii) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets, marshalling
of assets and liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of, or other similar proceeding affecting Pledgor or any other
Credit Party or any of their respective assets, or the disaffirmancy of this
Agreement or any Financing Document in any such proceeding, (viii) the release
or discharge of Pledgor or any other Credit Party from the performance or
observance of any agreement, covenant, term or condition contained in any of
such instruments by operation of law, (ix) the unenforceability of this
Agreement or any Financing Document or (x) any other circumstance which might
otherwise constitute a legal or equitable discharge of a surety or guarantor; or
22
(c) any exchange, sale, release or non-perfection of any Collateral, or
any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
SECTION 22. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any address or
telecopy number which such party shall have specified.
SECTION 23. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto and shall inure to the benefit of the Lenders;
provided, however, that Pledgor may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each of the Lenders. Any Lender may transfer, assign or grant all or
such relevant part of its rights hereunder in connection with an assignment or
transfer of all or any part of its interest in its Loans in accordance with the
provisions of the Credit Agreement, and such assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein or
otherwise. All agreements, statements, representations and warranties made by
Pledgor herein or in any certificate or other instrument delivered by Pledgor or
on its behalf under this Agreement shall be considered to have been relied upon
by the Lenders and shall survive the execution and delivery of this Agreement,
the Credit Agreement and the other Financing Documents regardless of any
investigation made by the Lenders or on their behalf.
SECTION 24. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no Lender shall have
any Commitment outstanding and until the Notes, together with interest, and all
other Secured Obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the Administrative Agent,
at the written request and expense of the Pledgor, will promptly authorize,
execute and deliver, as applicable, to the Pledgor the proper instruments (which
may include Uniform Commercial Code termination statements on form UCC-3)
acknowledging the termination of this Agreement, and will promptly duly assign,
transfer and deliver (without recourse and without any representation or
warranty) free from any interest of the Administrative Agent or Lien granted
hereunder such of the Collateral as may be in possession of the Administrative
Agent, in accordance with the Intercreditor Agreement or, if the OPMW Second
Lien Documents shall have terminated pursuant to the terms thereof, to the
Pledgor, and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement together with such notices to third parties as may be
necessary to countermand any notices previously sent to them pursuant hereto.
SECTION 25. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
23
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH
REQUIREMENTS OF LAW THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO
THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE AND
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS
OTHERWISE DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF
THE NEW YORK UNIFORM COMMERCIAL CODE ARE USED HEREIN AS THEREIN DEFINED. ANY
DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN PLEDGOR AND EACH SECURED PARTY IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF
THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH SECURED
PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST PLEDGOR OR
ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY SECURED
PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN
24
THEM IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS.
INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.
(e) PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED AGENTS,
INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW YORK, NEW
YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF PLEDGOR TO RECEIVE FOR AND ON
BEHALF OF PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENTS
RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH
AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO PLEDGOR AT ITS ADDRESS SET FORTH IN
ACCORDANCE WITH SECTION 22. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE
DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT (I) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (II) TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (C) THIS SECTION
26.
SECTION 27. 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
but all of which shall together constitute one and the same instrument.
SECTION 28. Limitation of Recourse. The obligations of Pledgor hereunder
are obligations solely of Pledgor and shall not constitute a debt or obligation
of any direct or indirect member, partner or shareholder of Pledgor or any of
their respective directors, officers, agents or employees (each such Person, a
"Non-Recourse Party"). No Non-Recourse Party shall be liable for any amount
payable by Pledgor under this Agreement and the Secured Parties shall not seek a
money judgment or deficiency or personal judgment against any Non-Recourse Party
for payment of the indebtedness payable by Pledgor evidenced by this Agreement.
No property or assets of any Non-Recourse Party, other than as contemplated in
the Financing Documents, shall be sold, levied upon or otherwise used to satisfy
any judgment rendered in connection with any action brought against Pledgor with
respect to this Agreement or the other Financing Documents. The foregoing
acknowledgments, agreements and waivers shall be enforceable by any Non-Recourse
Party. Notwithstanding the foregoing, nothing in this Section 28 shall limit or
affect or be construed to limit or affect the obligations and liabilities of any
Credit Party or any other Non-Recourse Party (a) in accordance with the terms of
any Transaction Document or Financing Document creating such liabilities and
obligations to which such Credit Party or Non-Recourse Party is a party, (b)
arising from liability pursuant to any applicable Requirement of Law for such
25
Credit Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the Credit Agreement.
[Remainder of page intentionally left blank.]
26
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER CAPITAL, LLC
By:
--------------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity,
but solely as Administrative Agent
By:
--------------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
27
EXHIBIT I-3 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
[FORM OF]
SECOND LIEN STOCK PLEDGE AGREEMENT
made by
ORION POWER CAPITAL, LLC
to
BANK OF AMERICA, N.A.,
as OPNY Administrative Agent
Dated as of : October 28, 2002
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS: CONSTRUCTION..................................................2
SECTION 2. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST..............................4
SECTION 3. SECURITY FOR SECURED OBLIGATIONS............................................5
SECTION 4. NO SUBROGATION..............................................................5
SECTION 5. DELIVERY OF COLLATERAL......................................................6
SECTION 6. REINSTATEMENT...............................................................6
SECTION 7. REPRESENTATIONS AND WARRANTIES..............................................6
SECTION 8. FURTHER ASSURANCES.........................................................10
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC..........................................11
SECTION 10. PLACE OF ORGANIZATION; PLACE OF PERFECTION; RECORDS........................12
SECTION 11. COVENANTS..................................................................12
SECTION 12. ADMINISTRATIVE AGENT.......................................................16
SECTION 13. ADMINISTRATIVE AGENT MAY PERFORM...........................................17
SECTION 14. DUTIES OF THE OPNY ADMINISTRATIVE AGENT, PLEDGOR, THE
COMPANIES AND THE BORROWER.................................................17
SECTION 15. REMEDIES...................................................................17
SECTION 16. APPLICATION OF PROCEEDS....................................................21
SECTION 17. REMEDIES CUMULATIVE........................................................21
SECTION 18. DISCONTINUANCE OF PROCEEDINGS..............................................21
SECTION 19. INDEMNITY AND EXPENSES.....................................................21
SECTION 20. WAIVER, AMENDMENT; SEVERABILITY............................................22
SECTION 21. SECURITY INTEREST ABSOLUTE.................................................22
SECTION 22. ADDRESSES FOR NOTICES......................................................23
i
SECTION 23. SUCCESSORS AND ASSIGNS.....................................................23
SECTION 24. TERMINATION; RELEASE.......................................................24
SECTION 25. HEADINGS DESCRIPTIVE, ETC..................................................24
SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE........................24
SECTION 27. EXECUTION IN COUNTERPARTS..................................................26
SECTION 28. LIMITATION OF RECOURSE.....................................................26
SECTION 29. SUBORDINATION..............................................................26
Annexes
Annex A - Pledged Stock
Annex B - Form of Power
Annex C - Filings and Recordings
ii
SECOND LIEN STOCK PLEDGE AGREEMENT
SECOND LIEN STOCK PLEDGE AGREEMENT, dated as of October 28, 2002 (this
"Agreement"), made by ORION POWER CAPITAL, LLC, a Delaware limited liability
company ("Pledgor"), as the obligor hereunder, to BANK OF AMERICA, N.A., as
administrative agent (in such capacity, together with any successors and
assigns, the "OPNY Administrative Agent") for the benefit of the Secured Parties
(as defined in the Credit Agreement defined below).
W I T N E S S E T H:
WHEREAS, Pledgor is the owner of (a) all the issued and outstanding
shares of the Capital Stock of Orion Power MidWest GP, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "GP
Company"); such shares consisting of 100 shares of common stock more fully
described on Annex A hereto (the "GP Pledged Shares") and (b) all the issued and
outstanding shares of the Capital Stock of Orion Power MidWest LP, Inc., a
corporation organized and existing under the laws of the State of Delaware
(together with any successor limited liability company, the "LP Company", and
together with the GP Company, the "Companies"); such shares consisting of 100
shares of Capital Stock more fully described on Annex A hereto (including any
membership interests of a limited liability company successor to Orion Power
MidWest L.P., Inc., the "LP Pledged Shares", and, together with the GP Pledged
Shares, the "Pledged Shares");
WHEREAS, the GP Company is the sole general partner of Orion Power
MidWest, L.P., a Delaware limited partnership (the "OPMW Borrower"), and the LP
Company is the sole limited partner of the OPMW Borrower;
WHEREAS, Orion Power New York, L.P. (the "OPNY Borrower") has entered
into an Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPNY Credit Agreement"), with Bank of America, N.A., as
Administrative Agent (the "OPNY Administrative Agent"), Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, Union Bank
of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman
Island Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "OPNY Lenders"),
pursuant to which the OPNY Lenders have agreed, inter alia, to renew, modify and
extend credit facilities that were issued to the OPNY Borrower to finance a
portion of the purchase price of the Portfolio Assets and to provide working
capital availability to the OPNY Borrower;
WHEREAS, the OPMW Borrower has entered into a Second Amended and
Restated Credit Agreement, dated as of the Restructuring Effective Date (as the
same may be amended, supplemented or otherwise modified from time to time, the
"OPMW Credit Agreement"), with the OPMW Administrative Agent, Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, The Bank
of Nova Scotia, Mizuho Corporate Bank, Ltd, and Bayerische
Hypo-Und Vereinsbank AG New York Branch, as documentation agents, and the
Lenders named on the signature pages thereto and from time to time parties
thereto (the "OPMW Lenders"), pursuant to which the OPMW Lenders have agreed,
inter alia, to renew, modify and extend credit facilities that were issued to
the OPMW Borrower to finance a portion of the purchase price of the Portfolio
Assets (as defined in the OPMW Credit Agreement) and to provide working capital
availability to the OPMW Borrower;
WHEREAS, Pledgor has entered into that certain Stock Pledge Agreement,
dated as of the Restructuring Effective Date (as the same may be amended,
supplemented or otherwise modified from time to time, the "First Lien Stock
Pledge Agreement"), in favor of the OPMW Administrative Agent, pursuant to which
Pledgor has, among other things, granted a first priority pledge, assignment and
security interest in the Collateral to the OPMW Administrative Agent;
WHEREAS, the OPMW Administrative Agent, the OPNY Administrative Agent,
the OPMW Lenders, the OPNY Lenders and Bank of America, N.A., as collateral
agent have entered into a Collateral Agency and Intercreditor Agreement, dated
as of the Restructuring Effective Date (the "Intercreditor Agreement");
WHEREAS, Pledgor and the Collateral Agent have entered into that certain
Deposit Account Agreement, dated as of the Restructuring Effective Date (as the
same may be amended, supplemented or otherwise modified from time to time, the
"Holdco Deposit Account Agreement"); and
WHEREAS, it is a condition precedent to the obligations of the OPNY
Lenders under the Credit Agreement that this Agreement shall have been entered
into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to induce
the OPNY Lenders to enter into the Credit Agreement, to continue to make
available to the Borrower the credit facilities evidenced by the OPNY Credit
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions: Construction.
(a) For the purposes of this Agreement, the following terms shall
have the meaning assigned to them in Article I of the OPNY Credit Agreement:
Acceptable Reserves; Affiliate; Capital Stock; Collateral Agent; Commitments;
Contractual Obligations; Credit Party; Events of Default; Financing Documents;
Governing Documents; Governmental Approval; Holdco Guarantee; Holdco New York
Second Lien Stock Pledge Agreement; Insurance Proceeds; Lead Arrangers; Lien;
Notes; Obligations; Person; Portfolio Assets; Operational Plans; OPMW Guarantee;
OPMW Obligations; OPMW Second Lien Documents, Requirement of Law; Restructuring
Effective Date; Secured Parties; Sponsor; and Transaction Documents.
(b) When used in this Agreement: (i) "or" is not exclusive; (ii) a
reference to a Requirement of Law includes any amendment or modification to such
Requirement of Law; (iii)
2
a reference to a Person includes its permitted successors and permitted assigns;
(iv) a reference to an agreement, instrument or document shall include such
agreement, instrument or document and all exhibits and schedules thereto as the
same may be amended, modified or supplemented from time to time in accordance
with its terms and as permitted by the Financing Documents; and (v) the words
"include," "includes," and "including" mean "including without limitation".
(c) In addition, wherever used in this Agreement and unless the
context otherwise requires, the following terms shall have the following
meanings:
"AGREEMENT" shall mean this Second Lien Stock Pledge Agreement.
"COLLATERAL" shall have the meaning specified in Section 2.
"COMPANIES" shall have the meaning provided in the Recitals to
this Agreement.
"GP COMPANY" shall have the meaning provided in the Recitals to
this Agreement.
"GP PLEDGED SHARES" shall have the meaning provided in the
Recitals to this Agreement.
"HOLDCO ACCOUNTS" shall have the meaning assigned the term
"Accounts" in the Holdco Deposit Account Agreement.
"HOLDCO DEPOSIT ACCOUNT AGREEMENT" shall have the meaning
provided in the Recitals to this Agreement.
"HOLDCO OPERATING AGREEMENT" shall mean the limited liability
company agreement for the Pledgor in effect as of the Restructuring Effective
Date.
"INTERCREDITOR AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
"LP COMPANY" shall have the meaning provided in the Recitals to
this Agreement.
"LP PLEDGED SHARES" shall have the meaning provided in the
Recitals to this Agreement.
"NON-RECOURSE PARTY" shall have the meaning provided in Section
28.
"OPMW ADMINISTRATIVE AGENT" shall have the meaning provided in
the Recitals to this Agreement.
"OPMW BORROWER" shall have the meaning provided in the Recitals
to this Agreement.
3
"OPMW CREDIT AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
"OPMW LENDERS" shall have the meaning provided in the Recitals
to this Agreement.
"OPERATING AGREEMENT" shall have the meaning specified in
Section 2(a)(iii).
"OPNY ADMINISTRATIVE AGENT" shall have the meaning provided in
the first paragraph of this Agreement.
"OPNY BORROWER" shall have the meaning provided in the Recitals
to this Agreement.
"OPNY CREDIT AGREEMENT" shall have the meaning provided in the
Recitals to this Agreement.
"OPNY LENDERS" shall have the meaning provided in the Recitals
to this Agreement.
"PLEDGED SHARES" shall have the meaning provided in the Recitals
to this Agreement.
"PLEDGOR" shall have the meaning provided in the first paragraph
of this Agreement.
"SECURED OBLIGATIONS" shall have the meaning provided in Section
3.
SECTION 2. Pledge; Assignment; Grant of Security Interest(a) . (a) To
secure the payment of the Secured Obligations, Pledgor hereby pledges, grants,
hypothecates, assigns, transfers and sets over to the OPNY Administrative Agent,
and hereby grants to the OPNY Administrative Agent a security interest of second
priority in, and hereby delivers unto, endorses to, and registers a Lien in
favor of the OPNY Administrative Agent (in each case for the benefit of the
Secured Parties) in the following (collectively, the "Collateral"):
(i) the Pledged Shares and any certificates or instruments
representing the Pledged Shares, accompanied by duly executed powers in
blank, and all cash, securities, dividends and other property at any
time in the future and from time to time received, receivable or
otherwise distributed, in respect of or in exchange for any or all of
the Pledged Shares;
(ii) all securities hereafter delivered to the OPNY
Administrative Agent in substitution for or in addition to any of the
foregoing, any certificates representing or evidencing such securities,
and all cash, securities, dividends and other property, at any time and
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the foregoing;
4
(iii) all other claims of any kind or nature, and any
instruments, certificates, chattel paper or other writings evidencing
such claims, including, upon the conversion of the LP Company to a
limited liability company, the limited liability company agreement
relating to the LP Company (the "Operating Agreement"), whether in
contract or tort, and whether arising by operation of law, consensual
agreement or otherwise, at any time acquired by Pledgor in respect of
any or all of the foregoing collateral against the LP Company, including
(A) all claims of Pledgor for damages arising out of or for breach of or
default under the Operating Agreement, (B) the right of Pledgor to
terminate the Operating Agreement, to perform and exercise consensual or
voting rights thereunder and to compel performance and otherwise
exercise all remedies thereunder, (C) all rights of Pledgor as a member
of the LP Company, to any property and assets of the LP Company (whether
real property, inventory, equipment, contract rights, accounts,
receivables, general intangibles, securities, instruments, chattel
paper, documents, chooses in action or otherwise) ; and
(iv) all proceeds of any of the foregoing including (A) all
rights of Pledgor to receive monies due and to become due under or
pursuant to the foregoing collateral, (B) all rights of Pledgor to
receive a return of any insurance premiums or Insurance Proceeds or
other proceeds of any indemnity, warranty or guarantee with respect to
the foregoing collateral, and (C) to the extent not included in the
foregoing, all additions to and replacements of the foregoing collateral
and all proceeds (including proceeds that constitute property of the
types described above) receivable or received when any and all of the
foregoing collateral is sold, collected, exchanged or otherwise disposed
whether voluntarily or involuntarily.
(b) Notwithstanding anything to the contrary contained in Section
2(a), if any Pledged Share (whether now owned or hereafter acquired) is
evidenced by an uncertificated security, Pledgor shall promptly notify the OPNY
Administrative Agent thereof and shall promptly take all actions required to
perfect the security interest of the OPNY Administrative Agent under applicable
law (including under the Uniform Commercial Code as adopted in any appropriate
jurisdiction). Pledgor further agrees to take such actions as the OPNY
Administrative Agent deems necessary or desirable to effect the foregoing and to
permit the OPNY Administrative Agent to exercise any of its rights and remedies
hereunder, and agrees to provide an opinion of counsel reasonably satisfactory
to the OPNY Administrative Agent with respect to any such pledge of
uncertificated Pledged Shares promptly upon written request of the OPNY
Administrative Agent.
SECTION 3. Security for Secured Obligations. This Agreement is for the
benefit of the OPNY Administrative Agent and the other Secured Parties to secure
(i) the prompt and complete payment and performance when due by the OPMW
Borrower of all of the obligations under the OPMW Guarantee (collectively, the
"Secured Obligations").
SECTION 4. No Subrogation. Pledgor shall not exercise any rights which
it may acquire by way of subrogation, reimbursement, contribution, or offset
under this Agreement, by any payments made hereunder or otherwise, until all
Secured Obligations and all the Notes, together with interest, shall have been
indefeasibly paid in full in cash and all Commitments have
5
been terminated. If any amount shall be paid to Pledgor on account of such
subrogation rights at any time when all Secured Obligations and the Notes,
together with interest shall not have been indefeasibly paid in full in cash
(whether pursuant to a claim in any bankruptcy or similar proceeding or
otherwise) or when any Commitment shall remain outstanding, such amount shall be
held in trust for the benefit of the OPNY Administrative Agent and the Secured
Parties and shall forthwith be paid to the OPNY Administrative Agent to be
credited and applied to the Secured Obligations, whether matured or unmatured,
in accordance with Section 16.
SECTION 5. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the OPMW Administrative Agent pursuant to the First Lien
Stock Pledge 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, in accordance with the terms of the Intercreditor Agreement and
otherwise in form and substance satisfactory to the OPNY Administrative Agent.
During any period after the First Lien Stock Pledge Agreement has been
terminated in accordance with its terms, the OPNY Administrative Agent shall
have the right, upon the occurrence and continuance of an Event of Default, in
its discretion and without notice to Pledgor, to transfer to or to register in
the name of the OPNY Administrative Agent or any of its nominees any or all of
the Collateral then held by the OPNY Administrative Agent, subject only to
compliance with Requirements of Law, the terms and conditions of the OPNY Credit
Agreement and the Intercreditor Agreement and the revocable rights specified in
Section 9 and Section 29. In addition, to the extent certificates or instruments
are held by the OPNY Administrative Agent, the OPNY Administrative Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
SECTION 6. Reinstatement. This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor or any other Credit Party,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, Pledgor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is a limited liability company, duly formed, validly
existing and in good standing under the laws of the State of Delaware, (ii) has
all requisite power and authority to own its property and assets, to borrow
money and to transact the business in which it is presently engaged and in which
it proposes to be engaged, (iii) has duly qualified and is authorized to do
business and is in good standing in every jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified could not reasonably be
expected to have a material adverse effect on any Portfolio Asset, and (iv) is
in full compliance with its Governing Documents, all Contractual Obligations,
all applicable material Requirements of Law and all Governmental Approvals,
except in each case of this clause (iv), to the extent that the failure to
comply with any of the
6
foregoing could not reasonably be expected to have a Material Adverse Effect. As
of the date hereof, Pledgor is the owner of all the issued and outstanding
shares of the Capital Stock of each of the Companies.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary limited
liability company action, (iii) do not and will not contravene (A) its Governing
Documents or (B) any material Requirement of Law, any material Contractual
Obligation or any material Governmental Approval binding on or affecting it, and
(iv) do not and will not conflict with or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of its properties or assets
pursuant to the terms of any material Contractual Obligation binding on or
affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(d) No approval of any Person (except for any Governmental
Authority), except such as have been duly obtained, made or given, and are in
full force and effect, is required to authorize, or is required in connection
with (i) the execution, delivery or performance of this Agreement by Pledgor or
the consummation of any of the transactions contemplated hereby, (ii) the
legality, validity, binding effect or enforceability of this Agreement or the
perfection and maintenance of the security interest created hereby (including
the second priority nature of such security interest) or (iii) subject to the
terms of Section 29 hereof and the Intercreditor Agreement, for the exercise by
the OPNY Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (including Section 29 hereof and the Intercreditor Agreement) except,
in each case, for any approval of any such Person the absence of which could not
reasonably be expected to have a material adverse effect on the ability of the
Administrative Agent to exercise voting rights or remedies in respect of the
Collateral.
(e) This Agreement creates a valid security interest in the
Collateral purported to be pledged and assigned by Pledgor hereunder securing
the payment of the Secured Obligations.
(f) The Pledged Shares consist of the number and type of shares of
the Capital Stock of the Companies, as described in Annex A. All of the Pledged
Shares are certificated securities.
(g) The Pledged Shares are, and along with any securities pledged in
substitution therefor or in addition thereto will be, duly and validly issued,
fully paid and nonassessable and duly and validly pledged hereunder in
accordance with all applicable Requirements of Law, and Pledgor warrants,
covenants and agrees to defend the Collateral Agent's right, title and interest
in
7
and to the Pledged Shares and all other Collateral against the claims and
demands of all Persons whomsoever.
(h) Pledgor is the record, legal and beneficial owner of, and has
good title to all of the Pledged Shares and all other Collateral purported to be
pledged and assigned by it hereunder, free and clear of all Liens and other
claims, security interests, mortgages, pledges and other encumbrances of every
nature whatsoever, except Liens in favor of the OPMW Administrative Agent and
the OPNY Administrative Agent, and it has the right to pledge the Pledged Shares
and all other Collateral as herein provided.
(i) The Pledged Shares constitute and any securities pledged in
substitution therefor, or in addition thereto shall as of the date thereof
constitute one hundred percent (100%) of all the issued and outstanding Capital
Stock of the Companies. The Companies do not have outstanding (i) any securities
convertible into or exchangeable for their Capital Stock or (ii) any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement, or any options for the purchase of, or any agreement, arrangements or
understandings providing for the issuance of its Capital Stock.
(j) Each certificate evidencing the Pledged Shares is issued in the
name of Pledgor and each such certificate has been duly endorsed and executed in
blank or has attached thereto a power substantially in the form of Annex B duly
signed in blank by the appropriate officer of Pledgor. Each such power will give
the OPNY Administrative Agent the rights and authority it purports to give.
(k) Upon receipt by the OPNY Administrative Agent of the
certificates representing the Pledged Shares (which either have been duly
executed in blank or have attached thereto powers substantially in the form of
Annex B duly signed in blank by the appropriate officer of Pledgor), the
security interest described in this Agreement will represent a valid and
perfected second priority lien on, and security interest in, the Collateral, in
favor of the OPNY Administrative Agent for the benefit of the Secured Parties.
(l) Pledgor has not executed, or authorized and there does not
currently exist, any effective financing statement or other instrument similar
in effect that is on file in any recording office covering all or any part of
Pledgor's interest in the Collateral, except such as may have been filed
pursuant to this Agreement or the other Financing Documents or the Financing
Documents (as defined in the OPMW Credit Agreement) (the "OPMW Financing
Documents"). Upon the completion of all filings and recordings described in
Annex C, no filings or recordings (including under the Uniform Commercial Code
as adopted in the State of New York and in the State of Delaware) will be
necessary to be made in order to perfect, protect and preserve the lien on and
security interest in the Collateral created by this Agreement.
(m) None of the Pledged Shares constitutes margin stock, as defined
in Regulation U of the Board of Governors of the Federal Reserve System.
(n) The Holdco Operating Agreement, a true and complete copy of
which has been furnished to the OPNY Administrative Agent, has been duly
authorized, executed and delivered
8
by Pledgor and is in full force and effect and is binding upon and enforceable
against Pledgor in accordance with its terms, except as enforcement thereof may
be subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (ii) general principles of equity. There exists no default under the Holdco
Operating Agreement.
(o) The chief place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the Collateral
is set forth under its name on the signature page hereof.
(p) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(q) No part of the Collateral is subject to the terms of any
agreement restricting the sale or transfer of such Collateral, except for the
Operating Agreement, Holdco Operating Agreement and the Financing Documents and
the OPMW Financing Documents.
(r) Except as set forth on Schedule 4.05 of the OPMW Credit
Agreement, there is no (i) injunction, writ, preliminary restraining order or
order of any nature issued by an arbitrator, court or other Governmental
Authority against Pledgor in connection with the transactions provided for
herein, the other Transaction Documents or the Operational Plans, or (ii)
action, suit, arbitration, litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority pending against Pledgor or, to
Pledgor's knowledge, threatened against Pledgor which would reasonably be
expected to adversely affect the right or ability of Pledgor to fulfill its
obligations under this Agreement.
(s) Pledgor's obligations under this Agreement are not subject to
any offsets or defenses of any kind against the OPMW Borrower, the OPNY
Borrower, the OPMW Administrative Agent, the OPNY Administrative Agent or the
Secured Parties.
(t) Pledgor has, independently and without reliance upon the OPNY
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
(u) Pledgor is not (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the United States
of America Investment Company Act of 1940, as amended, or an "investment
advisor" within the meaning of the United States of America Investment Advisors
Act of 1940, as amended or (ii) subject to regulation by the Securities and
Exchange Commission under PUHCA as a "public-utility company," an "electric
utility company," a "holding company," or a subsidiary or affiliate of any of
the foregoing. No certification of a state public utility commission pursuant to
Section 33(a)(2) of PUHCA is required as a result of the investment of Pledgor
in the Companies.
(v) (i) Upon its execution and delivery, the Operating Agreement,
a true and complete copy of which will be furnished to the OPNY
Administrative Agent, will have been duly authorized, executed and
delivered by Pledgor and will be in full force and
9
effect and is binding upon and enforceable against Pledgor in accordance
with its terms, except as enforcement thereof may be subject to (i) the
effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
(ii) general principles of equity.
(ii) Pledgor shall at its expense perform and observe all the
terms and provisions to be performed or observed by it under the
Operating Agreement, maintain the Operating Agreement in full force and
effect, enforce the Operating Agreement in accordance with its terms,
and take all such action to such end as may be from time to time
reasonably requested by the OPNY Administrative Agent.
(iii) Pledgor shall not:
(A) cancel or terminate the Operating Agreement or
consent to or accept any cancellation or termination thereof;
(B) amend or otherwise modify in a material respect
the Operating Agreement; or
(C) waive any material default under or material
breach of the Operating Agreement.
SECTION 8. Further Assurances(a). (a) Subject to and without limiting
Section 7(k) and Section 29 hereof and the Intercreditor Agreement, Pledgor
agrees that from time to time, at the expense of Pledgor, Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary, or that the OPNY Administrative Agent may
reasonably request, in order to perfect and protect the pledge, assignment,
hypothecation and security interest granted or purported to be granted hereby or
to enable the OPNY Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral, including entering into any
amendment or restatement of this Agreement in connection with the conversion of
the LP Company to a limited liability company pursuant to the terms and
conditions of the LP Guarantee, filing financing statements, paying fees,
charges and expenses related thereto, and causing the LP Company to register the
security interests hereunder in the name of the OPNY Administrative Agent in the
register maintained for such purpose at the chief executive office and principal
place of business of such LP Company. Without limiting the generality of the
foregoing, Pledgor will (i) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary, or as the OPNY Administrative Agent may reasonably request, in
order to perfect and preserve the assignment, hypothecation and security
interest granted or purported to be granted hereby; and (ii) mark conspicuously,
at the request of the OPNY Administrative Agent, each of its records pertaining
to the Collateral with a legend, in form and substance reasonably satisfactory
to the OPNY Administrative Agent, indicating that the Collateral has been
assigned and is subject to the security interest pursuant hereto.
(b) Pledgor hereby further authorizes the OPNY Administrative Agent
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of
10
the Collateral without the signature of Pledgor where permitted by law. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) Pledgor shall not
be entitled to receive any payments or other distributions receivable by it
under the Operating Agreement except as expressly permitted for deposit in the
Holdco Accounts pursuant to the terms and conditions of the Holdco Deposit
Account Agreement. Unless and until an Event of Default shall have occurred and
be continuing, and Pledgor shall have been notified by the OPNY Administrative
Agent of the Secured Parties' written election to exercise remedies hereunder,
but subject, nevertheless, at all times to the restrictions imposed by the terms
and conditions of the OPMW Credit Agreement during any period after the First
Lien Stock Pledge Agreement has terminated in accordance with its terms, Pledgor
shall be entitled to exercise any voting and other corporate rights with respect
to the Pledged Shares or any securities pledged in substitution therefor or in
addition thereto for any purpose, and in any manner, not in violation of or
inconsistent with the terms of this Agreement or any other Financing Document;
provided, however, that, Pledgor shall not exercise or refrain from exercising
any such voting and other rights if it could reasonably be anticipated that such
action or inaction would have an adverse effect on the creation, attachment,
perfection or priority of the security interests herein granted. Upon Pledgor's
receipt of a notice in accordance with the first sentence of this Section 9, and
during the continuance of an Event of Default, all such rights of Pledgor to
vote and to give consents, waivers and ratifications shall be exercisable solely
by the OPNY Administrative Agent in accordance with Section 15.
(b) Pledgor shall not be entitled to receive any cash or non-cash
dividends or distributions otherwise payable in respect of the Pledged Shares,
except any cash distributions expressly permitted for deposit in the Holdco
Accounts pursuant to the terms and conditions of the Holdco Deposit Account
Agreement. Non-cash dividends or distributions and dividends and distributions
paid or payable in cash in respect of any such Collateral in connection with a
partial or total liquidation or dissolution of any of the Companies or the
Borrower Entities, shall be, and shall be forthwith delivered to the OPNY
Administrative Agent to hold as Collateral and shall, if received by Pledgor, be
received in trust for the benefit of the OPNY Administrative Agent, be
segregated from the other property or funds of Pledgor and be promptly delivered
to the OPNY Administrative Agent as Collateral in the same form as so received
(with any necessary endorsement or assignment). The OPNY Administrative Agent
shall also be entitled at all times to receive directly, and to retain as part
of the Collateral all other or additional stock or other securities or property
(including cash) issued, paid or distributed for any reason in respect of the
Pledged Shares or other Collateral.
(c) Subject to the terms and conditions of the Holdco Deposit
Account Agreement, upon the occurrence and during the continuance of an Event of
Default during any period in which the First Lien Stock Pledge Agreement has
terminated in accordance with its terms, immediately upon Pledgor's receipt of
written notice from the OPNY Administrative Agent that the OPNY Administrative
Agent intends to act pursuant to this clause (c), all rights of Pledgor to
exercise or refrain from exercising the voting and other corporate rights which
it would otherwise be entitled to exercise shall thereupon become exercisable by
the OPNY Administrative Agent,
11
acting in good faith, who shall have the sole right to exercise or refrain from
exercising such voting and other corporate rights unless and until such Event of
Default ceases to exist.
SECTION 10. Place of Organization; Place of Perfection; Records. Pledgor
is organized in the State of Delaware, and Pledgor's exact legal name is Orion
Power Capital, LLC. Pledgor has no trade name. Pledgor will not change its
jurisdiction of organization or its name without having given the OPNY
Administrative Agent not less than thirty (30) days' prior written notice of its
intention to do so, clearly describing to the OPNY Administrative Agent such new
jurisdiction or name and providing such other information and taking any action
in connection therewith as the OPNY Administrative Agent may reasonably request,
including all action necessary or requested by the OPNY Administrative Agent to
maintain the security interest of the OPNY Administrative Agent in the
Collateral intended to be granted hereby at all times fully perfected, of second
priority and in full force and effect. Pledgor shall keep its place of business
and chief executive office and the office where it keeps its records concerning
the Collateral, and of all other chattel paper which evidence the Collateral, at
its address specified on the signature pages hereof, or, upon thirty (30) days'
prior written notice to the OPNY Administrative Agent, at such other location in
a jurisdiction where all action required by Section 8 shall have been taken with
respect to the Collateral. Pledgor will hold and preserve such records and will
permit representatives of the OPNY Administrative Agent at any time, upon
reasonable prior notice, during normal business hours to inspect and make
abstracts from such records.
SECTION 11. Covenants. Pledgor covenants and agrees that so long as any
OPNY Lender shall have any Commitment outstanding, and until the Notes, together
with interest, and all other Secured Obligations are indefeasibly paid in full
in cash, unless the OPNY Administrative Agent shall otherwise consent in
writing:
(a) Maintenance of Register. Pledgor shall cause each Company to
maintain at all times a register at its chief place of business and chief
executive office in which the security interest in the Collateral granted hereby
to the OPNY Administrative Agent, to the extent that the same constitutes
"uncertificated securities" (as defined in the Delaware Uniform Commercial
Code), shall be evidenced.
(b) Preservation of Existence, Etc. Except in connection with the
conversion of the LP Company into a limited liability company, Pledgor shall
preserve and maintain, and shall cause each of the Companies and the Borrower
and its Subsidiaries to preserve and maintain, its lawful existence under the
laws of the state of organization and its qualification to do business in every
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified could not reasonably be expected to have a material adverse effect on
any Portfolio Asset. Pledgor shall preserve and maintain all of its rights
(charter and statutory), privileges and franchises necessary or desirable for
the conduct of its business in accordance with the Transaction Documents.
(c) Compliance with Law. Pledgor shall comply with all Requirements
of Law and Governmental Approvals applicable to it, except when any such
Requirement of Law or Governmental Approval is being contested in good faith and
by appropriate proceedings and for which Acceptable Reserves have been
established, or except in each case where the failure to so
12
comply could not reasonably be expected to have a material adverse effect on any
Portfolio Asset.
(d) Change in Nature of Business. Pledgor shall not engage in any
business other than being the sole shareholder of the Companies, Orion Power New
York GP, Inc. and Orion Power New York LP, Inc., and maintaining, and
distributing cash to and from, the Holdco Accounts pursuant to the Holdco
Deposit Account Agreement. Except in accordance with a conversion of the LP
Company to limited liability company as contemplated by the LP Guarantee,
Pledgor shall not cause or permit either Company to change its legal form or
Governing Documents (other than to (i) change its name, (ii) add, replace or
eliminate offices and/or officers, and/or (iii) replace any director, or add to
or reduce the number of directors comprising the board so long as such addition,
replacement or reduction does not eliminate the independent director or modify
the nature or extent of the independent director's powers in any way), change
its fiscal year or engage in any business other than, with regard to Orion Power
MidWest GP, Inc., being the managing member of Twelvepole Creek, LLC, and with
regard to Orion Power MidWest LP, Inc., being a limited partner or other equity
owner of the OPMW Borrower.
(e) Jurisdiction of Organization. Except in accordance with the
conversion of the LP Company to a limited liability company in the manner
contemplated and permitted under Section 7 of the LP Guarantee, Pledgor shall
cause each of the Companies at all times to be a corporation organized under the
laws of the State of Delaware. Pledgor shall at all times be a limited liability
company organized under the laws of the State of Delaware.
(f) Bankruptcy. Pledgor shall not file a voluntary petition
concerning itself, or commence proceedings to have any of the Companies, the
OPMW Borrower or any of its Subsidiaries adjudicated bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against
itself, any of the Companies, the OPMW Borrower or any of its Subsidiaries, or
file a petition seeking or consenting to reorganization or relief of itself, any
of the Companies, the OPMW Borrower or any of its Subsidiaries as debtor under
any applicable federal or state law relating to bankruptcy, insolvency, or other
relief from debtors, if any, with respect to itself, any of the Companies, the
OPMW Borrower or any of its Subsidiaries, or seek or consent to the appointment
of any trustee, receiver, conservator, assignee, sequestrator, custodian,
liquidator (or other similar official) of any of the Companies, the OPMW
Borrower or any of its Subsidiaries or of all or any substantial part of the
properties and assets of itself, any of the Companies, the OPMW Borrower or any
of its Subsidiaries, or make any general assignment for the benefit of
creditors, if any, of itself, any of the Companies, the OPMW Borrower or any of
its Subsidiaries, or admit in writing the inability of itself, any of the
Companies, the OPMW Borrower or any of its Subsidiaries to pay its debts
generally as they become due or declare or effect a moratorium on the debt, if
any, of itself, any of the Companies, the OPMW Borrower or any of its
Subsidiaries or take any action in furtherance of any of the foregoing.
(g) Taxes. Pledgor shall cause to be paid or discharged (whether by
it or any of its Affiliates, or otherwise) all taxes, assessments and
governmental charges or levies lawfully imposed upon it, any of the Companies,
the OPMW Borrower or any of its Subsidiaries or upon any of their respective
income or profits or upon any of the Portfolio Assets or the Collateral and
13
all lawful claims or obligations that, if unpaid, would become a Lien upon the
Collateral (as defined in the OPNY Credit Agreement), whether real or personal,
the Collateral (as defined in this Agreement) or upon any part thereof. Pledgor
or the applicable Company, the OPMW Borrower or any of its Subsidiaries shall
have the right, however, to contest in good faith the validity or amount of any
such tax, assessment, charge, levy, claim or obligation by proper proceedings,
and may permit the taxes, assessments, charges, levies, claims or obligations so
contested to remain unpaid during the period of such contest if: (i) Pledgor or
such Company, the OPMW Borrower or any of its Subsidiaries diligently prosecutes
such contest in good faith and by appropriate proceedings and for which
Acceptable Reserves have been established; (ii) during the period of such
contest, the enforcement of any contested item is effectively stayed; and (iii)
the failure to pay or comply with the contested item could not reasonably be
expected to result in an adverse effect on the Collateral taking into account
the existence of such Acceptable Reserves.
(h) Operations Matters. In the conduct its business and operations,
Pledgor shall, and shall cause each of the Companies to:
(i) maintain books and records, separate from those of any
other Person;
(ii) maintain its bank accounts and all its other assets
separate from those of any other Person;
(iii) hold regular member, partnership or shareholder
meetings, as appropriate, to conduct its business, and observe all other
limited liability company, partnership or corporate formalities, as the
case may be;
(iv) hold itself out to creditors and the public as a legal
entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part of a
consolidated or combined group, then it will be shown as a separate
member of such group, including in a footnote(s) to the relevant
financial statements disclosing its separate existence and identity and
the existence of its own assets;
(vi) allocate and charge fairly and reasonably any common
employee or overhead shared with Affiliates;
(vii) transact all business with Affiliates on an arm's-length
basis and to enter into transactions with Affiliates on an arm's-length
basis;
(viii) conduct business in its own name;
(ix) with regard to each Company, maintain a sufficient
number of employees in light of such Company's contemplated business
operations;
(x) correct any misunderstanding regarding its separate
identity of which Pledgor has actual knowledge;
14
(xi) not identify itself in writing as a division of any
other Person; and
(xii) maintain adequate capital in light of its contemplated
business operations.
(i) Assets. Pledgor shall not own or acquire ownership interest in
any Person other than the Companies, Orion Power New York GP, Inc. and Orion
Power New York, Inc. (or any successor limited liability company) and other
assets having an aggregate value in excess of $50,000, and shall not sell,
assign (by operation of law or otherwise) or otherwise dispose of any interest
in any of the Collateral.
(j) Indebtedness. Pledgor shall not incur Indebtedness, other than
pursuant to the Holdco Guarantees, or make any loan or advances to any other
Person except loans or advances permitted under the Holdco Deposit Account
Agreement.
(k) Distributions. Pledgor shall not declare any dividends or make
any distributions to any Person, except strictly in accordance with the Holdco
Deposit Account Agreement.
(l) Merger. Pledgor shall not merge or be consolidated with any
Person.
(m) Holdco Operating Agreement. Pledgor shall not change its legal
form or amend, or otherwise modify, the Holdco Operating Agreement or any of its
other Governing Documents (other than to (i) change its name, (ii) add, replace
or eliminate offices or officers, if any, or (iii) replace any Manager or add to
or reduce the number of Managers so long as such addition, replacement or
reduction does not eliminate the independent Manager or modify the nature or
extent of the independent Manager's powers in any way) or cancel or terminate
the Holdco Operating Agreement or consent to or accept any cancellation or
termination thereof, nor shall it change its fiscal year.
(n) Contributions. Pledgor shall not make any equity investment or
contributions of capital to any Subsidiary except in accordance with the Holdco
Deposit Account Agreement.
(o) Pledged Shares.
(i) Pledgor shall defend the OPNY Administrative Agent's
right, title and interest in and to the Pledged Shares and all other
Collateral against the claims and demands of all Persons whomsoever.
(ii) The Pledged Shares, and any securities pledged in
substitution therefor or in addition thereto, shall at all times
constitute, one hundred percent (100%) of all the issued and outstanding
Capital Stock of the Companies.
(iii) Pledgor shall not authorize the issuance by the
Companies of any additional membership interests or stock of the
Companies, (whether common or preferred and whether of a class now or
hereafter existing) unless concurrently with such issuance all such
stock is owned by Pledgor and made subject to the subordinated pledge of
shares hereunder. If Pledgor shall acquire (by purchase, stock dividend
or otherwise) any additional membership interests or stock in the
Companies at any time or from time
15
to time after the date hereof, Pledgor will promptly pledge and deposit
or cause to be deposited such membership interests or stock with the
OPNY Administrative Agent and deliver or cause to be delivered to the
OPNY Administrative Agent certificates therefor, accompanied by powers
duly executed in blank by Pledgor, and will promptly thereafter deliver
to the OPNY Administrative Agent a certificate executed by any
Responsible Officer of Pledgor describing such shares and certifying
that the same have been duly pledged with the OPNY Administrative Agent
hereunder.
(iv) Any security pledged in substitution of the Pledged
Shares or in addition to the Pledged Shares will be (A) duly and validly
issued, fully paid and nonassessable and duly and validly pledged
hereunder in accordance with all applicable Requirements of Law and (B)
issued in the name of Pledgor and when issued will then have been duly
endorsed and executed in blank or when issued will then have, attached
thereto a power substantially in the form of Annex B duly signed in
blank by the appropriate officer of Pledgor. Each such power will give
the OPMW Administrative Agent the rights and authority it purports to
give. Upon receipt by the OPMW Administrative Agent of such new
certificates (which either will have been duly executed in blank or will
have attached thereto such powers in favor of the OPMW Administrative
Agent), the security interest described in this Agreement will attach
thereto and will represent a valid and perfected second priority on and
security interest in such Collateral, in favor of the OPNY
Administrative Agent for the benefit of the Secured Parties.
(v) Pledgor shall not execute or authorize to be filed in
any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed
or to be filed in respect of and covering the security interests granted
hereby by Pledgor or granted by Pledgor in the First Lien Stock Pledge
Agreement.
(vi) Pledgor shall not hereafter create or permit to exist
any Lien, security interest or other charge, encumbrance or other
security arrangement upon or with respect to, any of the Collateral
(other than Liens created under this Agreement or the First Lien Stock
Pledge Agreement).
(p) Share Transfer Restrictions. Pledgor shall not sell, assign,
transfer or permit to be sold, assigned or transferred any of its interests in
the Companies, whether directly or indirectly.
SECTION 12. OPNY Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the OPNY Administrative Agent
hereunder. Pledgor hereby appoints the OPNY Administrative Agent as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time in the OPNY Administrative
Agent's discretion at any time that an Event of Default shall have occurred and
be continuing during any period after the First Lien Stock Pledge Agreement has
terminated in accordance with its terms, to take any action and to execute any
instrument which the OPNY Administrative Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including to ask, demand, collect,
sue for, recover, compound, receive and give acceptance and receipts for moneys
due and to become due under or in connection with the
16
Collateral, to receive, indorse, and collect any drafts or other instruments,
documents and chattel paper in connection therewith, and to file any claims or
take any action or institute any proceedings which the OPNY Administrative Agent
may deem to be necessary or desirable for the collection thereof. Such
appointment is coupled with an interest and is irrevocable. The OPNY
Administrative Agent shall have the right to appoint one or more agents for the
purpose of retaining physical possession of the Pledged Shares and other
Collateral, which may be held (in the discretion of the OPNY Administrative
Agent) in the name of Pledgor, endorsed or assigned in blank or in favor of the
OPNY Administrative Agent or any nominee or nominees of the OPNY Administrative
Agent or an agent appointed by the OPNY Administrative Agent.
SECTION 13. Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the OPNY Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the OPNY
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 19(b).
SECTION 14. Duties of the OPNY Administrative Agent, Pledgor, the
Companies and the Borrower. (a)The powers conferred on the OPMW Administrative
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the OPNY Administrative Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral,
and no such duties shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the
contrary notwithstanding, that Pledgor, each Company and the OPNY Borrower and
each of its Subsidiaries shall remain liable to perform all of their respective
obligations, if any, assumed by them with respect to the Collateral and the OPNY
Administrative Agent and the OPNY Lenders shall have no obligations or
liabilities (other than obligations or liabilities resulting from the OPNY
Administrative Agent's or any OPNY Lender's gross negligence or willful
misconduct) with respect to any Collateral by reason of or arising out of or in
connection with this Agreement, nor shall the OPNY Administrative Agent or the
OPNY Lenders be required or obligated in any manner to perform or fulfill any of
the obligations of Pledgor, any of the Companies, the OPMW Borrower or any of
its Subsidiaries under or with respect to any Collateral.
SECTION 15. Remedies. If any Event of Default shall have occurred and be
continuing, subject to the terms and conditions of the Credit Agreement and this
Agreement and in compliance with Requirements of Law and the terms of the
Intercreditor Agreement:
(a) The OPNY Administrative Agent shall be entitled to exercise all
the rights, powers and remedies vested in it (whether vested in it by this
Agreement, the OPNY Credit Agreement or any other Financing Document or by law)
for the protection and enforcement of its rights in respect of the Collateral
and, without limitation of the foregoing, may cause all or any of the Pledged
Shares or other Collateral to be transferred into its name or that of a nominee
or nominees, and Pledgor shall, upon the request of the OPNY Administrative
Agent, execute such additional instruments and documents as are necessary to
effect such transfer;
17
(b) The OPNY Administrative Agent, without being required to give
any notice to Pledgor or the Companies (except in respect of actions taken
pursuant to Section 9(a)), shall be entitled to exercise the following rights,
which, Pledgor agrees, are commercially reasonable:
(i) to exercise any and all voting rights with respect to
the Pledged Shares and other Collateral, including the appointment and
removal of any proxy or proxies or substitute or substitutes;
(ii) to receive and retain, as collateral security for the
Secured Obligations, any and all dividends at any time and from time to
time declared or paid upon any of the Pledged Shares and other
Collateral otherwise payable to Pledgor;
(iii) to accept rights issues;
(iv) approve any liquidation or scheme of arrangement or any
other composition or arrangement with or for creditors, whether secured
or unsecured and whether formed pursuant to the order of any court or
otherwise, and to give any consent on behalf of Pledgor in relation
thereto;
(v) to attend meetings of creditors and vote;
(vi) to compromise claims in relation to or arising out of
the Pledged Shares;
(vii) to give sufficient receipts and discharges for all
monies to which Pledgor is or may become entitled in respect of the
Pledged Shares or any part thereof or which shall come into the hands of
the OPNY Administrative Agent, which receipts and discharges shall, to
the maximum extent permitted by Requirements of Law, exonerate the OPNY
Administrative Agent from all liability to see to the application
thereof or from being answerable for the loss or misapplication thereof;
(viii) to execute any documents which it may consider
expedient, in good faith, in relation to the foregoing as it shall in
its absolute discretion determine (but without any obligation to consult
with Pledgor) in relation to any exercise of any such right, power or
privilege; and
(ix) to institute, prosecute and defend any proceedings in
any court or tribunal in respect of any act or transaction referred to
in this Section 15(a).
(c) (i) Any Collateral repossessed by the OPNY Administrative
Agent under or pursuant to this Section 15 or any other provision hereof and in
accordance with Section 29 hereof and the Intercreditor Agreement, and any other
Collateral whether or not so repossessed by the OPNY Administrative Agent, may
be sold, assigned, leased, delivered or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place
of sale the property to be sold, and in general in such manner, at such time or
times, at such place or places and on such terms as the OPNY Administrative
Agent may, upon written direction in compliance with any mandatory requirements
of any Requirement of Law, determine to be commercially reasonable, including
sale on any securities exchange on which the Pledged
18
Shares, any security pledged in substitution therefor or in addition thereto or
any of them may then be listed.
(ii) Any disposition pursuant to subsection (i) above which
shall be a private sale or other private proceeding permitted by such
requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the OPNY Administrative Agent shall determine,
in its sole discretion, that any of the Pledged Shares or other
Collateral threatens to decline quickly in value or to become worthless,
any such sale may be made upon three days' notice to Pledgor) specifying
the time at which such disposition is to be made and the intended sale
price or other consideration therefor, and shall be subject, for the 10
days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for
such other consideration at least equal to the intended sale price or
other consideration so specified. To the extent permitted by
Requirements of Law, the OPNY Administrative Agent on behalf of the OPNY
Lenders may bid for and become the purchaser of the Collateral or any
item thereof, offered for sale in accordance with this Section 15.
(iii) If, under mandatory requirements of any Requirement of
Law, the OPNY Administrative Agent shall be required to make disposition
of the Collateral within a period of time which does not permit the
giving of notice to Pledgor as hereinabove specified, the OPNY
Administrative Agent need give Pledgor only such notice of disposition
as shall be reasonably practicable in view of such mandatory
requirements of any Requirement of Law.
(iv) The OPNY Administrative Agent, may without notice,
adjourn any public or private sale or cause the same to be adjourned
from time to time by announcement at the time and place fixed for sale,
and such sale may, without further notice, be made at the time and place
to which the same was so adjourned.
(v) For the purposes of this Section 15(c), an agreement to
sell any or all of the Pledged Shares or other Collateral entered into
following any Event of Default shall, to the extent permitted by
Requirements of Law, be treated as a sale thereof, and the OPNY
Administrative Agent shall be free to carry out such sale pursuant to
such agreement and Pledgor shall not be entitled to the return of any of
the Pledged Shares or other Collateral subject thereto notwithstanding
the fact that, the OPNY Administrative Agent shall have entered into any
such agreement, the Secured Obligations shall have been paid in full in
cash.
(vi) In any event, the OPNY Administrative Agent shall not be
obligated to make any sale of the Collateral if it shall determine not
to do so, regardless of the fact that notice of sale of the Collateral
may have been given.
(d) In case sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained until the
sale price is paid by the purchaser or purchasers thereof, but the OPNY
Administrative Agent shall not incur any liability in case any
19
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice.
(e) The OPNY Administrative Agent shall have the right, for and in
the name, place and stead of Pledgor, to execute endorsements, assignments or
other instruments of conveyance or transfer with respect to all or any of the
Pledged Shares and other Collateral in connection with any sale thereof in
accordance with Section 15(b) or (c). Neither the OPNY Administrative Agent nor
any other Secured Party shall be liable for failure to collect or realize upon
any or all of the Collateral or for any delay in so doing nor shall any of them
be under any obligation to take any action whatsoever with regard thereto.
(f) Upon any sale of the Collateral by the OPNY Administrative Agent
hereunder (whether by virtue of the power of sale herein, granted, pursuant to
judicial process or otherwise), the receipt of the OPNY Administrative Agent or
the officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the OPNY Administrative Agent or such officer or be answerable in any
way for the misapplication or nonapplication thereof.
(g) Waiver of Claims. Except as otherwise provided in this
Agreement, PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE OPNY
ADMINISTRATIVE AGENT TAKING POSSESSION OR THE OPNY ADMINISTRATIVE AGENT'S
DISPOSITION OF ANY OF THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE
HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL
SUBDIVISION OF ANY SUCH JURISDICTION, and Pledgor hereby further waives:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the gross negligence
or willful misconduct of either of the OPNY Administrative Agent or any
Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
OPNY Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any Requirements
of Law in order to prevent or delay the enforcement of this Agreement
(including any right to claim that such enforcement should be stayed
pending the outcome of any other action or proceeding (including any
arbitration proceeding)) or the absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such Requirements of Law.
20
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall, to the extent permitted by Requirements of Law, operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under Pledgor.
SECTION 16. Application of Proceeds. Notwithstanding any other provision
of this Agreement but subject to Section 29 hereof and the Intercreditor
Agreement, all payments made under or in connection with this Agreement, and all
moneys collected by the OPNY Administrative Agent upon any sale or other
disposition of the Collateral pursuant to Section 15, together with all other
moneys received by the OPNY Administrative Agent hereunder, shall be applied in
accordance with the Holdco Deposit Account Agreement and the Intercreditor
Agreement. For the avoidance of doubt, it is understood that Pledgor shall
remain liable to the extent of any deficiency between the amount of all moneys
collected by the OPNY Administrative Agent upon any such sale or other
disposition of the Collateral and the aggregate amount of the Secured
Obligations.
SECTION 17. Remedies Cumulative. No failure or delay on the part of the
OPNY Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the OPNY Administrative Agent or any Secured Party
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the OPNY
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the OPNY Administrative Agent or any Secured Party to any other or
further action in any circumstances without notice or demand.
SECTION 18. Discontinuance of Proceedings. In case the OPNY
Administrative Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the OPNY Administrative Agent, then and in
every such case Pledgor, the OPNY Administrative Agent and each holder of any of
the Secured Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the OPNY
Administrative Agent shall continue as if no such proceeding had been
instituted.
SECTION 19. Indemnity and Expenses. (a) Pledgor agrees to indemnify
and hold harmless the OPNY Administrative Agent and each Secured Party from and
against any and all claims, losses and liabilities arising out of or resulting
from the Collateral or Pledgor's pledge and assignment under this Agreement
(including enforcement against Pledgor of this
21
Agreement), except claims, losses or liabilities resulting from the OPNY
Administrative Agent's or any Secured Party's gross negligence or willful
misconduct.
(b) Pledgor will upon demand pay to the OPNY Administrative Agent or
any Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the OPNY Administrative Agent or any Secured Party may incur in connection with
(i) the administration of this Agreement, including the exercise or attempted
exercise of any right conferred on the OPNY Administrative Agent under or by
virtue of this Agreement or by statute, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the OPNY Administrative Agent or any Secured Party
hereunder against Pledgor or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 20. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the OPNY Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
SECTION 21. Security Interest Absolute. The obligations of Pledgor under
this Agreement are independent of the Secured Obligations, and subject to
Section 29 hereof, a separate action or actions may be brought and prosecuted
against Pledgor to enforce this Agreement, irrespective of whether any action is
brought against the OPNY Borrower, any other pledgor or any guarantor of the
Secured Obligations or whether the OPNY Borrower, any other pledgor or any
guarantor of the Secured Obligations is joined in any such action or actions.
All rights of the OPNY Administrative Agent and the assignment, hypothecation
and security interest hereunder, and all obligations of Pledgor hereunder, shall
be absolute and unconditional, to the extent permitted by applicable law,
irrespective of:
(a) any lack of validity or enforceability of this Agreement, the
OPNY Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor or any other Credit Party or any other Credit Party
(as defined in the OPMW Credit Agreement, an "OPMW Credit Party"), the recovery
of any judgment against Pledgor or any other Credit Party or any other OPNY
Credit Party, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including, (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor or any
other Credit Party or any OPNY Credit Party contained
22
in this Agreement, the OPNY Credit Agreement or any other Financing Document,
(ii) any impairment, modification, release or limitation of the liability of
Pledgor or any other Credit Party or any OPMW Credit Party or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable bankruptcy
law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by Pledgor, the OPNY Administrative Agent or any other
Secured Party of any rights or remedies, (iv) the assignment or the purported
assignment of any property as security for the Secured Obligations, including
all or any part of the rights of Pledgor under this Agreement, (v) the extension
of the time for payment by Pledgor or any other Credit Party or any OPMW Credit
Party or any other guarantor of any payments or other sums or any part thereof
owing or payable under any of the terms and provisions of any Financing Document
or of the time for performance by Pledgor or any other Credit Party or any OPMW
Credit Party of any other obligations under or arising out of any terms or
provisions or the extension of the renewal of any thereof, (vi) the modification
or amendment (whether material or otherwise) of any duty, agreement or
obligation of Pledgor or any other Credit Party set forth in any Financing
Document, (vii) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of, or other similar proceeding affecting Pledgor or any other Credit Party or
any OPMW Credit Party or any of their respective assets, or the disaffirmancy of
this Agreement or any Financing Document in any such proceeding, (viii) the
release or discharge of Pledgor or any other Credit Party or any OPMW Credit
Party from the performance or observance of any agreement, covenant, term or
condition contained in any of such instruments by operation of law, (ix) the
unenforceability of this Agreement or any Financing Document or (x) any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; or
(c) any exchange, sale, release or non-perfection of any Collateral,
or any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
SECTION 22. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the OPNY Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any address or
telecopy number which such party shall have specified.
SECTION 23. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto and shall inure to the benefit of the OPNY
Lenders; provided, however, that Pledgor may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the OPNY
Administrative Agent and each of the OPNY Lenders. Any OPNY Lender may transfer,
assign or grant all or such relevant part of its rights hereunder in connection
with an assignment or transfer of all or any part of its interest in its Loans
in accordance with the provisions of the Credit Agreement, and such assignee
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise. All agreements, statements, representations
and warranties made by Pledgor herein or in any certificate or other
23
instrument delivered by Pledgor or on its behalf under this Agreement shall be
considered to have been relied upon by the OPNY Lenders and shall survive the
execution and delivery of this Agreement, the OPNY Credit Agreement and the
other Financing Documents regardless of any investigation made by the OPNY
Lenders or on their behalf.
SECTION 24. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no OPNY Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash. This
Agreement shall terminate when all Secured Obligations have been indefeasibly
paid in full in cash and all Commitments have been terminated, and the OPNY
Administrative Agent, at the written request and expense of the Pledgor, will
promptly authorize, execute and deliver, as applicable, to the Pledgor the
proper instruments (which may include Uniform Commercial Code termination
statements on form UCC-3) acknowledging the termination of this Agreement, and
will promptly duly assign, transfer and deliver (without recourse and without
any representation or warranty) free from any interest of the OPNY
Administrative Agent or Lien granted hereunder such of the Collateral as may be
in possession of the OPNY Administrative Agent, to the Pledgor, and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement together with such notices to third parties as may be necessary to
countermand any notices previously sent to them pursuant hereto.
SECTION 25. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENTS OF LAW THAT WOULD
APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF
ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS OTHERWISE DEFINED HEREIN
OR IN THE OPNY CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NEW YORK UNIFORM
COMMERCIAL CODE ARE USED HEREIN AS THEREIN DEFINED. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN PLEDGOR AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING
24
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK,
NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF PLEDGOR TO RECEIVE
FOR AND ON BEHALF OF PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO PLEDGOR AT ITS ADDRESS SET
FORTH IN ACCORDANCE WITH SECTION 22. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
25
(f) NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (ii)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY, IN EITHER CASE,
SOLELY AS PERMITTED IN SUBSECTION (c) THIS SECTION 26.
SECTION 27. 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
but all of which shall together constitute one and the same instrument.
SECTION 28. Limitation of Recourse. The obligations of Pledgor hereunder
are obligations solely of Pledgor and shall not constitute a debt or obligation
of any direct or indirect member, partner or shareholder of Pledgor or any of
their respective directors, officers, agents or employees (each such Person, a
"Non-Recourse Party"). No Non-Recourse Party shall be liable for any amount
payable by Pledgor under this Agreement and the Secured Parties shall not seek a
money judgment or deficiency or personal judgment against any Non-Recourse Party
for payment of the indebtedness payable by Pledgor evidenced by this Agreement.
No property or assets of any Non-Recourse Party, other than as contemplated in
the Financing Documents, shall be sold, levied upon or otherwise used to satisfy
any judgment rendered in connection with any action brought against Pledgor with
respect to this Agreement or the other Financing Documents. The foregoing
acknowledgments, agreements and waivers shall be enforceable by any Non-Recourse
Party. Notwithstanding the foregoing, nothing in this Section 28 shall limit or
affect or be construed to limit or affect the obligations and liabilities of any
Credit Party or any other Non-Recourse Party (a) in accordance with the terms of
any Transaction Document or Financing Document creating such liabilities and
obligations to which such Credit Party or Non-Recourse Party is a party, (b)
arising from liability pursuant to any applicable Requirement of Law for such
Credit Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the OPNY Credit Agreement.
SECTION 29. Subordination. Notwithstanding any provision of this
Agreement or any other Financing Document to the contrary, (i) the security
interests created hereby and granted hereby are subject to, subordinate and
inferior to the security interests created by the First Lien Stock Pledge
Agreement, in accordance with, and all rights, powers and remedies granted to
the OPMW Administrative Agent thereunder, are subject in all respects to the
terms and conditions of the Intercreditor Agreement, including restrictions on
the right of the OPNY Administrative Agent to give notices, exercise power of
attorney rights, direct or receive payments, hold, control or receive delivery
of any Assignment Collateral or other possessory collateral or to exercise
powers or remedies and to apply proceeds of Collateral; provided, that if and to
the extent the Intercreditor Agreement is amended, supplemented or modified at
any time from time to time and such amendment, supplement or modification could
reasonably be expected to have any adverse effect on the Pledgor's rights,
duties or obligations hereunder or under any other Financing Document, such
amendment, supplement or modification shall not be effective as to the Pledgor
without the Pledgor's prior written acknowledgment (which acknowledgment shall
not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or
26
supplement shall be effective for purposes of this Agreement and the other
Financing Documents, and (ii) the OPNY Administrative Agent on behalf of each of
the Secured Parties hereby acknowledges and agrees that the Pledgor shall not
have any duty and obligation with respect to the perfection or priority of the
security interest granted hereunder in and to any of the Collateral (and no
Default or Event of Default shall result or occur) to the extent (a) such
Collateral is in the possession of the OPMW Administrative Agent, (b) such
Collateral is not transferred by the OPMW Administrative Agent to the OPNY
Administrative Agent as required pursuant to the Intercreditor Agreement, (c)
such perfection or priority requires any consent, approval or other action of
the OPMW Administrative Agent, or (d) the OPMW Administrative Agent then
maintains a perfected, first priority security interest in and to Collateral and
(iii) no obligations contained in this Agreement shall require the Pledgor to
take or omit to take any action inconsistent with the terms and conditions of
the Holdco Deposit Account Agreement and no Default or Event of Default shall
arise or result from the taking or omitting of such action.
[Remainder of page intentionally left blank.]
27
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER CAPITAL, LLC
By:
----------------------------------
Name:
---------------------------
Title:
--------------------------
Address for Notices:
1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President - Finance
Ph.:(713) 207-3160
Fax:(713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity,
but solely as Administrative Agent
By:
----------------------------------
Name:
---------------------------
Title:
--------------------------
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Telecopy: (704) 386-3324
EXHIBIT J-1
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
AMENDED AND RESTATED PARTNERSHIP INTEREST
PLEDGE AGREEMENT
made by
ORION POWER NEW YORK GP, INC.
to
BANK OF AMERICA, N.A.,
as Administrative Agent
Dated as of : October 28, 2002
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
SECTION 1. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST..............................2
SECTION 2. SECURITY FOR SECURED OBLIGATIONS............................................2
SECTION 3. PLEDGOR REMAINS LIABLE......................................................2
SECTION 4. DELIVERY OF COLLATERAL......................................................3
SECTION 5. NO SUBROGATION..............................................................3
SECTION 6. REINSTATEMENT...............................................................3
SECTION 7. REPRESENTATIONS AND WARRANTIES..............................................4
SECTION 8. FURTHER ASSURANCES..........................................................6
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC...........................................6
SECTION 10. PLACE OF INCORPORATION; PLACE OF PERFECTION; RECORDS........................7
SECTION 11. AS TO THE PARTNERSHIP AGREEMENTS............................................8
SECTION 12. COVENANTS...................................................................8
SECTION 13. ADMINISTRATIVE AGENT.......................................................11
SECTION 14. ADMINISTRATIVE AGENT MAY PERFORM...........................................11
SECTION 15. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR AND THE BORROWER ENTITIES......11
SECTION 16. REMEDIES...................................................................11
SECTION 17. APPLICATION OF PROCEEDS....................................................13
SECTION 18. REMEDIES CUMULATIVE........................................................13
SECTION 19. DISCONTINUANCE OF PROCEEDINGS..............................................14
SECTION 20. INDEMNITY AND EXPENSES.....................................................14
SECTION 21. WAIVER, AMENDMENT; SEVERABILITY............................................14
SECTION 22. SECURITY INTEREST ABSOLUTE.................................................15
i
SECTION 23. ADDRESSES FOR NOTICES......................................................16
SECTION 24 SUCCESSORS AND ASSIGNS.....................................................16
SECTION 25. TERMINATION; RELEASE.......................................................16
SECTION 26. HEADINGS DESCRIPTIVE, ETC..................................................17
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE........................17
SECTION 28. EXECUTION IN COUNTERPARTS..................................................18
SECTION 29. LIMITATION OF RECOURSE.....................................................18
SECTION 30. AMENDMENT AND RESTATEMENT..................................................19
ii
AMENDED AND RESTATED PARTNERSHIP INTEREST PLEDGE AGREEMENT
AMENDED AND RESTATED PARTNERSHIP INTEREST PLEDGE AGREEMENT, dated as of
October 28, 2002 (this "Agreement"), made by ORION POWER NEW YORK GP, INC., a
Delaware corporation ("Pledgor"), as the obligor hereunder, to BANK OF AMERICA,
N.A., as administrative agent (in such capacity, together with any successors
and assigns, the "Administrative Agent") for the benefit of the Secured Parties
(as defined in the Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Pledgor is the sole general partner of (a) Orion Power New
York, L.P., a Delaware limited partnership (the "Borrower") and (b) each of (i)
Astoria Generating Company, L.P., a Delaware limited partnership, (ii) Carr
Street Generating Station, L.P., a Delaware limited partnership, and (iii) Erie
Boulevard Hydropower, L.P., a Delaware limited partnership, (each, an "Operating
Company" and together with the Borrower, the "Borrower Entities")
WHEREAS, the Borrower has entered into an Amended and Restated Credit
Agreement, dated as of the Restructuring Effective Date (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with the Administrative Agent, Banc of America Securities LLC and
BNP Paribas, as lead arrangers and joint book runners, Bank of America, N.A., as
issuing bank, BNP Paribas, as syndication agent, Union Bank of California, N.A.,
CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
documentation agents, and the Lenders named on the signature pages thereto and
from time to time parties thereto (the "Lenders") (all capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement and the principles of construction set forth in
Section 1.04 of the Credit Agreement shall apply hereto), pursuant to which the
Lenders have agreed, inter alia, to renew, modify and extend credit facilities
that were issued to the Borrower to finance a portion of the purchase price of
the Portfolio Assets and to provide working capital availability to the
Borrower;
WHEREAS, the Borrower, the Operating Companies and the Administrative
Agent have entered into that certain Amended and Restated Deposit Account
Agreement, dated as of the Restructuring Effective Date (as the same may be
amended, supplemented or otherwise modified from time to time, the "Deposit
Account Agreement"), providing for, among other things, the establishment of the
Accounts (as defined in the Credit Agreement) and the application of the
proceeds of the Collateral (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligations of the Lenders
under the Credit Agreement that this Agreement shall have been entered into by
the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the Lenders to enter into the Credit Agreement, to make available
to the Borrower such credit facilities and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Pledge; Assignment; Grant of Security Interest. Pledgor
hereby pledges, hypothecates and assigns to the Administrative Agent, and hereby
grants to the Administrative Agent for the benefit of the Secured Parties, a
pledge and assignment of, and a security interest in, all of its right, title
and interest in and to the following (the "Collateral"):
(a) All general and limited partnership interests now owned or
hereafter acquired by Pledgor in and to each Borrower Entity (collectively, the
"Partnership Interests") and the partnership agreement relating to each Borrower
Entity (collectively, the "Partnership Agreements") and all rights related
thereto, including (i) all rights of Pledgor as a general or limited partner, as
the case may be, and all rights to receive distributions, cash, instruments and
other property from time to time receivable or otherwise distributable in
respect of any Partnership Interest or pursuant to any Partnership Agreement,
(ii) all rights of Pledgor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to any Partnership Interest or any Partnership
Agreement, (iii) all claims of Pledgor for damages arising out of or for breach
of or default under any Partnership Agreement, (iv) the right of Pledgor to
terminate any Partnership Agreement, to perform and exercise consensual or
voting rights thereunder and to compel performance and otherwise exercise all
remedies thereunder, (v) all rights of Pledgor as a general or limited partner
of any of the Borrower Entities, to any property and assets of the Borrower
Entities (whether real property, inventory, equipment, contract rights,
accounts, receivables, general intangibles, securities, instruments, chattel
paper, documents, chooses in action or otherwise), and (vi) all certificates or
instruments evidencing an ownership or partnership interest in the Borrower
Entities or their assets; and
(b) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing (including proceeds that constitute property of the
types described above).
SECTION 2. Security for Secured Obligations. This Agreement secures
the prompt and complete payment and performance of (a) all Obligations of the
Borrower now or hereafter existing under the Financing Documents, (b) all
obligations of each Operating Company under the Subsidiary Guarantees and (c)
the due performance and compliance of all other obligations of any Borrower
Entity under any of the Financing Documents (collectively, the "Secured
Obligations"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by the Borrower to the Secured Parties but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Credit Party.
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under each Partnership
Agreement and the other contracts and agreements included in the Collateral to
the extent set forth therein to perform all of its duties
2
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by any Secured Party of any of the rights hereunder
shall not release Pledgor from any of its duties or obligations under the
contracts and agreements included in the Collateral and (c) neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral or
otherwise by reason of this Agreement, nor shall the Administrative Agent or any
Secured Party be obligated to perform any of the obligations or duties of
Pledgor thereunder or to take any action to collect or enforce any claim
assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the Administrative Agent pursuant hereto 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 Administrative Agent. The Administrative Agent
shall have the right, upon the occurrence and continuance of an Event of
Default, in its discretion and without notice to Pledgor, to transfer to or to
register in the name of the Administrative Agent or any of its nominees any or
all of the Collateral, subject only to compliance with Requirements of Law, the
terms and conditions of the Credit Agreement and the Intercreditor Agreement and
the revocable rights specified in Section 9(a). In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 5. No Subrogation. Pledgor shall not exercise any rights
which it may acquire by way of subrogation under this Agreement, by any payments
made hereunder or otherwise, until all Secured Obligations shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such subrogation rights at any
time when all Secured Obligations shall not have been indefeasibly paid in full
in cash (whether pursuant to a claim in any bankruptcy or similar proceeding or
otherwise) or when any Commitment shall remain outstanding, such amount shall be
held in trust for the benefit of the Administrative Agent and the Secured
Parties and shall forthwith be paid to the Administrative Agent to be credited
and applied to the Secured Obligations, whether matured or unmatured, in
accordance with Section 17.
SECTION 6. Reinstatement. This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
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SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is duly formed, validly existing and in good
standing under the laws of the State of Delaware, (ii) has all requisite power
and authority to own its property and assets, to borrow money and to transact
the business in which it is presently engaged and in which it proposes to be
engaged, (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (iv) is in full compliance with its
Governing Documents, all material Contractual Obligations, all applicable
material Requirements of Law and all material Governmental Approvals, except in
each case of this clause (iv) to the extent that the failure to comply with any
of the foregoing could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, (x) Pledgor is the sole General Partner of the
Borrower; (y) the Operating Companies are the only Subsidiaries of the Borrower;
and (z) Pledgor is the sole General Partner of each Operating Company.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary corporate
action, (iii) do not and will not contravene (A) its Governing Documents or (B)
any material Requirement of Law, any material Contractual Obligation or any
material Governmental Approval binding on or affecting it and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted Liens) upon any of its properties
or assets pursuant to, the terms of any material Contractual Obligation binding
on or affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(d) No approval of any Person other than a Governmental Authority
(except such as have been duly obtained, made or given, and are in full force
and effect) is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the first
priority nature of such security interest) or (iii) for the exercise by the
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except, in each case, for any approval of any such Person the absence
of which could not reasonably be expected to have a material adverse effect on
the ability of the Administrative Agent to exercise voting rights or remedies in
respect of the Collateral.
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(e) Each Partnership Agreement, true and complete copies of which
have been furnished to the Administrative Agent, has been duly authorized,
executed and delivered by Pledgor and is in full force and effect and is binding
upon and enforceable against Pledgor in accordance with its terms, except as
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity. There exists
no default under any Partnership Agreement.
(f) This Agreement creates a valid security interest in the
Collateral purported to be pledged and assigned by Pledgor hereunder securing
the payment of the Secured Obligations.
(g) Upon the filing of the financing statements (the "Financing
Statements") referenced in Schedule I hereof under the Uniform Commercial Code
as in effect in the State of Delaware (the "Delaware UCC"), the security
interest created hereby shall be perfected under the Delaware UCC, to the extent
that the Collateral constitutes "general intangibles" (as defined in the
Delaware UCC) and no further filings or other actions are necessary to perfect
such security interest. Upon filing of such Financing Statements pursuant to the
Delaware UCC, such security interests, as so perfected, are first priority
security interests.
(h) When any certificates or instruments evidencing the Collateral
shall be delivered hereunder and endorsed to, or registered in favor of, the
Administrative Agent in accordance with Section 8-106 of the Uniform Commercial
Code as in effect in the State of New York (the "NY UCC") or the State of North
Carolina (the "NC UCC"), and for so long as such certificates or instruments
shall remain in the possession of the Administrative Agent in the State of New
York or the State of North Carolina, the security interest in such Collateral
created hereby shall be perfected under the NY UCC or the NC UCC, as applicable,
and such security interest, as so perfected, will be a first priority security
interest.
(i) The security interest created by this Agreement in the
Collateral described in clause (a) of Section 1 hereof has been registered in
the name of the Administrative Agent in the register maintained for such purpose
at the chief executive office and principal place of business of the Borrower
and each Operating Company, as applicable, and, to the extent that such
Collateral constitutes "uncertificated securities" (as defined in the Delaware
UCC), such security interest is perfected under the Delaware UCC and, as so
perfected, is a first priority security interest.
(j) The chief place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the Collateral
is set forth under its name on the signature page hereof.
(k) Pledgor is the legal and beneficial owner of the Collateral
purported to be pledged and assigned by it hereunder, free and clear of any
Lien, other than Permitted Liens. No effective financing statement or other
instrument similar in effect covering all or any part of such Collateral has
been executed or authorized by Pledgor or, is on file in any recording office,
except such as may have been filed in favor of (i) the Administrative Agent
relating to this
5
Agreement or (ii) the OPMW Administrative Agent relating to the OPMW Credit
Agreement. Pledgor has no trade name.
(l) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(m) No part of the Collateral is subject to the terms of any
agreement restricting the sale or transfer of such Collateral, except for the
Partnership Agreements and the Financing Documents.
(n) Except as set forth in Schedule 4.05 of the Credit Agreement,
there is no (i) injunction, writ, preliminary restraining order or order of any
nature issued by an arbitrator, court or other Governmental Authority against
Pledgor in connection with the transactions provided for herein, or (ii) action,
suit, arbitration, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority pending against Pledgor or, to Pledgor's
knowledge, threatened against Pledgor which would reasonably be expected to
materially adversely affect the right or ability of Pledgor to fulfill its
obligations under this Agreement.
(o) Pledgor has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
SECTION 8. Further Assurances. (a) Pledgor agrees that from time to
time, at the expense of Pledgor, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Administrative Agent may reasonably request, in order to
perfect and protect the pledge, assignment, hypothecation and security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Pledgor will (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as the
Administrative Agent may reasonably request, in order to perfect and preserve
the assignment, hypothecation and security interest granted or purported to be
granted hereby; and (ii) mark conspicuously, at the request of the
Administrative Agent, each of its records pertaining to the Collateral with a
legend, in form and substance reasonably satisfactory to the Administrative
Agent, indicating that the Partnership Agreements and such chattel paper have
been assigned and are subject to the security interest pursuant hereto.
(b) Pledgor hereby further authorizes the Administrative Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) So long as any
Obligations are outstanding, Pledgor shall not be entitled to any payments or
distributions (whether cash or non-cash) pursuant to the Partnership Agreements,
except payments or distributions from the
6
Borrower that are directly distributed from Pledgor to Holdco in accordance with
the Holdco Deposit Account Agreement. So long as no Event of Default shall have
occurred and be continuing, but subject, nevertheless, at all times to the
restrictions imposed by the terms and conditions of the Credit Agreement,
Pledgor shall be entitled to exercise any and all management, voting and other
partnership rights pertaining to any Collateral (including but not limited to
any partnership interest or Partnership Agreement) and the Borrower Entities for
any purpose not inconsistent with the terms of this Agreement or any other
Financing Document; provided, however, that Pledgor shall exercise, or refrain
from exercising, any such right if such action or inaction would have a material
adverse effect on the attachment, perfection, creation or priority of the
security interest in the Collateral or any part thereof as herein granted.
(b) If Pledgor receives any distributions in respect of the
Collateral purported to be pledged and assigned by it hereunder, such
distributions shall be promptly delivered to the Collateral Agent to deposit in
the Holdco Accounts pursuant to the Holdco Deposit Account Agreement, or, if
such distributions are in connection with a partial or total liquidation or are
non-cash distributions, to the Administrative Agent to hold as Collateral and
shall, if received by Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or funds of Pledgor
and be forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary endorsement or assignment).
(c) Upon the occurrence and during the continuance of an Event of
Default:
(i) Immediately upon Pledgor's receipt of written notice
from the Administrative Agent that the Administrative Agent intends to
act pursuant to this clause (c)(i), all rights of Pledgor to exercise or
refrain from exercising the voting and other consensual rights which it
would otherwise be entitled to exercise shall thereupon become
exercisable by the Administrative Agent, acting in good faith, who shall
have the sole right to exercise or refrain from exercising such voting
and other consensual rights unless and until such Event of Default
ceases to exist.
(ii) All rights of Pledgor to receive the distributions, if
any, which it would otherwise be authorized to receive and retain,
pursuant to Section 9(a) and (b), above, shall become exercisable by the
Administrative Agent who shall thereupon have the sole right to receive
and hold as Collateral such distributions unless and until such Event of
Default ceases to exist.
(iii) All distributions which are received by Pledgor contrary
to the provisions of clause (ii), above, shall be received in trust for
the benefit of the Administrative Agent, shall be segregated from other
funds of Pledgor and shall be forthwith paid over to the Administrative
Agent as Collateral in the same form as so received (with any necessary
endorsement) for application pursuant to Section 17.
SECTION 10. Place of Incorporation; Place of Perfection; Records.
Pledgor is incorporated in the State of Delaware, and Pledgor's exact legal name
is Orion Power New York GP, Inc. Pledgor will not change its jurisdiction of
incorporation or its name without having given Administrative Agent not less
than 30 days' prior written notice of its intention to do so, clearly describing
to the Administrative Agent such new jurisdiction or name and providing such
7
other information and taking any action in connection therewith as the
Administrative Agent may reasonably request. Pledgor shall keep its place of
business and chief executive office and the office where it keeps its records
concerning the Collateral, and original copies of each Partnership Agreement and
of all other chattel paper which evidence the Collateral, at its address
specified on the signature pages hereof; or, upon 30 days' prior written notice
to the Administrative Agent, at such other location in a jurisdiction where all
action required by Section 8 shall have been taken with respect to the
Collateral. Pledgor will hold and preserve such records and will permit
representatives of the Administrative Agent at any time, upon reasonable prior
notice, during normal business hours to inspect and make abstracts from such
records.
SECTION 11. As to the Partnership Agreements. (a) Pledgor shall at its
expense perform and observe all the terms and provisions to be performed or
observed by it under each Partnership Agreement, maintain each Partnership
Agreement in full force and effect, enforce each Partnership Agreement in
accordance with its terms, and take all such action to such end as may be from
time to time reasonably requested by the Administrative Agent.
(b) Pledgor shall not:
(i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, or create or suffer
to exist any Lien upon or with respect to any of the Collateral,
except for the pledge, assignment, hypothecation and security
interest created by this Agreement and Permitted Liens;
(ii) cancel or terminate any Partnership Agreement or consent
to or accept any cancellation or termination thereof;
(iii) amend or otherwise modify in a material respect any
Partnership Agreement; or
(iv) waive any material default under or material breach of
any Partnership Agreement.
SECTION 12. Covenants. Pledgor covenants and agrees that so long as
any Lender shall have any Commitment outstanding and until the Notes, together
with interest, and all other Secured Obligations are indefeasibly paid in full
in cash, unless the Administrative Agent shall otherwise consent in writing,
Pledgor:
(a) Maintenance of Register. Will cause each Borrower Entity to
maintain at all times a register at its chief place of business and chief
executive office in which the security interest in the Collateral granted hereby
to the Administrative Agent, to the extent that the same constitutes
"uncertificated securities" (as defined in the Delaware UCC), shall be
evidenced.
(b) Preservation of Existence, Etc. Will preserve and maintain, and
will cause each Borrower Entity to preserve and maintain, its lawful existence,
rights (charter and statutory), and franchises in accordance with the
Transaction Documents.
8
(c) Compliance with Law. Will comply with all Requirements of Law
and Governmental Approvals applicable to it, except when any such Requirement of
Law or Governmental Approval is being contested in good faith and by appropriate
proceedings and for which Acceptable Reserves have been established, or except
where the failure to so comply could not reasonably be expected to have a
material adverse effect on any Portfolio Asset.
(d) Nature of Business. Will not change its legal form or Governing
Documents (other than to (i) change its name, (ii) add, replace or eliminate
offices and/or officers, and/or (iii) replace any director, or add to or reduce
the number of directors comprising the board so long as such addition,
replacement or reduction does not eliminate the independent director or modify
the nature of the independent director's powers in any way), change its fiscal
year or engage in any business other than being a general partner of the
Borrower Entities.
(e) Jurisdiction of Organization. Will cause each Borrower Entity at
all times to be a limited partnership organized under the laws of the State of
Delaware.
(f) Bankruptcy. Will not file a voluntary petition or otherwise
initiate proceedings to have any Borrower Entity adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against any Borrower Entity, or file a petition seeking or consenting to
reorganization or relief of any Borrower Entity as debtor under any applicable
federal or state law relating to bankruptcy, insolvency, or other relief for
debtors with respect to any Borrower Entity; or seek or consent to the
appointment of any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of any Borrower Entity or of
all or any substantial part of the properties and assets of any Borrower Entity,
or make any general assignment for the benefit of creditors of any Borrower
Entity, or admit in writing the inability of any Borrower Entity to pay its
debts generally as they become due or declare or effect a moratorium on the debt
of any Borrower Entity or take any action in furtherance of any or the
foregoing;
(g) Taxes. Will cause to be paid or discharged (whether it or any of
its Affiliates, or otherwise) all taxes, assessments and governmental charges or
levies lawfully imposed upon it, any Borrower Entity or upon any of their
respective income or profits or upon any of the Portfolio Assets or the
Collateral and all lawful claims or obligations that, if unpaid, would become a
Lien upon the Collateral (as defined in the Credit Agreement), whether real or
personal, the Collateral (as defined in this Agreement) or upon any part
thereof. Pledgor or the applicable Borrower Entity shall have the right,
however, to contest in good faith the validity or amount of any such tax,
assessment, charge, levy, claim or obligation by proper proceedings, and may
permit the taxes, assessments, charges, levies, claims or obligations so
contested to remain unpaid during the period of such contest if: (a) Pledgor or
such Borrower Entity diligently prosecutes such contest in good faith and by
appropriate proceedings and for which Acceptable Reserves have been established;
(b) during the period of such contest, the enforcement of any contested item is
effectively stayed; and (c) the failure to pay or comply with the contested item
could not reasonably be expected to result in a material adverse effect on the
Collateral.
9
(h) Operations Matters. In the conduct of its business and
operations, Pledgor shall, and shall cause each Borrower Entity to:
(i) maintain books and records, separate from those of any
other Person;
(ii) except as may be expressly contemplated or required by
the Deposit Account Agreement, maintain its bank accounts and all its
other assets separate from those of any other Person;
(iii) hold regular shareholder or partnership meetings, as
appropriate, to conduct its business, and observe all other corporate or
partnership formalities, as the case may be;
(iv) hold itself out to creditors and the public as a legal
entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part of a
consolidated or combined group, then it shall be shown as a separate
member of such group, including in a footnote(s) to the relevant
financial statements disclosing its separate existence and identity and
the existence of its own assets;
(vi) allocate and charge fairly and reasonably any common
employee or overhead shared with Affiliates except as otherwise
permitted under the Financing Documents;
(vii) transact all business with Affiliates on an arm's-length
basis and to enter into transactions with Affiliates on an arm's-length
basis;
(viii) conduct business in its own name;
(ix) with regard to each Borrower Entity, maintain a
sufficient number of employees in light of such Borrower Entity's
contemplated business operations;
(x) correct any misunderstanding regarding its separate
identity of which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of any
other Person; and
(xii) maintain adequate capital in light of its contemplated
business operations.
(i) Assets. Will not own or acquire any asset other than the
Collateral and Distributions permitted by the Financing Documents and other
assets having an aggregate value in excess of $50,000.
(j) Indebtedness. Will not incur Indebtedness other than Permitted
Indebtedness (in its capacity as the general partner of the Borrower Entities.).
10
SECTION 13. Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the Administrative Agent hereunder.
Pledgor hereby appoints the Administrative Agent as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of Pledgor
or otherwise, from time to time in the Administrative Agent's discretion at any
time that an Event of Default shall have occurred and be continuing, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including
to ask, demand, collect, sue for, recover, compound, receive and give acceptance
and receipts for moneys due and to become due under or in connection with the
Collateral, to receive, indorse, and collect any drafts or other instruments,
documents and chattel paper in connection therewith, to file any claims or take
any action or institute any proceedings which the Administrative Agent may deem
to be necessary or desirable for the collection thereof or to enforce compliance
with the terms and conditions of any Partnership Agreement, and to sell assign,
lease or otherwise dispose of the Collateral or any part thereof pursuant to
this Agreement. Such appointment is coupled with an interest and is irrevocable.
SECTION 14. Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 20(b).
SECTION 15. Duties of the Administrative Agent, Pledgor and the Borrower
Entities. (a) The powers conferred on the Administrative Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral and no such duties
shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the
contrary notwithstanding, that Pledgor and each Borrower Entity shall remain
liable to perform all of their respective obligations, if any, assumed by them
with respect to the Collateral and the Administrative Agent and the Lenders
shall have no obligations or liabilities with respect to any Collateral (other
than obligations or liabilities resulting from the Administrative Agent's or any
Lender's gross negligence or willful misconduct) by reason of or arising out of
or in connection with this Agreement, nor shall the Administrative Agent or the
Lenders be required or obligated in any manner to perform or fulfill any of the
obligations of Pledgor or any Borrower Entity under or with respect to any
Collateral.
SECTION 16. Remedies. If any Event of Default shall have occurred and
be continuing, subject to the terms of Section 9 and compliance with
Requirements of Law:
(a) The Administrative Agent may exercise any and all rights and
remedies of Pledgor under or in connection with any Partnership Agreement, the
Partnership Interests or otherwise in respect of the Collateral, including any
and all rights of Pledgor to demand or
11
otherwise require payment of any amount under, or performance of any provision
of, any Partnership Agreement and all rights of Pledgor to control the operation
of the Borrower Entities.
(b) All payments received by Pledgor under or in connection with any
Partnership Agreement, the Partnership Interests, or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other funds of Pledgor and shall be forthwith
paid over to the Administrative Agent in the same form as so received (with any
necessary endorsement).
(c) Any Collateral repossessed by the Administrative Agent under or
pursuant to this Section 16 or any other provision hereof, and any other
Collateral whether or not so repossessed by the Administrative Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Administrative Agent may, upon
written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceeding permitted
by such requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the Administrative Agent shall determine, in its sole
discretion, that any of the Collateral threatens to decline quickly in value or
to become worthless, any such sale may be made upon three days' notice to
Pledgor) specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of Law, the
Administrative Agent on behalf of the Lenders may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in accordance
with this Section 16. If, under mandatory requirements of any Requirement of
Law, the Administrative Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice to
Pledgor as hereinabove specified, the Administrative Agent need give Pledgor
only such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of any Requirement of Law.
(d) The Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the Uniform Commercial Code or any other
applicable Requirement of Law in all relevant jurisdictions.
(e) Waiver of Claims. Except as otherwise provided in this
Agreement, PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
ADMINISTRATIVE AGENT TAKING POSSESSION OR THE ADMINISTRATIVE AGENT'S DISPOSITION
OF ANY OF THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS
OF LAW, INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER
THE
12
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF
ANY SUCH JURISDICTION, and Pledgor hereby further waives:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the gross negligence
or willful misconduct of either of the Administrative Agent or any
Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any Requirements
of Law in order to prevent or delay the enforcement of this Agreement
(including any right to claim that such enforcement should be stayed
pending the outcome of any other action or proceeding (including any
arbitration proceeding)) or the absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such Requirements of Law.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall, to the extent permitted by Requirements
of Law, operate to divest all right, title, interest, claim and demand, either
at law or in equity, of Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through and under Pledgor.
SECTION 17. Application of Proceeds. Notwithstanding any other
provision of this Agreement, all payments made under or in connection with this
Agreement, and all moneys collected by the Administrative Agent upon any sale or
other disposition of the Collateral pursuant to Section 16, together with all
other moneys received by the Administrative Agent hereunder, shall be applied in
accordance with the Financing Documents, including that any proceeds of
Collateral which remains after payment in full of cash of the Obligations will
be paid to the Collateral Agent for the benefit of the OPMW Secured Parties to
be applied pursuant to the Intercreditor Agreement and the OPMW Second Lien
Documents, and such proceeds shall constitute proceeds under the OPMW Second
Lien Documents. For the avoidance of doubt, it is understood that Pledgor shall
remain liable to the extent of any deficiency between the amount of all moneys
collected by the Administrative Agent upon any such sale or other disposition of
the Collateral and the aggregate amount of the Secured Obligations.
SECTION 18. Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the Administrative Agent or any Secured Party shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power
13
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other Financing Document expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Administrative Agent or
any Secured Party would otherwise have. No notice to or demand on Pledgor in any
case shall entitle Pledgor to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any Secured Party to any other or further action in any
circumstances without notice or demand.
SECTION 19. Discontinuance of Proceedings. In case the Administrative
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Administrative Agent, then and in every such case
Pledgor, the Administrative Agent and each holder of any of the Secured
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Administrative Agent
shall continue as if no such proceeding had been instituted.
SECTION 20. Indemnity and Expenses. (a) Pledgor agrees to indemnify
and hold harmless the Administrative Agent and each Secured Party from and
against any and all claims, losses and liabilities arising out of or resulting
from the Collateral or Pledgor's pledge and assignment under this Agreement
(including enforcement against Pledgor of this Agreement), except claims, losses
or liabilities resulting from the Administrative Agent's or any Secured Party's
gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the Administrative Agent or any
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Administrative Agent or any Secured Party may incur in connection with (i)
the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the Administrative Agent or any Secured Party hereunder
against Pledgor or (iv) the failure by Pledgor to perform or observe any of the
provisions hereof.
SECTION 21. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
14
SECTION 22. Security Interest Absolute. The obligations of Pledgor
under this Agreement are independent of the Secured Obligations, and a separate
action or actions may be brought and prosecuted against Pledgor to enforce this
Agreement, irrespective of whether any action is brought against the Borrower,
any other pledgor or any guarantor of the Secured Obligations or whether the
Borrower, any other pledgor or any guarantor of the Secured Obligations is
joined in any such action or actions. All rights of the Administrative Agent and
the assignment, hypothecation and security interest hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional, to the
extent permitted by applicable Requirements of Law, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor or any other Credit Party, the recovery of any
judgment against Pledgor or any other Credit Party, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor or any
other Credit Party contained in this Agreement, the Credit Agreement or any
other Financing Document, (ii) any impairment, modification, release or
limitation of the liability of Pledgor or any other Credit Party or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable bankruptcy
law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by Pledgor, the Administrative Agent or any other Secured
Party of any rights or remedies, (iv) the assignment or the purported assignment
of any property as security for the Secured Obligations, including all or any
part of the rights of Pledgor under this Agreement, (v) the extension of the
time for payment by Pledgor or any other Credit Party or any other guarantor of
any payments or other sums or any part thereof owing or payable under any of the
terms and provisions of any Financing Document or of the time for performance by
Pledgor or any other Credit Party of any other obligations under or arising out
of any terms or provisions or the extension of the renewal of any thereof, (vi)
the modification or amendment (whether material or otherwise) of any duty,
agreement or obligation of Pledgor or any other Credit Party set forth in any
Financing Document, (vii) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets, marshalling
of assets and liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of, or other similar proceeding affecting Pledgor or any other
Credit Party or any of their respective assets, or the disaffirmancy of this
Agreement or any Financing Document in any such proceeding, (viii) the release
or discharge of Pledgor or any other Credit Party from the performance or
observance of any agreement, covenant, term or condition contained in any of
such instruments by operation of law, (ix) the unenforceability of this
Agreement or any Financing Document or (x) any other circumstance which might
otherwise constitute a legal or equitable discharge of a surety or guarantor; or
15
(c) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
SECTION 23. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any other address
or telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 24. Successors and Assigns. This Agreement shall create a
continuing pledge, assignment of, hypothecation of and security interest in the
Collateral and shall (i) remain in full force and effect until no Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash, (ii) be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto and shall inure to the benefit of
the Lenders; provided, however, that Pledgor may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
Administrative Agent and each of the Lenders. Any Lender may transfer, assign or
grant all or such relevant part of its rights hereunder in connection with an
assignment or transfer of all or any part of its interest in its Loans in
accordance with the provisions of the Credit Agreement, and such assignee shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. All agreements, statements, representations and
warranties made by Pledgor herein or in any certificate or other instrument
delivered by Pledgor or on its behalf under this Agreement shall be considered
to have been relied upon by the Lenders and shall survive the execution and
delivery of this Agreement, the Credit Agreement and the other Financing
Documents regardless of any investigation made by the Lenders or on their
behalf.
SECTION 25. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no Lender shall have
any Commitment outstanding and until the Notes, together with interest, and all
other Secured Obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the Administrative Agent,
at the written request and expense of Pledgor, will promptly authorize, execute
and deliver, as applicable, to Pledgor the proper instruments (which may include
Uniform Commercial Code termination statements on form UCC-3) acknowledging the
termination of this Agreement, and will promptly duly assign, transfer and
deliver (without recourse and without any representation or warranty) free from
any interest of the Administrative Agent or Lien granted hereunder such of the
Collateral as may be in possession of the Administrative Agent, in accordance
with the Intercreditor Agreement or, if the OPMW Second Lien Documents shall
have terminated pursuant to the terms thereof, to Pledgor, and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement together with such notices to third parties as may be necessary to
countermand any notices previously sent to them pursuant hereto.
16
SECTION 26. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT
WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS OTHERWISE DEFINED HEREIN
OR IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NY UCC ARE USED
HEREIN AS THEREIN DEFINED. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN PLEDGOR AND EACH
SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR
WAIVES ANY OJBECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
17
PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF PLEDGOR TO RECEIVE
FOR AND ON BEHALF OF PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO PLEDGOR AT ITS ADDRESS SET
FORTH IN ACCORDANCE WITH SECTION 23. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW (ii) OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 27.
SECTION 28. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 29. Limitation of Recourse. The obligations of Pledgor hereunder
are obligations solely of Pledgor and shall not constitute a debt or obligation
of any direct or indirect partner or shareholder of Pledgor or any of their
respective directors, officers, agents or employees (each such Person, a
"Non-Recourse Party"). No Non-Recourse Party shall be liable for any amount
payable by Pledgor under this Agreement and the Secured Parties shall not seek a
money judgment or deficiency or personal judgment against any Non-Recourse Party
for payment of the indebtedness payable by Pledgor evidenced by this Agreement.
No property or assets of any Non-Recourse Party, other than as contemplated in
the Financing Documents, shall
18
be sold, levied upon or otherwise used to satisfy any judgment rendered in
connection with any action brought against Pledgor with respect to this
Agreement or the other Financing Documents. The foregoing acknowledgments,
agreements and waivers shall be enforceable by any Non-Recourse Party.
Notwithstanding the foregoing, nothing in this Section shall limit or affect or
be construed to limit or affect the obligations and liabilities of any Credit
Party or any other Non-Recourse Party (a) in accordance with the terms of any
Transaction Document or Financing Document creating such liabilities and
obligations to which such Credit Party or Non-Recourse Party is a party, (b)
arising from liability pursuant to any applicable Requirement of Law for such
Credit Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the Credit Agreement.
SECTION 30. Amendment and Restatement. This Agreement is an amendment
and restatement of the Partnership Interest Pledge Agreement, dated as of July
28, 1999 (the "Original Agreement") made by Pledgor to the Administrative Agent.
It is the intention of Pledgor and the Administrative Agent that this Agreement
amend, restate, extend and renew the terms and conditions of the Original
Agreement and the liens and security interests created thereby, and is not
intended to be a novation or discharge of the obligations of Pledgor thereunder
or the liens and security interests created thereby. The liens and security
interests of the Original Agreement are hereby ratified, confirmed, renewed,
extended, and brought forward in full force and effect as security for the
Obligations.
[Remainder of page intentionally left blank]
19
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER NEW YORK GP, INC.
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Telephone:(713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone:(713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity,
but solely as Administrative Agent
By:
---------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
20
ANNEX I
TO
PARTNERSHIP INTEREST PLEDGE AGREEMENT
Partnership Interests
Partnership Agreements
EXHIBIT J-2
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
AMENDED AND RESTATED PARTNERSHIP INTEREST
PLEDGE AGREEMENT
made by
ORION POWER NEW YORK, L.P.
to
BANK OF AMERICA, N.A.,
as Administrative Agent
Dated as of : October 28, 2002
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
SECTION 1. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST..............................2
SECTION 2. SECURITY FOR SECURED OBLIGATIONS............................................2
SECTION 3. PLEDGOR REMAINS LIABLE......................................................2
SECTION 4. DELIVERY OF COLLATERAL......................................................3
SECTION 5. NO SUBROGATION..............................................................3
SECTION 6. REINSTATEMENT...............................................................3
SECTION 7. REPRESENTATIONS AND WARRANTIES..............................................3
SECTION 8. FURTHER ASSURANCES..........................................................6
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC...........................................6
SECTION 10. PLACE OF ORGANIZATION; PLACE OF PERFECTION; RECORDS.........................7
SECTION 11. AS TO THE PARTNERSHIP AGREEMENTS............................................8
SECTION 12. COVENANTS...................................................................8
SECTION 13. ADMINISTRATIVE AGENT.......................................................10
SECTION 14. ADMINISTRATIVE AGENT MAY PERFORM...........................................10
SECTION 15. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR AND THE BORROWER ENTITIES......10
SECTION 16. REMEDIES...................................................................11
SECTION 17. APPLICATION OF PROCEEDS....................................................13
SECTION 18. REMEDIES CUMULATIVE........................................................13
SECTION 19. DISCONTINUANCE OF PROCEEDINGS..............................................13
SECTION 20. INDEMNITY AND EXPENSES.....................................................13
SECTION 21. WAIVER, AMENDMENT; SEVERABILITY............................................14
SECTION 22. SECURITY INTEREST ABSOLUTE.................................................14
i
SECTION 23. ADDRESSES FOR NOTICES......................................................15
SECTION 24 SUCCESSORS AND ASSIGNS.....................................................16
SECTION 25. TERMINATION; RELEASE.......................................................16
SECTION 26. HEADINGS DESCRIPTIVE, ETC..................................................16
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE........................16
SECTION 28. EXECUTION IN COUNTERPARTS..................................................18
SECTION 29. LIMITATION OF RECOURSE.....................................................18
SECTION 30. AMENDMENT AND RESTATEMENT..................................................19
ii
AMENDED AND RESTATED PARTNERSHIP INTEREST PLEDGE AGREEMENT
AMENDED AND RESTATED PARTNERSHIP INTEREST PLEDGE AGREEMENT,
dated as of October 28, 2002 (this "Agreement"), made by ORION POWER NEW YORK,
L.P., a Delaware limited partnership (the "Pledgor"), as the obligor hereunder,
to BANK OF AMERICA, N.A., as administrative agent (in such capacity, together
with any successors and assigns, the "Administrative Agent") for the benefit of
the Secured Parties (as defined in the Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Pledgor is the sole limited partner of each of (i)
Astoria Generating Company, L.P., a Delaware limited partnership, (ii) Carr
Street Generating Station, L.P., a Delaware limited partnership, and (iii) Erie
Boulevard Hydropower, L.P., a Delaware limited partnership (each, an "Operating
Company" or a "Borrower Entity")
WHEREAS, the Pledgor has entered into an Amended and Restated
Credit Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with the Administrative Agent, Banc of America Securities LLC and
BNP Paribas, as lead arrangers and joint book runners, Bank of America, N.A., as
issuing bank, BNP Paribas, as syndication agent, Union Bank of California, N.A.,
CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
documentation agents, and the Lenders named on the signature pages thereto and
from time to time parties thereto (the "Lenders") (all capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement and the principles of construction set forth in
Section 1.04 of the Credit Agreement shall apply hereto), pursuant to which the
Lenders have agreed, inter alia, to renew, modify and extend credit facilities
that were issued to the Borrower to finance a portion of the purchase price of
the Portfolio Assets and to provide working capital availability to the Pledgor;
WHEREAS, the Pledgor, the Operating Companies and the
Administrative Agent have entered into that certain Amended and Restated Deposit
Account Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "Deposit
Account Agreement"), providing for, among other things, the establishment of the
Accounts (as defined in the Credit Agreement) and the application of the
proceeds of the Collateral (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligations of the Lenders
under the Credit Agreement that this Agreement shall have been entered into by
the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to induce
the Lenders to enter into the Credit Agreement, to make available to the Pledgor
such credit facilities
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Pledge; Assignment; Grant of Security Interest. Pledgor
hereby pledges, hypothecates and assigns to the Administrative Agent, and hereby
grants to the Administrative Agent for the benefit of the Secured Parties, a
pledge and assignment of, and a security interest in, all of its right, title
and interest in and to the following (the "Collateral"):
(a) All general and limited partnership interests now owned or
hereafter acquired by Pledgor in and to each Borrower Entity (collectively, the
"Partnership Interests") and the partnership agreement relating to each Borrower
Entity (collectively, the "Partnership Agreements") and all rights related
thereto, including (i) all rights of Pledgor as a general or limited partner, as
the case may be, and all rights to receive distributions, cash, instruments and
other property from time to time receivable or otherwise distributable in
respect of any Partnership Interest or pursuant to any Partnership Agreement,
(ii) all rights of Pledgor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to any Partnership Interest or any Partnership
Agreement, (iii) all claims of Pledgor for damages arising out of or for breach
of or default under any Partnership Agreement, (iv) the right of Pledgor to
terminate any Partnership Agreement, to perform and exercise consensual or
voting rights thereunder and to compel performance and otherwise exercise all
remedies thereunder, (v) all rights of Pledgor as a general or limited partner
of any of the Borrower Entities, to any property and assets of the Borrower
Entities (whether real property, inventory, equipment, contract rights,
accounts, receivables, general intangibles, securities, instruments, chattel
paper, documents, chooses in action or otherwise), and (vi) all certificates or
instruments evidencing an ownership or partnership interest in the Borrower
Entities or their assets; and
(b) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing (including proceeds that constitute property of the
types described above).
SECTION 2. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of (a) all Obligations of the
Pledgor now or hereafter existing under the Financing Documents, (b) all
obligations of each Operating Company under the Subsidiary Guarantees and (c)
the due performance and compliance of all other obligations of any Borrower
Entity under any of the Financing Documents (collectively, the "Secured
Obligations"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by the Pledgor to the Secured Parties but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Credit Party.
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under each Partnership
Agreement and the other contracts and agreements included in the Collateral to
the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by any Secured Party of any of the rights hereunder shall not
release Pledgor from any of
its duties or obligations under the contracts and agreements included in the
Collateral and (c) neither the Administrative Agent nor any Secured Party shall
have any obligation or liability under the contracts and agreements included in
the Collateral or otherwise by reason of this Agreement, nor shall the
Administrative Agent or any Secured Party be obligated to perform any of the
obligations or duties of Pledgor thereunder or to take any action to collect or
enforce any claim assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the Administrative Agent pursuant hereto 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 Administrative Agent. The Administrative Agent
shall have the right, upon the occurrence and continuance of an Event of
Default, in its discretion and without notice to Pledgor, to transfer to or to
register in the name of the Administrative Agent or any of its nominees any or
all of the Collateral, subject only to compliance with Requirements of Law, the
terms and conditions of the Credit Agreement and the Intercreditor Agreement and
the revocable rights specified in Section 9(a). In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 5. No Subrogation. Pledgor shall not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payments made
hereunder or otherwise, until all Secured Obligations shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such subrogation rights at any
time when all Secured Obligations shall not have been indefeasibly paid in full
in cash (whether pursuant to a claim in any bankruptcy or similar proceeding or
otherwise) or when any Commitment shall remain outstanding, such amount shall be
held in trust for the benefit of the Administrative Agent and the Secured
Parties and shall forthwith be paid to the Administrative Agent to be credited
and applied to the Secured Obligations, whether matured or unmatured, in
accordance with Section 17.
SECTION 6. Reinstatement. This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is duly formed, validly existing and in good
standing under the laws of the State of Delaware, (ii) has all requisite power
and authority to own its property and assets, to borrow money and to transact
the business in which it is presently engaged and in which it
proposes to be engaged, (iii) has duly qualified and is authorized to do
business and is in good standing in every jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary except where the failure to be so qualified could not reasonably be
expected to have a material adverse effect on any Portfolio Asset and (iv) is in
full compliance with its Governing Documents, all material Contractual
Obligations, all applicable material Requirements of Law and all material
Governmental Approvals, except in each case of this clause (iv) to the extent
that the failure to comply with any of the foregoing could not reasonably be
expected to have a Material Adverse Effect. As of the date hereof, (x) the
Operating Companies are the only Subsidiaries of the Borrower; and (y) Pledgor
is the sole Limited Partner of each Operating Company.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary corporate
action, (iii) do not and will not contravene (A) its Governing Documents or (B)
any material Requirement of Law, any material Contractual Obligation or any
material Governmental Approval binding on or affecting it and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted Liens) upon any of its properties
or assets pursuant to, the terms of any material Contractual Obligation binding
on or affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(d) No approval of any Person other than a Governmental Authority
(except such as have been duly obtained, made or given, and are in full force
and effect) is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the first
priority nature of such security interest) or (iii) for the exercise by the
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except, in each case, for any approval of any such Person the absence
of which could not reasonably be expected to have a material adverse effect on
the ability of the Administrative Agent to exercise voting rights or remedies in
respect of the Collateral.
(e) Each Partnership Agreement, true and complete copies of which
have been furnished to the Administrative Agent, has been duly authorized,
executed and delivered by Pledgor and is in full force and effect and is binding
upon and enforceable against Pledgor in accordance with its terms, except as
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors'
rights generally and (ii) general principles of equity. There exists no default
under any Partnership Agreement.
(f) This Agreement creates a valid security interest in the
Collateral purported to be pledged and assigned by Pledgor hereunder securing
the payment of the Secured Obligations.
(g) Upon the filing of the financing statements (the "Financing
Statements") referenced in Schedule I hereof under the Uniform Commercial Code
as in effect in the State of Delaware (the "Delaware UCC"), the security
interest created hereby shall be perfected under the Delaware UCC, to the extent
that the Collateral constitutes "general intangibles" (as defined in the
Delaware UCC) and no further filings or other actions are necessary to perfect
such security interest. Upon filing of such Financing Statements pursuant to the
Delaware UCC, such security interests, as so perfected, are first priority
security interests.
(h) When any certificates or instruments evidencing the Collateral
shall be delivered hereunder and endorsed to, or registered in favor of, the
Administrative Agent in accordance with Section 8-106 of the Uniform Commercial
Code as in effect in the State of New York (the "NY UCC") or the State of North
Carolina (the "NC UCC"), and for so long as such certificates or instruments
shall remain in the possession of the Administrative Agent in the State of New
York or the State of North Carolina, the security interest in such Collateral
created hereby shall be perfected under the NY UCC or the NC UCC, as applicable,
and such security interest, as so perfected, will be a first priority security
interest.
(i) The security interest created by this Agreement in the
Collateral described in clause (a) of Section 1 hereof has been registered in
the name of the Administrative Agent in the register maintained for such purpose
at the chief executive office and principal place of business of each Operating
Company, as applicable, and, to the extent that such Collateral constitutes
"uncertificated securities" (as defined in the Delaware UCC), such security
interest is perfected under the Delaware UCC and, as so perfected, is a first
priority security interest.
(j) The chief place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the Collateral
is set forth under its name on the signature page hereof.
(k) Pledgor is the legal and beneficial owner of the Collateral
purported to be pledged and assigned by it hereunder, free and clear of any
Lien, other than Permitted Liens. No effective financing statement or other
instrument similar in effect covering all or any part of such Collateral has
been executed or authorized by Pledgor or, is on file in any recording office,
except such as may have been filed in favor of (i) the Administrative Agent
relating to this Agreement or (ii) the OPMW Administrative Agent relating to the
OPMW Credit Agreement. Pledgor has no trade name.
(l) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(m) No part of the Collateral is subject to the terms of any
agreement restricting the sale or transfer of such Collateral, except for the
Partnership Agreements and the Financing Documents.
(n) Except as set forth in Schedule 4.05 of the Credit Agreement,
there is no (i) injunction, writ, preliminary restraining order or order of any
nature issued by an arbitrator, court or other Governmental Authority against
Pledgor in connection with the transactions provided for herein, or (ii) action,
suit, arbitration, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority pending against Pledgor or, to Pledgor's
knowledge, threatened against Pledgor which would reasonably be expected to
materially adversely affect the right or ability of Pledgor to fulfill its
obligations under this Agreement.
(o) Pledgor has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
SECTION 8. Further Assurances. (a) Pledgor agrees that from time to
time, at the expense of Pledgor, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Administrative Agent may reasonably request, in order to
perfect and protect the pledge, assignment, hypothecation and security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Pledgor will (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as the
Administrative Agent may reasonably request, in order to perfect and preserve
the assignment, hypothecation and security interest granted or purported to be
granted hereby; and (ii) mark conspicuously, at the request of the
Administrative Agent, each of its records pertaining to the Collateral with a
legend, in form and substance reasonably satisfactory to the Administrative
Agent, indicating that the Partnership Agreements and such chattel paper have
been assigned and are subject to the security interest pursuant hereto.
(b) Pledgor hereby further authorizes the Administrative Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) So long as any
Obligations are outstanding, Pledgor shall not be entitled to any payments or
distributions (whether cash or non-cash) pursuant to the Partnership Agreements,
except payments or distributions from the Borrower that are directly distributed
from Pledgor to Holdco in accordance with the Holdco Deposit Account Agreement.
So long as no Event of Default shall have occurred and be continuing, but
subject, nevertheless, at all times to the restrictions imposed by the terms and
conditions of the Credit Agreement, Pledgor shall be entitled to exercise any
and all management, voting and other partnership rights pertaining to any
Collateral (including but not
limited to any partnership interest or Partnership Agreement) and the Borrower
Entities for any purpose not inconsistent with the terms of this Agreement or
any other Financing Document; provided, however, that Pledgor shall exercise, or
refrain from exercising, any such right if such action or inaction would have a
material adverse effect on the attachment, perfection, creation or priority of
the security interest in the Collateral or any part thereof as herein granted.
(b) If Pledgor receives any distributions in respect of the
Collateral purported to be pledged and assigned by it hereunder, such
distributions shall be promptly delivered to the Collateral Agent to deposit in
the Holdco Accounts pursuant to the Holdco Deposit Account Agreement, or, if
such distributions are in connection with a partial or total liquidation or are
non-cash distributions, to the Administrative Agent to hold as Collateral and
shall, if received by Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or funds of Pledgor
and be forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary endorsement or assignment).
(c) Upon the occurrence and during the continuance of an Event of
Default:
(i) Immediately upon Pledgor's receipt of written
notice from the Administrative Agent that the Administrative Agent
intends to act pursuant to this clause (c)(i), all rights of Pledgor to
exercise or refrain from exercising the voting and other consensual
rights which it would otherwise be entitled to exercise shall thereupon
become exercisable by the Administrative Agent, acting in good faith,
who shall have the sole right to exercise or refrain from exercising
such voting and other consensual rights unless and until such Event of
Default ceases to exist.
(ii) All rights of Pledgor to receive the
distributions, if any, which it would otherwise be authorized to receive
and retain, pursuant to Section 9(a) and (b), above, shall become
exercisable by the Administrative Agent who shall thereupon have the
sole right to receive and hold as Collateral such distributions unless
and until such Event of Default ceases to exist.
(iii) All distributions which are received by Pledgor
contrary to the provisions of clause (ii), above, shall be received in
trust for the benefit of the Administrative Agent, shall be segregated
from other funds of Pledgor and shall be forthwith paid over to the
Administrative Agent as Collateral in the same form as so received (with
any necessary endorsement) for application pursuant to Section 17.
SECTION 10. Place of Organization; Place of Perfection; Records. Pledgor
is organized in the State of Delaware, and Pledgor's exact legal name is Orion
Power New York, L.P. Pledgor will not change its jurisdiction of organization or
its name without having given Administrative Agent not less than 30 days' prior
written notice of its intention to do so, clearly describing to the
Administrative Agent such new jurisdiction or name and providing such other
information and taking any action in connection therewith as the Administrative
Agent may reasonably request. Pledgor shall keep its place of business and chief
executive office and the office where it keeps its records concerning the
Collateral, and original copies of each Partnership Agreement and of all other
chattel paper which evidence the Collateral, at its address
specified on the signature pages hereof; or, upon 30 days' prior written notice
to the Administrative Agent, at such other location in a jurisdiction where all
action required by Section 8 shall have been taken with respect to the
Collateral. Pledgor will hold and preserve such records and will permit
representatives of the Administrative Agent at any time, upon reasonable prior
notice, during normal business hours to inspect and make abstracts from such
records.
SECTION 11. As to the Partnership Agreements. (a) Pledgor shall at its
expense perform and observe all the terms and provisions to be performed or
observed by it under each Partnership Agreement, maintain each Partnership
Agreement in full force and effect, enforce each Partnership Agreement in
accordance with its terms, and take all such action to such end as may be from
time to time reasonably requested by the Administrative Agent.
(b) Pledgor shall not:
(i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, or create or suffer
to exist any Lien upon or with respect to any of the Collateral,
except for the pledge, assignment, hypothecation and security
interest created by this Agreement and Permitted Liens;
(ii) cancel or terminate any Partnership Agreement or consent
to or accept any cancellation or termination thereof;
(iii) amend or otherwise modify in a material respect any
Partnership Agreement; or
(iv) waive any material default under or material breach of
any Partnership Agreement.
SECTION 12. Covenants. Pledgor covenants and agrees that so long as any
Lender shall have any Commitment outstanding and until the Notes, together with
interest, and all other Secured Obligations are indefeasibly paid in full in
cash, unless the Administrative Agent shall otherwise consent in writing,
Pledgor:
(a) Maintenance of Register. Will cause each Borrower Entity to
maintain at all times a register at its chief place of business and chief
executive office in which the security interest in the Collateral granted hereby
to the Administrative Agent, to the extent that the same constitutes
"uncertificated securities" (as defined in the Delaware UCC), shall be
evidenced.
(b) Preservation of Existence, Etc. Will cause each Borrower Entity
to preserve and maintain, its lawful existence, rights (charter and statutory),
and franchises in accordance with the Transaction Documents.
(c) Jurisdiction of Organization. Will cause each Borrower Entity at
all times to be a limited partnership organized under the laws of the State of
Delaware.
(d) Bankruptcy. Will not file a voluntary petition or otherwise
initiate proceedings to have any Borrower Entity adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against any Borrower Entity, or file a petition seeking or consenting to
reorganization or relief of any Borrower Entity as debtor under any applicable
federal or state law relating to bankruptcy, insolvency, or other relief for
debtors with respect to any Borrower Entity; or seek or consent to the
appointment of any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of any Borrower Entity or of
all or any substantial part of the properties and assets of any Borrower Entity,
or make any general assignment for the benefit of creditors of any Borrower
Entity, or admit in writing the inability of any Borrower Entity to pay its
debts generally as they become due or declare or effect a moratorium on the debt
of any Borrower Entity or take any action in furtherance of any or the
foregoing;
(e) Operations Matters. In the conduct of its business and
operations, Pledgor shall, and shall cause each Borrower Entity to:
(i) maintain books and records, separate from those of any
other Person;
(ii) except as may be expressly contemplated or required by
the Deposit Account Agreement, maintain its bank accounts and all its
other assets separate from those of any other Person;
(iii) hold regular member, shareholder or partnership
meetings, as appropriate, to conduct its business, and observe all other
limited liability company, corporate or partnership formalities, as the
case may be;
(iv) hold itself out to creditors and the public as a legal
entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part of a
consolidated or combined group, then it shall be shown as a separate
member of such group, including in a footnote(s) to the relevant
financial statements disclosing its separate existence and identity and
the existence of its own assets;
(vi) allocate and charge fairly and reasonably any common
employee or overhead shared with Affiliates except as otherwise
permitted under the Financing Documents;
(vii) transact all business with Affiliates on an arm's-length
basis and to enter into transactions with Affiliates on an arm's-length
basis;
(viii) conduct business in its own name;
(ix) with regard to each Borrower Entity, maintain a
sufficient number of employees in light of such Borrower Entity's
contemplated business operations;
(x) correct any misunderstanding regarding its separate
identity of which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of any
other Person; and
(xii) maintain adequate capital in light of its contemplated
business operations.
SECTION 13. Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the Administrative Agent hereunder.
Pledgor hereby appoints the Administrative Agent as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of Pledgor
or otherwise, from time to time in the Administrative Agent's discretion at any
time that an Event of Default shall have occurred and be continuing, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including
to ask, demand, collect, sue for, recover, compound, receive and give acceptance
and receipts for moneys due and to become due under or in connection with the
Collateral, to receive, indorse, and collect any drafts or other instruments,
documents and chattel paper in connection therewith, to file any claims or take
any action or institute any proceedings which the Administrative Agent may deem
to be necessary or desirable for the collection thereof or to enforce compliance
with the terms and conditions of any Partnership Agreement, and to sell assign,
lease or otherwise dispose of the Collateral or any part thereof pursuant to
this Agreement. Such appointment is coupled with an interest and is irrevocable.
SECTION 14. Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 20(b).
SECTION 15. Duties of the Administrative Agent, Pledgor and the Borrower
Entities. (a) The powers conferred on the Administrative Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral and no such duties
shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the
contrary notwithstanding, that Pledgor and each Borrower Entity shall remain
liable to perform all of their respective obligations, if any, assumed by them
with respect to the Collateral and the Administrative Agent and the Lenders
shall have no obligations or liabilities with respect to any Collateral (other
than obligations or liabilities resulting from the Administrative Agent's or any
Lender's gross negligence or willful misconduct) by reason of or arising out of
or in connection with this Agreement, nor shall the Administrative Agent or the
Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of Pledgor or any Borrower
Entity under or with respect to any Collateral.
SECTION 16. Remedies. If any Event of Default shall have occurred and be
continuing, subject to the terms of Section 9 and compliance with Requirements
of Law:
(a) The Administrative Agent may exercise any and all rights and
remedies of Pledgor under or in connection with any Partnership Agreement, the
Partnership Interests or otherwise in respect of the Collateral, including any
and all rights of Pledgor to demand or otherwise require payment of any amount
under, or performance of any provision of, any Partnership Agreement and all
rights of Pledgor to control the operation of the Borrower Entities.
(b) All payments received by Pledgor under or in connection with any
Partnership Agreement, the Partnership Interests, or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other funds of Pledgor and shall be forthwith
paid over to the Administrative Agent in the same form as so received (with any
necessary endorsement).
(c) Any Collateral repossessed by the Administrative Agent under or
pursuant to this Section 16 or any other provision hereof, and any other
Collateral whether or not so repossessed by the Administrative Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Administrative Agent may, upon
written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceeding permitted
by such requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the Administrative Agent shall determine, in its sole
discretion, that any of the Collateral threatens to decline quickly in value or
to become worthless, any such sale may be made upon three days' notice to
Pledgor) specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of Law, the
Administrative Agent on behalf of the Lenders may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in accordance
with this Section 16. If, under mandatory requirements of any Requirement of
Law, the Administrative Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice to
Pledgor as hereinabove specified, the Administrative Agent need give Pledgor
only such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of any Requirement of Law.
(d) The Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the Uniform Commercial Code or any other
applicable Requirement of Law in all relevant jurisdictions.
(e) Waiver of Claims. Except as otherwise provided in this
Agreement, PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
ADMINISTRATIVE AGENT TAKING POSSESSION OR THE ADMINISTRATIVE AGENT'S DISPOSITION
OF ANY OF THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS
OF LAW, INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER
THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL
SUBDIVISION OF ANY SUCH JURISDICTION, and Pledgor hereby further waives:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the gross negligence
or willful misconduct of either of the Administrative Agent or any
Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any Requirements
of Law in order to prevent or delay the enforcement of this Agreement
(including any right to claim that such enforcement should be stayed
pending the outcome of any other action or proceeding (including any
arbitration proceeding)) or the absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such Requirements of Law.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall, to the extent permitted by Requirements
of Law, operate to divest all right, title, interest, claim and demand, either
at law or in equity, of Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through and under Pledgor.
SECTION 17. Application of Proceeds. Notwithstanding any other provision
of this Agreement, all payments made under or in connection with this Agreement,
and all moneys collected by the Administrative Agent upon any sale or other
disposition of the Collateral pursuant to Section 16, together with all other
moneys received by the Administrative Agent hereunder, shall be applied in
accordance with the Financing Documents, including that any proceeds of
Collateral which remains after payment in full of cash of the Obligations will
be paid to the Collateral Agent for the benefit of the OPMW Secured Parties to
be applied pursuant to the Intercreditor Agreement and the OPMW Second Lien
Documents, and such proceeds shall constitute proceeds under the OPMW Second
Lien Documents. For the avoidance of doubt, it is understood that Pledgor shall
remain liable to the extent of any deficiency between the amount of all moneys
collected by the Administrative Agent upon any such sale or other disposition of
the Collateral and the aggregate amount of the Secured Obligations.
SECTION 18. Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the Administrative Agent or any Secured Party shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Secured Party to any other or further
action in any circumstances without notice or demand.
SECTION 19. Discontinuance of Proceedings. In case the Administrative
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Administrative Agent, then and in every such case
Pledgor, the Administrative Agent and each holder of any of the Secured
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Administrative Agent
shall continue as if no such proceeding had been instituted.
SECTION 20. Indemnity and Expenses. (a) Pledgor agrees to indemnify and
hold harmless the Administrative Agent and each Secured Party from and against
any and all claims, losses and liabilities arising out of or resulting from the
Collateral or Pledgor's pledge and assignment under this Agreement (including
enforcement against Pledgor of this Agreement), except claims, losses or
liabilities resulting from the Administrative Agent's or any Secured Party's
gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the Administrative Agent or any
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Administrative Agent or any Secured Party may incur in connection with (i)
the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the Administrative Agent or any Secured Party hereunder
against Pledgor or (iv) the failure by Pledgor to perform or observe any of the
provisions hereof.
SECTION 21. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
SECTION 22. Security Interest Absolute. The obligations of Pledgor under
this Agreement are independent of the Secured Obligations, and a separate action
or actions may be brought and prosecuted against Pledgor to enforce this
Agreement, irrespective of whether any action is brought against any other
pledgor or any guarantor of the Secured Obligations or whether any other pledgor
or any guarantor of the Secured Obligations is joined in any such action or
actions. All rights of the Administrative Agent and the assignment,
hypothecation and security interest hereunder, and all obligations of Pledgor
hereunder, shall be absolute and unconditional, to the extent permitted by
applicable Requirements of Law, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor or any other Credit Party, the recovery of any
judgment against Pledgor or any other Credit Party, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor or any
other Credit Party contained in this Agreement, the Credit Agreement or any
other Financing Document, (ii) any impairment, modification, release or
limitation of the liability of Pledgor or any other Credit Party or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable bankruptcy
law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by Pledgor, the Administrative Agent or any other Secured
Party of any rights or remedies, (iv) the assignment or the purported
assignment of any property as security for the Secured Obligations, including
all or any part of the rights of Pledgor under this Agreement, (v) the extension
of the time for payment by Pledgor or any other Credit Party or any other
guarantor of any payments or other sums or any part thereof owing or payable
under any of the terms and provisions of any Financing Document or of the time
for performance by Pledgor or any other Credit Party of any other obligations
under or arising out of any terms or provisions or the extension of the renewal
of any thereof, (vi) the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation of Pledgor or any other Credit
Party set forth in any Financing Document, (vii) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
of the assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar proceeding
affecting Pledgor or any other Credit Party or any of their respective assets,
or the disaffirmancy of this Agreement or any Financing Document in any such
proceeding, (viii) the release or discharge of Pledgor or any other Credit Party
from the performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of this Agreement or any Financing Document or (x) any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
SECTION 23. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any other address
or telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 24. Successors and Assigns. This Agreement shall create a
continuing pledge, assignment of, hypothecation of and security interest in the
Collateral and shall (i) remain in full force and effect until no Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash, (ii) be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto and shall inure to the benefit of
the Lenders; provided, however, that Pledgor may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
Administrative Agent and each of the Lenders. Any Lender may transfer, assign or
grant all or such relevant part of its rights hereunder in connection with an
assignment or transfer of all or any part of its interest in its Loans in
accordance with the provisions of the Credit Agreement, and such assignee shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. All agreements, statements, representations and
warranties made by Pledgor herein or in any certificate or other instrument
delivered by Pledgor or on its behalf under this Agreement shall be considered
to have been relied upon by the Lenders and shall survive the execution and
delivery of this Agreement, the Credit Agreement and the other Financing
Documents regardless of any investigation made by the Lenders or on their
behalf.
SECTION 25. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no Lender shall have
any Commitment outstanding and until the Notes, together with interest, and all
other Secured Obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the Administrative Agent,
at the written request and expense of Pledgor, will promptly authorize, execute
and deliver, as applicable, to Pledgor the proper instruments (which may include
Uniform Commercial Code termination statements on form UCC-3) acknowledging the
termination of this Agreement, and will promptly duly assign, transfer and
deliver (without recourse and without any representation or warranty) free from
any interest of the Administrative Agent or Lien granted hereunder such of the
Collateral as may be in possession of the Administrative Agent, in accordance
with the Intercreditor Agreement or, if the OPMW Second Lien Documents shall
have terminated pursuant to the terms thereof, to Pledgor, and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement together with such notices to third parties as may be necessary to
countermand any notices previously sent to them pursuant hereto.
SECTION 26. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT
THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS OTHERWISE
DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NY UCC
ARE USED HEREIN AS THEREIN DEFINED. ANY DISPUTE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN PLEDGOR AND
EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR
WAIVES ANY OJBECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF PLEDGOR TO RECEIVE
FOR AND ON BEHALF OF PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO PLEDGOR AT ITS ADDRESS SET
FORTH IN ACCORDANCE WITH SECTION 23. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW (ii) OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 27.
SECTION 28. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 29. Limitation of Recourse. The obligations of Pledgor hereunder
are obligations solely of Pledgor and shall not constitute a debt or obligation
of any direct or indirect member, partner or shareholder of Pledgor or any of
their respective directors, officers, agents or employees (each such Person, a
"Non-Recourse Party"). No Non-Recourse Party shall be liable for any amount
payable by Pledgor under this Agreement and the Secured Parties shall not seek a
money judgment or deficiency or personal judgment against any Non-Recourse Party
for payment of the indebtedness payable by Pledgor evidenced by this Agreement.
No property or assets of any Non-Recourse Party, other than as contemplated in
the Financing Documents, shall be sold, levied upon or otherwise used to satisfy
any judgment rendered in connection with any action brought against Pledgor with
respect to this Agreement or the other Financing Documents. The foregoing
acknowledgments, agreements and waivers shall be enforceable by any Non-Recourse
Party. Notwithstanding the foregoing, nothing in this Section shall limit or
affect or be construed to limit or affect the obligations and liabilities of any
Credit Party or any other Non-Recourse Party (a) in accordance with the terms of
any Transaction Document or Financing Document creating such liabilities and
obligations to which such Credit Party or Non-Recourse Party is a party, (b)
arising from liability pursuant to any applicable Requirement of Law for such
Credit Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or
willful misconduct or (c) with respect to amounts distributed to it in violation
of Section 6.10 of the Credit Agreement.
SECTION 30. Amendment and Restatement. This Agreement is an amendment
and restatement of the Partnership Interest Pledge Agreement, dated as of July
28, 1999 (the "Original Agreement") made by Pledgor to the Administrative Agent.
It is the intention of Pledgor and the Administrative Agent that this Agreement
amend, restate, extend and renew the terms and conditions of the Original
Agreement and the liens and security interests created thereby, and is not
intended to be a novation or discharge of the obligations of Pledgor thereunder
or the liens and security interests created thereby. The liens and security
interests of the Original Agreement are hereby ratified, confirmed, renewed,
extended, and brought forward in full force and effect as security for the
Obligations.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc., its general
partner
By:
--------------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity,
but solely as Administrative Agent
By:
--------------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
ANNEX I
TO
PARTNERSHIP INTEREST PLEDGE AGREEMENT
Partnership Interests
Partnership Agreements
EXHIBIT J-3
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
AMENDED AND RESTATED PARTNERSHIP INTEREST
PLEDGE AGREEMENT
made by
ORION POWER NEW YORK LP, INC.
to
BANK OF AMERICA, N.A.,
as Administrative Agent
Dated as of : October 28, 2002
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
SECTION 1. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST..............................2
SECTION 2. SECURITY FOR SECURED OBLIGATIONS............................................2
SECTION 3. PLEDGOR REMAINS LIABLE......................................................2
SECTION 4. DELIVERY OF COLLATERAL......................................................3
SECTION 5. NO SUBROGATION..............................................................3
SECTION 6. REINSTATEMENT...............................................................3
SECTION 7. REPRESENTATIONS AND WARRANTIES..............................................3
SECTION 8. FURTHER ASSURANCES..........................................................6
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC...........................................6
SECTION 10. PLACE OF INCORPORATION; PLACE OF PERFECTION; RECORDS........................7
SECTION 11. AS TO THE PARTNERSHIP AGREEMENTS............................................8
SECTION 12. COVENANTS...................................................................8
SECTION 13. ADMINISTRATIVE AGENT.......................................................10
SECTION 14. ADMINISTRATIVE AGENT MAY PERFORM...........................................11
SECTION 15. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR AND THE BORROWER ENTITIES......11
SECTION 16. REMEDIES...................................................................11
SECTION 17. APPLICATION OF PROCEEDS....................................................13
SECTION 18. REMEDIES CUMULATIVE........................................................13
SECTION 19. DISCONTINUANCE OF PROCEEDINGS..............................................14
SECTION 20. INDEMNITY AND EXPENSES.....................................................14
SECTION 21. WAIVER, AMENDMENT; SEVERABILITY............................................14
SECTION 22. SECURITY INTEREST ABSOLUTE.................................................14
i
SECTION 23. ADDRESSES FOR NOTICES......................................................15
SECTION 24 SUCCESSORS AND ASSIGNS.....................................................16
SECTION 25. TERMINATION; RELEASE.......................................................16
SECTION 26. HEADINGS DESCRIPTIVE, ETC..................................................16
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE........................16
SECTION 28. EXECUTION IN COUNTERPARTS..................................................18
SECTION 29. LIMITATION OF RECOURSE.....................................................18
SECTION 30. AMENDMENT AND RESTATEMENT..................................................19
ii
AMENDED AND RESTATED PARTNERSHIP INTEREST PLEDGE AGREEMENT
AMENDED AND RESTATED PARTNERSHIP INTEREST PLEDGE AGREEMENT, dated
as of October 28, 2002 (this "Agreement"), made by ORION POWER NEW YORK LP,
INC., a Delaware corporation ("Pledgor"), as the obligor hereunder, to BANK OF
AMERICA, N.A., as administrative agent (in such capacity, together with any
successors and assigns, the "Administrative Agent") for the benefit of the
Secured Parties (as defined in the Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Pledgor is the sole limited partner of Orion Power New
York, L.P., a Delaware limited partnership (the "Borrower")
WHEREAS, the Borrower has entered into an Amended and Restated
Credit Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with the Administrative Agent, Banc of America Securities LLC and
BNP Paribas, as lead arrangers and joint book runners, Bank of America, N.A., as
issuing bank, BNP Paribas, as syndication agent, Union Bank of California, N.A.,
CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
documentation agents, and the Lenders named on the signature pages thereto and
from time to time parties thereto (the "Lenders") (all capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement and the principles of construction set forth in
Section 1.04 of the Credit Agreement shall apply hereto), pursuant to which the
Lenders have agreed, inter alia, to renew, modify and extend credit facilities
that were issued to the Borrower to finance a portion of the purchase price of
the Portfolio Assets and to provide working capital availability to the
Borrower;
WHEREAS, the Borrower, certain of its Subsidiaries and the
Administrative Agent have entered into that certain Amended and Restated Deposit
Account Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "Deposit
Account Agreement"), providing for, among other things, the establishment of the
Accounts (as defined in the Credit Agreement) and the application of the
proceeds of the Collateral (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligations of the Lenders
under the Credit Agreement that this Agreement shall have been entered into by
the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to induce
the Lenders to enter into the Credit Agreement, to make available to the
Borrower such credit facilities and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Pledge; Assignment; Grant of Security Interest. Pledgor
hereby pledges, hypothecates and assigns to the Administrative Agent, and hereby
grants to the Administrative Agent for the benefit of the Secured Parties, a
pledge and assignment of, and a security interest in, all of its right, title
and interest in and to the following (the "Collateral"):
(a) All general and limited partnership interests now owned or
hereafter acquired by Pledgor in and the Borrower (the "Partnership Interests")
and the partnership agreement relating to the Borrower (the "Partnership
Agreement") and all rights related thereto, including (i) all rights of Pledgor
as a general or limited partner, as the case may be, and all rights to receive
distributions, cash, instruments and other property from time to time receivable
or otherwise distributable in respect of any Partnership Interest or pursuant to
the Partnership Agreement, (ii) all rights of Pledgor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to any Partnership
Interest or the Partnership Agreement, (iii) all claims of Pledgor for damages
arising out of or for breach of or default under the Partnership Agreement, (iv)
the right of Pledgor to terminate the Partnership Agreement, to perform and
exercise consensual or voting rights thereunder and to compel performance and
otherwise exercise all remedies thereunder, (v) all rights of Pledgor as a
general or limited partner of the Borrower, to any property and assets of the
Borrower (whether real property, inventory, equipment, contract rights,
accounts, receivables, general intangibles, securities, instruments, chattel
paper, documents, chooses in action or otherwise), and (vi) all certificates or
instruments evidencing an ownership or partnership interest in the Borrower or
its assets; and
(b) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing (including proceeds that constitute property of the
types described above).
SECTION 2. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of (a) all Obligations of the
Borrower now or hereafter existing under the Financing Documents, (b) all
obligations of each Subsidiary of the Borrower under the Subsidiary Guarantees
and (c) the due performance and compliance of all other obligations of the
Borrower and its Subsidiaries under any of the Financing Documents
(collectively, the "Secured Obligations"). Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts which
constitute part of the Secured Obligations and would be owed by the Borrower to
the Secured Parties but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Credit Party.
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under the Partnership Agreement
and the other contracts and agreements included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by any
Secured Party of any of the rights hereunder shall not release Pledgor from any
of its duties or obligations under the contracts and agreements included in the
Collateral and (c) neither the Administrative Agent nor any Secured Party shall
have any obligation or liability under the contracts and agreements included in
the Collateral or otherwise by reason of this
2
Agreement, nor shall the Administrative Agent or any Secured Party be obligated
to perform any of the obligations or duties of Pledgor thereunder or to take any
action to collect or enforce any claim assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the Administrative Agent pursuant hereto 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 Administrative Agent. The Administrative Agent
shall have the right, upon the occurrence and continuance of an Event of
Default, in its discretion and without notice to Pledgor, to transfer to or to
register in the name of the Administrative Agent or any of its nominees any or
all of the Collateral, subject only to compliance with Requirements of Law, the
terms and conditions of the Credit Agreement and the Intercreditor Agreement and
the revocable rights specified in Section 9(a). In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 5. No Subrogation. Pledgor shall not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payments made
hereunder or otherwise, until all Secured Obligations shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such subrogation rights at any
time when all Secured Obligations shall not have been indefeasibly paid in full
in cash (whether pursuant to a claim in any bankruptcy or similar proceeding or
otherwise) or when any Commitment shall remain outstanding, such amount shall be
held in trust for the benefit of the Administrative Agent and the Secured
Parties and shall forthwith be paid to the Administrative Agent to be credited
and applied to the Secured Obligations, whether matured or unmatured, in
accordance with Section 17.
SECTION 6. Reinstatement. This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is duly formed, validly existing and in good
standing under the laws of the State of Delaware, (ii) has all requisite power
and authority to own its property and assets, to borrow money and to transact
the business in which it is presently engaged and in which it proposes to be
engaged, (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary except where the
failure to be so qualified could not
3
reasonably be expected to have a material adverse effect on any Portfolio Asset
and (iv) is in full compliance with its Governing Documents, all material
Contractual Obligations, all applicable material Requirements of Law and all
material Governmental Approvals, except in each case of this clause (iv) to the
extent that the failure to comply with any of the foregoing could not reasonably
be expected to have a Material Adverse Effect. As of the date hereof, Pledgor is
the sole Limited Partner of the Borrower.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary corporate
action, (iii) do not and will not contravene (A) its Governing Documents or (B)
any material Requirement of Law, any material Contractual Obligation or any
material Governmental Approval binding on or affecting it and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted Liens) upon any of its properties
or assets pursuant to, the terms of any material Contractual Obligation binding
on or affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(d) No approval of any Person other than a Governmental Authority
(except such as have been duly obtained, made or given, and are in full force
and effect) is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the first
priority nature of such security interest) or (iii) for the exercise by the
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except, in each case, for any approval of any such Person the absence
of which could not reasonably be expected to have a material adverse effect on
the ability of the Administrative Agent to exercise voting rights or remedies in
respect of the Collateral.
(e) The Partnership Agreement, a true and complete copy of which has
been furnished to the Administrative Agent, has been duly authorized, executed
and delivered by Pledgor and is in full force and effect and is binding upon and
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity. There exists no default
under the Partnership Agreement.
(f) This Agreement creates a valid security interest in the
Collateral purported to be pledged and assigned by Pledgor hereunder securing
the payment of the Secured Obligations.
4
(g) Upon the filing of the financing statements (the "Financing
Statements") referenced in Schedule I hereof under the Uniform Commercial Code
as in effect in the State of Delaware (the "Delaware UCC"), the security
interest created hereby shall be perfected under the Delaware UCC, to the extent
that the Collateral constitutes "general intangibles" (as defined in the
Delaware UCC) and no further filings or other actions are necessary to perfect
such security interest. Upon filing of such Financing Statements pursuant to the
Delaware UCC, such security interests, as so perfected, are first priority
security interests.
(h) When any certificates or instruments evidencing the Collateral
shall be delivered hereunder and endorsed to, or registered in favor of, the
Administrative Agent in accordance with Section 8-106 of the Uniform Commercial
Code as in effect in the State of New York (the "NY UCC") or the State of North
Carolina (the "NC UCC"), and for so long as such certificates or instruments
shall remain in the possession of the Administrative Agent in the State of New
York or the State of North Carolina, the security interest in such Collateral
created hereby shall be perfected under the NY UCC or the NC UCC, as applicable,
and such security interest, as so perfected, will be a first priority security
interest.
(i) The security interest created by this Agreement in the
Collateral described in clause (a) of Section 1 hereof has been registered in
the name of the Administrative Agent in the register maintained for such purpose
at the chief executive office and principal place of business of the Borrower,
and, to the extent that such Collateral constitutes "uncertificated securities"
(as defined in the Delaware UCC), such security interest is perfected under the
Delaware UCC and, as so perfected, is a first priority security interest.
(j) The chief place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the Collateral
is set forth under its name on the signature page hereof.
(k) Pledgor is the legal and beneficial owner of the Collateral
purported to be pledged and assigned by it hereunder, free and clear of any
Lien, other than Permitted Liens. No effective financing statement or other
instrument similar in effect covering all or any part of such Collateral has
been executed or authorized by Pledgor or, is on file in any recording office,
except such as may have been filed in favor of (i) the Administrative Agent
relating to this Agreement or (ii) the OPMW Administrative Agent relating to the
OPMW Credit Agreement. Pledgor has no trade name.
(l) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(m) No part of the Collateral is subject to the terms of any
agreement restricting the sale or transfer of such Collateral, except for the
Partnership Agreement and the Financing Documents.
(n) Except as set forth in Schedule 4.05 of the Credit Agreement,
there is no (i) injunction, writ, preliminary restraining order or order of any
nature issued by an arbitrator, court or other Governmental Authority against
Pledgor in connection with the transactions provided
5
for herein, or (ii) action, suit, arbitration, litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority pending against
Pledgor or, to Pledgor's knowledge, threatened against Pledgor which would
reasonably be expected to materially adversely affect the right or ability of
Pledgor to fulfill its obligations under this Agreement.
(o) Pledgor has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
SECTION 8. Further Assurances. (a) Pledgor agrees that from time to
time, at the expense of Pledgor, Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, or that the Administrative Agent may reasonably request, in order to
perfect and protect the pledge, assignment, hypothecation and security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Pledgor will (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as the
Administrative Agent may reasonably request, in order to perfect and preserve
the assignment, hypothecation and security interest granted or purported to be
granted hereby; and (ii) mark conspicuously, at the request of the
Administrative Agent, each of its records pertaining to the Collateral with a
legend, in form and substance reasonably satisfactory to the Administrative
Agent, indicating that the Partnership Agreements and such chattel paper have
been assigned and are subject to the security interest pursuant hereto.
(b) Pledgor hereby further authorizes the Administrative Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) So long as any
Obligations are outstanding, Pledgor shall not be entitled to any payments or
distributions (whether cash or non-cash) pursuant to the Partnership Agreement,
except payments or distributions from the Borrower that are directly distributed
from Pledgor to Holdco in accordance with the Holdco Deposit Account Agreement.
So long as no Event of Default shall have occurred and be continuing, but
subject, nevertheless, at all times to the restrictions imposed by the terms and
conditions of the Credit Agreement, Pledgor shall be entitled to exercise any
and all management, voting and other partnership rights pertaining to any
Collateral (including but not limited to any partnership interest or the
Partnership Agreement) and the Borrower for any purpose not inconsistent with
the terms of this Agreement or any other Financing Document; provided, however,
that Pledgor shall exercise, or refrain from exercising, any such right if such
action or inaction would have a material adverse effect on the attachment,
perfection, creation or priority of the security interest in the Collateral or
any part thereof as herein granted.
6
(b) If Pledgor receives any distributions in respect of the
Collateral purported to be pledged and assigned by it hereunder, such
distributions shall be promptly delivered to the Collateral Agent to deposit in
the Holdco Accounts pursuant to the Holdco Deposit Account Agreement, or, if
such distributions are in connection with a partial or total liquidation or are
non-cash distributions, to the Administrative Agent to hold as Collateral and
shall, if received by Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or funds of Pledgor
and be forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary endorsement or assignment).
(c) Upon the occurrence and during the continuance of an Event of
Default:
(i) Immediately upon Pledgor's receipt of written
notice from the Administrative Agent that the Administrative Agent
intends to act pursuant to this clause (c)(i), all rights of Pledgor to
exercise or refrain from exercising the voting and other consensual
rights which it would otherwise be entitled to exercise shall thereupon
become exercisable by the Administrative Agent, acting in good faith,
who shall have the sole right to exercise or refrain from exercising
such voting and other consensual rights unless and until such Event of
Default ceases to exist.
(ii) All rights of Pledgor to receive the
distributions, if any, which it would otherwise be authorized to receive
and retain, pursuant to Section 9(a) and (b), above, shall become
exercisable by the Administrative Agent who shall thereupon have the
sole right to receive and hold as Collateral such distributions unless
and until such Event of Default ceases to exist.
(iii) All distributions which are received by Pledgor
contrary to the provisions of clause (ii), above, shall be received in
trust for the benefit of the Administrative Agent, shall be segregated
from other funds of Pledgor and shall be forthwith paid over to the
Administrative Agent as Collateral in the same form as so received (with
any necessary endorsement) for application pursuant to Section 17.
SECTION 10. Place of Incorporation; Place of Perfection; Records.
Pledgor is incorporated in the State of Delaware, and Pledgor's exact legal name
is Orion Power New York LP, Inc. Pledgor will not change its jurisdiction of
organization or its name without having given Administrative Agent not less than
30 days' prior written notice of its intention to do so, clearly describing to
the Administrative Agent such new jurisdiction or name and providing such other
information and taking any action in connection therewith as the Administrative
Agent may reasonably request. Pledgor shall keep its place of business and chief
executive office and the office where it keeps its records concerning the
Collateral, and original copies of the Partnership Agreement and of all other
chattel paper which evidence the Collateral, at its address specified on the
signature pages hereof; or, upon 30 days' prior written notice to the
Administrative Agent, at such other location in a jurisdiction where all action
required by Section 8 shall have been taken with respect to the Collateral.
Pledgor will hold and preserve such records and will permit representatives of
the Administrative Agent at any time, upon reasonable prior notice, during
normal business hours to inspect and make abstracts from such records.
7
SECTION 11. As to the Partnership Agreements. (a) Pledgor shall at its
expense perform and observe all the terms and provisions to be performed or
observed by it under the Partnership Agreement, maintain the Partnership
Agreement in full force and effect, enforce each Partnership Agreement in
accordance with its terms, and take all such action to such end as may be from
time to time reasonably requested by the Administrative Agent.
(b) Pledgor shall not:
(i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, or create or suffer
to exist any Lien upon or with respect to any of the Collateral,
except for the pledge, assignment, hypothecation and security
interest created by this Agreement and Permitted Liens;
(ii) cancel or terminate the Partnership Agreement or consent
to or accept any cancellation or termination thereof;
(iii) amend or otherwise modify in a material respect the
Partnership Agreement; or
(iv) waive any material default under or material breach of
the Partnership Agreement.
SECTION 12. Covenants. Pledgor covenants and agrees that so long as any
Lender shall have any Commitment outstanding and until the Notes, together with
interest, and all other Secured Obligations are indefeasibly paid in full in
cash, unless the Administrative Agent shall otherwise consent in writing,
Pledgor:
(a) Maintenance of Register. Will cause the Borrower to maintain at
all times a register at its chief place of business and chief executive office
in which the security interest in the Collateral granted hereby to the
Administrative Agent, to the extent that the same constitutes "uncertificated
securities" (as defined in the Delaware UCC), shall be evidenced.
(b) Preservation of Existence, Etc. Will preserve and maintain, and
will cause the Borrower to preserve and maintain, its lawful existence, rights
(charter and statutory), and franchises in accordance with the Transaction
Documents except as provided in Section 7 of the LP Guarantee.
(c) Compliance with Law. Will comply with all Requirements of Law
and Governmental Approvals applicable to it, except when any such Requirement of
Law or Governmental Approval is being contested in good faith and by appropriate
proceedings and for which Acceptable Reserves have been established, or except
where the failure to so comply could not reasonably be expected to have a
material adverse effect on any Portfolio Asset.
(d) Nature of Business. Will not change its legal form or Governing
Documents (other than to (i) convert its corporate status to a limited liability
company in accordance with
8
Section 7 of the LP Guarantee, (ii) change its name, (iii) add, replace or
eliminate offices and/or officers, and/or (iv) replace any director, or add to
or reduce the number of directors comprising the board so long as such addition,
replacement or reduction does not eliminate the independent director or modify
the nature of the independent director's powers in any way), change its fiscal
year or engage in any business other than being a general partner of the
Borrower Entities.
(e) Jurisdiction of Organization. Will cause the Borrower at all
times to be a limited partnership organized under the laws of the State of
Delaware.
(f) Bankruptcy. Will not file a voluntary petition or otherwise
initiate proceedings to have the Borrower adjudicated bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against the
Borrower, or file a petition seeking or consenting to reorganization or relief
of the Borrower as debtor under any applicable federal or state law relating to
bankruptcy, insolvency, or other relief for debtors with respect to the
Borrower; or seek or consent to the appointment of any trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or other similar
official) of the Borrower or of all or any substantial part of the properties
and assets of the Borrower, or make any general assignment for the benefit of
creditors of the Borrower, or admit in writing the inability of the Borrower to
pay its debts generally as they become due or declare or effect a moratorium on
the debt of the Borrower or take any action in furtherance of any or the
foregoing;
(g) Taxes. Will cause to be paid or discharged (whether it or any of
its Affiliates, or otherwise) all taxes, assessments and governmental charges or
levies lawfully imposed upon it, the Borrower or upon any of their respective
income or profits or upon any of the Portfolio Assets or the Collateral and all
lawful claims or obligations that, if unpaid, would become a Lien upon the
Collateral (as defined in the Credit Agreement), whether real or personal, the
Collateral (as defined in this Agreement) or upon any part thereof. Pledgor or
the Borrower shall have the right, however, to contest in good faith the
validity or amount of any such tax, assessment, charge, levy, claim or
obligation by proper proceedings, and may permit the taxes, assessments,
charges, levies, claims or obligations so contested to remain unpaid during the
period of such contest if: (a) Pledgor or the Borrower diligently prosecutes
such contest in good faith and by appropriate proceedings and for which
Acceptable Reserves have been established; (b) during the period of such
contest, the enforcement of any contested item is effectively stayed; and (c)
the failure to pay or comply with the contested item could not reasonably be
expected to result in a material adverse effect on the Collateral.
(h) Operations Matters. In the conduct of its business and
operations, Pledgor shall, and shall cause the Borrower to:
(i) maintain books and records, separate from those of any
other Person;
(ii) except as may be expressly contemplated or required by
the Deposit Account Agreement, maintain its bank accounts and all its
other assets separate from those of any other Person;
9
(iii) hold regular member, shareholder or partnership
meetings, as appropriate, to conduct its business, and observe all other
limited liability company, corporate or partnership formalities, as the
case may be;
(iv) hold itself out to creditors and the public as a legal
entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part of a
consolidated or combined group, then it shall be shown as a separate
member of such group, including in a footnote(s) to the relevant
financial statements disclosing its separate existence and identity and
the existence of its own assets;
(vi) allocate and charge fairly and reasonably any common
employee or overhead shared with Affiliates except as otherwise
permitted under the Financing Documents;
(vii) transact all business with Affiliates on an arm's-length
basis and to enter into transactions with Affiliates on an arm's-length
basis;
(viii) conduct business in its own name;
(ix) with regard to the Borrower, maintain a sufficient
number of employees in light of the Borrower's contemplated business
operations;
(x) correct any misunderstanding regarding its separate
identity of which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of any
other Person; and
(xii) maintain adequate capital in light of its contemplated
business operations.
(i) Assets. Will not own or acquire any asset other than the
Collateral and Distributions permitted by the Financing Documents and other
assets having an aggregate value in excess of $50,000.
(j) Indebtedness. Will not incur Indebtedness other than Permitted
Indebtedness (in its capacity as the limited partner of the Borrower).
SECTION 13. Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the Administrative Agent hereunder.
Pledgor hereby appoints the Administrative Agent as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of Pledgor
or otherwise, from time to time in the Administrative Agent's discretion at any
time that an Event of Default shall have occurred and be continuing, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including
to ask, demand, collect, sue for, recover, compound, receive and give acceptance
and receipts for moneys due and to become
10
due under or in connection with the Collateral, to receive, indorse, and collect
any drafts or other instruments, documents and chattel paper in connection
therewith, to file any claims or take any action or institute any proceedings
which the Administrative Agent may deem to be necessary or desirable for the
collection thereof or to enforce compliance with the terms and conditions of any
Partnership Agreement, and to sell assign, lease or otherwise dispose of the
Collateral or any part thereof pursuant to this Agreement. Such appointment is
coupled with an interest and is irrevocable.
SECTION 14. Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 20(b).
SECTION 15. Duties of the Administrative Agent, Pledgor and the Borrower
Entities. (a) The powers conferred on the Administrative Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral and no such duties
shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the
contrary notwithstanding, that Pledgor and the Borrower shall remain liable to
perform all of their respective obligations, if any, assumed by them with
respect to the Collateral and the Administrative Agent and the Lenders shall
have no obligations or liabilities with respect to any Collateral (other than
obligations or liabilities resulting from the Administrative Agent's or any
Lender's gross negligence or willful misconduct) by reason of or arising out of
or in connection with this Agreement, nor shall the Administrative Agent or the
Lenders be required or obligated in any manner to perform or fulfill any of the
obligations of Pledgor or the Borrower under or with respect to any Collateral.
SECTION 16. Remedies. If any Event of Default shall have occurred and be
continuing, subject to the terms of Section 9 and compliance with Requirements
of Law:
(a) The Administrative Agent may exercise any and all rights and
remedies of Pledgor under or in connection with any Partnership Agreement, the
Partnership Interests or otherwise in respect of the Collateral, including any
and all rights of Pledgor to demand or otherwise require payment of any amount
under, or performance of any provision of, any Partnership Agreement and all
rights of Pledgor to control the operation of the Borrower.
(b) All payments received by Pledgor under or in connection with the
Partnership Agreement, the Partnership Interests, or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other funds of Pledgor and shall be forthwith
paid over to the Administrative Agent in the same form as so received (with any
necessary endorsement).
11
(c) Any Collateral repossessed by the Administrative Agent under or
pursuant to this Section 16 or any other provision hereof, and any other
Collateral whether or not so repossessed by the Administrative Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Administrative Agent may, upon
written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceeding permitted
by such requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the Administrative Agent shall determine, in its sole
discretion, that any of the Collateral threatens to decline quickly in value or
to become worthless, any such sale may be made upon three days' notice to
Pledgor) specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of Law, the
Administrative Agent on behalf of the Lenders may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in accordance
with this Section 16. If, under mandatory requirements of any Requirement of
Law, the Administrative Agent shall be required to make disposition of the
Collateral within a period of time which does not permit the giving of notice to
Pledgor as hereinabove specified, the Administrative Agent need give Pledgor
only such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of any Requirement of Law.
(d) The Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the Uniform Commercial Code or any other
applicable Requirement of Law in all relevant jurisdictions.
(e) Waiver of Claims. Except as otherwise provided in this
Agreement, PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
ADMINISTRATIVE AGENT TAKING POSSESSION OR THE ADMINISTRATIVE AGENT'S DISPOSITION
OF ANY OF THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS
OF LAW, INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER
THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL
SUBDIVISION OF ANY SUCH JURISDICTION, and Pledgor hereby further waives:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the gross negligence
or willful misconduct of either of the Administrative Agent or any
Person acting on its behalf or instruction;
12
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any Requirements
of Law in order to prevent or delay the enforcement of this Agreement
(including any right to claim that such enforcement should be stayed
pending the outcome of any other action or proceeding (including any
arbitration proceeding)) or the absolute sale of the Collateral or any
portion thereof, and Pledgor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such Requirements of Law.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall, to the extent permitted by Requirements
of Law, operate to divest all right, title, interest, claim and demand, either
at law or in equity, of Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through and under Pledgor.
SECTION 17. Application of Proceeds. Notwithstanding any other provision
of this Agreement, all payments made under or in connection with this Agreement,
and all moneys collected by the Administrative Agent upon any sale or other
disposition of the Collateral pursuant to Section 16, together with all other
moneys received by the Administrative Agent hereunder, shall be applied in
accordance with the Financing Documents, including that any proceeds of
Collateral which remains after payment in full of cash of the Obligations will
be paid to the Collateral Agent for the benefit of the OPMW Secured Parties to
be applied pursuant to the Intercreditor Agreement and the OPMW Second Lien
Documents, and such proceeds shall constitute proceeds under the OPMW Second
Lien Documents. For the avoidance of doubt, it is understood that Pledgor shall
remain liable to the extent of any deficiency between the amount of all moneys
collected by the Administrative Agent upon any such sale or other disposition of
the Collateral and the aggregate amount of the Secured Obligations.
SECTION 18. Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the Administrative Agent or any Secured Party shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Secured Party to any other or further
action in any circumstances without notice or demand.
13
SECTION 19. Discontinuance of Proceedings. In case the Administrative
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Administrative Agent, then and in every such case
Pledgor, the Administrative Agent and each holder of any of the Secured
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Administrative Agent
shall continue as if no such proceeding had been instituted.
SECTION 20. Indemnity and Expenses. (a) Pledgor agrees to indemnify and
hold harmless the Administrative Agent and each Secured Party from and against
any and all claims, losses and liabilities arising out of or resulting from the
Collateral or Pledgor's pledge and assignment under this Agreement (including
enforcement against Pledgor of this Agreement), except claims, losses or
liabilities resulting from the Administrative Agent's or any Secured Party's
gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the Administrative Agent or any
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Administrative Agent or any Secured Party may incur in connection with (i)
the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the Administrative Agent or any Secured Party hereunder
against Pledgor or (iv) the failure by Pledgor to perform or observe any of the
provisions hereof.
SECTION 21. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
SECTION 22. Security Interest Absolute. The obligations of Pledgor under
this Agreement are independent of the Secured Obligations, and a separate action
or actions may be brought and prosecuted against Pledgor to enforce this
Agreement, irrespective of whether any action is brought against the Borrower,
any other pledgor or any guarantor of the Secured Obligations or whether the
Borrower, any other pledgor or any guarantor of the Secured Obligations is
joined in any such action or actions. All rights of the Administrative Agent and
the assignment, hypothecation and security interest hereunder, and all
obligations of Pledgor
14
hereunder, shall be absolute and unconditional, to the extent permitted by
applicable Requirements of Law, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor or any other Credit Party, the recovery of any
judgment against Pledgor or any other Credit Party, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor or any
other Credit Party contained in this Agreement, the Credit Agreement or any
other Financing Document, (ii) any impairment, modification, release or
limitation of the liability of Pledgor or any other Credit Party or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable bankruptcy
law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by Pledgor, the Administrative Agent or any other Secured
Party of any rights or remedies, (iv) the assignment or the purported assignment
of any property as security for the Secured Obligations, including all or any
part of the rights of Pledgor under this Agreement, (v) the extension of the
time for payment by Pledgor or any other Credit Party or any other guarantor of
any payments or other sums or any part thereof owing or payable under any of the
terms and provisions of any Financing Document or of the time for performance by
Pledgor or any other Credit Party of any other obligations under or arising out
of any terms or provisions or the extension of the renewal of any thereof, (vi)
the modification or amendment (whether material or otherwise) of any duty,
agreement or obligation of Pledgor or any other Credit Party set forth in any
Financing Document, (vii) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets, marshalling
of assets and liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of, or other similar proceeding affecting Pledgor or any other
Credit Party or any of their respective assets, or the disaffirmancy of this
Agreement or any Financing Document in any such proceeding, (viii) the release
or discharge of Pledgor or any other Credit Party from the performance or
observance of any agreement, covenant, term or condition contained in any of
such instruments by operation of law, (ix) the unenforceability of this
Agreement or any Financing Document or (x) any other circumstance which might
otherwise constitute a legal or equitable discharge of a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
SECTION 23. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at
15
any other address or telecopy number which such party shall have specified for
the purpose of communications hereunder by notice to the other parties
hereunder.
SECTION 24. Successors and Assigns. This Agreement shall create a
continuing pledge, assignment of, hypothecation of and security interest in the
Collateral and shall (i) remain in full force and effect until no Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash, (ii) be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto and shall inure to the benefit of
the Lenders; provided, however, that except for conversion from corporate status
to a limited liability company in accordance with Section 7 of the LP Guarantee,
Pledgor may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each of the
Lenders. Any Lender may transfer, assign or grant all or such relevant part of
its rights hereunder in connection with an assignment or transfer of all or any
part of its interest in its Loans in accordance with the provisions of the
Credit Agreement, and such assignee shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise. All
agreements, statements, representations and warranties made by Pledgor herein or
in any certificate or other instrument delivered by Pledgor or on its behalf
under this Agreement shall be considered to have been relied upon by the Lenders
and shall survive the execution and delivery of this Agreement, the Credit
Agreement and the other Financing Documents regardless of any investigation made
by the Lenders or on their behalf.
SECTION 25. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no Lender shall have
any Commitment outstanding and until the Notes, together with interest, and all
other Secured Obligations are indefeasibly paid in full in cash. This Agreement
shall terminate when all Secured Obligations have been indefeasibly paid in full
in cash and all Commitments have been terminated, and the Administrative Agent,
at the written request and expense of Pledgor, will promptly authorize, execute
and deliver, as applicable, to Pledgor the proper instruments (which may include
Uniform Commercial Code termination statements on form UCC-3) acknowledging the
termination of this Agreement, and will promptly duly assign, transfer and
deliver (without recourse and without any representation or warranty) free from
any interest of the Administrative Agent or Lien granted hereunder such of the
Collateral as may be in possession of the Administrative Agent, in accordance
with the Intercreditor Agreement or, if the OPMW Second Lien Documents shall
have terminated pursuant to the terms thereof, to Pledgor, and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement together with such notices to third parties as may be necessary to
countermand any notices previously sent to them pursuant hereto.
SECTION 26. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
16
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH
REQUIREMENT OF LAW THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO
THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE AND
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS
OTHERWISE DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF
THE NY UCC ARE USED HEREIN AS THEREIN DEFINED. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN PLEDGOR AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR
WAIVES ANY OJBECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
17
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY
DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF PLEDGOR TO RECEIVE
FOR AND ON BEHALF OF PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO PLEDGOR AT ITS ADDRESS SET
FORTH IN ACCORDANCE WITH SECTION 23. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW (ii) OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 27.
SECTION 28. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 29. Limitation of Recourse. The obligations of Pledgor hereunder
are obligations solely of Pledgor and shall not constitute a debt or obligation
of any direct or indirect member, partner or shareholder of Pledgor or any of
their respective directors, officers, agents or employees (each such Person, a
"Non-Recourse Party"). No Non-Recourse Party shall be liable for any amount
payable by Pledgor under this Agreement and the Secured Parties shall not seek a
money judgment or deficiency or personal judgment against any Non-Recourse Party
for payment of the indebtedness payable by Pledgor evidenced by this Agreement.
No property or assets of any Non-Recourse Party, other than as contemplated in
the Financing Documents, shall be sold, levied upon or otherwise used to satisfy
any judgment rendered in connection with any action brought against Pledgor with
respect to this Agreement or the other Financing Documents. The foregoing
acknowledgments, agreements and waivers shall be enforceable by any Non-Recourse
Party. Notwithstanding the foregoing, nothing in this Section shall limit or
affect or be construed to limit or affect the obligations and liabilities of any
Credit Party or any other Non-Recourse Party (a) in accordance with the terms of
any Transaction Document or Financing
18
Document creating such liabilities and obligations to which such Credit Party or
Non-Recourse Party is a party, (b) arising from liability pursuant to any
applicable Requirement of Law for such Credit Party's or such Non-Recourse
Party's fraudulent actions, knowing misrepresentations or willful misconduct or
(c) with respect to amounts distributed to it in violation of Section 6.10 of
the Credit Agreement.
SECTION 30. Amendment and Restatement. This Agreement is an amendment
and restatement of the Partnership Interest Pledge Agreement, dated as of July
28, 1999 (the "Original Agreement") made by Pledgor to the Administrative Agent.
It is the intention of Pledgor and the Administrative Agent that this Agreement
amend, restate, extend and renew the terms and conditions of the Original
Agreement and the liens and security interests created thereby, and is not
intended to be a novation or discharge of the obligations of Pledgor thereunder
or the liens and security interests created thereby. The liens and security
interests of the Original Agreement are hereby ratified, confirmed, renewed,
extended, and brought forward in full force and effect as security for the
Obligations.
[Remainder of page intentionally left blank]
19
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER NEW YORK LP, INC.
By:
-------------------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President-Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity,
but solely as Administrative Agent
By:
-------------------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
ANNEX I
TO
PARTNERSHIP INTEREST PLEDGE AGREEMENT
Partnership Interests
Partnership Agreement
EXHIBIT J-4
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
SECOND LIEN MEMBERSHIP INTEREST
PLEDGE AGREEMENT
made by
ORION POWER MIDWEST, L.P.
to
BANK OF AMERICA, N.A.,
as OPNY Administrative Agent
Dated as of : October 28, 2002
================================================================================
TABLE OF CONTENTS
<Table>
SECTION 1. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST................................................2
SECTION 2. SECURITY FOR SECURED OBLIGATIONS..............................................................3
SECTION 3. PLEDGOR REMAINS LIABLE........................................................................3
SECTION 4. DELIVERY OF COLLATERAL........................................................................3
SECTION 5. NO SUBROGATION................................................................................3
SECTION 6. REINSTATEMENT.................................................................................4
SECTION 7. REPRESENTATIONS AND WARRANTIES................................................................4
SECTION 8. FURTHER ASSURANCES............................................................................7
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC.............................................................7
SECTION 10. PLACE OF INCORPORATION; PLACE OF PERFECTION; RECORDS..........................................8
SECTION 11. AS TO THE PARTNERSHIP AGREEMENTS..............................................................9
SECTION 12. COVENANTS.....................................................................................9
SECTION 13. ADMINISTRATIVE AGENT.........................................................................11
SECTION 14. ADMINISTRATIVE AGENT MAY PERFORM.............................................................11
SECTION 15. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR AND THE OPERATING COMPANY........................11
SECTION 16. REMEDIES.....................................................................................12
SECTION 17. APPLICATION OF PROCEEDS......................................................................13
SECTION 18. REMEDIES CUMULATIVE..........................................................................14
SECTION 19. DISCONTINUANCE OF PROCEEDINGS................................................................14
SECTION 20. INDEMNITY AND EXPENSES.......................................................................14
SECTION 21. WAIVER, AMENDMENT; SEVERABILITY..............................................................14
SECTION 22. SECURITY INTEREST ABSOLUTE...................................................................15
</Table>
i
<Table>
SECTION 23. ADDRESSES FOR NOTICES........................................................................16
SECTION 24 SUCCESSORS AND ASSIGNS.......................................................................16
SECTION 25. TERMINATION; RELEASE.........................................................................16
SECTION 26. HEADINGS DESCRIPTIVE, ETC....................................................................17
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE..........................................17
SECTION 28. EXECUTION IN COUNTERPARTS....................................................................18
SECTION 29. LIMITATION OF RECOURSE.......................................................................19
SECTION 30. SUBORDINATION................................................................................19
</Table>
ii
SECOND LIEN MEMBERSHIP INTEREST PLEDGE AGREEMENT
SECOND LIEN MEMBERSHIP INTEREST PLEDGE AGREEMENT, dated as of
October 28, 2002 (this "Agreement"), made by ORION POWER MIDWEST, L.P., a
Delaware limited partnership (the "Pledgor"), as the obligor hereunder, to BANK
OF AMERICA, N.A., as administrative agent (in such capacity, together with any
successors and assigns, the "OPNY Administrative Agent") for the benefit of the
Secured Parties (as defined in the OPNY Credit Agreement referred to below).
WITNESSETH:
WHEREAS, Pledgor is the sole member of Twelvepole Creek, LLC,
a Delaware limited liability company, (the "Operating Company")
WHEREAS, the Pledgor has entered into an Amended and Restated
Credit Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "OPMW
Credit Agreement"), with the Administrative Agent, Banc of America Securities
LLC and BNP Paribas, as lead arrangers and joint book runners, Bank of America,
N.A., as issuing bank, BNP Paribas, as syndication agent, The Bank of Nova
Scotia, Mizuho Corporate Bank, Ltd, and Bayerische Hypo-Und Vereinsbank AG, New
York Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "OPMW Lenders")
pursuant to which the OPMW Lenders have agreed, inter alia, to renew, modify and
extend credit facilities that were issued to the Pledgor to finance a portion of
the purchase price of the Portfolio Assets and to provide working capital
availability to the Pledgor;
WHEREAS, Orion Power New York, L.P. (the "OPNY Borrower") has entered
into an Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPNY Credit Agreement"), with Bank of America, N.A., as
Administrative Agent (the "OPNY Administrative Agent"), Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, Union Bank
of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman
Island Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "OPNY Lenders"),
pursuant to which the OPNY Lenders have agreed, inter alia, to renew, modify and
extend credit facilities that were issued to the OPNY Borrower to finance a
portion of the purchase price of the Portfolio Assets (as defined in the OPNY
Credit Agreement) and to provide working capital availability to the OPNY
Borrower;
WHEREAS, Pledgor has entered into that certain Amended and Restated
Membership Interest Pledge Agreement, dated as of the Restructuring Effective
Date (as the same may be amended, supplemented or otherwise modified from time
to time, the "First Lien Borrower Twelvepole LLC Interest Pledge Agreement"), in
favor of the OPMW Administrative Agent,
pursuant to which Pledgor has, among other things, granted a first priority
pledge, assignment and security interest in the Collateral to the OPMW
Administrative Agent;
WHEREAS, the OPMW Administrative Agent, the OPNY Administrative Agent,
the OPMW Lenders, the OPNY Lenders and Bank of America, N.A., as collateral
agent have entered into a Collateral Agency and Intercreditor Agreement, dated
as of the Restructuring Effective Date (the "Intercreditor Agreement");
WHEREAS, all capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the OPNY Credit Agreement
and the principles of construction set forth in Section 1.04 of the OPNY Credit
Agreement shall apply hereto; provided, that, the following terms shall have the
meanings set forth in the OPMW Credit Agreement: "Acceptable Reserves",
"Borrower Entity", "Contractual Obligations", "Distributions", "Governing
Documents", "Governmental Approvals", "Governmental Authority", "Lien",
"Permitted Lien" and "Portfolio Asset"; and
WHEREAS, it is a condition precedent to the obligations of the OPNY
Lenders under the OPNY Credit Agreement that this Agreement shall have been
entered into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the OPNY Lenders to enter into the OPNY Credit Agreement, to make
available to the OPNY Borrower such credit facilities and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Pledge; Assignment; Grant of Security Interest. Pledgor
hereby pledges, hypothecates and assigns to the OPNY Administrative Agent, and
hereby grants to the OPNY Administrative Agent for the benefit of the Secured
Parties, a second priority pledge and assignment of, and a second priority
security interest in, all of its right, title and interest in and to the
following (the "Collateral"):
(a) All membership interests now owned or hereafter acquired by Pledgor
in and to the Operating Company (the "Membership Interest") and the operating
agreement relating to the Operating Company (the "Operating Agreement") and all
rights related thereto, including, without limitation, (i) all rights of Pledgor
as a member and all rights to receive distributions, cash, instruments and other
property from time to time receivable or otherwise distributable in respect of
any Membership Interest or pursuant to the Operating Agreement, (ii) all rights
of Pledgor to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to any Membership Interest or the Operating Agreement, (iii) all
claims of Pledgor for damages arising out of or for breach of or default under
the Operating Agreement, (iv) the right of Pledgor to terminate the Operating
Agreement, to perform and exercise consensual or voting rights thereunder and to
compel performance and otherwise exercise all remedies thereunder, (v) all
rights of Pledgor as a member of the Operating Company, to any property and
assets of the Operating Company (whether real property, inventory, equipment,
contract rights, accounts, receivables, general intangibles, securities,
instruments, chattel paper, documents, chooses in
2
action or otherwise), and (vi) all certificates or instruments evidencing an
ownership or membership interest in the Operating Company or their assets; and
(b) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing (including proceeds that constitute property of the
types described above).
SECTION 2. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of all obligations of the Pledgor
under the OPMW Guarantee (collectively, the "Secured Obligations").
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under the Operating Agreement
and the other contracts and agreements included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by any
Secured Party of any of the rights hereunder shall not release Pledgor from any
of its duties or obligations under the contracts and agreements included in the
Collateral and (c) neither the OPMW Administrative Agent nor any Secured Party
shall have any obligation or liability under the contracts and agreements
included in the Collateral or otherwise by reason of this Agreement, nor shall
the OPNY Administrative Agent or any Secured Party be obligated to perform any
of the obligations or duties of Pledgor thereunder or to take any action to
collect or enforce any claim assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the OPMW Administrative Agent pursuant to the First Lien
Borrower Twelvepole LLC Interest Pledge 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, in accordance with the terms and conditions
of the Intercreditor Agreement and otherwise in form and substance satisfactory
to the OPNY Administrative Agent. During any period after the First Lien
Borrower Twelvepole LLC Interest Pledge Agreement has terminated in accordance
with its terms, the OPNY Administrative Agent shall have the right, upon the
occurrence and continuance of an Event of Default, in its discretion and without
notice to Pledgor, to transfer to or to register in the name of the OPNY
Administrative Agent or any of its nominees any or all of the Collateral then
held by the OPNY Administrative Agent, subject only to compliance with
Requirements of Law, the terms and conditions of the OPNY Credit Agreement and
the Intercreditor Agreement, the revocable rights specified in Section 9(a) and
the provisions of Section 30. In addition, to the extent certificates or
instruments are held by the OPNY Administrative Agent, the OPNY Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 5. No Subrogation. Pledgor shall not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payments made
hereunder or otherwise, until all Secured Obligations shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such
3
subrogation rights at any time when all Secured Obligations shall not have been
indefeasibly paid in full in cash (whether pursuant to a claim in any bankruptcy
or similar proceeding or otherwise) or when any Commitment shall remain
outstanding, such amount shall be held in trust for the benefit of the OPNY
Administrative Agent and the Secured Parties and shall forthwith be paid to the
OPNY Administrative Agent to be credited and applied to the Secured Obligations,
whether matured or unmatured, in accordance with Section 17.
SECTION 6. Reinstatement. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Secured Obligations is rescinded or must otherwise
be restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is duly formed, validly existing and in good standing
under the laws of the State of Delaware, (ii) has all requisite power and
authority to own its property and assets, to borrow money and to transact the
business in which it is presently engaged and in which it proposes to be
engaged, (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (iv) is in full compliance with its
Governing Documents, all material Contractual Obligations, all applicable
material Requirements of Law and all material Governmental Approvals, except in
each case of this clause (iv) to the extent that the failure to comply with any
of the foregoing could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, (y) the Operating Company is the only Subsidiary
of the OPMW Borrower; and (z) Pledgor is the sole member of the Operating
Company.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary partnership
action, (iii) do not and will not contravene (A) its Governing Documents or (B)
any material Requirement of Law, any material Contractual Obligation or any
material Governmental Approval binding on or affecting it and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted Liens) upon any of its properties
or assets pursuant to, the terms of any material Contractual Obligation binding
on or affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in
4
accordance with its terms, except as enforcement thereof may be subject to (i)
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and (ii) general
principles of equity.
(d) No approval of any Person other than a Governmental Authority
(except such as have been duly obtained, made or given, and are in full force
and effect) is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the second
priority nature of such security interest) or (iii) for the exercise by the OPNY
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (including Section 30 hereof and the Intercreditor Agreement), except,
in each case, for any approval of any such Person the absence of which could not
reasonably be expected to have a material adverse effect on the ability of the
OPNY Administrative Agent to exercise voting rights or remedies in respect of
the Collateral.
(e) The Operating Agreement, true and complete copies of which have
been furnished to the OPNY Administrative Agent, has been duly authorized,
executed and delivered by Pledgor and is in full force and effect and is binding
upon and enforceable against Pledgor in accordance with its terms, except as
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity. There exists
no default under the Operating Agreement.
(f) This Agreement creates a valid security interest in the Collateral
purported to be pledged and assigned by Pledgor hereunder securing the payment
of the Secured Obligations.
(g) Upon the filing of the financing statements (the "Financing
Statements") referenced in Schedule I hereof under the Uniform Commercial Code
as in effect in the State of Delaware (the "Delaware UCC"), the security
interest created hereby shall be perfected under the Delaware UCC, to the extent
that the Collateral constitutes "general intangibles" (as defined in the
Delaware UCC) and no further filings or other actions are necessary to perfect
such security interest. Upon filing of such Financing Statements pursuant to the
Delaware UCC, such security interests, as so perfected, shall be second priority
security interests.
(h) When any certificates or instruments evidencing the Collateral
shall be delivered hereunder and endorsed to, or registered in favor of, the
OPNY Administrative Agent in accordance with Section 8-106 of the Uniform
Commercial Code as in effect in the State of New York (the "NY UCC") or the
State of North Carolina (the "NC UCC"), and for so long as such certificates or
instruments shall remain in the possession of the OPMW Adminstrative Agent (as
contemplated by the terms of the Intercreditor Agreement) or the OPNY
Administrative Agent in the State of New York or the State of North Carolina,
the security interest in such Collateral created hereby shall be perfected under
the NY UCC or the NC UCC, as applicable, and such security interest, as so
perfected, will be a second priority security interest subject only to the lien
of the OPMW Administrative Agent under the First Lien Borrower Twelvepole LLC
Interest
5
Pledge Agreement, it being acknowledged and agreed that, unless and until
permitted in accordance with the terms and conditions of Section 30 and the
Intercreditor Agreement, the certificates and instruments evidencing the
Collateral shall be delivered and endorsed to, or be registered as a first lien
in favor of, and shall remain in possession of, the OPMW Administrative Agent,
and that notwithstanding any provisions of any Financing Documents, no breach,
Default or Event of Default shall occur or exist as a result thereof..
(i) The security interest created by this Agreement in the Collateral
described in clause (a) of Section 1 hereof has been registered as a
subordinated, second lien in the name of the OPNY Administrative Agent in the
register maintained for such purpose at the chief executive office and principal
place of business of the Operating Company and, to the extent that such
Collateral constitutes "uncertificated securities" (as defined in the Delaware
UCC), such security interest is perfected under the Delaware UCC and, as so
perfected, is a second priority security interest.
(j) The chief place of business and chief executive office of Pledgor
and the office where Pledgor keeps its records concerning the Collateral is set
forth under its name on the signature page hereof.
(k) Pledgor is the legal and beneficial owner of the Collateral
purported to be pledged and assigned by it hereunder, free and clear of any
Lien, other than Permitted Liens, including the security interest granted to the
OPMW Administrative Agent under the First Lien Borrower Twelvepole LLC Interest
Pledge Agreement. No effective financing statement or other instrument similar
in effect covering all or any part of such Collateral has been executed or
authorized by Pledgor or, is on file in any recording office, except such as may
have been filed in favor of (i) the OPNY Administrative Agent relating to this
Agreement or (ii) the OPNY Administrative Agent relating to the First Lien
Borrower Twelvepole LLC Interest Pledge Agreement. Pledgor has no trade name.
(l) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(m) No part of the Collateral is subject to the terms of any agreement
restricting the sale or transfer of such Collateral, except for the Operating
Agreement and the Financing Documents (as defined in the OPMW Credit Agreement,
the "OPMW Financing Documents").
(n) Except as set forth in Schedule 4.05 of the OPMW Credit Agreement,
there is no (i) injunction, writ, preliminary restraining order or order of any
nature issued by an arbitrator, court or other Governmental Authority against
Pledgor in connection with the transactions provided for herein, or (ii) action,
suit, arbitration, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority pending against Pledgor or, to Pledgor's
knowledge, threatened against Pledgor which would reasonably be expected to
materially adversely affect the right or ability of Pledgor to fulfill its
obligations under this Agreement.
6
(o) Pledgor has, independently and without reliance upon the OPNY
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
SECTION 8. Further Assurances. (a) Subject to and without limiting
Section 7(h) and Section 30 hereof and the Intercreditor Agreement, Pledgor
agrees that from time to time, at the expense of Pledgor, Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary, or that the OPNY Administrative Agent may
reasonably request, in order to perfect and protect the pledge, assignment,
hypothecation and security interest granted or purported to be granted hereby or
to enable the OPNY Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Pledgor will (i) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the OPNY Administrative Agent may reasonably
request, in order to perfect and preserve the assignment, hypothecation and
security interest granted or purported to be granted hereby; and (ii) mark
conspicuously, at the request of the OPNY Administrative Agent, each of its
records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to the OPNY Administrative Agent, indicating that the
Partnership Agreements and such chattel paper have been assigned and are subject
to the subordinated, second lien security interest pursuant hereto.
(b) Pledgor hereby further authorizes the OPNY Administrative Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) So long as any
Obligations are outstanding, Pledgor shall not be entitled to any payments or
distributions (whether cash or non-cash) pursuant to the Partnership Agreements,
except payments or distributions from the Borrower that are directly distributed
from Pledgor to Holdco in accordance with the Holdco Deposit Account Agreement.
So long as no Event of Default shall have occurred and be continuing, but
subject, nevertheless, at all times to the restrictions imposed by the terms and
conditions of the OPMW Credit Agreement, during any period after the First Lien
Borrower Twelvepole LLC Interest Pledge Agreement has terminated in accordance
with its terms Pledgor shall be entitled to exercise any and all management,
voting and other partnership rights pertaining to any Collateral (including any
partnership interest or Partnership Agreement) and the OPMW Borrower Entities
for any purpose not inconsistent with the terms of this Agreement or any other
OPMW Financing Document; provided, however, that Pledgor shall exercise, or
refrain from exercising, any such right if such action or inaction would have a
material adverse effect on the attachment, perfection, creation or priority of
the security interest in the Collateral or any part thereof as herein granted.
7
(b) If Pledgor receives any distributions in respect of the Collateral
purported to be pledged and assigned by it hereunder, such distributions shall
be promptly delivered to the Collateral Agent to deposit in the Holdco Accounts
pursuant to the Holdco Deposit Account Agreement, or, if such distributions are
in connection with a partial or total liquidation or are non-cash distributions,
to the OPNY Administrative Agent to hold as Collateral and shall, if received by
Pledgor, be received in trust for the benefit of the OPNY Administrative Agent,
be segregated from the other property or funds of Pledgor and be forthwith
delivered to the OPNY Administrative Agent as Collateral in the same form as so
received (with any necessary endorsement or assignment).
(c) Upon the occurrence and during the continuance of an Event of
Default during any period after the First Lien Borrower Twelvepole LLC Interest
Pledge Agreement has terminated in accordance with its terms:
(i) Immediately upon Pledgor's receipt of written
notice from the OPMW Administrative Agent that the OPNY Administrative
Agent intends to act pursuant to this clause (c)(i), all rights of
Pledgor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise
shall thereupon become exercisable by the OPNY Administrative Agent,
acting in good faith, who shall have the sole right to exercise or
refrain from exercising such voting and other consensual rights unless
and until such Event of Default ceases to exist.
(ii) All rights of Pledgor to receive the
distributions, if any, which it would otherwise be authorized to
receive and retain, pursuant to Section 9(a) and (b), above, shall
become exercisable, subject to the terms of the First Lien Borrower
Twelvepole LLC Interest Pledge Agreement and the Intercreditor
Agreement, by the OPNY Administrative Agent who shall thereupon have
the sole right to receive and hold as Collateral such distributions
unless and until such Event of Default ceases to exist.
(iii) All distributions which are received by Pledgor
contrary to the provisions of clause (ii), above, subject to the terms
of the First Lien Borrower Twelvepole LLC Interest Pledge Agreement and
the Intercreditor Agreement shall be received in trust for the benefit
of the OPNY Administrative Agent, shall be segregated from other funds
of Pledgor and shall be forthwith paid over to the OPNY Administrative
Agent as Collateral in the same form as so received (with any necessary
endorsement) for application pursuant to Section 17.
SECTION 10. Place of Incorporation; Place of Perfection; Records.
Pledgor is organized in the State of Delaware, and Pledgor's exact legal name is
Orion Power New York L.P., Inc. Pledgor will not change its jurisdiction of
organization or its name without having given OPNY Administrative Agent not less
than 30 days' prior written notice of its intention to do so, clearly describing
to the OPNY Administrative Agent such new jurisdiction or name and providing
such other information and taking any action in connection therewith as the OPNY
Administrative Agent may reasonably request. Pledgor shall keep its place of
business and chief executive office and the office where it keeps its records
concerning the Collateral, and original copies of each Partnership Agreement and
of all other chattel paper which evidence the Collateral, at its
8
address specified on the signature pages hereof; or, upon 30 days' prior written
notice to the OPNY Administrative Agent, at such other location in a
jurisdiction where all action required by Section 8 shall have been taken with
respect to the Collateral. Pledgor will hold and preserve such records and will
permit representatives of the OPNY Administrative Agent at any time, upon
reasonable prior notice, during normal business hours to inspect and make
abstracts from such records.
SECTION 11. As to the Partnership Agreements. (a) Pledgor shall at its
expense perform and observe all the terms and provisions to be performed or
observed by it under each Partnership Agreement, maintain each Partnership
Agreement in full force and effect, enforce each Partnership Agreement in
accordance with its terms, and take all such action to such end as may be from
time to time reasonably requested by the OPNY Administrative Agent.
(b) Pledgor shall not:
(i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, or create or
suffer to exist any Lien upon or with respect to any of the
Collateral, except for the pledge, assignment, hypothecation
and security interest created by this Agreement, the First
Lien Borrower Twelvepole LLC Interest Pledge Agreement and
Permitted Liens;
(ii) cancel or terminate any Partnership Agreement or consent
to or accept any cancellation or termination thereof;
(iii) amend or otherwise modify in a material respect any
Partnership Agreement; or
(iv) waive any material default under or material breach of
any Partnership Agreement.
SECTION 12. Covenants. Pledgor covenants and agrees that so long as any
OPNY Lender shall have any Commitment outstanding and until the Notes, together
with interest, and all other Secured Obligations are indefeasibly paid in full
in cash, unless the OPNY Administrative Agent shall otherwise consent in
writing, Pledgor:
(a) Maintenance of Register. Will cause each Borrower Entity to
maintain at all times a register at its chief place of business and chief
executive office in which the subordinated, second lien security interest in the
Collateral granted hereby to the OPNY Administrative Agent, to the extent that
the same constitutes "uncertificated securities" (as defined in the Delaware
UCC), shall be evidenced.
(b) Preservation of Existence, Etc. Will cause each Borrower Entity to
preserve and maintain, its lawful existence, rights (charter and statutory), and
franchises in accordance with the Transaction Documents.
9
(c) Jurisdiction of Organization. Will cause each Borrower Entity at
all times to be a limited partnership organized under the laws of the State of
Delaware.
(d) Bankruptcy. Will not file a voluntary petition or otherwise
initiate proceedings to have any Borrower Entity adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against any Borrower Entity, or file a petition seeking or consenting to
reorganization or relief of any Borrower Entity as debtor under any applicable
federal or state law relating to bankruptcy, insolvency, or other relief for
debtors with respect to any Borrower Entity; or seek or consent to the
appointment of any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of any Borrower Entity or of
all or any substantial part of the properties and assets of any Borrower Entity,
or make any general assignment for the benefit of creditors of any Borrower
Entity, or admit in writing the inability of any Borrower Entity to pay its
debts generally as they become due or declare or effect a moratorium on the debt
of any Borrower Entity or take any action in furtherance of any or the
foregoing.
(e) Operations Matters. In the conduct of its business and operations,
Pledgor shall, and shall cause each Borrower Entity to:
(i) maintain books and records, separate from those of any
other Person;
(ii) maintain its bank accounts and all its other assets
separate from those of any other Person;
(iii) hold regular member, shareholder or partnership
meetings, as appropriate, to conduct its business, and observe all
other limited liability company, corporate or partnership formalities,
as the case may be;
(iv) hold itself out to creditors and the public as a legal
entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part of a
consolidated or combined group, then it shall be shown as a separate
member of such group, including in a footnote(s) to the relevant
financial statements disclosing its separate existence and identity and
the existence of its own assets;
(vi) allocate and charge fairly and reasonably any common
employee or overhead shared with Affiliates;
(vii) transact all business with Affiliates on an arm's-length
basis and to enter into transactions with Affiliates on an arm's-length
basis;
(viii) conduct business in its own name;
10
(ix) with regard to each Borrower Entity, maintain a
sufficient number of employees in light of such Borrower Entity's
contemplated business operations;
(x) correct any misunderstanding regarding its separate
identity of which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of any other
Person; and
(xii) maintain adequate capital in light of its contemplated
business operations.
SECTION 13. Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the OPNY Administrative Agent
hereunder. Pledgor hereby appoints the OPNY Administrative Agent as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time in the OPNY Administrative
Agent's discretion at any time that an Event of Default shall have occurred and
be continuing during any period after the First Lien Partnership Interest Pledge
Agreement has terminated in accordance with its terms, to take any action and to
execute any instrument which the OPNY Administrative Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including to ask,
demand, collect, sue for, recover, compound, receive and give acceptance and
receipts for moneys due and to become due under or in connection with the
Collateral, to receive, indorse, and collect any drafts or other instruments,
documents and chattel paper in connection therewith, to file any claims or take
any action or institute any proceedings which the OPNY Administrative Agent may
deem to be necessary or desirable for the collection thereof or to enforce
compliance with the terms and conditions of any Partnership Agreement, and to
sell assign, lease or otherwise dispose of the Collateral or any part thereof
pursuant to this Agreement. Such appointment is coupled with an interest and is
irrevocable.
SECTION 14. Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the OPNY Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the OPNY
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 20(b).
SECTION 15. Duties of the Administrative Agent, Pledgor and the
Operating Company. (a) The powers conferred on the OPNY Administrative Agent
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the OPNY Administrative Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral and no
such duties shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the contrary
notwithstanding, that Pledgor and the Operating Company shall remain liable to
perform all of their respective obligations, if any, assumed by them with
respect to the Collateral and the OPNY Administrative Agent and the OPNY Lenders
shall have no obligations or liabilities with respect to any Collateral by
reason of or arising out of or in connection with this Agreement, nor shall the
11
OPNY Administrative Agent or the OPNY Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of Pledgor or the Operating
Company under or with respect to any Collateral.
SECTION 16. Remedies. If any Event of Default shall have occurred and
be continuing, subject to the terms of Section 9, Section 30 and compliance with
Requirements of Law and the terms of the Intercreditor Agreement:
(a) The OPNY Administrative Agent may exercise any and all rights and
remedies of Pledgor under or in connection with the Operating Agreement, the
Membership Interests or otherwise in respect of the Collateral, including any
and all rights of Pledgor to demand or otherwise require payment of any amount
under, or performance of any provision of, any Partnership Agreement and all
rights of Pledgor to control the operation of the Borrower Entities.
(b) All payments received by Pledgor under or in connection with the
Operating Agreement, the Membership Interests, or otherwise in respect of the
Collateral shall be received in trust for the benefit of the OPNY Administrative
Agent, shall be segregated from other funds of Pledgor and shall be forthwith
paid over to the OPNY Administrative Agent in the same form as so received (with
any necessary endorsement).
(c) Any Collateral repossessed by the OPNY Administrative Agent under
or pursuant to this Section 16 or any other provision hereof and in accordance
with Section 30 hereof and the Intercreditor Agreement, and any other Collateral
whether or not so repossessed by the Administrative Agent, may be sold,
assigned, leased or otherwise disposed of under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the OPNY Administrative Agent may,
upon written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceeding permitted
by such requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the OPNY Administrative Agent shall determine, in its
sole discretion, that any of the Collateral threatens to decline quickly in
value or to become worthless, any such sale may be made upon three days' notice
to Pledgor) specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of Law, the
OPNY Administrative Agent on behalf of the OPNY Lenders may bid for and become
the purchaser of the Collateral or any item thereof, offered for sale in
accordance with this Section 16. If, under mandatory requirements of any
Requirement of Law, the OPNY Administrative Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to Pledgor as hereinabove specified, the OPNY Administrative
Agent need give Pledgor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of any Requirement of Law.
12
(d) The OPNY Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the Uniform Commercial Code or any other
applicable Requirement of Law in all relevant jurisdictions.
(e) Waiver of Claims. Except as otherwise provided in this Agreement,
PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE OPNY ADMINISTRATIVE
AGENT TAKING POSSESSION OR THE OPNY ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF
THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF
ANY SUCH JURISDICTION, and Pledgor hereby further waives:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the gross negligence or
willful misconduct of either of the OPNY Administrative Agent or any
Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the OPNY
Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any
Requirements of Law in order to prevent or delay the enforcement of
this Agreement (including any right to claim that such enforcement
should be stayed pending the outcome of any other action or proceeding
(including any arbitration proceeding)) or the absolute sale of the
Collateral or any portion thereof, and Pledgor, for itself and all who
may claim under it, insofar as it or they now or hereafter lawfully
may, hereby waives the benefit of all such Requirements of Law.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall, to the extent permitted by Requirements
of Law, operate to divest all right, title, interest, claim and demand, either
at law or in equity, of Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through and under Pledgor.
SECTION 17. Application of Proceeds. Notwithstanding any other
provision of this Agreement but subject to Section 30 hereof and the
Intercreditor Agreement, all payments made under or in connection with this
Agreement, and all moneys collected by the OPNY Administrative Agent upon any
sale or other disposition of the Collateral pursuant to Section 16, together
with all other moneys received by the OPNY Administrative Agent hereunder, shall
be applied in accordance with the Financing Documents. For the avoidance of
doubt, it is understood that Pledgor shall remain liable to the extent of any
deficiency between the amount of
13
all moneys collected by the OPNY Administrative Agent upon any such sale or
other disposition of the Collateral and the aggregate amount of the Secured
Obligations.
SECTION 18. Remedies Cumulative. No failure or delay on the part of the
OPNY Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the OPNY Administrative Agent or any Secured Party
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the OPNY
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the OPNY Administrative Agent or any Secured Party to any other or
further action in any circumstances without notice or demand.
SECTION 19. Discontinuance of Proceedings. In case the OPNY
Administrative Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the OPNY Administrative Agent, then and in
every such case Pledgor, the OPNY Administrative Agent and each holder of any of
the Secured Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the OPNY
Administrative Agent shall continue as if no such proceeding had been
instituted.
SECTION 20. Indemnity and Expenses. (a) Pledgor agrees to indemnify and
hold harmless the OPNY Administrative Agent and each Secured Party from and
against any and all claims, losses and liabilities arising out of or resulting
from the Collateral or Pledgor's pledge and assignment under this Agreement
(including enforcement against Pledgor of this Agreement), except claims, losses
or liabilities resulting from the OPNY Administrative Agent's or any Secured
Party's gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the OPNY Administrative Agent or
any Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the OPNY Administrative Agent or any Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the OPNY Administrative Agent or any Secured Party
hereunder against Pledgor or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 21. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and
14
accomplished in accordance with the requirements of Section 9.02 of the OPNY
Credit Agreement. No delay on the part of any Secured Party in the exercise of
any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial waiver by such Secured Party of any right, power or remedy
preclude any further exercise thereof, or the exercise of any other right, power
or remedy. In case any provision hereof shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
SECTION 22. Security Interest Absolute. The obligations of Pledgor
under this Agreement are independent of the Secured Obligations, and, subject to
Section 30 and the Intercreditor Agreement, a separate action or actions may be
brought and prosecuted against Pledgor to enforce this Agreement, irrespective
of whether any action is brought against any other pledgor or any guarantor of
the Secured Obligations or whether any other pledgor or any guarantor of the
Secured Obligations is joined in any such action or actions. All rights of the
OPNY Administrative Agent and the assignment, hypothecation and security
interest hereunder, and all obligations of Pledgor hereunder, shall be absolute
and unconditional, to the extent permitted by applicable Requirements of Law,
irrespective of:
(a) any lack of validity or enforceability of this Agreement,
the OPNY Credit Agreement, any other Financing Document or any other agreement
or instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor, any Credit Party or any other Credit Party (as
defined in the OPMW Credit Agreement, an "OPMW Credit Party"), the recovery of
any judgment against Pledgor, any Credit Party or any other OPMW Credit Party,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor, any Credit
Party or any other OPMW Credit Party contained in this Agreement, the Credit
Agreement or any other Financing Document, (ii) any impairment, modification,
release or limitation of the liability of Pledgor or any other Credit Party or
any of their estates in bankruptcy, or any remedy for the enforcement thereof,
resulting from the operation of any present or future provision of any
applicable bankruptcy law, as amended, or other statute or from the decision of
any court, (iii) the assertion or exercise by Pledgor, the OPNY Administrative
Agent or any other Secured Party of any rights or remedies, (iv) the assignment
or the purported assignment of any property as security for the Secured
Obligations, including all or any part of the rights of Pledgor under this
Agreement, (v) the extension of the time for payment by Pledgor or any other
OPMW Credit Party or any other guarantor of any payments or other sums or any
part thereof owing or payable under any of the terms and provisions of any
Financing Document or of the time for performance by Pledgor, any Credit Party
or any other OPMW Credit Party of any other obligations under or arising out of
any terms or provisions or the extension of the renewal of any thereof, (vi) the
modification or amendment (whether material or otherwise) of any duty, agreement
or obligation of Pledgor, any Credit Party or any other OPMW Credit Party set
forth in any Financing Document, (vii) the voluntary or
15
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting Pledgor, any Credit Party or any other OPMW Credit Party or
any of their respective assets, or the disaffirmancy of this Agreement or any
Financing Document in any such proceeding, (viii) the release or discharge of
Pledgor or any other Credit Party from the performance or observance of any
agreement, covenant, term or condition contained in any of such instruments by
operation of law, (ix) the unenforceability of this Agreement or any Financing
Document or (x) any other circumstance which might otherwise constitute a legal
or equitable discharge of a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
SECTION 23. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the OPNY Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any other address
or telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 24. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto and shall inure to the benefit of the OPNY
Lenders; provided, however, that Pledgor may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the OPNY
Administrative Agent and each of the OPNY Lenders. Any OPNY Lender may transfer,
assign or grant all or such relevant part of its rights hereunder in connection
with an assignment or transfer of all or any part of its interest in its Loans
(as defined in the OPNY Credit Agreement) in accordance with the provisions of
the OPNY Credit Agreement, and such assignee shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or otherwise.
All agreements, statements, representations and warranties made by Pledgor
herein or in any certificate or other instrument delivered by Pledgor or on its
behalf under this Agreement shall be considered to have been relied upon by the
OPNY Lenders and shall survive the execution and delivery of this Agreement, the
OPNY Credit Agreement and the other Financing Documents regardless of any
investigation made by the Lenders or on their behalf.
SECTION 25. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no OPNY Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash. This
Agreement shall terminate when all Secured Obligations have been indefeasibly
paid in full in cash and all Commitments have been terminated, and the OPNY
Administrative Agent, at the written request and expense of Pledgor, will
promptly authorize, execute and deliver, as applicable, to Pledgor the proper
instruments (which may include Uniform Commercial Code termination statements on
form UCC-3) acknowledging the termination of this Agreement, and
16
will promptly duly assign, transfer and deliver to Pledgor (without recourse and
without any representation or warranty) free from any interest of the OPNY
Administrative Agent or Lien granted hereunder such of the Collateral as may be
in possession of the OPNY Administrative Agent and has not theretofore been sold
or otherwise applied or released pursuant to this Agreement together with such
notices to third parties as may be necessary to countermand any notices
previously sent to them pursuant hereto.
SECTION 26. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS OTHERWISE DEFINED HEREIN
OR IN THE OPNY CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NY UCC ARE USED
HEREIN AS THEREIN DEFINED. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN PLEDGOR AND EACH
SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH SECURED
PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
17
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST PLEDGOR OR
ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY SECURED
PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) Pledgor hereby irrevocably designates National Registered Agents,
Inc., with an address at 875 avenue of the americas, suite 501, New York, New
York 10001 as the designee, appointee and agent of Pledgor to receive for and on
behalf of Pledgor service of process in such respective jurisdictions in any
legal action or proceeding with respect to this Agreement or any documents
related thereto. It is understood that a copy of such process served on such
agent will be promptly forwarded by mail to Pledgor at its address set forth in
accordance with Section 23. Pledgor further irrevocably consents to the service
of process of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to Pledgor at its said address, such service to become effective on the
date of receipt thereof.
(f) Nothing in this Agreement SHALL affect the right of any party to
this Agreement (i) to serve process in any other manner permitted by law or (ii)
to commence legal proceedings or otherwise against any party in any other
JURISDICTION, in either case, solely as permitted in subsection (c) of the
section 27.
SECTION 28. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
18
SECTION 29. Limitation of Recourse. Except as otherwise expressly
provided in the Financing Documents and the OPMW Financing Documents, the
obligations of Pledgor hereunder are obligations solely of Pledgor and shall not
constitute a debt or obligation of any direct or indirect member, partner or
shareholder of Pledgor or any of their respective directors, officers, agents or
employees (each such Person, a "Non-Recourse Party"). No Non-Recourse Party
shall be liable for any amount payable by Pledgor under this Agreement and the
Secured Parties shall not seek a money judgment or deficiency or personal
judgment against any Non-Recourse Party for payment of the indebtedness payable
by Pledgor evidenced by this Agreement. No property or assets of any
Non-Recourse Party, other than as contemplated in the Financing Documents or the
OPMW Financing Documents, shall be sold, levied upon or otherwise used to
satisfy any judgment rendered in connection with any action brought against
Pledgor with respect to this Agreement or the other Financing Documents or OPMW
Financing Documents. The foregoing acknowledgments, agreements and waivers shall
be enforceable by any Non-Recourse Party. Notwithstanding the foregoing, nothing
in this Section shall limit or affect or be construed to limit or affect the
obligations and liabilities of any Credit Party or any other Non-Recourse Party
(a) in accordance with the terms of any Transaction Document or Financing
Document creating such liabilities and obligations to which such Credit Party or
Non-Recourse Party is a party, (b) arising from liability pursuant to any
applicable Requirement of Law for such Credit Party's or such Non-Recourse
Party's fraudulent actions, knowing misrepresentations or willful misconduct or
(c) with respect to amounts distributed to it in violation of Section 6.10 of
the OPNY Credit Agreement.
SECTION 30. Subordination. Notwithstanding any provision of this
Agreement or any other Financing Document to the contrary, (i) the security
interests created and granted hereby are subject to, subordinate and inferior to
the security interests created by the First Lien Borrower Twelvepole LLC
Interest Pledge Agreement, in accordance with, and all rights, powers and
remedies granted to the OPNY Administrative Agent thereunder, are subject in all
respects to the terms and conditions of the Intercreditor Agreement, including
restrictions on the right of the OPNY Administrative Agent to give notices,
exercise power of attorney rights, direct or receive payments, hold, control or
receive delivery of any Assignment Collateral or other possessory collateral or
to exercise remedies and to apply proceeds of Collateral; provided, that if and
to the extent the Intercreditor Agreement is amended, supplemented or modified
at any time from time to time and such amendment, supplement or modification
could reasonably be expected to have any adverse effect on the Pledgor's rights,
duties or obligations hereunder or under any other Financing Document, such
amendment, supplement or modification shall not be effective as to the Pledgor
without the Pledgor's prior written acknowledgment (which acknowledgment shall
not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or supplement shall be effective for purposes of this Agreement and
the other Financing Documents, (ii) the OPNY Administrative Agent on behalf of
each of the Secured Parties hereby acknowledges and agrees that the Pledgor
shall not have any duty and obligation with respect to the perfection or
priority of the security interest granted hereunder in and to any of the
Collateral (and no Default or Event of Default shall result or occur) to the
extent (a) such Collateral is in the possession or control of the OPMW
Administrative Agent, (b) such Collateral is not transferred by the OPMW
Administrative Agent to the OPNY Administrative Agent as required pursuant to
the Intercreditor Agreement, (c) such perfection or priority requires any
consent, approval or
19
other action of the OPMW Administrative Agent, or (d) the OPMW Administrative
Agent then maintains a perfected, first priority security interest in and to
Collateral and (iii) no obligations contained in this Agreement shall require
the OPMW Borrower to take or omit to take any action inconsistent with the terms
and conditions of the OPMW Deposit Account Agreement and/or the Holdco Deposit
Account Agreement and no Default or Event of Default shall arise or result from
the taking or omitting of such action.
[Remainder of page intentionally left blank]
20
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
ORION POWER MIDWEST L.P.
By: Orion Power MidWest GP, Inc., its
general partner
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity,
but solely as OPNY Administrative Agent
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
21
ANNEX I
TO
PARTNERSHIP INTEREST PLEDGE AGREEMENT
Partnership Interests
Partnership Agreements
EXHIBIT J-5
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
SECOND LIEN PARTNERSHIP INTEREST
PLEDGE AGREEMENT
made by
ORION POWER MIDWEST GP, INC.
to
BANK OF AMERICA, N.A.,
as OPNY Administrative Agent
Dated as of : October 28, 2002
================================================================================
TABLE OF CONTENTS
<Table>
SECTION 1. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST................................................2
SECTION 2. SECURITY FOR SECURED OBLIGATIONS..............................................................3
SECTION 3. PLEDGOR REMAINS LIABLE........................................................................3
SECTION 4. DELIVERY OF COLLATERAL........................................................................3
SECTION 5. NO SUBROGATION................................................................................3
SECTION 6. REINSTATEMENT.................................................................................4
SECTION 7. REPRESENTATIONS AND WARRANTIES................................................................4
SECTION 8. FURTHER ASSURANCES............................................................................7
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC.............................................................7
SECTION 10. PLACE OF INCORPORATION; PLACE OF PERFECTION; RECORDS..........................................8
SECTION 11. AS TO THE PARTNERSHIP AGREEMENT...............................................................9
SECTION 12. COVENANTS.....................................................................................9
SECTION 13. OPNY ADMINISTRATIVE AGENT....................................................................11
SECTION 14. OPNY ADMINISTRATIVE AGENT MAY PERFORM........................................................12
SECTION 15. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR AND OPMW BORROWER................................12
SECTION 16. REMEDIES.....................................................................................12
SECTION 17. APPLICATION OF PROCEEDS......................................................................14
SECTION 18. REMEDIES CUMULATIVE..........................................................................14
SECTION 19. DISCONTINUANCE OF PROCEEDINGS................................................................15
SECTION 20. INDEMNITY AND EXPENSES.......................................................................15
SECTION 21. WAIVER, AMENDMENT; SEVERABILITY..............................................................15
SECTION 22. SECURITY INTEREST ABSOLUTE...................................................................15
SECTION 23. ADDRESSES FOR NOTICES........................................................................17
</Table>
i
<Table>
SECTION 24. SUCCESSORS AND ASSIGNS.......................................................................17
SECTION 25. TERMINATION; RELEASE.........................................................................17
SECTION 26. HEADINGS DESCRIPTIVE, ETC....................................................................17
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE..........................................17
SECTION 28. EXECUTION IN COUNTERPARTS....................................................................19
SECTION 29. LIMITATION OF RECOURSE.......................................................................19
SECTION 30. SUBORDINATION................................................................................20
</Table>
ii
SECOND LIEN PARTNERSHIP INTEREST PLEDGE AGREEMENT
SECOND LIEN PARTNERSHIP INTEREST PLEDGE AGREEMENT, dated as of October
28, 2002 (this "Agreement"), made by ORION POWER MIDWEST GP, INC., a Delaware
corporation ("Pledgor"), as the obligor hereunder, to BANK OF AMERICA, N.A., as
administrative agent (in such capacity, together with any successors and
assigns, the "OPNY Administrative Agent") for the benefit of the Secured Parties
(as defined in the OPNY Credit Agreement referred to below).
WITNESSETH:
WHEREAS, Pledgor is the sole general partner of Orion Power Midwest,
L.P., a Delaware limited partnership (the "OPMW Borrower");
WHEREAS, Orion Power New York, L.P. (the "OPNY Borrower") has entered
into an Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPNY Credit Agreement"), with Bank of America, N.A., as
Administrative Agent (the "OPNY Administrative Agent"), Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, Union Bank
of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman
Island Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "OPNY Lenders"),
pursuant to which the OPNY Lenders have agreed, inter alia, to renew, modify and
extend credit facilities that were issued to the OPNY Borrower to finance a
portion of the purchase price of the Portfolio Assets and to provide working
capital availability to the OPNY Borrower;
WHEREAS, the OPMW Borrower has entered into a Second Amended and
Restated Credit Agreement, dated as of the Restructuring Effective Date (as the
same may be amended, supplemented or otherwise modified from time to time, the
"OPMW Credit Agreement"), with the OPMW Administrative Agent, Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, The Bank
of Nova Scotia, Mizuho Bank, Ltd, and Bayerische Hypo-Und Vereinsbank AG, New
York Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "OPMW Lenders"),
pursuant to which the OPMW Lenders have agreed, inter alia, to renew, modify and
extend credit facilities that were issued to the OPMW Borrower to finance a
portion of the purchase price of the Portfolio Assets (as defined in the OPMW
Credit Agreement) and to provide working capital availability to the OPMW
Borrower;
WHEREAS, Pledgor has entered into that certain Amended and Restated
Partnership Interest Pledge Agreement, dated as of the Restructuring Effective
Date (as the same may be amended, supplemented or otherwise modified from time
to time, the "First Lien Partnership Interest Pledge Agreement"), in favor of
the OPMW Administrative Agent, pursuant to which
Pledgor has, among other things, granted a first priority pledge, assignment and
security interest in the Collateral to the OPMW Administrative Agent;
WHEREAS, the OPMW Administrative Agent, the OPNY Administrative Agent,
the OPMW Lenders, the OPNY Lenders and Bank of America, N.A., as collateral
agent have entered into a Collateral Agency and Intercreditor Agreement, dated
as of the Restructuring Effective Date (the "Intercreditor Agreement");
WHEREAS, all capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the OPNY Credit Agreement
and the principles of construction set forth in Section 1.04 of the OPNY Credit
Agreement shall apply hereto; provided, that, the following terms shall have the
meanings set forth in the OPMW Credit Agreement: "Acceptable Reserves",
"Contractual Obligations", "Distributions", "Governing Documents", "Governmental
Approvals", "Governmental Authority", "Lien", "Permitted Lien" and "Portfolio
Asset"; and
WHEREAS, it is a condition precedent to the obligations of the OPNY
Lenders under the OPNY Credit Agreement that this Agreement shall have been
entered into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the OPNY Lenders to enter into the OPNY Credit Agreement, to make
available to the OPNY Borrower such credit facilities and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Pledge; Assignment; Grant of Security Interest. Pledgor
hereby pledges, hypothecates and assigns to the OPNY Administrative Agent, and
hereby grants to the OPNY Administrative Agent for the benefit of the Secured
Parties, a second priority pledge and assignment of, and a second priority
security interest in, all of its right, title and interest in and to the
following (the "Collateral"):
(a) All general and limited partnership interests now owned or
hereafter acquired by Pledgor in and to the OPMW Borrower (collectively, the
"Partnership Interests") and the partnership agreement relating to the OPMW
Borrower (the "Partnership Agreements") and all rights related thereto,
including (i) all rights of Pledgor as a general or limited partner, as the case
may be, and all rights to receive distributions, cash, instruments and other
property from time to time receivable or otherwise distributable in respect of
any Partnership Interest or pursuant to the Partnership Agreement, (ii) all
rights of Pledgor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Partnership Interest or the Partnership Agreement,
(iii) all claims of Pledgor for damages arising out of or for breach of or
default under the Partnership Agreement, (iv) the right of Pledgor to terminate
the Partnership Agreement, to perform and exercise consensual or voting rights
thereunder and to compel performance and otherwise exercise all remedies
thereunder, (v) all rights of Pledgor as a general or limited partner of the
OPMW Borrower, to any property and assets of the OPMW Borrower (whether real
property, inventory, equipment, contract rights, accounts, receivables, general
intangibles, securities, instruments, chattel paper, documents, chooses in
action or otherwise), and (vi) all certificates or
2
instruments evidencing an ownership or partnership interest in the OPMW Borrower
or its assets; and
(b) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing (including, without limitation, proceeds that
constitute property of the types described above).
SECTION 2. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of all obligations of Pledgor under
the OPMW Guarantee (collectively, the "Secured Obligations").
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under the Partnership Agreement
and the other contracts and agreements included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by any
Secured Party of any of the rights hereunder shall not release Pledgor from any
of its duties or obligations under the contracts and agreements included in the
Collateral and (c) neither the OPNY Administrative Agent nor any Secured Party
shall have any obligation or liability under the contracts and agreements
included in the Collateral or otherwise by reason of this Agreement, nor shall
the OPNY Administrative Agent or any Secured Party be obligated to perform any
of the obligations or duties of Pledgor thereunder or to take any action to
collect or enforce any claim assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the OPMW Administrative Agent pursuant to the First Lien
Partnership Interest Pledge 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, in accordance with the terms and conditions of the
Intercreditor Agreement and otherwise in form and substance reasonably
satisfactory to the OPNY Administrative Agent. During any period after the First
Lien Partnership Interest Pledge Agreement has terminated in accordance with its
terms, the OPNY Administrative Agent shall have the right, upon the occurrence
and continuance of an Event of Default, in its discretion and without notice to
Pledgor, to transfer to or to register in the name of the OPNY Administrative
Agent or any of its nominees any or all of the Collateral then held by the OPNY
Administrative Agent, subject only to compliance with Requirements of Law, the
terms and conditions of the OPNY Credit Agreement and the Intercreditor
Agreement, the revocable rights specified in Section 9(a) and the provisions of
Section 30. In addition, to the extent certificates or instruments are held by
the OPNY Administrative Agent, the OPNY Administrative Agent shall have the
right at any time to exchange certificates or instruments representing or
evidencing Collateral for certificates or instruments of smaller or larger
denominations.
SECTION 5. No Subrogation. Pledgor shall not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payments made
hereunder or otherwise, until all Secured Obligations shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such subrogation rights at any
time when all Secured Obligations shall not have been indefeasibly paid
3
in full in cash (whether pursuant to a claim in any bankruptcy or similar
proceeding or otherwise) or when any Commitment shall remain outstanding, such
amount shall be held in trust for the benefit of the OPNY Administrative Agent
and the Secured Parties and shall forthwith be paid to the OPNY Administrative
Agent to be credited and applied to the Secured Obligations, whether matured or
unmatured, in accordance with Section 17.
SECTION 6. Reinstatement. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Secured Obligations is rescinded or must otherwise
be restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is duly formed, validly existing and in good standing
under the laws of the State of Delaware, (ii) has all requisite power and
authority to own its property and assets, to borrow money and to transact the
business in which it is presently engaged and in which it proposes to be
engaged, (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (iv) is in full compliance with its
Governing Documents, all material Contractual Obligations, all applicable
material Requirements of Law and all material Governmental Approvals, except in
each case of this clause (iv) to the extent that the failure to comply with any
of the foregoing could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, (x) Pledgor is the sole General Partner of the
OPMW Borrower; and (y) Twelvepole Creek LLC is the only Subsidiary of the OPMW
Borrower.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary corporate
action, (iii) do not and will not contravene (A) its Governing Documents or (B)
any material Requirement of Law, any material Contractual Obligation or any
material Governmental Approval binding on or affecting it and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted Liens) upon any of its properties
or assets pursuant to, the terms of any material Contractual Obligation binding
on or affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any
4
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of equity.
(d) No approval of any Person (except for any Governmental Authority),
except such as have been duly obtained, made or given, and are in full force and
effect, is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the second
priority nature of such security interest) or (iii) for the exercise by the OPNY
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (including Section 30 hereof and the Intercreditor Agreement), except,
in each case, for any approval of any such Person the absence of which could not
reasonably be expected to have a material adverse effect on the ability of the
Administrative Agent to exercise voting rights or remedies in respect of the
Collateral.
(e) The Partnership Agreement, a true and complete copy of which has
been furnished to the OPNY Administrative Agent, has been duly authorized,
executed and delivered by Pledgor and is in full force and effect and is binding
upon and enforceable against Pledgor in accordance with its terms, except as
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity. There exists
no default under the Partnership Agreement.
(f) This Agreement creates a valid security interest in the Collateral
purported to be pledged and assigned by Pledgor hereunder securing the payment
of the Secured Obligations.
(g) Upon the filing of the financing statements (the "Financing
Statements") referenced in Schedule I hereof under the Uniform Commercial Code
as in effect in the State of Delaware (the "Delaware UCC"), the security
interest created hereby shall be perfected under the Delaware UCC, to the extent
that the Collateral constitutes "general intangibles" (as defined in the
Delaware UCC) and no further filings or other actions are necessary to perfect
such security interest. Upon filing of such Financing Statements pursuant to the
Delaware UCC, such security interests, as so perfected, are second priority
security interests.
(h) When any certificates or instruments evidencing the Collateral
shall be delivered hereunder and endorsed to, or registered in favor of, the
OPNY Administrative Agent in accordance with Section 8-106 of the Uniform
Commercial Code as in effect in the State of New York (the "NY UCC") or the
State of North Carolina (the "NC UCC"), and for so long as such certificates or
instruments shall remain in the possession of the OPMW Administrative Agent (as
contemplated by the terms of the Intercreditor Agreement) or the OPNY
Administrative Agent in the State of New York or the State of North Carolina,
the security interest in such Collateral created hereby shall be perfected under
the NY UCC or the NC UCC, as applicable, and such security interest, as so
perfected, will be a second priority security interest subject only to the lien
of the OPMW Administrative Agent under the First Lien Borrower Security
Agreement, it being acknowledged and agreed that, unless and until permitted in
accordance with the terms and
5
conditions of Section 30 and the Intercreditor Agreement, the certificates and
instruments evidencing the Collateral shall be delivered and endorsed to, or be
registered as a first lien in favor of, and shall remain in possession of, the
OPMW Administrative Agent, and that notwithstanding any provisions of any
Financing Documents, no breach, Default or Event of Default shall occur or exist
as a result thereof.
(i) The security interest created by this Agreement in the Collateral
described in clause (a) of Section 1 hereof has been registered as a
subordinated, second lien in the name of the OPNY Administrative Agent in the
register maintained for such purpose at the chief executive office and principal
place of business of the OPMW Borrower and each Operating Company, as
applicable, and, to the extent that such Collateral constitutes "uncertificated
securities" (as defined in the Delaware UCC), such security interest is
perfected under the Delaware UCC and, as so perfected, is a second priority
security interest.
(j) The chief place of business and chief executive office of Pledgor
and the office where Pledgor keeps its records concerning the Collateral is set
forth under its name on the signature page hereof.
(k) Pledgor is the legal and beneficial owner of the Collateral
purported to be pledged and assigned by it hereunder, free and clear of any
Lien, other than Permitted Liens, including the security interest granted to the
OPMW Administrative Agent under the First Lien Partnership Interest Pledge
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral has been executed or
authorized by Pledgor or, is on file in any recording office, except such as may
have been filed in favor of (i) the OPNY Administrative Agent relating to this
Agreement or (ii) the OPMW Administrative Agent relating to the First Lien
Partnership Interest Pledge Agreement (as hereinafter defined). Pledgor has no
trade name.
(l) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(m) No part of the Collateral is subject to the terms of any agreement
restricting the sale or transfer of such Collateral, except for the Partnership
Agreement, the Financing Documents and the Financing Documents (as defined in
the OPMW Credit Agreement, the "OPMW Financing Documents").
(n) Except as set forth on Schedule 4.05 of the OPMW Credit Agreement,
there is no (i) injunction, writ, preliminary restraining order or order of any
nature issued by an arbitrator, court or other Governmental Authority against
Pledgor in connection with the transactions provided for herein, or (ii) action,
suit, arbitration, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority pending against Pledgor or, to Pledgor's
knowledge, threatened against Pledgor which would reasonably be expected to
materially adversely affect the right or ability of Pledgor to fulfill its
obligations under this Agreement.
6
(o) Pledgor has, independently and without reliance upon the OPNY
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
SECTION 8. Further Assurances. (a) Subject to and without limiting
Section 7(h) and Section 30 hereof and the Intercreditor Agreement, Pledgor
agrees that from time to time, at the expense of Pledgor, Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary, or that the OPNY Administrative Agent may
reasonably request, in order to perfect and protect the pledge, assignment,
hypothecation and security interest granted or purported to be granted hereby or
to enable the OPNY Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Pledgor will (i) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the OPNY Administrative Agent may reasonably
request, in order to perfect and preserve the assignment, hypothecation and
security interest granted or purported to be granted hereby; and (ii) mark
conspicuously, at the request of the OPNY Administrative Agent, each of its
records pertaining to the Collateral with a legend, in form and substance
satisfactory to the OPNY Administrative Agent, indicating that the Partnership
Agreement and such chattel paper have been assigned and are subject to the
subordinated, second lien security interest pursuant hereto.
(b) Pledgor hereby further authorizes the OPNY Administrative Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) So long as any
Obligations are outstanding, the Pledgor shall not be entitled to any payments
or distributions (whether cash or non-cash) pursuant to the Partnership
Agreement, except payments or distributions from the OPMW Borrower that are
directly distributed from Pledgor to Holdco in accordance with the Holdco
Deposit Account Agreement. So long as no Event of Default shall have occurred
and be continuing, but subject, nevertheless, at all times to the restrictions
imposed by the terms and conditions of the OPMW Credit Agreement, during any
period after the First Lien Partnership Interest Pledge Agreement has terminated
in accordance with its terms, Pledgor shall be entitled to exercise any and all
management, voting and other partnership rights pertaining to any Collateral
(including but not limited to any partnership interest or the Partnership
Agreement) and the OPMW Borrower for any purpose not inconsistent with the terms
of this Agreement or any other OPMW Financing Document; provided, however, that
Pledgor shall exercise, or refrain from exercising, any such right if such
action or inaction would have a material adverse effect on the attachment,
perfection, creation or priority of the security interest in the Collateral or
any part thereof as herein granted.
(b) If Pledgor receives any distributions in respect of the Collateral
purported to be pledged and assigned by it hereunder, such distributions shall
be promptly delivered to the Collateral Agent to deposit in the Holdco Accounts
pursuant to the Holdco Deposit Account
7
Agreement, or, if such distributions are in connection with a partial or total
liquidation or are non-cash distributions, to the OPNY Administrative Agent to
hold as Collateral and shall, if received by Pledgor, be received in trust for
the benefit of the OPNY Administrative Agent, be segregated from the other
property or funds of Pledgor and be forthwith delivered to the OPNY
Administrative Agent as Collateral in the same form as so received (with any
necessary endorsement or assignment).
(c) Upon the occurrence and during the continuance of an Event of
Default during any period after the First Lien Partnership Interest Pledge
Agreement has terminated in accordance with its terms:
(i) Immediately upon Pledgor's receipt of written
notice from the OPMW Administrative Agent that the OPNY Administrative
Agent intends to act pursuant to this clause (c)(i), all rights of
Pledgor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise
shall thereupon become exercisable by the OPNY Administrative Agent,
acting in good faith, who shall have the sole right to exercise or
refrain from exercising such voting and other consensual rights unless
and until such Event of Default ceases to exist.
(ii) All rights of Pledgor to receive the
distributions, if any, which it would otherwise be authorized to
receive and retain, pursuant to Section 9(a) and (b), above, shall
become exercisable, subject to the terms of the First Lien Partnership
Interest Pledge Agreement and the Intercreditor Agreement, by the OPNY
Administrative Agent who shall thereupon have the sole right to receive
and hold as Collateral such distributions unless and until such Event
of Default ceases to exist.
(iii) All distributions which are received by Pledgor
contrary to the provisions of clause (ii), above, subject to the terms
of the First Lien Partnership Interest Pledge Agreement and the
Intercreditor Agreement, shall be received in trust for the benefit of
the OPNY Administrative Agent, shall be segregated from other funds of
Pledgor and shall be forthwith paid over to the OPNY Administrative
Agent as Collateral in the same form as so received (with any necessary
endorsement) for application pursuant to Section 17.
SECTION 10. Place of Incorporation; Place of Perfection; Records.
Pledgor is incorporated in the State of Delaware, and Pledgor's exact legal name
is Orion Power Midwest GP, Inc. Pledgor will not change its jurisdiction of
incorporation or its name without having given the OPNY Administrative Agent not
less than 30 days' prior written notice of its intention to do so, clearly
describing to the OPNY Administrative Agent such new jurisdiction or name and
providing such other information and taking any action in connection therewith
as the OPNY Administrative Agent may reasonably request. Pledgor shall keep its
place of business and chief executive office and the office where it keeps its
records concerning the Collateral, and original copies of the Partnership
Agreement and of all other chattel paper which evidence the Collateral, at its
address specified on the signature pages hereof; or, upon 30 days' prior written
notice to the OPNY Administrative Agent, at such other location in a
jurisdiction where all action required by Section 8 shall have been taken with
respect to the Collateral. Pledgor will hold and preserve
8
such records and will permit representatives of the OPNY Administrative Agent at
any time, upon reasonable prior notice, during normal business hours to inspect
and make abstracts from such records.
SECTION 11. As to the Partnership Agreement(a) . (a) Pledgor shall at
its expense perform and observe all the terms and provisions to be performed or
observed by it under the Partnership Agreement, maintain the Partnership
Agreement in full force and effect, enforce the Partnership Agreement in
accordance with its terms, and take all such action to such end as may be from
time to time reasonably requested by the OPNY Administrative Agent.
(b) Pledgor shall not:
(i) sell, assign (by operation of law or otherwise)
or otherwise dispose of any of the Collateral, or create or suffer to
exist any Lien upon or with respect to any of the Collateral, except
for the pledge, assignment, hypothecation and security interest created
by this Agreement, the First Lien Partnership Interest Pledge Agreement
and Permitted Liens;
(ii) cancel or terminate the Partnership Agreement or
consent to or accept any cancellation or termination thereof;
(iii) amend or otherwise modify in a material respect
the Partnership Agreement; or
(iv) waive any material default under or material
breach of the Partnership Agreement.
SECTION 12. Covenants. Pledgor covenants and agrees that so long as any
OPNY Lender shall have any Commitment outstanding and until the Notes, together
with interest, and all other Secured Obligations are indefeasibly paid in full
in cash, unless the OPNY Administrative Agent shall otherwise consent in
writing, Pledgor:
(a) Maintenance of Register. Will cause the OPMW Borrower to maintain
at all times a register at its chief place of business and chief executive
office in which the subordinated, second lien security interest in the
Collateral granted hereby to the OPNY Administrative Agent, to the extent that
the same constitutes "uncertificated securities" (as defined in the Delaware
UCC), shall be evidenced.
(b) Preservation of Existence, Etc. Will preserve and maintain, and
will cause the OPMW Borrower to preserve and maintain, its lawful existence,
rights (charter and statutory), and franchises in accordance with the
Transaction Documents.
(c) Compliance with Law. Will comply with all material Requirements of
Law and material Governmental Approvals applicable to it, except when any such
Requirement of Law or Governmental Approval is being contested in good faith and
by appropriate proceedings and for which Acceptable Reserves have been
established, or except in each case where the failure to so
9
comply could not reasonably be expected to have a material adverse effect on any
Portfolio Asset.
(d) Nature of Business. Will not change its legal form or Governing
Documents (other than to (i) change its name, (ii) add, replace or eliminate
offices and/or officers, and/or (iii) replace any director, or add to or reduce
the number of directors comprising the board so long as such addition,
replacement or reduction does not eliminate the independent director or modify
the nature of the independent director's powers in any way), change its fiscal
year or engage in any business other than being a general partner of the OPMW
Borrower.
(e) Jurisdiction of Organization. Will cause the OPMW Borrower at all
times to be a limited partnership organized under the laws of the State of
Delaware.
(f) Bankruptcy. Will not file a voluntary petition or otherwise
initiate proceedings to have the OPMW Borrower adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against the OPMW Borrower, or file a petition seeking or consenting to
reorganization or relief of the OPMW Borrower as debtor under any applicable
federal or state law relating to bankruptcy, insolvency, or other relief for
debtors with respect to the OPMW Borrower; or seek or consent to the appointment
of any trustee, receiver, conservator, assignee, sequestrator, custodian,
liquidator (or other similar official) of the OPMW Borrower or of all or any
substantial part of the properties and assets of the OPMW Borrower, or make any
general assignment for the benefit of creditors of the OPMW Borrower, or admit
in writing the inability of the OPMW Borrower to pay its debts generally as they
become due or declare or effect a moratorium on the debt of the OPMW Borrower or
take any action in furtherance of any of the foregoing.
(g) Taxes. Will cause to be paid or discharged (whether by it or any of
its Affiliates, or otherwise) all taxes, assessments and governmental charges or
levies lawfully imposed upon it, the OPMW Borrower or upon any of their
respective income or profits or upon any of the Portfolio Assets or the
Collateral and all lawful claims or obligations that, if unpaid, would become a
Lien upon the Collateral (as defined in the OPMW Credit Agreement), whether real
or personal, the Collateral (as defined in this Agreement) or upon any part
thereof. Pledgor or the OPMW Borrower shall have the right, however, to contest
in good faith the validity or amount of any such tax, assessment, charge, levy,
claim or obligation by proper proceedings, and may permit the taxes,
assessments, charges, levies, claims or obligations so contested to remain
unpaid during the period of such contest if: (a) Pledgor or the OPMW Borrower
diligently prosecutes such contest in good faith and by appropriate proceedings
and for which Acceptable Reserves have been established; (b) during the period
of such contest, the enforcement of any contested item is effectively stayed;
and (c) the failure to pay or comply with the contested item could not
reasonably be expected to result in a material adverse effect on the Collateral.
(h) Operations Matters. In the conduct of its business and operations,
Pledgor shall, and shall cause the OPMW Borrower to:
(i) maintain books and records, separate from those
of any other Person;
10
(ii) maintain its bank accounts and all its other
assets separate from those of any other Person; (iii) hold regular
shareholder or partnership meetings, as appropriate, to conduct its
business, and observe all other corporate or partnership formalities,
as the case may be;
(iv) hold itself out to creditors and the public as a
legal entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part
of a consolidated or combined group, then it shall be shown as a
separate member of such group, including in a footnote(s) to the
relevant financial statements disclosing its separate existence and
identity and the existence of its own assets;
(vi) allocate and charge fairly and reasonably any
common employee or overhead shared with Affiliates;
(vii) transact all business with Affiliates on an
arm's-length basis and to enter into transactions with Affiliates on an
arm's-length basis;
(viii) conduct business in its own name;
(ix) with regard to the OPMW Borrower, maintain a
sufficient number of employees in light of the OPMW Borrower's
contemplated business operations;
(x) correct any misunderstanding regarding its
separate identity of which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of
any other Person; and
(xii) maintain adequate capital in light of its
contemplated business operations.
(i) Assets. Will not own or acquire any asset other than the Collateral
and Distributions permitted by the OPMW Financing Documents and other assets
having an aggregate value in excess of $50,000.
(j) Indebtedness. Will not incur Indebtedness other than Permitted
Indebtedness (in its capacity as the general partner of the OPMW Borrower).
SECTION 13. OPNY Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the OPNY Administrative Agent
hereunder. Pledgor hereby appoints the OPNY Administrative Agent as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time in the OPNY Administrative
Agent's discretion at any time that an Event of Default shall have occurred and
be continuing during any period after the First Lien Partnership Interest Pledge
11
Agreement has terminated in accordance with its terms, to take any action and to
execute any instrument which the OPNY Administrative Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including to ask,
demand, collect, sue for, recover, compound, receive and give acceptance and
receipts for moneys due and to become due under or in connection with the
Collateral, to receive, indorse, and collect any drafts or other instruments,
documents and chattel paper in connection therewith, to file any claims or take
any action or institute any proceedings which the OPNY Administrative Agent may
deem to be necessary or desirable for the collection thereof or to enforce
compliance with the terms and conditions of any Partnership Agreement, and to
sell assign, lease or otherwise dispose of the Collateral or any part thereof
pursuant to this Agreement. Such appointment is coupled with an interest and is
irrevocable.
SECTION 14. OPNY Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the OPNY Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the OPNY
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 20(b).
SECTION 15. Duties of the Administrative Agent, Pledgor and OPMW
Borrower. (a) The powers conferred on the OPNY Administrative Agent hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the OPNY Administrative Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral and no such
duties shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the contrary
notwithstanding, that Pledgor and the OPMW Borrower shall remain liable to
perform all of their respective obligations, if any, assumed by them with
respect to the Collateral and the OPNY Administrative Agent and the OPNY Lenders
shall have no obligations or liabilities with respect to any Collateral by
reason of or arising out of or in connection with this Agreement, nor shall the
OPNY Administrative Agent or the OPNY Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of Pledgor or the OPMW
Borrower under or with respect to any Collateral.
SECTION 16. Remedies. If any Event of Default shall have occurred and
be continuing, subject to the terms of Section 9, Section 30 and compliance with
Requirements of Law and the terms of the Intercreditor Agreement:
(a) The OPNY Administrative Agent may exercise any and all rights and
remedies of Pledgor under or in connection with the Partnership Agreement, the
Partnership Interests or otherwise in respect of the Collateral, including any
and all rights of Pledgor to demand or otherwise require payment of any amount
under, or performance of any provision of, the Partnership Agreement and all
rights of Pledgor to control the operation of the OPMW Borrower.
(b) All payments received by Pledgor under or in connection with the
Partnership Agreement, the Partnership Interests, or otherwise in respect of the
Collateral shall be received in
12
trust for the benefit of the OPNY Administrative Agent, shall be segregated from
other funds of Pledgor and shall be forthwith paid over to the OPNY
Administrative Agent in the same form as so received (with any necessary
endorsement).
(c) Any Collateral repossessed by the OPNY Administrative Agent under
or pursuant to this Section 16 or any other provision hereof and in accordance
with Section 30 hereof and the Intercreditor Agreement, and any other Collateral
whether or not so repossessed by the OPNY Administrative Agent, may be sold,
assigned, leased or otherwise disposed of under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the OPNY Administrative Agent may,
upon written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceeding permitted
by such requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the OPNY Administrative Agent shall determine, in its
sole discretion, that any of the Collateral threatens to decline quickly in
value or to become worthless, any such sale may be made upon three days' notice
to Pledgor) specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of Law, the
OPNY Administrative Agent on behalf of the OPNY Lenders may bid for and become
the purchaser of the Collateral or any item thereof, offered for sale in
accordance with this Section 16. If, under mandatory requirements of any
Requirement of Law, the OPNY Administrative Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to Pledgor as hereinabove specified, the OPNY Administrative
Agent need give Pledgor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of any Requirement of Law.
(d) The OPNY Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the Uniform Commercial Code or any other
applicable Requirement of Law in all relevant jurisdictions.
(e) Waiver of Claims. Except as otherwise provided in this Agreement,
PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE OPNY ADMINISTRATIVE
AGENT TAKING POSSESSION OR THE OPNY ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF
THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF
ANY SUCH JURISDICTION, and Pledgor hereby further waives:
13
(i) all damages occasioned by such taking of
possession except any damages which are the direct result of the gross
negligence or willful misconduct of either of the OPNY Administrative
Agent or any Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of
the OPNY Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force
under any Requirements of Law in order to prevent or delay the
enforcement of this Agreement (including any right to claim that such
enforcement should be stayed pending the outcome of any other action or
proceeding (including any arbitration proceeding)) or the absolute sale
of the Collateral or any portion thereof, and Pledgor, for itself and
all who may claim under it, insofar as it or they now or hereafter
lawfully may, hereby waives the benefit of all such Requirements of
Law.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall, to the extent permitted by Requirements of Law, operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under Pledgor.
SECTION 17. Application of Proceeds. Notwithstanding any other
provision of this Agreement but subject to Section 30 hereof and the
Intercreditor Agreement, all payments made under or in connection with this
Agreement, and all moneys collected by the OPNY Administrative Agent upon any
sale or other disposition of the Collateral pursuant to Section 16, together
with all other moneys received by the OPNY Administrative Agent hereunder, shall
be applied in accordance with the Financing Documents. For the avoidance of
doubt, it is understood that Pledgor shall remain liable to the extent of any
deficiency between the amount of all moneys collected by the OPNY Administrative
Agent upon any such sale or other disposition of the Collateral and the
aggregate amount of the Secured Obligations.
SECTION 18. Remedies Cumulative. No failure or delay on the part of the
OPNY Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the OPNY Administrative Agent or any Secured Party
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the OPNY
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the OPNY
14
Administrative Agent or any Secured Party to any other or further action in any
circumstances without notice or demand.
SECTION 19. Discontinuance of Proceedings. In case the OPNY
Administrative Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the OPNY Administrative Agent, then and in
every such case Pledgor, the OPNY Administrative Agent and each holder of any of
the Secured Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the OPNY
Administrative Agent shall continue as if no such proceeding had been
instituted.
SECTION 20. Indemnity and Expenses. (a) Pledgor agrees to indemnify and
hold harmless the OPNY Administrative Agent and each Secured Party from and
against any and all claims, losses and liabilities arising out of or resulting
from the Collateral or Pledgor's pledge and assignment under this Agreement
(including enforcement against Pledgor of this Agreement), except claims, losses
or liabilities resulting from the OPNY Administrative Agent's or any Secured
Party's gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the OPNY Administrative Agent or
any Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the OPNY Administrative Agent or any Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the OPNY Administrative Agent or any Secured Party
hereunder against Pledgor or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 21. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the OPNY Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
SECTION 22. Security Interest Absolute. The obligations of Pledgor
under this Agreement are independent of the Secured Obligations, and, subject to
Section 30 and the Intercreditor Agreement, a separate action or actions may be
brought and prosecuted against Pledgor to enforce this Agreement, irrespective
of whether any action is brought against the OPNY Borrower, any other pledgor or
any guarantor of the Secured Obligations or whether the OPNY Borrower, any other
pledgor or any guarantor of the Secured Obligations is joined in any
15
such action or actions. All rights of the OPNY Administrative Agent and the
assignment, hypothecation and security interest hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional, to the extent
permitted by applicable Requirements of Law, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the OPNY
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor, any Credit Party or any other Credit Party (as
defined in the OPMW Credit Agreement, the "OPMW Credit Party"), the recovery of
any judgment against Pledgor, any Credit Party or any other OPMW Credit Party,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor, any Credit
Party or any other OPMW Credit Party contained in this Agreement, the OPNY
Credit Agreement or any other Financing Document, (ii) any impairment,
modification, release or limitation of the liability of Pledgor, any Credit
Party or any other OPMW Credit Party or any of their estates in bankruptcy, or
any remedy for the enforcement thereof, resulting from the operation of any
present or future provision of any applicable bankruptcy law, as amended, or
other statute or from the decision of any court, (iii) the assertion or exercise
by Pledgor, the OPNY Administrative Agent or any other Secured Party of any
rights or remedies, (iv) the assignment or the purported assignment of any
property as security for the Secured Obligations, including all or any part of
the rights of Pledgor under this Agreement, (v) the extension of the time for
payment by Pledgor, any Credit Party or any other OPMW Credit Party or any other
guarantor of any payments or other sums or any part thereof owing or payable
under any of the terms and provisions of any Financing Document or of the time
for performance by Pledgor, any Credit Party or any other OPMW Credit Party of
any other obligations under or arising out of any terms or provisions or the
extension of the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of Pledgor,
any Credit Party or any other OPMW Credit Party set forth in any Financing
Document, (vii) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of, or other similar proceeding affecting Pledgor, any Credit Party or any other
OPMW Credit Party or any of their respective assets, or the disaffirmancy of
this Agreement or any Financing Document in any such proceeding, (viii) the
release or discharge of Pledgor, any Credit Party or any other OPMW Credit Party
from the performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of this Agreement or any Financing Document or (x) any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
16
SECTION 23. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the OPNY Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any other address
or telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 24. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto and shall inure to the benefit of the OPNY
Lenders; provided, however, that Pledgor may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each of the OPNY Lenders. Any OPNY Lender may transfer,
assign or grant all or such relevant part of its rights hereunder in connection
with an assignment or transfer of all or any part of its interest in its Loans
(as defined in the OPNY Credit Agreement) in accordance with the provisions of
the OPNY Credit Agreement, and such assignee shall thereupon become vested with
all the benefits in respect thereof granted to such OPNY Lender herein or
otherwise. All agreements, statements, representations and warranties made by
Pledgor herein or in any certificate or other instrument delivered by Pledgor or
on its behalf under this Agreement shall be considered to have been relied upon
by the OPNY Lenders and shall survive the execution and delivery of this
Agreement, the OPNY Credit Agreement and the other Financing Documents
regardless of any investigation made by the Lenders or on their behalf.
SECTION 25. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no OPNY Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash. This
Agreement shall terminate when all Secured Obligations have been indefeasibly
paid in full in cash and all Commitments have been terminated, and the
Administrative Agent, at the written request and expense of Pledgor, will
promptly authorize, execute and deliver, as applicable, to Pledgor the proper
instruments (which may include Uniform Commercial Code termination statements on
form UCC-3) acknowledging the termination of this Agreement, and will promptly
duly assign, transfer and deliver to Pledgor (without recourse and without any
representation or warranty) free from any interest of the Administrative Agent
or Lien granted hereunder such of the Collateral as may be in possession of the
Administrative Agent and has not theretofore been sold or otherwise applied or
released pursuant to this Agreement together with such notices to third parties
as may be necessary to countermand any notices previously sent to them pursuant
hereto.
SECTION 26. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
17
JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS OTHERWISE DEFINED HEREIN
OR IN THE OPNY CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NY UCC ARE USED
HEREIN AS THEREIN DEFINED. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN PLEDGOR AND EACH
SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH SECURED
PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST PLEDGOR OR
ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY SECURED
PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING
18
DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(e) The Pledgor hereby irrevocably designates National Registered
Agents, Inc., with an address at 875 avenue of the americas, suite 501, New
York, New York 10001 as the designee, appointee and agent of the Pledgor to
receive for and on behalf of the Pledgor service of process in such respective
jurisdictions in any legal action or proceeding with respect to this Agreement
or any documents related thereto. It is understood that a copy of such process
served on such agent will be promptly forwarded by mail to the Pledgor at its
address set forth in accordance with Section 23. The Pledgor further irrevocably
consents to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Pledgor at its said address, such
service to become effective on the date of receipt thereof.
(f) Nothing in this Agreement SHALL affect the right of any party to
this Agreement to (i) serve process in any other manner permitted by law or (ii)
to commence legal proceedings or otherwise against any party in any other
JURISDICTION, in EITHER CASE SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 27.
SECTION 28. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 29. Limitation of Recourse. Except as otherwise expressly
provided in the Financing Documents and the OPMW Financing Documents, the
obligations of Pledgor hereunder are obligations solely of Pledgor and shall not
constitute a debt or obligation of any direct or indirect partner or shareholder
of Pledgor or any of their respective directors, officers, agents or employees
(each such Person, a "Non-Recourse Party"). No Non-Recourse Party shall be
liable for any amount payable by Pledgor under this Agreement and the Secured
Parties shall not seek a money judgment or deficiency or personal judgment
against any Non-Recourse Party for payment of the indebtedness payable by
Pledgor evidenced by this Agreement. No property or assets of any Non-Recourse
Party, other than as contemplated in the Financing Documents or the OPMW
Financing Documents, shall be sold, levied upon or otherwise used to satisfy any
judgment rendered in connection with any action brought against Pledgor with
respect to this Agreement or the other Financing Documents or OPMW Financing
Documents. The foregoing acknowledgments, agreements and waivers shall be
enforceable by any Non-Recourse Party. Notwithstanding the foregoing, nothing in
this Section shall limit or affect or be construed to limit or affect the
obligations and liabilities of any Credit Party or any other Non-Recourse Party
(a) in accordance with the terms of any Transaction Document or Financing
Document creating such liabilities and obligations to which such Credit Party or
Non-Recourse Party is a party, (b)
19
arising from liability pursuant to any applicable Requirement of Law for such
Credit Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the OPNY Credit Agreement.
SECTION 30. Subordination. Notwithstanding any provision of this
Agreement or any other Financing Document to the contrary, (i) the security
interests created and granted hereby are subject to, subordinate and inferior to
the security interests created by the First Lien Partnership Interest Pledge
Agreement, in accordance with, and all rights, powers and remedies granted to
the OPMW Administrative Agent thereunder, are subject in all respects to the
terms and conditions of the Intercreditor Agreement, including restrictions on
the right of the OPNY Administrative Agent to give notices, exercise power of
attorney rights, direct or receive payments, hold, control or receive delivery
of any Assignment Collateral or other possessory collateral or to exercise
powers or remedies and to apply proceeds of Collateral; provided, that if and to
the extent the Intercreditor Agreement is amended, supplemented or modified at
any time from time to time and such amendment, supplement or modification could
reasonably be expected to have any adverse effect on the Pledgor's rights,
duties or obligations hereunder or under any other Financing Document, such
amendment, supplement or modification shall not be effective as to the Pledgor
without the Pledgor's prior written acknowledgment (which acknowledgment shall
not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or supplement shall be effective for purposes of this Agreement and
the other Financing Documents, (ii) the OPNY Administrative Agent on behalf of
each of the Secured Parties hereby acknowledges and agrees that the Pledgor
shall not have any duty and obligation with respect to the perfection or
priority of the security interest granted hereunder in and to any of the
Collateral (and no Default or Event of Default shall result or occur) to the
extent (a) such Collateral is in the possession or control of the OPMW
Administrative Agent, (b) such Collateral is not transferred by the OPMW
Administrative Agent to the OPNY Administrative Agent as required pursuant to
the Intercreditor Agreement, (c) such perfection or priority requires any
consent, approval or other action of the OPMW Administrative Agent, or (d) the
OPMW Administrative Agent then maintains a perfected, first priority security
interest in and to Collateral and (iii) no obligations contained in this
Agreement shall require the OPMW Borrower to take or omit to take any action
inconsistent with the terms and conditions of the OPMW Deposit Account Agreement
and/or the Holdco Deposit Account Agreement and no Default or Event of Default
shall arise or result from the taking or omitting of such action.
[Remainder of page intentionally left blank]
20
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER MIDWEST GP, INC.
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity, but
solely as the OPNY Administrative Agent
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
ANNEX I
TO
PARTNERSHIP INTEREST PLEDGE AGREEMENT
Partnership Interests
Partnership Agreement
EXHIBIT J-6
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
SECOND LIEN PARTNERSHIP INTEREST
PLEDGE AGREEMENT
made by
ORION POWER MIDWEST LP, INC.
to
BANK OF AMERICA, N.A.,
as OPNY Administrative Agent
Dated as of : October 28, 2002
================================================================================
TABLE OF CONTENTS
<Table>
SECTION 1. PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTEREST................................................2
SECTION 2. SECURITY FOR SECURED OBLIGATIONS..............................................................3
SECTION 3. PLEDGOR REMAINS LIABLE........................................................................3
SECTION 4. DELIVERY OF COLLATERAL........................................................................3
SECTION 5. NO SUBROGATION................................................................................3
SECTION 6. REINSTATEMENT.................................................................................4
SECTION 7. REPRESENTATIONS AND WARRANTIES................................................................4
SECTION 8. FURTHER ASSURANCES............................................................................7
SECTION 9. VOTING RIGHTS; DISTRIBUTIONS, ETC.............................................................7
SECTION 10. PLACE OF INCORPORATION; PLACE OF PERFECTION; RECORDS..........................................8
SECTION 11. AS TO THE PARTNERSHIP AGREEMENT...............................................................9
SECTION 12. COVENANTS.....................................................................................9
SECTION 13. OPNY ADMINISTRATIVE AGENT....................................................................11
SECTION 14. OPNY ADMINISTRATIVE AGENT MAY PERFORM........................................................12
SECTION 15. DUTIES OF THE ADMINISTRATIVE AGENT, PLEDGOR AND OPMW BORROWER................................12
SECTION 16. REMEDIES.....................................................................................12
SECTION 17. APPLICATION OF PROCEEDS......................................................................14
SECTION 18. REMEDIES CUMULATIVE..........................................................................14
SECTION 19. DISCONTINUANCE OF PROCEEDINGS................................................................15
SECTION 20. INDEMNITY AND EXPENSES.......................................................................15
SECTION 21. WAIVER, AMENDMENT; SEVERABILITY..............................................................15
SECTION 22. SECURITY INTEREST ABSOLUTE...................................................................15
SECTION 23. ADDRESSES FOR NOTICES........................................................................17
</Table>
i
<Table>
SECTION 24. SUCCESSORS AND ASSIGNS.......................................................................17
SECTION 25. TERMINATION; RELEASE.........................................................................17
SECTION 26. HEADINGS DESCRIPTIVE, ETC....................................................................17
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE..........................................17
SECTION 28. EXECUTION IN COUNTERPARTS....................................................................19
SECTION 29. LIMITATION OF RECOURSE.......................................................................19
SECTION 30. SUBORDINATION................................................................................20
</Table>
ii
SECOND LIEN PARTNERSHIP INTEREST PLEDGE AGREEMENT
SECOND LIEN PARTNERSHIP INTEREST PLEDGE AGREEMENT, dated as of October
28, 2002 (this "Agreement"), made by ORION POWER MIDWEST LP, INC., a Delaware
corporation (the "Pledgor"), as the obligor hereunder, to BANK OF AMERICA, N.A.,
as administrative agent (in such capacity, together with any successors and
assigns, the "OPNY Administrative Agent") for the benefit of the Secured Parties
(as defined in the OPNY Credit Agreement referred to below).
WITNESSETH:
WHEREAS, Pledgor is the sole limited partner of Orion Power Midwest,
L.P., a Delaware limited partnership (the "OPMW Borrower");
WHEREAS, Orion Power New York, L.P. (the "OPNY Borrower") has entered
into an Amended and Restated Credit Agreement, dated as of the Restructuring
Effective Date (as the same may be amended, supplemented or otherwise modified
from time to time, the "OPNY Credit Agreement"), with Bank of America, N.A., as
Administrative Agent (the "OPNY Administrative Agent"), Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, Union Bank
of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman
Island Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "OPNY Lenders"),
pursuant to which the OPNY Lenders have agreed, inter alia, to renew, modify and
extend credit facilities that were issued to the OPNY Borrower to finance a
portion of the purchase price of the Portfolio Assets and to provide working
capital availability to the OPNY Borrower;
WHEREAS, the OPMW Borrower has entered into a Second Amended and
Restated Credit Agreement, dated as of the Restructuring Effective Date (as the
same may be amended, supplemented or otherwise modified from time to time, the
"OPMW Credit Agreement"), with the OPMW Administrative Agent, Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, The Bank
of Nova Scotia, Mizuho Corporate Bank, Ltd, and Bayerische Hypo-Und Vereinsbank
AG, New York Branch, as documentation agents, and the Lenders named on the
signature pages thereto and from time to time parties thereto (the "OPMW
Lenders"), pursuant to which the OPMW Lenders have agreed, inter alia, to renew,
modify and extend credit facilities that were issued to the OPMW Borrower to
finance a portion of the purchase price of the Portfolio Assets (as defined in
the OPMW Credit Agreement) and to provide working capital availability to the
OPMW Borrower;
WHEREAS, Pledgor has entered into that certain Amended and Restated
Partnership Interest Pledge Agreement, dated as of the Restructuring Effective
Date (as the same may be amended, supplemented or otherwise modified from time
to time, the "First Lien Partnership Interest Pledge Agreement"), in favor of
the OPMW Administrative Agent, pursuant to which
Pledgor has, among other things, granted a first priority pledge, assignment and
security interest in the Collateral to the OPMW Administrative Agent;
WHEREAS, the OPMW Administrative Agent, the OPNY Administrative Agent,
the OPMW Lenders, the OPNY Lenders and Bank of America, N.A., as collateral
agent have entered into a Collateral Agency and Intercreditor Agreement, dated
as of the Restructuring Effective Date (the "Intercreditor Agreement");
WHEREAS, all capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the OPNY Credit Agreement
and the principles of construction set forth in Section 1.04 of the OPNY Credit
Agreement shall apply hereto; provided, that, the following terms shall have the
meanings set forth in the OPMW Credit Agreement: "Acceptable Reserves",
"Contractual Obligations", "Distributions", "Governing Documents", "Governmental
Approvals", "Governmental Authority", "Lien", "Permitted Lien" and "Portfolio
Asset"; and
WHEREAS, it is a condition precedent to the obligations of the OPNY
Lenders under the OPNY Credit Agreement that this Agreement shall have been
entered into by the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the OPNY Lenders to enter into the OPNY Credit Agreement, to make
available to the OPNY Borrower such credit facilities and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Pledge; Assignment; Grant of Security Interest. Pledgor
hereby pledges, hypothecates and assigns to the OPNY Administrative Agent, and
hereby grants to the OPNY Administrative Agent for the benefit of the Secured
Parties, a second priority pledge and assignment of, and a second priority
security interest in, all of its right, title and interest in and to the
following (the "Collateral"):
(a) All general and limited partnership interests now owned or
hereafter acquired by Pledgor in and to the OPMW Borrower (the "Partnership
Interests") and the partnership agreement relating to the OPMW Borrower (the
"Partnership Agreements") and all rights related thereto, including (i) all
rights of Pledgor as a general or limited partner, as the case may be, and all
rights to receive distributions, cash, instruments and other property from time
to time receivable or otherwise distributable in respect of any Partnership
Interest or pursuant to the Partnership Agreement, (ii) all rights of Pledgor to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect
to the Partnership Interest or the Partnership Agreement, (iii) all claims of
Pledgor for damages arising out of or for breach of or default under the
Partnership Agreement, (iv) the right of Pledgor to terminate the Partnership
Agreement, to perform and exercise consensual or voting rights thereunder and to
compel performance and otherwise exercise all remedies thereunder, (v) all
rights of Pledgor as a general or limited partner of any of the OPMW Borrower,
to any property and assets of the OPMW Borrower (whether real property,
inventory, equipment, contract rights, accounts, receivables, general
intangibles, securities, instruments, chattel paper, documents, chooses in
action or otherwise), and (vi) all certificates or
2
instruments evidencing an ownership or partnership interest in the OPMW Borrower
or its assets; and
(b) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing (including, without limitation, proceeds that
constitute property of the types described above).
SECTION 2. Security for Secured Obligations. This Agreement secures the
prompt and complete payment and performance of all obligations of Pledgor under
the OPMW Guarantee (collectively, the "Secured Obligations").
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Pledgor shall remain liable under the Partnership Agreement
and the other contracts and agreements included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by any
Secured Party of any of the rights hereunder shall not release Pledgor from any
of its duties or obligations under the contracts and agreements included in the
Collateral and (c) neither the OPNY Administrative Agent nor any Secured Party
shall have any obligation or liability under the contracts and agreements
included in the Collateral or otherwise by reason of this Agreement, nor shall
the OPNY Administrative Agent or any Secured Party be obligated to perform any
of the obligations or duties of Pledgor thereunder or to take any action to
collect or enforce any claim assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates or instruments
representing or evidencing the Collateral at any time shall be delivered to and
held by or on behalf of the OPMW Administrative Agent pursuant to the First Lien
Partnership Interest Pledge 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, in accordance with the terms and conditions of the
Intercreditor Agreement and otherwise in form and substance reasonably
satisfactory to the OPNY Administrative Agent. During any period after the First
Lien Partnership Interest Pledge Agreement has terminated in accordance with its
terms, the OPNY Administrative Agent shall have the right, upon the occurrence
and continuance of an Event of Default, in its discretion and without notice to
Pledgor, to transfer to or to register in the name of the OPNY Administrative
Agent or any of its nominees any or all of the Collateral then held by the OPNY
Administrative Agent, subject only to compliance with Requirements of Law, the
terms and conditions of the OPNY Credit Agreement and the Intercreditor
Agreement, the revocable rights specified in Section 9(a) and the provisions of
Section 30. In addition, to the extent certificates or instruments are held by
the OPNY Administrative Agent, the OPNY Administrative Agent shall have the
right at any time to exchange certificates or instruments representing or
evidencing Collateral for certificates or instruments of smaller or larger
denominations.
SECTION 5. No Subrogation. Pledgor shall not exercise any rights which
it may acquire by way of subrogation under this Agreement, by any payments made
hereunder or otherwise, until all Secured Obligations shall have been
indefeasibly paid in full in cash and all Commitments have been terminated. If
any amount shall be paid to Pledgor on account of such subrogation rights at any
time when all Secured Obligations shall not have been indefeasibly paid
3
in full in cash (whether pursuant to a claim in any bankruptcy or similar
proceeding or otherwise) or when any Commitment shall remain outstanding, such
amount shall be held in trust for the benefit of the OPNY Administrative Agent
and the Secured Parties and shall forthwith be paid to the OPNY Administrative
Agent to be credited and applied to the Secured Obligations, whether matured or
unmatured, in accordance with Section 17.
SECTION 6. Reinstatement. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Secured Obligations is rescinded or must otherwise
be restored or returned by any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Pledgor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
SECTION 7. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Pledgor (i) is duly formed, validly existing and in good standing
under the laws of the State of Delaware, (ii) has all requisite power and
authority to own its property and assets, to borrow money and to transact the
business in which it is presently engaged and in which it proposes to be
engaged, (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (iv) is in full compliance with its
Governing Documents, all material Contractual Obligations, all applicable
material Requirements of Law and all material Governmental Approvals, except in
each case of this clause (iv) to the extent that the failure to comply with any
of the foregoing could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, (x) Pledgor is the sole Limited Partner of the
OPMW Borrower; and (y) Twelvepole Creek LLC is the only Subsidiary of the OPMW
Borrower.
(b) The execution, delivery and performance by Pledgor of this
Agreement and the consummation of the transactions contemplated hereby (i) are
within its powers, (ii) have been duly authorized by all necessary corporate
action, (iii) do not and will not contravene (A) its Governing Documents or (B)
any material Requirement of Law, any material Contractual Obligation or any
material Governmental Approval binding on or affecting it and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except Permitted Liens) upon any of its properties
or assets pursuant to, the terms of any material Contractual Obligation binding
on or affecting it.
(c) Pledgor has duly executed and delivered this Agreement and this
Agreement constitutes the legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any
4
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of equity.
(d) No approval of any Person (except for any Governmental Authority),
except such as have been duly obtained, made or given, and are in full force and
effect, is required to authorize, or is required in connection with (i) the
execution, delivery or performance of this Agreement by Pledgor or the
consummation of any of the transactions contemplated hereby, (ii) the legality,
validity, binding effect or enforceability of this Agreement or the perfection
and maintenance of the security interest created hereby (including the second
priority nature of such security interest) or (iii) for the exercise by the OPNY
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (including Section 30 hereof and the Intercreditor Agreement), except,
in each case, for any approval of any such Person the absence of which could not
reasonably be expected to have a material adverse effect on the ability of the
Administrative Agent to exercise voting rights or remedies in respect of the
Collateral.
(e) The Partnership Agreement, a true and complete copy of which has
been furnished to the OPNY Administrative Agent, has been duly authorized,
executed and delivered by Pledgor and is in full force and effect and is binding
upon and enforceable against Pledgor in accordance with its terms, except as
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity. There exists
no default under the Partnership Agreement.
(f) This Agreement creates a valid security interest in the Collateral
purported to be pledged and assigned by Pledgor hereunder securing the payment
of the Secured Obligations.
(g) Upon the filing of the financing statements (the "Financing
Statements") referenced in Schedule I hereof under the Uniform Commercial Code
as in effect in the State of Delaware (the "Delaware UCC"), the security
interest created hereby shall be perfected under the Delaware UCC, to the extent
that the Collateral constitutes "general intangibles" (as defined in the
Delaware UCC) and no further filings or other actions are necessary to perfect
such security interest. Upon filing of such Financing Statements pursuant to the
Delaware UCC, such security interests, as so perfected, are second priority
security interests.
(h) When any certificates or instruments evidencing the Collateral
shall be delivered hereunder and endorsed to, or registered in favor of, the
OPNY Administrative Agent in accordance with Section 8-106 of the Uniform
Commercial Code as in effect in the State of New York (the "NY UCC") or the
State of North Carolina (the "NC UCC"), and for so long as such certificates or
instruments shall remain in the possession of the OPMW Administrative Agent (as
contemplated by the terms of the Intercreditor Agreement) or the OPNY
Administrative Agent in the State of New York or the State of North Carolina,
the security interest in such Collateral created hereby shall be perfected under
the NY UCC or the NC UCC, as applicable, and such security interest, as so
perfected, will be a second priority security interest subject only to the lien
of the OPMW Administrative Agent under the First Lien Borrower Security
Agreement, it being acknowledged and agreed that, unless and until permitted in
accordance with the terms and
5
conditions of Section 30 and the Intercreditor Agreement, the certificates and
instruments evidencing the Collateral shall be delivered and endorsed to, or be
registered as a first lien in favor of, and shall remain in possession of, the
OPMW Administrative Agent, and that notwithstanding any provisions of any
Financing Documents, no breach, Default or Event of Default shall occur or exist
as a result thereof.
(i) The security interest created by this Agreement in the Collateral
described in clause (a) of Section 1 hereof has been registered as a
subordinated, second lien in the name of the OPNY Administrative Agent in the
register maintained for such purpose at the chief executive office and principal
place of business of the OPMW Borrower and each Operating Company, as
applicable, and, to the extent that such Collateral constitutes "uncertificated
securities" (as defined in the Delaware UCC), such security interest is
perfected under the Delaware UCC and, as so perfected, is a second priority
security interest.
(j) The chief place of business and chief executive office of Pledgor
and the office where Pledgor keeps its records concerning the Collateral is set
forth under its name on the signature page hereof.
(k) Pledgor is the legal and beneficial owner of the Collateral
purported to be pledged and assigned by it hereunder, free and clear of any
Lien, other than Permitted Liens, including the security interest granted to the
OPMW Administrative Agent under the First Lien Partnership Interest Pledge
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral has been executed or
authorized by Pledgor or, is on file in any recording office, except such as may
have been filed in favor of (i) the OPNY Administrative Agent relating to this
Agreement or (ii) the OPMW Administrative Agent relating to the First Lien
Partnership Interest Pledge Agreement (as hereinafter defined). Pledgor has no
trade name.
(l) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(m) No part of the Collateral is subject to the terms of any agreement
restricting the sale or transfer of such Collateral, except for the Partnership
Agreement, the Financing Documents and the Financing Documents (as defined in
the OPMW Credit Agreement, the "OPMW Financing Documents").
(n) Except as set forth on Schedule 4.05 of the OPMW Credit Agreement,
there is no (i) injunction, writ, preliminary restraining order or order of any
nature issued by an arbitrator, court or other Governmental Authority against
Pledgor in connection with the transactions provided for herein, or (ii) action,
suit, arbitration, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority pending against Pledgor or, to Pledgor's
knowledge, threatened against Pledgor which would reasonably be expected to
materially adversely affect the right or ability of Pledgor to fulfill its
obligations under this Agreement.
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(o) Pledgor has, independently and without reliance upon the OPNY
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement.
SECTION 8. Further Assurances. (a) Subject to and without limiting
Section 7(h) and Section 30 hereof and the Intercreditor Agreement, Pledgor
agrees that from time to time, at the expense of Pledgor, Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary, or that the OPNY Administrative Agent may
reasonably request, in order to perfect and protect the pledge, assignment,
hypothecation and security interest granted or purported to be granted hereby or
to enable the OPNY Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Pledgor will (i) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the OPNY Administrative Agent may reasonably
request, in order to perfect and preserve the assignment, hypothecation and
security interest granted or purported to be granted hereby; and (ii) mark
conspicuously, at the request of the OPNY Administrative Agent, each of its
records pertaining to the Collateral with a legend, in form and substance
satisfactory to the OPNY Administrative Agent, indicating that the Partnership
Agreement and such chattel paper have been assigned and are subject to the
subordinated, second lien security interest pursuant hereto.
(b) Pledgor hereby further authorizes the OPNY Administrative Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Pledgor
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9. Voting Rights; Distributions, Etc. (a) So long as any
Obligations are outstanding, the Pledgor shall not be entitled to any payments
or distributions (whether cash or non-cash) pursuant to the Partnership
Agreement, except payments or distributions from the OPMW Borrower that are
directly distributed from Pledgor to Holdco in accordance with the Holdco
Deposit Account Agreement. So long as no Event of Default shall have occurred
and be continuing, but subject, nevertheless, at all times to the restrictions
imposed by the terms and conditions of the OPMW Credit Agreement, during any
period after the First Lien Partnership Interest Pledge Agreement has terminated
in accordance with its terms, Pledgor shall be entitled to exercise any and all
management, voting and other partnership rights pertaining to any Collateral
(including but not limited to any partnership interest or the Partnership
Agreement) and the OPMW Borrower for any purpose not inconsistent with the terms
of this Agreement or any other OPMW Financing Document; provided, however, that
Pledgor shall exercise, or refrain from exercising, any such right if such
action or inaction would have a material adverse effect on the attachment,
perfection, creation or priority of the security interest in the Collateral or
any part thereof as herein granted.
(b) If Pledgor receives any distributions in respect of the Collateral
purported to be pledged and assigned by it hereunder, such distributions shall
be promptly delivered to the Collateral Agent to deposit in the Holdco Accounts
pursuant to the Holdco Deposit Account
7
Agreement, or, if such distributions are in connection with a partial or total
liquidation or are non-cash distributions, to the OPNY Administrative Agent to
hold as Collateral and shall, if received by Pledgor, be received in trust for
the benefit of the OPNY Administrative Agent, be segregated from the other
property or funds of Pledgor and be forthwith delivered to the OPNY
Administrative Agent as Collateral in the same form as so received (with any
necessary endorsement or assignment).
(c) Upon the occurrence and during the continuance of an Event of
Default during any period after the First Lien Partnership Interest Pledge
Agreement has terminated in accordance with its terms:
(i) Immediately upon Pledgor's receipt of written
notice from the OPMW Administrative Agent that the OPNY Administrative
Agent intends to act pursuant to this clause (c)(i), all rights of
Pledgor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise
shall thereupon become exercisable by the OPNY Administrative Agent,
acting in good faith, who shall have the sole right to exercise or
refrain from exercising such voting and other consensual rights unless
and until such Event of Default ceases to exist.
(ii) All rights of Pledgor to receive the
distributions, if any, which it would otherwise be authorized to
receive and retain, pursuant to Section 9(a) and (b), above, shall
become exercisable, subject to the terms of the First Lien Partnership
Interest Pledge Agreement and the Intercreditor Agreement, by the OPNY
Administrative Agent who shall thereupon have the sole right to receive
and hold as Collateral such distributions unless and until such Event
of Default ceases to exist.
(iii) All distributions which are received by Pledgor
contrary to the provisions of clause (ii), above, subject to the terms
of the First Lien Partnership Interest Pledge Agreement and the
Intercreditor Agreement, shall be received in trust for the benefit of
the OPNY Administrative Agent, shall be segregated from other funds of
Pledgor and shall be forthwith paid over to the OPNY Administrative
Agent as Collateral in the same form as so received (with any necessary
endorsement) for application pursuant to Section 17.
SECTION 10. Place of Incorporation; Place of Perfection; Records.
Pledgor is incorporated in the State of Delaware, and Pledgor's exact legal name
is Orion Power Midwest LP, Inc. Pledgor will not change its jurisdiction of
organization or its name without having given the OPNY Administrative Agent not
less than 30 days' prior written notice of its intention to do so, clearly
describing to the OPNY Administrative Agent such new jurisdiction or name and
providing such other information and taking any action in connection therewith
as the OPNY Administrative Agent may reasonably request. Pledgor shall keep its
place of business and chief executive office and the office where it keeps its
records concerning the Collateral, and original copies of the Partnership
Agreement and of all other chattel paper which evidence the Collateral, at its
address specified on the signature pages hereof; or, upon 30 days' prior written
notice to the OPNY Administrative Agent, at such other location in a
jurisdiction where all action required by Section 8 shall have been taken with
respect to the Collateral. Pledgor will hold and preserve
8
such records and will permit representatives of the OPNY Administrative Agent at
any time, upon reasonable prior notice, during normal business hours to inspect
and make abstracts from such records.
SECTION 11. As to the Partnership Agreement. (a) Pledgor shall at its
expense perform and observe all the terms and provisions to be performed or
observed by it under the Partnership Agreement, maintain the Partnership
Agreement in full force and effect, enforce the Partnership Agreement in
accordance with its terms, and take all such action to such end as may be from
time to time reasonably requested by the OPNY Administrative Agent.
(b) Pledgor shall not:
(i) sell, assign (by operation of law or otherwise)
or otherwise dispose of any of the Collateral, or create or suffer to
exist any Lien upon or with respect to any of the Collateral, except
for the pledge, assignment, hypothecation and security interest created
by this Agreement, the First Lien Partnership Interest Pledge Agreement
and Permitted Liens;
(ii) cancel or terminate the Partnership Agreement or
consent to or accept any cancellation or termination thereof;
(iii) amend or otherwise modify in a material respect
the Partnership Agreement; or
(iv) waive any material default under or material
breach of the Partnership Agreement.
SECTION 12. Covenants. Pledgor covenants and agrees that so long as any
OPNY Lender shall have any Commitment outstanding and until the Notes, together
with interest, and all other Secured Obligations are indefeasibly paid in full
in cash, unless the OPNY Administrative Agent shall otherwise consent in
writing, Pledgor:
(a) Maintenance of Register. Will cause the OPMW Borrower to maintain
at all times a register at its chief place of business and chief executive
office in which the subordinated, second lien security interest in the
Collateral granted hereby to the OPNY Administrative Agent, to the extent that
the same constitutes "uncertificated securities" (as defined in the Delaware
UCC), shall be evidenced.
(b) Preservation of Existence, Etc. Will preserve and maintain, and
will cause the OPMW Borrower to preserve and maintain, its lawful existence,
rights (charter and statutory), and franchises in accordance with the
Transaction Documents except in connection with the Pledgor's conversion from
corporate status to a limited liability company in accordance with Section 7 of
the LP Guarantee.
(c) Compliance with Law. Will comply with all material Requirements of
Law and material Governmental Approvals applicable to it, except when any such
Requirement of Law or Governmental Approval is being contested in good faith and
by appropriate proceedings and for
9
which Acceptable Reserves have been established, or except in each case where
the failure to so comply could not reasonably be expected to have a material
adverse effect on any Portfolio Asset.
(d) Nature of Business. Will not change its legal form or Governing
Documents (other than to (i) convert its corporate status to a limited liability
company in accordance with Section 7 of the LP Guarantee, (ii) change its name,
(iii) add, replace or eliminate offices and/or officers, and/or (iv) replace any
director, or add to or reduce the number of directors comprising the board so
long as such addition, replacement or reduction does not eliminate the
independent director or modify the nature of the independent director's powers
in any way), change its fiscal year or engage in any business other than being a
limited partner of the OPMW Borrower.
(e) Jurisdiction of Organization. Will cause the OPMW Borrower at all
times to be a limited partnership organized under the laws of the State of
Delaware.
(f) Bankruptcy. Will not file a voluntary petition or otherwise
initiate proceedings to have the OPMW Borrower adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against the OPMW Borrower, or file a petition seeking or consenting to
reorganization or relief of the OPMW Borrower as debtor under any applicable
federal or state law relating to bankruptcy, insolvency, or other relief for
debtors with respect to the OPMW Borrower; or seek or consent to the appointment
of any trustee, receiver, conservator, assignee, sequestrator, custodian,
liquidator (or other similar official) of the OPMW Borrower or of all or any
substantial part of the properties and assets of the OPMW Borrower, or make any
general assignment for the benefit of creditors of the OPMW Borrower, or admit
in writing the inability of the OPMW Borrower to pay its debts generally as they
become due or declare or effect a moratorium on the debt of the OPMW Borrower or
take any action in furtherance of any of the foregoing.
(g) Taxes. Will cause to be paid or discharged (whether by it or any of
its Affiliates, or otherwise) all taxes, assessments and governmental charges or
levies lawfully imposed upon it, the OPMW Borrower or upon any of their
respective income or profits or upon any of the Portfolio Assets or the
Collateral and all lawful claims or obligations that, if unpaid, would become a
Lien upon the Collateral (as defined in the OPMW Credit Agreement), whether real
or personal, the Collateral (as defined in this Agreement) or upon any part
thereof. Pledgor or the OPMW Borrower shall have the right, however, to contest
in good faith the validity or amount of any such tax, assessment, charge, levy,
claim or obligation by proper proceedings, and may permit the taxes,
assessments, charges, levies, claims or obligations so contested to remain
unpaid during the period of such contest if: (a) Pledgor or the OPMW Borrower
diligently prosecutes such contest in good faith and by appropriate proceedings
and for which Acceptable Reserves have been established; (b) during the period
of such contest, the enforcement of any contested item is effectively stayed;
and (c) the failure to pay or comply with the contested item could not
reasonably be expected to result in a material adverse effect on the Collateral.
(h) Operations Matters. In the conduct of its business and operations,
Pledgor shall, and shall cause the OPMW Borrower to:
10
(i) maintain books and records, separate from those
of any other Person;
(ii) maintain its bank accounts and all its other
assets separate from those of any other Person;
(iii) hold regular member, shareholder or partnership
meetings, as appropriate, to conduct its business, and observe all
other limited liability company, corporate or partnership formalities,
as the case may be;
(iv) hold itself out to creditors and the public as a
legal entity separate and distinct from any other Person;
(v) prepare separate financial statements, or if part
of a consolidated or combined group, then it shall be shown as a
separate member of such group, including in a footnote(s) to the
relevant financial statements disclosing its separate existence and
identity and the existence of its own assets;
(vi) allocate and charge fairly and reasonably any
common employee or overhead shared with Affiliates;
(vii) transact all business with Affiliates on an
arm's-length basis and to enter into transactions with Affiliates on an
arm's-length basis;
(viii) conduct business in its own name;
(ix) with regard to the OPMW Borrower, maintain a
sufficient number of employees in light of the OPMW Borrower's
contemplated business operations;
(x) correct any misunderstanding regarding its
separate identity of which Pledgor has actual knowledge;
(xi) not identify itself in writing as a division of
any other Person; and
(xii) maintain adequate capital in light of its
contemplated business operations.
(i) Assets. Will not own or acquire any asset other than the Collateral
and Distributions permitted by the OPMW Financing Documents and other assets
having an aggregate value in excess of $50,000.
(j) Indebtedness. Will not incur Indebtedness other than Permitted
Indebtedness (in its capacity as the limited partner of the OPMW Borrower).
SECTION 13. OPNY Administrative Agent. Bank of America, N.A. has been
appointed by the Secured Parties to act as the OPNY Administrative Agent
hereunder. Pledgor hereby appoints the OPNY Administrative Agent as Pledgor's
attorney-in-fact, with full
11
authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in the OPNY Administrative Agent's discretion at
any time that an Event of Default shall have occurred and be continuing during
any period after the First Lien Partnership Interest Pledge Agreement has
terminated in accordance with its terms, to take any action and to execute any
instrument which the OPNY Administrative Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including to ask, demand, collect,
sue for, recover, compound, receive and give acceptance and receipts for moneys
due and to become due under or in connection with the Collateral, to receive,
indorse, and collect any drafts or other instruments, documents and chattel
paper in connection therewith, to file any claims or take any action or
institute any proceedings which the OPNY Administrative Agent may deem to be
necessary or desirable for the collection thereof or to enforce compliance with
the terms and conditions of any Partnership Agreement, and to sell assign, lease
or otherwise dispose of the Collateral or any part thereof pursuant to this
Agreement. Such appointment is coupled with an interest and is irrevocable.
SECTION 14. OPNY Administrative Agent May Perform. If Pledgor fails to
perform any agreement contained herein, the OPNY Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the OPNY
Administrative Agent incurred in connection therewith shall be payable by
Pledgor under Section 20(b).
SECTION 15. Duties of the Administrative Agent, Pledgor and OPMW
Borrower. (a) The powers conferred on the OPNY Administrative Agent hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the OPNY Administrative Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral and no such
duties shall be implied as arising hereunder.
(b) It is expressly agreed, anything herein contained to the contrary
notwithstanding, that Pledgor and the OPMW Borrower shall remain liable to
perform all of their respective obligations, if any, assumed by them with
respect to the Collateral and the OPNY Administrative Agent and the OPNY Lenders
shall have no obligations or liabilities with respect to any Collateral by
reason of or arising out of or in connection with this Agreement, nor shall the
OPNY Administrative Agent or the OPNY Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of Pledgor or the OPMW
Borrower under or with respect to any Collateral.
SECTION 16. Remedies. If any Event of Default shall have occurred and
be continuing, subject to the terms of Section 9, Section 30 and compliance with
Requirements of Law and the terms of the Intercreditor Agreement:
(a) The OPNY Administrative Agent may exercise any and all rights and
remedies of Pledgor under or in connection with the Partnership Agreement, the
Partnership Interests or otherwise in respect of the Collateral, including any
and all rights of Pledgor to demand or otherwise require payment of any amount
under, or performance of any provision of, the Partnership Agreement and all
rights of Pledgor to control the operation of the OPMW Borrower.
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(b) All payments received by Pledgor under or in connection with the
Partnership Agreement, the Partnership Interests, or otherwise in respect of the
Collateral shall be received in trust for the benefit of the OPNY Administrative
Agent, shall be segregated from other funds of Pledgor and shall be forthwith
paid over to the OPNY Administrative Agent in the same form as so received (with
any necessary endorsement).
(c) Any Collateral repossessed by the OPNY Administrative Agent under
or pursuant to this Section 16 or any other provision hereof and in accordance
with Section 30 hereof and the Intercreditor Agreement, and any other Collateral
whether or not so repossessed by the OPNY Administrative Agent, may be sold,
assigned, leased or otherwise disposed of under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the OPNY Administrative Agent may,
upon written direction in compliance with any mandatory requirements of any
Requirement of Law, determine to be commercially reasonable. Any such
disposition which shall be a private sale or other private proceeding permitted
by such requirements shall be made upon not less than 10 days' written notice to
Pledgor (except that, if the OPNY Administrative Agent shall determine, in its
sole discretion, that any of the Collateral threatens to decline quickly in
value or to become worthless, any such sale may be made upon three days' notice
to Pledgor) specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of Pledgor or any
nominee of Pledgor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. To the extent permitted by Requirements of Law, the
OPNY Administrative Agent on behalf of the OPNY Lenders may bid for and become
the purchaser of the Collateral or any item thereof, offered for sale in
accordance with this Section 16. If, under mandatory requirements of any
Requirement of Law, the OPNY Administrative Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to Pledgor as hereinabove specified, the OPNY Administrative
Agent need give Pledgor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of any Requirement of Law.
(d) The OPNY Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the Uniform Commercial Code or any other
applicable Requirement of Law in all relevant jurisdictions.
(e) Waiver of Claims. Except as otherwise provided in this Agreement,
PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE OPNY ADMINISTRATIVE
AGENT TAKING POSSESSION OR THE OPNY ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF
THE COLLATERAL, IN EACH CASE AS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF
ANY SUCH JURISDICTION, and Pledgor hereby further waives:
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(i) all damages occasioned by such taking of
possession except any damages which are the direct result of the gross
negligence or willful misconduct of either of the OPNY Administrative
Agent or any Person acting on its behalf or instruction;
(ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of
the OPNY Administrative Agent's rights hereunder; and
(iii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force
under any Requirements of Law in order to prevent or delay the
enforcement of this Agreement (including any right to claim that such
enforcement should be stayed pending the outcome of any other action or
proceeding (including any arbitration proceeding)) or the absolute sale
of the Collateral or any portion thereof, and Pledgor, for itself and
all who may claim under it, insofar as it or they now or hereafter
lawfully may, hereby waives the benefit of all such Requirements of
Law.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall, to the extent permitted by Requirements of Law, operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under Pledgor.
SECTION 17. Application of Proceeds. Notwithstanding any other
provision of this Agreement but subject to Section 30 hereof and the
Intercreditor Agreement, all payments made under or in connection with this
Agreement, and all moneys collected by the OPNY Administrative Agent upon any
sale or other disposition of the Collateral pursuant to Section 16, together
with all other moneys received by the OPNY Administrative Agent hereunder, shall
be applied in accordance with the Financing Documents. For the avoidance of
doubt, it is understood that Pledgor shall remain liable to the extent of any
deficiency between the amount of all moneys collected by the OPNY Administrative
Agent upon any such sale or other disposition of the Collateral and the
aggregate amount of the Secured Obligations.
SECTION 18. Remedies Cumulative. No failure or delay on the part of the
OPNY Administrative Agent or any Secured Party in exercising any right, power or
privilege hereunder or under any other Financing Document and no course of
dealing between Pledgor and the OPNY Administrative Agent or any Secured Party
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Financing Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the OPNY
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the OPNY
14
Administrative Agent or any Secured Party to any other or further action in any
circumstances without notice or demand.
SECTION 19. Discontinuance of Proceedings. In case the OPNY
Administrative Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the OPNY Administrative Agent, then and in
every such case Pledgor, the OPNY Administrative Agent and each holder of any of
the Secured Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies and powers of the OPNY
Administrative Agent shall continue as if no such proceeding had been
instituted.
SECTION 20. Indemnity and Expenses. (a) Pledgor agrees to indemnify and
hold harmless the OPNY Administrative Agent and each Secured Party from and
against any and all claims, losses and liabilities arising out of or resulting
from the Collateral or Pledgor's pledge and assignment under this Agreement
(including enforcement against Pledgor of this Agreement), except claims, losses
or liabilities resulting from the OPNY Administrative Agent's or any Secured
Party's gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to the OPNY Administrative Agent or
any Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the OPNY Administrative Agent or any Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of Pledgor, (iii) the exercise or
enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the OPNY Administrative Agent or any Secured Party
hereunder against Pledgor or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 21. Waiver, Amendment; Severability. No amendment or waiver of
any provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the OPNY Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations or of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
SECTION 22. Security Interest Absolute. The obligations of Pledgor
under this Agreement are independent of the Secured Obligations, and, subject to
Section 30 and the Intercreditor Agreement, a separate action or actions may be
brought and prosecuted against Pledgor to enforce this Agreement, irrespective
of whether any action is brought against the OPNY Borrower, any other pledgor or
any guarantor of the Secured Obligations or whether the OPNY Borrower, any other
pledgor or any guarantor of the Secured Obligations is joined in any
15
such action or actions. All rights of the OPNY Administrative Agent and the
assignment, hypothecation and security interest hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional, to the extent
permitted by applicable Requirements of Law, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the OPNY
Credit Agreement, any other Financing Document or any other agreement or
instrument relating to any thereof, the absence of any action to enforce the
same, any release of Pledgor, any Credit Party or any other Credit Party (as
defined in the OPMW Credit Agreement, the "OPMW Credit Party"), the recovery of
any judgment against Pledgor, any Credit Party or any other OPMW Credit Party,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of Pledgor;
(b) any occurrence or condition whatsoever, including (i) any
compromise, settlement, release, waiver, renewal, extension, indulgence or
modification of, or any change in, any of the obligations of Pledgor, any Credit
Party or any other OPMW Credit Party contained in this Agreement, the OPNY
Credit Agreement or any other Financing Document, (ii) any impairment,
modification, release or limitation of the liability of Pledgor, any Credit
Party or any other OPMW Credit Party or any of their estates in bankruptcy, or
any remedy for the enforcement thereof, resulting from the operation of any
present or future provision of any applicable bankruptcy law, as amended, or
other statute or from the decision of any court, (iii) the assertion or exercise
by Pledgor, the OPNY Administrative Agent or any other Secured Party of any
rights or remedies, (iv) the assignment or the purported assignment of any
property as security for the Secured Obligations, including all or any part of
the rights of Pledgor under this Agreement, (v) the extension of the time for
payment by Pledgor, any Credit Party or any other OPMW Credit Party or any other
guarantor of any payments or other sums or any part thereof owing or payable
under any of the terms and provisions of any Financing Document or of the time
for performance by Pledgor, any Credit Party or any other OPMW Credit Party of
any other obligations under or arising out of any terms or provisions or the
extension of the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of Pledgor,
any Credit Party or any other OPMW Credit Party set forth in any Financing
Document, (vii) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of, or other similar proceeding affecting Pledgor, any Credit Party or any other
OPMW Credit Party or any of their respective assets, or the disaffirmancy of
this Agreement or any Financing Document in any such proceeding, (viii) the
release or discharge of Pledgor, any Credit Party or any other OPMW Credit Party
from the performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of this Agreement or any Financing Document or (x) any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
16
SECTION 23. Addresses for Notices. All notices hereunder, unless
otherwise specified, shall be given in the manner provided for in Section 9.01
of the OPNY Credit Agreement, and shall be given to such party at its address or
telecopy number set forth on the signature page hereof or at any other address
or telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 24. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto and shall inure to the benefit of the OPNY
Lenders; provided, however, that except for the conversion of Pledgor from
corporate status to a limited liability company pursuant to Section 7 of the LP
Guarantee, Pledgor may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
of the OPNY Lenders. Any OPNY Lender may transfer, assign or grant all or such
relevant part of its rights hereunder in connection with an assignment or
transfer of all or any part of its interest in its Loans (as defined in the OPNY
Credit Agreement) in accordance with the provisions of the OPNY Credit
Agreement, and such assignee shall thereupon become vested with all the benefits
in respect thereof granted to such OPNY Lender herein or otherwise. All
agreements, statements, representations and warranties made by Pledgor herein or
in any certificate or other instrument delivered by Pledgor or on its behalf
under this Agreement shall be considered to have been relied upon by the OPNY
Lenders and shall survive the execution and delivery of this Agreement, the OPNY
Credit Agreement and the other Financing Documents regardless of any
investigation made by the Lenders or on their behalf.
SECTION 25. Termination; Release. This Agreement shall create a
continuing pledge, assignment of hypothecation of and security interest in the
Collateral and shall remain in full force and effect until no OPNY Lender shall
have any Commitment outstanding and until the Notes, together with interest, and
all other Secured Obligations are indefeasibly paid in full in cash. This
Agreement shall terminate when all Secured Obligations have been indefeasibly
paid in full in cash and all Commitments have been terminated, and the
Administrative Agent, at the written request and expense of Pledgor, will
promptly authorize, execute and deliver, as applicable, to Pledgor the proper
instruments (which may include Uniform Commercial Code termination statements on
form UCC-3) acknowledging the termination of this Agreement, and will promptly
duly assign, transfer and deliver to Pledgor (without recourse and without any
representation or warranty) free from any interest of the Administrative Agent
or Lien granted hereunder such of the Collateral as may be in possession of the
Administrative Agent and has not theretofore been sold or otherwise applied or
released pursuant to this Agreement together with such notices to third parties
as may be necessary to countermand any notices previously sent to them pursuant
hereto.
SECTION 26. Headings Descriptive, Etc.. The headings of the several
sections and subsections of this Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK OTHER THAN ANY
17
SUCH REQUIREMENT OF LAW THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY
APPLICABLE AND EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. UNLESS OTHERWISE DEFINED HEREIN OR IN THE OPNY CREDIT AGREEMENT, TERMS
USED IN ARTICLE 9 OF THE NY UCC ARE USED HEREIN AS THEREIN DEFINED. ANY DISPUTE
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN PLEDGOR AND EACH SECURED PARTY IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE
OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, PLEDGOR AND EACH SECURED
PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT PLEDGOR AND EACH SECURED
PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. PLEDGOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(c) PLEDGOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST PLEDGOR OR
ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY SECURED
PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) PLEDGOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING
18
DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(e) THE PLEDGOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE PLEDGOR TO
RECEIVE FOR AND ON BEHALF OF THE PLEDGOR SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS
SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE PLEDGOR AT ITS
ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 23. THE PLEDGOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE PLEDGOR AT ITS SAID ADDRESS, SUCH
SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT TO (i) SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (ii)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 27.
SECTION 28. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 29. Limitation of Recourse. Except as otherwise expressly
provided in the Financing Documents and the OPMW Financing Documents, the
obligations of Pledgor hereunder are obligations solely of Pledgor and shall not
constitute a debt or obligation of any direct or indirect member, partner or
shareholder of Pledgor or any of their respective directors, officers, agents or
employees (each such Person, a "Non-Recourse Party"). No Non-Recourse Party
shall be liable for any amount payable by Pledgor under this Agreement and the
Secured Parties shall not seek a money judgment or deficiency or personal
judgment against any Non-Recourse Party for payment of the indebtedness payable
by Pledgor evidenced by this Agreement. No property or assets of any
Non-Recourse Party, other than as contemplated in the Financing Documents or the
OPMW Financing Documents, shall be sold, levied upon or otherwise used to
satisfy any judgment rendered in connection with any action brought against
Pledgor with respect to this Agreement or the other Financing Documents or OPMW
Financing Documents. The foregoing acknowledgments, agreements and waivers shall
be enforceable by any Non-Recourse Party. Notwithstanding the foregoing, nothing
in this Section shall limit or affect or be construed to limit or affect the
obligations and liabilities of any Credit Party or any other Non-Recourse Party
(a) in accordance with the terms of any Transaction Document or Financing
Document creating such liabilities and obligations to which such Credit Party or
Non-
19
Recourse Party is a party, (b) arising from liability pursuant to any applicable
Requirement of Law for such Credit Party's or such Non-Recourse Party's
fraudulent actions, knowing misrepresentations or willful misconduct or (c) with
respect to amounts distributed to it in violation of Section 6.10 of the OPNY
Credit Agreement.
SECTION 30. Subordination. Notwithstanding any provision of this
Agreement or any other Financing Document to the contrary, (i) the security
interests created and granted hereby are subject to, subordinate and inferior to
the security interests created by the First Lien Partnership Interest Pledge
Agreement, in accordance with, and all rights, powers and remedies granted to
the OPMW Administrative Agent thereunder, are subject in all respects to the
terms and conditions of the Intercreditor Agreement, including restrictions on
the right of the OPNY Administrative Agent to give notices, exercise power of
attorney rights, direct or receive payments, hold, control or receive delivery
of any Assignment Collateral or other possessory collateral or to exercise
powers or remedies and to apply proceeds of Collateral; provided, that if and to
the extent the Intercreditor Agreement is amended, supplemented or modified at
any time from time to time and such amendment, supplement or modification could
reasonably be expected to have any adverse effect on the Pledgor's rights,
duties or obligations hereunder or under any other Financing Document, such
amendment, supplement or modification shall not be effective as to the Pledgor
without the Pledgor's prior written acknowledgment (which acknowledgment shall
not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or supplement shall be effective for purposes of this Agreement and
the other Financing Documents, (ii) the OPNY Administrative Agent on behalf of
each of the Secured Parties hereby acknowledges and agrees that the Pledgor
shall not have any duty and obligation with respect to the perfection or
priority of the security interest granted hereunder in and to any of the
Collateral (and no Default or Event of Default shall result or occur) to the
extent (a) such Collateral is in the possession or control of the OPMW
Administrative Agent, (b) such Collateral is not transferred by the OPMW
Administrative Agent to the OPNY Administrative Agent as required pursuant to
the Intercreditor Agreement, (c) such perfection or priority requires any
consent, approval or other action of the OPMW Administrative Agent, or (d) the
OPMW Administrative Agent then maintains a perfected, first priority security
interest in and to Collateral and (iii) no obligations contained in this
Agreement shall require the OPMW Borrower to take or omit to take any action
inconsistent with the terms and conditions of the OPMW Deposit Account Agreement
and/or the Holdco Deposit Account Agreement and no Default or Event of Default
shall arise or result from the taking or omitting of such action.
[Remainder of page intentionally left blank]
20
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ORION POWER MIDWEST LP, INC.
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
BANK OF AMERICA, N.A.
not in its individual capacity, but
solely as the OPNY Administrative Agent
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
ANNEX I
TO
PARTNERSHIP INTEREST PLEDGE AGREEMENT
Partnership Interests
Partnership Agreement
EXHIBIT K-1
TO
AMEDED AND RESTATED
CREDIT AGREEMENT
[FORM OF]
INTERCOMPANY ACQUISITION NOTE
$700,000,000
[City, State
Date]
FOR VALUE RECEIVED, the undersigned, __________________, a limited
partnership organized under the laws of the State of Delaware (the "Maker"),
hereby promises to pay to the order of Orion Power New York, L.P., a Delaware
limited partnership (the "Payee"), at 1111 Louisiana Street, Houston, Texas
77002, (i) the principal amount of $700,000,000, or if less, the aggregate
unpaid principal amount of each loan or advance made by the Payee to the Maker,
at any time upon demand by the Payee, in lawful money of the United States of
America in immediately available funds, and (ii) interest from the date hereof
on the principal amount hereof from time to time outstanding, in like funds, at
a rate per annum equal to the rate applicable at such time to Base Rate Loans
pursuant to Section 2.06 of the Credit Agreement (as defined below), all as
recorded either on the grid attached to this Note or in the records of the
Payee; provided, however, that the failure to make any such recordation or any
error in such recordation shall not in any way affect the Maker's obligation to
repay this Note. This Note may be prepaid in whole or in part at any time
without premium or penalty. Amounts prepaid on this Note may not be reborrowed.
Terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Amended and Restated Credit Agreement, dated as of
October 28, 2002 (as amended or modified from time to time, the "Credit
Agreement"), among the Payee, BANC OF AMERICA SECURITIES LLC, as a Lead Arranger
and a Joint Book Runner, BNP PARIBAS, as a Lead Arranger and a Joint Book
Runner, BNP PARIBAS, as Syndication Agent, Union Bank of California, N.A., as a
Documentation Agent, COBANK, ACB, as a Documentation Agent, Deutsche Bank AG,
New York and/or Cayman Island Branch, as a Documentation Agent, BANK OF AMERICA,
N.A., as Issuing Bank and Administrative Agent, and each financial institution
which is a signatory thereto or which may hereafter become an assignee pursuant
to Section 9.06 of the Credit Agreement, as a lender.
The Maker promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate per annum applicable pursuant to the preceding paragraph, plus 2.00%.
The Maker and any and all sureties, guarantors and endorsers of this
Note and all other parties now or hereafter liable hereon, severally waive
grace, presentment of payment, protest, notice of any kind (including notice of
dishonor, notice of protest, notice of intention to accelerate and notice of
acceleration) and diligence in collecting
and bringing suit against any party hereto, and agree (i) to all extensions and
partial payments, with or without notice before or after maturity, (ii) to any
substitution, exchange or release of any security now or hereafter given for
this Note, (iii) to the release of any party primarily or secondarily liable
hereon and (iv) that it will not be necessary for the Payee, or any of its
successors or assigns, in order to enforce payment of this Note, to first
institute or exhaust their remedies against the Maker or any other party liable
therefor or against any security for this Note. The nonexercise by the holder of
any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
The outstanding principal balance of the loans and advances evidenced
by this Note shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
expressly waived by the Maker, upon occurrence of an Event of Default under the
Credit Agreement and any acceleration of the maturity of the Obligations,
unless, however, such acceleration has been stayed, prevented or otherwise
frustrated for any reason, in which event, solely upon the occurrence of an
Event of Default under the Credit Agreement.
The Payee hereby subordinates in right of payment all indebtedness of
the Maker owing to it, whether originally contracted with the Payee or acquired
by the Payee by assignment, transfer or otherwise, whether now owed or hereafter
arising, whether for principal, interest, fees, expenses or otherwise, together
with all renewals, extensions, increases or rearrangements thereof, to the prior
indefeasible payment in full in cash of the Obligations (as defined in the
Credit Agreement), whether now owed or hereafter arising, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding referred to in Section 7.07 of the Credit Agreement), fees,
expenses or otherwise together with all renewals, extensions, increases or
rearrangements thereof.
This Note shall be construed in accordance with and governed by the
laws of the State of New York and any applicable laws of the United States of
America.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Maker agrees to pay, in addition to the principal of
and interest on this Note, all costs of collection, including reasonable
attorneys' fees.
This Intercompany Acquisition Note is an amendment and restatement of
the Intercompany Acquisition Note in the amount of $700,000,000 made by the
Maker to the Payee, dated [July 28, 1999 (Carr Street and Erie Boulevard)]
[August 19, 1999 (Astoria Generating)] (the "Original Intercompany Acquisition
Note"). It is the intention of the Maker and the Payee that this Intercompany
Acquisition Note amend, restate, extend and renew the terms and conditions of
the Original Intercompany Acquisition Note, and is not intended to be a novation
or discharge of the obligations of the Borrower thereunder.
[Remainder of page intentionally left blank.]
[Insert Name of Maker]
By:
--------------------------------------
Name:
Title:
Accepted and agreed to as of the date
first written above:
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
--------------------------------------
Name:
Title:
ASSIGNMENT
FOR VALUE RECEIVED, Orion Power New York, L.P. hereby assigns and
transfers unto ____________________________ the Intercompany Note dated as of
October 28, 2002 and made by
_______________________________.
Dated: __________ ___
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
--------------------------------------
Name:
Title:
EXHIBIT K-2
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
[Form of]
INTERCOMPANY WORKING CAPITAL NOTE
[$ ]
FOR VALUE RECEIVED, the undersigned, __________________, a limited
partnership organized under the laws of the State of Delaware (the "Maker"),
hereby promises to pay to the order of Orion Power New York, L.P., a Delaware
limited partnership (the "Payee"), at 1111 Louisiana Street, Houston, Texas
77002, (i) the principal amount of [$ ], or if less, the aggregate unpaid
principal amount of each loan or advance made by the Payee to the Maker, at any
time upon demand by the Payee, in lawful money of the United States of America
in immediately available funds, and (ii) interest from the date hereof on the
principal amount hereof from time to time outstanding, in like funds, at a rate
per annum equal to the rate applicable at such time to Base Rate Loans pursuant
to Section 2.06 of the Credit Agreement (as defined below), all as recorded
either on the grid attached to this Note or in the records of the Payee;
provided, however, that the failure to make any such recordation or any error in
such recordation shall not in any way affect the Maker's obligation to repay
this Note. This Note may be prepaid in whole or in part at any time without
premium or penalty. Amounts prepaid on this Note may be reborrowed. Terms used
herein and not otherwise defined herein shall have the meanings assigned to them
in the Amended and Restated Credit Agreement, dated as of October 28, 2002 (as
amended or modified from time to time, the "Credit Agreement"), among the Payee,
BANC OF AMERICA SECURITIES LLC, as a Lead Arranger and a Joint Book Runner, BNP
PARIBAS, as a Lead Arranger and a Joint Book Runner, BNP PARIBAS, as Syndication
Agent, UNION BANK OF CALIFORNIA, N.A., COBANK, ACB and DEUTSCHE BANK AG NEW YORK
and/or CAYMAN ISLAND BRANCH, as Documentation Agents, BANK OF AMERICA, N.A., as
Issuing Bank and Administrative Agent, and each financial institution which is a
signatory thereto or which may hereafter become an assignee pursuant to Section
9.06 of the Credit Agreement, as a lender.
The Maker promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate per annum applicable pursuant to the preceding paragraph, plus 2.00%.
The Maker and any and all sureties, guarantors and endorsers of this
Note and all other parties now or hereafter liable hereon, severally waive
grace, presentment of payment, protest, notice of any kind (including notice of
dishonor, notice of protest, notice of intention to accelerate and notice of
acceleration) and diligence in collecting
and bringing suit against any party hereto, and agree (i) to all extensions and
partial payments, with or without notice before or after maturity, (ii) to any
substitution, exchange or release of any security now or hereafter given for
this Note, (iii) to the release of any party primarily or secondarily liable
hereon and (iv) that it will not be necessary for the Payee, or any of its
successors or assigns, in order to enforce payment of this Note, to first
institute or exhaust their remedies against the Maker or any other party liable
therefor or against any security for this Note. The nonexercise by the holder of
any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
The outstanding principal balance of the loans and advances evidenced
by this Note shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
expressly waived by the Maker, upon occurrence of an Event of Default under the
Credit Agreement and any acceleration of the maturity of the Obligations,
unless, however, such acceleration has been stayed, prevented or otherwise
frustrated for any reason, in which event, solely upon the occurrence of an
Event of Default under the Credit Agreement.
The Payee hereby subordinates in right of payment all indebtedness of
the Maker owing to it, whether originally contracted with the Payee or acquired
by the Payee by assignment, transfer or otherwise, whether now owed or hereafter
arising, whether for principal, interest, fees, expenses or otherwise, together
with all renewals, extensions, increases or rearrangements thereof, to the prior
indefeasible payment in full in cash of the Obligations (as defined in the
Credit Agreement), whether now owed or hereafter arising, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding referred to in Section 7.07 of the Credit Agreement), fees,
expenses or otherwise together with all renewals, extensions, increases or
rearrangements thereof.
This Note shall be construed in accordance with and governed by the
laws of the State of New York and any applicable laws of the United States of
America.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Maker agrees to pay, in addition to the principal of
and interest on this Note, all costs of collection, including reasonable
attorneys' fees.
This Intercompany Working Capital Note is an amendment and restatement
of the Intercompany Working Capital Note in the amount of $[ ] made by the Maker
to the Payee, dated [ ], 1999 (the "Original Intercompany Working Capital
Note"). It is the intention of the Maker and the Payee that this Intercompany
Working Capital Note amend, restate, extend and renew the terms and conditions
of the Original Intercompany Working Capital Note, and is not intended to be a
novation or discharge of the obligations of the Borrower thereunder.
[Remainder of page intentionally left blank.]
[Insert Name of Maker]
By:
--------------------------------------
Name:
Title:
Accepted and agreed to as of the date
first written above:
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
--------------------------------------
Name:
Title:
ASSIGNMENT
FOR VALUE RECEIVED, Orion Power New York, L.P. hereby assigns and
transfers unto Bank of America, N.A., as Administrative Agent, the Intercompany
Note dated as of October 28, 2002 and made by
Dated: October 28, 2002
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By:
--------------------------------------
Name:
Title:
EXHIBIT L-1
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
AMENDED AND RESTATED
SUBSIDIARY GUARANTEE AGREEMENT
DATED AS OF OCTOBER 28, 2002
AMONG
THE GUARANTORS NAMED HEREIN
AND
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
================================================================================
TABLE OF CONTENTS
<Table>
<Caption>
Section Page
SECTION 1. Guarantee...............................................................................................1
SECTION 2. Guarantee Absolute......................................................................................2
SECTION 3. Waivers.................................................................................................2
SECTION 4. Security for Guarantee..................................................................................5
SECTION 5. Subrogation.............................................................................................5
SECTION 6. Representations and Warranties..........................................................................6
SECTION 7. Affirmative Covenants...................................................................................8
SECTION 8. Negative Covenants.....................................................................................16
SECTION 9. Amendments, Etc........................................................................................20
SECTION 10. Notices, Etc...........................................................................................21
SECTION 11. No Waiver; Remedies....................................................................................21
SECTION 12. Right of Set-off.......................................................................................21
SECTION 13. Continuing Guarantee...................................................................................21
SECTION 14. Assignments............................................................................................21
SECTION 15. Contribution...........................................................................................22
SECTION 16. Limitation of Liability................................................................................22
SECTION 17. [Intentionally Omitted.]...............................................................................22
SECTION 18. Counterparts...........................................................................................22
SECTION 19. Savings Clause.........................................................................................23
SECTION 20. Governing Law; Submission to Jurisdiction and Venue....................................................23
SECTION 21. Subordination by Guarantors............................................................................24
SECTION 22. Survival of Agreement..................................................................................25
SECTION 23. Entire Agreement.......................................................................................25
SECTION 24. Headings...............................................................................................25
SECTION 25. Amendment and Restatement..............................................................................25
</Table>
i
THIS AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT (this
"Guarantee Agreement") is dated as of October 28, 2002 among ASTORIA GENERATING
COMPANY, L.P., a Delaware limited partnership ("Astoria"), ERIE BOULEVARD
HYDROPOWER, L.P., a Delaware limited partnership ("Erie") and CARR STREET
GENERATING STATION, L.P., a Delaware limited partnership ("Carr Street")
(Astoria, Erie and Carr Street being referred to herein individually as a
"Guarantor" and collectively as the "Guarantors") and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the "Administrative Agent") for the
Lenders (as defined below) under the Credit Agreement (as defined below).
Reference is made to that certain Amended and Restated Credit
Agreement, dated as of the Restructuring Effective Date (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Orion Power New York, L.P. (the "Borrower"), Banc of America Securities
LLC and BNP Paribas, as lead arrangers (the "Lead Arrangers") and joint book
runners, the financial institutions from time to time signatories thereto (the
"Lenders"), Bank of America, N.A., as Issuing Bank, the Administrative Agent,
BNP Paribas, as syndication agent, and Union Bank of California, N.A., CoBank,
ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as documentation
agents, pursuant to which the Lenders have agreed to renew, modify and extend
credit to the Borrower upon the terms and subject to the conditions set forth
therein. Terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement and the principles of
construction set forth in Section 1.04 of the Credit Agreement shall apply
hereto. In the event any conflict between the terms of this Guarantee Agreement
and the Credit Agreement, the terms of the Credit Agreement shall prevail.
The obligations of the Lenders to continue to extend credit under the
Credit Agreement are conditioned on, among other things, the execution and
delivery by the Guarantors of a Guarantee Agreement in the form hereof. The
proceeds of the credit extended to the Borrower under the Credit Agreement have
been extended to the Subsidiaries to finance the Subsidiaries' acquisition of
certain power generation assets described in the Credit Agreement and will, in
part, enable the Borrower to provide the Subsidiaries with working capital
pursuant to the Intercompany Working Capital Note. As Subsidiaries, the
Guarantors acknowledge that they will derive substantial benefits from the
extension of credit to the Borrower under the Credit Agreement. As consideration
therefor and in order to induce the Lenders to make Loans and continue to issue
the Letters of Credit, the Guarantors are willing to execute and deliver this
Guarantee Agreement.
Accordingly, the Guarantors, intending to be legally bound, hereby
agree with the Administrative Agent, for the ratable benefit of the Secured
Parties, as follows:
SECTION 1. Guarantee. Each of the Guarantors unconditionally
guarantees, jointly and severally, as a primary obligor and not merely as a
surety, the due and punctual payment by the Borrower of (a) the principal of and
interest (including interest accruing after the filing of a petition initiating
any proceeding referred to in Section 7.07 of the Credit Agreement) on the Loans
and all amounts drawn under all Letters of Credit, when and as due and payable,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (b) each payment required to be made by the Borrower under any
Interest Hedge Contract entered into by
the Borrower with any Lender, and (c) all other Obligations of the Borrower and
the payment obligations of the other Credit Parties (other than the Sponsor) to
the Secured Parties under the Credit Agreement and the other Financing Documents
(all the foregoing obligations being collectively called the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred in enforcing any rights under this Guarantee
Agreement.
SECTION 2. Guarantee Absolute. (a) Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Financing Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Secured Parties with respect thereto. The obligations of the Guarantors under
this Guarantee Agreement are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Guarantee Agreement, irrespective of whether any action is
brought against the Borrower or any other Guarantor or whether the Borrower or
any other Guarantor is joined in any such action or actions. This Guarantee
Agreement is an absolute and unconditional guaranty of payment when due, and not
of collection, by each Guarantor, jointly and severally with any other Guarantor
of the Guaranteed Obligations in each and every particular. The obligations of
each Guarantor hereunder are several from those of the Borrower and are primary
obligations concerning which each Guarantor is the principal obligor. The
Secured Parties shall not be required to mitigate damages or take any action to
reduce, collect or enforce the Guaranteed Obligations.
(b) This Guarantee Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the
Administrative Agent or any other Secured Party upon the insolvency, bankruptcy
or reorganization of the Borrower or otherwise, all as though such payment had
not been made.
(c) The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
the existence of any claim, set-off or other right which any Guarantor may have
at any time against the Borrower or any other Guarantor, the Administrative
Agent or other Secured Party or any other corporation or person, whether in
connection herewith or any unrelated transactions; provided, that, nothing
herein shall prevent the assertion of any such claim by separate suit or
counterclaim. Without limiting the generality of the foregoing, each Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to any Secured Party under the
Financing Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
SECTION 3. Waivers. Each Guarantor hereby waives presentment to, demand
of payment from and protest to the Borrower or any other Guarantor of any of the
Guaranteed Obligations, and also waives promptness, diligence, notice of
acceptance of its guarantee, any other notice with respect to any of the
Guaranteed Obligations and this Guarantee Agreement and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto. Each Guarantor further waives
any right to require that resort be had by the Administrative Agent or any other
Secured Party to any
2
security held for payment of the Guaranteed Obligations or to any balance of any
deposit, account or credit on the books of the Administrative Agent or any other
Secured Party in favor of the Borrower or any other person. Each Guarantor
hereby consents and agrees to each of the following to the fullest extent
permitted by applicable Requirements of Law, and agrees to the fullest extent
permitted by applicable Requirements of Law that such Guarantor's obligations
under this Guarantee Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including rights to notice) which such Guarantor might otherwise have as a
result of or in connection with any of the following:
(a) any renewal, extension, modification, increase, decrease,
alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any
contract or understanding with the Borrower, the Administrative Agent,
the other Secured Parties, or any of them, or any other person,
pertaining to the Guaranteed Obligations;
(b) any adjustment, indulgence, forbearance or compromise that
might be granted or given by the Administrative Agent or any other
Secured Party to the Borrower or any Guarantor or any person liable on
the Guaranteed Obligations; or the failure of the Administrative Agent
or any other Secured Party to assert any claim or demand or to exercise
any right or remedy against the Borrower or any Guarantor under the
provisions of any Financing Document or otherwise; or any rescission,
waiver, amendment or modification of, or any release from any of the
terms or provisions of, any Financing Document, any guarantee or any
other agreement, including with respect to any other Guarantor under
this Guarantee Agreement;
(c) the insolvency, bankruptcy arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
the Borrower or any Guarantor or any other person at any time liable
for the payment of all or part of the Guaranteed Obligations; or any
dissolution of the Borrower or any Guarantor, or any change,
restructuring or termination of the corporate structure or existence of
the Borrower or any Guarantor, or any sale, lease or transfer of any or
all of the assets of the Borrower or any Guarantor, or any change in
the shareholders, partners, or members of the Borrower or any
Guarantor; or any default, failure or delay, willful or otherwise, in
the performance of the Guaranteed Obligations;
(d) the invalidity, illegality or unenforceability of all or
any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever, including the fact that the Guaranteed Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating
the Guaranteed Obligations or any part thereof is ultra vires, the
officers or representatives executing the documents or otherwise
creating the Guaranteed Obligations acted in excess of their authority,
the Guaranteed Obligations violate applicable usury laws, the Borrower
has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from the Borrower, the creation, performance or repayment
of the Guaranteed Obligations (or the execution, delivery and
performance of any document or
3
instrument representing part of the Guaranteed Obligations or executed
in connection with the Guaranteed Obligations or given to secure the
repayment of the Guaranteed Obligations) is illegal, uncollectible,
legally impossible or unenforceable, or the documents or instruments
pertaining to the Guaranteed Obligations have been forged or otherwise
are irregular or not genuine or authentic;
(e) any full or partial release of the liability of the
Borrower on the Guaranteed Obligations or any part thereof, of any
co-guarantors, or of any other person now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally,
to pay, perform, guarantee or assure the payment of the Guaranteed
Obligations or any part thereof, it being recognized, acknowledged and
agreed by each Guarantor that such Guarantor may be required to pay the
Guaranteed Obligations in full without assistance or support of any
other person, and such Guarantor has not been induced to enter into
this Guarantee Agreement on the basis of a contemplation, belief,
understanding or agreement that any parties other than the Borrower
will be liable to perform the Guaranteed Obligations, or that the
Secured Parties will look to other parties to perform the Guaranteed
Obligations;
(f) the taking or accepting of any other security, collateral
or guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
(g) any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including negligent,
unreasonable or unjustifiable impairment) of any letter of credit,
collateral, property or security, at any time existing in connection
with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations;
(h) the failure of the Administrative Agent, any other Secured
Party or any other person to exercise diligence or reasonable care in
the preservation, protection, enforcement, sale or other handling or
treatment of all or any part of such collateral, property or security;
(i) the fact that any collateral, security, security interest
or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized
and agreed by each Guarantor that such Guarantor is not entering into
this Guarantee Agreement in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of
any of the Collateral;
(j) any payment by the Borrower to the Administrative Agent or
any other Secured Party being held to constitute a preference under
Title 11 of the United States Code or any similar Federal or state law,
or for any reason the Administrative Agent or any other Secured Party
being required to refund such payment or pay such amount to the
Borrower or someone else;
(k) any other action taken or omitted to be taken with respect
to the Guaranteed Obligations, or the security and collateral therefor,
whether or not such action
4
or omission prejudices any Guarantor or increases the likelihood that
any Guarantor will be required to pay the Guaranteed Obligations
pursuant to the terms hereof, it being the unambiguous and unequivocal
intention of each Guarantor that such Guarantor shall be obligated to
pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action or omission whatsoever, whether
or not contemplated, and whether or not otherwise or particularly
described herein, except for the full and indefeasible payment and
satisfaction of the Guaranteed Obligations in cash;
(l) the fact that all or any of the Guaranteed Obligations
cease to exist by operation of law, including by way of a discharge,
limitation or tolling thereof under applicable bankruptcy laws; or
(m) any other circumstance (including any statute of
limitations) that might in any manner or to any extent otherwise
constitute a defense (other than a defense of indefeasible payment and
performance in full of the Guaranteed Obligations) available to, vary
the risk of, or operate as a discharge of, the Borrower or any
Guarantor as a matter of law or equity.
All waivers herein contained shall be without prejudice to the Administrative
Agent at its option to proceed against the Borrower, any Guarantor or any other
person, whether by separate action or by joinder.
SECTION 4. Security for Guarantee. Each of the Guarantors authorizes
the Administrative Agent, in accordance with the terms and subject to the
conditions set forth in the Credit Agreement and the Security Documents, (a) to
take and hold security for the payment of this Guarantee Agreement and the
Guaranteed Obligations and to exchange, enforce, waive and release any such
security, (b) to apply such security and direct the order or manner of sale
thereof as the Administrative Agent in its reasonable discretion may determine
in accordance with the Financing Documents and (c) to release or substitute any
one or more endorsees, other guarantors or other obligors. The Administrative
Agent may, at its election, in accordance with the terms and subject to the
conditions set forth in the Credit Agreement and the Security Documents,
foreclose on any security held by it by one or more judicial or nonjudicial
sales, or exercise any other right or remedy available to it against the
Borrower or any of the Guarantors, or any security, without affecting or
impairing in any way the liability of any of the Guarantors hereunder, except to
the extent the Guaranteed Obligations have been indefeasibly paid in full in
cash.
SECTION 5. Subrogation. In furtherance of the foregoing and not in
limitation of any other right which the Administrative Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any Guarantor to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each of the Guarantors
hereby promises to and will, upon receipt of written demand by the
Administrative Agent, forthwith pay, or cause to be paid, to the Administrative
Agent for distribution to the Lenders and the other Secured Parties, if and as
appropriate, in cash the amount of such unpaid Guaranteed Obligation. No
Guarantor shall exercise any claims or rights which it may now have or hereafter
acquire against the Borrower or any other Credit Party that arise from the
existence, payment, performance or
5
enforcement of such Guarantor's obligations under this Guarantee Agreement or
any other Financing Documents, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any other
Secured Party against the Borrower or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including the right to take or receive from the Borrower directly or indirectly,
in cash or other property or by setoff or any other manner, payment or security
on account of such claim, remedy or right, until the later of (a) the
indefeasible cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guarantee Agreement and (b) the termination of the
Commitments. If any amount shall be paid to any Guarantor at any time prior to
the later of the events set forth in clauses (a) and (b) of the preceding
sentence, such amount shall be held in trust for the benefit of the
Administrative Agent and the other Secured Parties and shall forthwith be paid
to the Administrative Agent to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guarantee Agreement,
whether matured or unmatured, in accordance with the terms of the Financing
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guarantee Agreement thereafter arising. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Financing Documents and that the
waiver set forth in this Section 5 is knowingly made in contemplation of such
benefits.
SECTION 6. Representations and Warranties. Each Guarantor hereby
represents and warrants as follows:
(a) Existence; Due Qualification; Compliance With Law. Such Guarantor
(a) is duly formed, validly existing and in good standing under the laws of the
respective jurisdiction of its formation, (b) has all requisite power and
authority to own its property and assets, to borrow money and to transact the
business in which it is presently engaged and in which it proposes to be
engaged, (c) has duly qualified and is authorized to do business and is in good
standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (d) is in full compliance with its
Governing Documents, all Contractual Obligations, all applicable material
Requirements of Law and all Governmental Approvals, except to the extent that
the failure to comply with any of the foregoing could not reasonably be expected
to have a Material Adverse Effect
(b) Power; Authority; No Violation; Binding Effect. The execution,
delivery and performance by such Guarantor of the Transaction Documents to which
it is a party and the consummation of the transactions contemplated thereby (i)
are within its powers, (ii) have been duly authorized by all necessary corporate
or partnership action, (iii) do not and will not contravene (A) its Governing
Documents or (B) any material Requirement of Law, any material Contractual
Obligation or any material Governmental Approval binding on or affecting it and
(iv) do not and will not conflict with or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except Permitted Liens) upon any of
its properties or assets pursuant to, the terms of any material Contractual
Obligation binding on or affecting it.
6
(c) Due Execution and Delivery. Such Guarantor has duly executed and
delivered each Transaction Document to which it is a party. Each Transaction
Document constitutes the legal, valid and binding obligation of each Guarantor
(to the extent it is a party thereto), enforceable against such Guarantor in
accordance with its terms, except as enforcement thereof may be subject to (i)
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and (ii) general
principles of equity.
(d) Ownership of Property. Except for property, assets and revenues
disposed of in accordance with Section 6.11 of the Credit Agreement or Section
8.11 hereof, such Guarantor has good title to, or valid leasehold, easement or
right-of-way interests in, the material property, assets or revenues which it
purports to own, lease or hold any such interest in, free and clear of all Liens
(except Permitted Liens), including possession of all required real estate
interests and licenses, Intellectual Property and other proprietary rights,
except where the failure to own or possess any of the foregoing could not
reasonably be expected to have a material adverse effect on any Portfolio Asset.
(e) Governmental Approvals. Each Guarantor has all Governmental
Approvals required to authorize, and currently required to be maintained (and
currently expects to be able to obtain all Governmental Approvals required in
the future on or prior to the date and time required) under applicable
Requirements of Law in connection with (i) the execution, delivery and
performance by such Guarantor of the Transaction Documents and the Operational
Plans to which it is a party, (ii) the ownership, maintenance or operation of
the Portfolio Assets as contemplated by the Transaction Documents to which it is
a party and the Operational Plans, and (iii) the legality, validity, binding
effect or enforceability of any Transaction Document except, in each case where
the failure to obtain such Governmental Approvals could not reasonably be
expected to have a material adverse effect on any Portfolio Asset. Except as set
forth on Schedule 4.04 of the Credit Agreement, all applicable waiting periods
(including appeal periods) relating to any such Governmental Approval or other
approval which are required and have been obtained have expired without any
adverse action taken with respect thereto. All such Governmental Approvals are
in full force and effect and are not subject to any appeal or similar
proceeding, except where the failure to be in full force and effect or any such
appeal or proceeding could not reasonably be expected to have a material adverse
effect on any Portfolio Asset. Such Guarantor is not in violation of any
condition in any material Governmental Approval, which violation could
reasonably be expected to have a material adverse effect on any Portfolio Asset.
(f) Solvency. As of the Restructuring Effective Date, such Guarantor is
and, after consummation of the transactions contemplated by this Guarantee
Agreement, will be Solvent. As used herein, "Solvent" shall mean, with respect
to any Person as of a particular date, that on such date (i) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (ii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature in their ordinary course, taking into account the
timing of and amounts of cash to be received by such Person and the timing of
and amounts of cash to be payable on or in respect of debts and liabilities of
such Person, (iii) such Person is not engaged in a business or a transaction,
and is not about to engage
7
in a business or a transaction, for which such Person's property would
constitute unreasonably small capital after giving due consideration to the
industry in which such Person is engaged or is to engage, (iv) the fair value of
the property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person and (v) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts and
liabilities as they become absolute and matured. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(g) Conditions Precedent. There are no conditions precedent to the
effectiveness of this Guarantee Agreement that have not been satisfied or
waived.
(h) Independent Analysis. Such Guarantor has, independently and without
reliance upon the Administrative Agent or any other Secured Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guarantee Agreement. Such Guarantor has
investigated fully the benefits and advantages which will be derived by it from
execution of this Guarantee Agreement, and the Board of Directors of the general
partner of such Guarantor has decided that a direct or an indirect benefit will
accrue to such Guarantor by reason of the execution of this Guarantee Agreement.
(i) Intent; Considerations. (i) This Guarantee Agreement is not given
with actual intent to hinder, delay or defraud any Person to which any Guarantor
is or will become, on or after the date hereof, indebted; (ii) such Guarantor
has received at least a reasonably equivalent value in exchange for the giving
of this Guarantee Agreement; (iii) such Guarantor is not engaged in a business
or transaction, nor is about to engage in a business or transaction, for which
any property remaining with such Guarantor constitutes an unreasonably small
amount of capital; and (iv) such Guarantor does not intend to incur debts that
will be beyond such Guarantor's ability to pay as such debts mature.
SECTION 7. Affirmative Covenants. Each Guarantor covenants and agrees
that, so long as this Guarantee Agreement is in effect and any Lender shall have
any Commitment outstanding under the Credit Agreement, and until the Notes,
together with interest, and all other Obligations are indefeasibly paid in full
and all Letters of Credit have been cancelled or have expired and all amounts
drawn thereunder have been indefeasibly reimbursed in full and the OPMW
Obligations have been indefeasibly paid in full, such Guarantor will:
Section 7.01 Conduct of Business; Maintenance of Existence.
(a) Engage solely in the business of owning, maintaining and managing its
interests in the Portfolio Assets which such Guarantor owns, (b) preserve and
maintain in full force and effect its existence as a limited partnership under
the laws of the state of Delaware and its qualification to do business in every
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified could not reasonably be expected to have a material adverse effect on
any Portfolio Asset, (c) preserve and maintain all of its rights, privileges and
franchises necessary for the ownership of its interest in the Portfolio Assets
which such Guarantor owns, in accordance with the Transaction Documents and (d)
8
subject to Section 6.11 of the Credit Agreement and Section 8.11 hereof, keep
all property useful and necessary in its business in good working order and
condition (except to the extent that any such property is no longer used or
useful for the business of such Guarantor), ordinary wear and tear excepted. No
Guarantor shall amend its respective Governing Documents in any manner, the
result of which would be to alter the distribution, nature of business,
management, transfer of interests or powers of the general partner provisions
thereof.
Section 7.02 Governmental Approvals. Duly obtain on, or prior
to, such date as the same may be legally required, and thereafter maintain in
effect as long as legally required, all Governmental Approvals required to be
obtained by such Guarantor under Section 4.04 of the Credit Agreement and
Section 6(e) hereof, except to the extent the failure to so obtain or maintain
could not reasonably be expected to result in a Material Adverse Effect.
Section 7.03 Payment of Indebtedness. Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all of its Obligations and other Indebtedness and monetary
obligations of whatever nature (except for any Indebtedness (other than the
Obligations) or other monetary obligations which are being contested in good
faith and by appropriate proceedings if (a) Acceptable Reserves have been
established, and (b) such contest does not involve any unreasonable risk of the
sale, forfeiture or loss of any of the right, title estate and interest of such
Guarantor in any material Portfolio Asset, taking into account the existence of
such Acceptable Reserves).
Section 7.04 Accounts. Maintain all of its Accounts with the
Administrative Agent in accordance with, and apply or cause the application of,
all amounts on deposit therein as required by the Deposit Account Agreement and
the other Financing Documents.
Section 7.05 Performance of Covenants, Etc. Perform and
observe all of its Contractual Obligations, including all such the covenants and
agreements contained in the Project Contracts to which it is a party and shall
enforce (including, as necessary, through negotiation, litigation or other
reasonable means) the rights granted to it under and in connection with each of
the Transaction Documents, except where the failure to perform and observe such
Contractual Obligations or enforce such rights could not reasonably be expected
to have a material adverse effect on any Portfolio Asset.
Section 7.06 Insurance Requirements. Procure and maintain with
respect to such Guarantor and all of such Guarantor's Portfolio Assets,
insurance against physical loss, public liability, property damage, general
liability, business interruption, environmental risk and other insurance, with
coverages and limits in no event less than those required to be maintained by
such Guarantor, as set forth on Schedule 5.06 to the Credit Agreement (and in
conformance with the requirements set forth thereon). All premiums due under all
insurance policies required to be maintained by such Guarantor under Section
5.06 of the Credit Agreement will be paid timely by or on behalf of such
Guarantor. All proceeds of insurance shall be applied as provided in the Deposit
Account Agreement.
Section 7.07 Books and Records. Keep proper books of records
and accounts in which full, true and correct entries shall be made of all of its
transactions in accordance with GAAP.
9
Section 7.08 Visitation, Inspection, etc. Permit
representatives of the Administrative Agent, the Independent Engineer and the
Lead Arrangers (at the cost and expense of such Guarantor so long as any Default
or Event of Default exists), and any other Lender (at the cost and expense of
such Lender) to visit and inspect any of its Portfolio Assets, to examine its
books and records and to make copies and take extracts therefrom, and to discuss
its affairs, finances and accounts with its officers and employees and its
independent accountants, all with reasonable prior notice and at such reasonable
times as such Person may reasonably request and subject to such Guarantor's
reasonable rules and procedures regarding operation, safety and confidentiality.
Section 7.09 Requirements of Law. Comply with all Requirements
of Law and Governmental Approvals (a) applicable to it and such Guarantor's
portion of the Portfolio Assets, including all Environmental Laws and (b)
required of such Guarantor by virtue of any concessions and licenses held by
such Guarantor except in each case when any such Requirement of Law or
Governmental Approval is being contested in good faith and by appropriate
proceedings (or, as appropriate, settlement negotiations) and for which
Acceptable Reserves have been established, except in each case where the failure
to so comply could not reasonably be expected to have a material adverse effect
on any Portfolio Asset; provided, that, such Guarantor shall not be required to
establish Acceptable Reserves in respect of any "new source review" enforcement
action brought by the Environmental Protection Agency against such Guarantor or
any Portfolio Asset (other than for penalties that may be assessed as a result
of such enforcement action) that such Guarantor is contesting in good faith or
in respect of which such Borrower Entity is involved in settlement negotiations.
Section 7.10 [Intentionally Omitted.]
Section 7.11 Operating Budget.
(a) Cause to be delivered to the Administrative Agent for its
approval (such approval not to be unreasonably conditioned, withheld or delayed)
an Operating Budget for the Borrower not less than 30 days in advance of each
calendar year satisfying the requirements contained in the definition thereof
(it being understood that the initial Operating Budget shall cover the period
through December 31, 2003); provided, that, with respect to any Operating
Budget, if the Administrative Agent fails to approve such Operating Budget or
provides notice to such Guarantor and the Borrower that it rejects all or any
portion of such Operating Budget, such Guarantor and the Administrative Agent
(in consultation with the Independent Experts) agree to work in good faith to
resolve such dispute; and provided, further, that if an Operating Budget is not
adopted and approved on or prior to the first day of any calendar year, such
Guarantor shall adhere to the Interim Operating Budget until such time as an
Operating Budget is adopted and approved by the Administrative Agent (in
consultation with the Independent Experts).
(b) Operate and maintain its portion of the Portfolio Assets
or cause its portion of the Portfolio Assets to be operated and maintained, in
accordance with each Operating Budget and subject to the terms of Section 5.11
of the Credit Agreement.
Section 7.12 Payment of Taxes and Claims. Timely cause to be
paid and discharged (whether by it, an Affiliate or otherwise) all taxes,
assessments and governmental
10
charges or levies lawfully imposed upon such Guarantor or upon its respective
income or profits or upon its portion of the Portfolio Assets or the Collateral
and all lawful claims or obligations that, if unpaid, would become a Lien upon
the Collateral, real or personal, or upon any part thereof; provided, that, such
Guarantor shall have the right to contest in good faith the validity or amount
of any such tax, assessment, charge, levy, claim or obligation by proper
proceedings, and may permit the taxes, assessments, charges, levies, claims or
obligations so contested to remain unpaid during the period of such contest if:
(a) such Guarantor diligently prosecutes such contest in good faith and by
appropriate proceedings and for which Acceptable Reserves have been established;
(b) during the period of such contest, the enforcement of any contested item is
effectively stayed; and (c) the failure to pay or comply with the contested item
could not reasonably be expected to result in a Material Adverse Effect taking
into account the existence of such Acceptable Reserves.
Section 7.13 Maintenance and Operation of Portfolio Assets;
Repair and Replacement of Portfolio Assets.
(a) Operate and maintain its portion of the Portfolio Assets
and conduct its business (i) in accordance with Prudent Industry Practice, (ii)
in accordance with all applicable material Requirements of Law, except where
being contested in good faith and by appropriate proceedings and as to which
Acceptable Reserves have been established, or except where the failure to so
operate and maintain the Portfolio Assets could not reasonably be expected to
have a material adverse effect on any Portfolio Asset, and (iii) in accordance
with the terms of any insurance policy or policies in effect at any time with
respect to its portion of the Portfolio Assets or any part thereof; and
(b) After the occurrence of a loss, damage, destruction or
taking of any part of its portion of the Portfolio Assets, proceed diligently
with all work necessary to replace and/or repair such loss, destruction or
damage to the extent required pursuant to the terms of the Financing Documents.
Section 7.14 Real and Personal Property. Except as permitted
in Section 8.11 hereof or Section 6.11 of the Credit Agreement, maintain good
title to or valid leasehold, easement or right-of-way interests in the material
property, assets or revenues on which it purports to own, lease or hold any such
interest in, free and clear of all Liens (except Permitted Liens), including the
possession of all material real estate interests and licenses, material
Intellectual Property and other material proprietary rights required for the
ownership, operation and maintenance of its portion of the Portfolio Assets, all
to the extent contemplated by the Transaction Documents and in accordance with
Prudent Industry Practice.
Section 7.15 ERISA. Deliver to the Administrative Agent, if
and when such Guarantor or any ERISA Affiliate (a) gives or is required to give
notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan, other than a reportable event for which 30-day
notice to the PBGC has been waived, or knows that the plan administrator of any
Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (b) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such
11
notice; (c) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (d) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (e) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (f) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (g) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which in either case would trigger the provisions of Section 412(n)
or 401(a)(29) of the Code (or any corresponding provisions of ERISA), a
certificate of the chief financial officer or the chief accounting officer of
such Guarantor setting forth details as to such occurrence and action, if any,
which such Guarantor or applicable ERISA Affiliate is required or proposes to
take.
Section 7.16 Notices. Within ten (10) Business Days after a
Responsible Officer of any Borrower Entity obtains actual knowledge thereof,
give notice to the Lenders of:
(a) any Default or Event of Default, together with a
description of any action being taken or proposed to be taken with respect
thereto;
(b) any action, suit, arbitration, litigation, investigation
or proceeding involving or affecting such Guarantor or any portion of its
Portfolio Assets or any Major Project Party involving $1,000,000 or more or
seeking any injunctive, declaratory or other equitable relief;
(c) any action, suit, arbitration, litigation, investigation
or proceeding instituted for the purpose of revoking, terminating, suspending,
withdrawing, modifying or withholding any material Governmental Approval
necessary for such Guarantor or any other Major Project Party to perform its
obligations or exercise its rights under any Project Contract or for the
operation or maintenance of its portion of the Portfolio Assets in the manner
contemplated by the Transaction Documents;
(d) proposed execution of any Additional Contract or Approved
Agreement (other than confirmations issued under Approved Master Agreements or
any other master agreement);
(e) any casualty, loss or damage to any portion of its
Portfolio Assets, whether or not insured, involving a probable loss of $500,000
or more;
(f) any termination, material default or event of default or
notice thereof under any Project Contract;
(g) any change in the Responsible Officers of such Guarantor,
together with evidence of authority thereof and specimen signature;
(h) any fact, circumstance, condition or occurrence that is
reasonably likely to form the basis of a material Environmental Claim arising
with respect to its portion of the Portfolio Assets against such Guarantor or
any pending or threatened material Environmental
12
Claim arising with respect to its portion of the Portfolio Assets against such
Guarantor, describing the same in reasonable detail and, together with or as
soon thereafter as is reasonably possible, a description of the action that such
Guarantor has taken or proposes to take with respect thereto and, thereafter,
from time to time such detailed reports with respect thereto as the
Administrative Agent or any Lender (through the Administrative Agent) may
reasonably request;
(i) copies of all written communications with any Governmental
Authority relating to any material violation or alleged material violation of
any material Environmental Law or other Environmental Claim arising out of its
portion of the Portfolio Assets;
(j) copies of all notices and other information that such
Guarantor receives from, or delivers to, any Governmental Authority that could
reasonably be expected to be materially adverse to its portion of the Portfolio
Assets;
(k) all material notices relating to the Insurance Policies;
(l) any Emergency then requiring any payment of money or the
execution and delivery of any agreement and the amount of related spending
associated therewith;
(m) any other event or development that could reasonably be
expected to have a Material Adverse Effect; and
(n) any condemnation or similar proceeding involving assets
having an aggregate value of $1,000,000.
Section 7.17 Preservation of Security Interests; Further
Assurances. (a) Except with respect to dispositions of assets permitted under
Section 8.11 hereof or Section 6.11 of the Credit Agreement or as otherwise
provided in Section 5.18(B) of the Credit Agreement or in any Security Document,
preserve, or cause to be preserved, the security interests granted under and
pursuant to the Security Documents and undertake all actions which are necessary
or appropriate in the reasonable judgment of the Administrative Agent to (i)
maintain the Secured Parties' security interest in the Collateral in full force
and effect at all times (including the priority thereof, other than with respect
to vehicles and any emergency response boat or as to second liens in any of the
Collateral for which possession, or exclusive control or any other action which
would not be permitted pursuant to any OPNY Primary Security Document is
required to perfect such second lien) and (ii) preserve and protect the
Collateral and protect and enforce such Guarantor's rights and title and the
rights of the Secured Parties to the Collateral, including the making or
delivery of all filings and recordations, the payments of fees and other charges
and the issuance of supplemental documentation.
(b) Upon notice from the Administrative Agent, the Guarantor
shall take or cause to be taken all action required or, in the reasonable
opinion of the Administrative Agent, which is desirable to maintain and preserve
the Liens of the Security Documents and execute or cause to be executed any and
all further instruments (including financing statements, continuation statements
and similar statements with respect to any of the Security Documents) requested
by the Administrative Agent for such purpose. Notwithstanding any provision of
this Guarantee Agreement or any other Financing Document, each Guarantor
acknowledges and
13
agrees that (i) such Guarantor is in the process of obtaining each of the
consents identified in the attached Schedule 5.18 of the Credit Agreement as a
Consent Guarantor is required to obtain, (ii) the such Guarantor shall use
diligent and commercially reasonable efforts to obtain any such consents, and
(iii) such Guarantor shall not be deemed to be in breach or violation of any
provision of this Guarantee Agreement or any other Financing Document due to a
failure to obtain any such consent referenced in Schedule 5.18, including those
consents the Guarantor is in the process of obtaining except as a result of the
breach by such Guarantor's obligations under this Section 7.17(b).
(c) Any action under this Section 5.18, with respect to OPNY
Second Lien Documents, shall be subject to the terms of the Section entitled
"Subordination" contained in each OPNY Second Lien Document.
Section 7.18 Extraordinary Proceeds. Promptly apply all
payments in respect of Extraordinary Proceeds or Insurance Proceeds received by,
or for the account of, such Guarantor in accordance with the terms of Section
2.07 of the Credit Agreement and the Deposit Account Agreement.
Section 7.19 [Intentionally Omitted]
Section 7.20 [Intentionally Omitted]
Section 7.21 Environmental Compliance.
(a) Not use or Release, or permit the use or Release of,
Hazardous Materials at the site of any of its Portfolio Assets other than in
material compliance with all applicable Environmental Laws, or except to the
extent that any such use or Release could not reasonably be expected to have a
material adverse effect on any Portfolio Asset; provided, that such Guarantor
shall have the right to contest or engage in any settlement negotiation with
respect to such Environmental Laws in accordance with Section 7.09 hereof, so
long as during such contest, enforcement of any such contested Environmental Law
is stayed.
(b) Conduct and complete any investigation, study, sampling
and testing and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials Released at, on, in,
under or from its portion of the Portfolio Assets, in accordance with the
requirements of all applicable Environmental Laws, except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
(c) Ensure that the insurer adds any off-site location for the
disposal of Hazardous Materials from any of its portion of the Portfolio Assets
on the Non-Owned Covered Locations Schedule under the PLL Policy before
disposing of any such Hazardous Materials or entering into any contractual
arrangement permitting any such disposal.
(d) Promptly provide the Administrative Agent with copies of
any (1) reports of claims made to the insurer pursuant to the PLL Policy or
claims made under the Cost Cap Policy and (2) denials, partial denials or
reservations of rights in respect to any such claims received from an insurer.
Such Guarantor shall report claims to the insurer pursuant to the PLL Policy for
any Pollution Conditions which such Guarantor reasonably believes based upon
14
reasonable assumptions will exceed $1,000,000 in "clean-up costs" (as defined
under the PLL Policy); however, this covenant shall in no way prohibit such
Guarantor from reporting claims pursuant to the PLL Policy for amounts below
$1,000,000 in "clean-up costs" (as defined under the PLL Policy).
Section 7.22 Additional Contracts.
(a) Enter into Additional Contracts only with the prior
written consent of the Required Lenders, such consent not be unreasonably
withheld, conditioned or delayed; provided, that no such consent shall be
required to the extent such Additional Contracts were entered into in response
to an Emergency in accordance with Prudent Industry Practice; provided, further,
that this clause 7.22(a) shall not be construed to permit any Guarantor to enter
into an Additional Contract for a term longer than is reasonably necessary to
deal with such Emergency and in no event with a term in excess of 364 days
without the consent of the Required Lenders, such consent not be unreasonably
withheld, conditioned or delayed.
(b) (i) If any Guarantor shall at any time enter into an
Additional Contract or Approved Agreement (other than confirmations under
Approval Master Agreements), such Guarantor shall within ten Business Days after
a Responsible Officer has actual knowledge of such execution provide a copy of
the same to the Administrative Agent and to the extent the Administrative Agent
so requests in writing to such Guarantor, promptly execute, deliver and record,
or cause to be executed, delivered and recorded, a supplement to the Security
Documents, reasonably satisfactory in form and substance to the Administrative
Agent, subjecting such Additional Contract or applicable Approved Agreement, as
the case may be, to the Lien and security interests created by the Security
Documents, ensure that the security interest in such interest will be a valid
and an effective interest on terms comparable to the security interest of the
Secured Parties in the Collateral.
(ii) If reasonably requested by the Lead Arrangers,
such Guarantor shall use commercially reasonable efforts to obtain and deliver
to the Administrative Agent, a duly executed and delivered Additional Contract
Consent or Approved Agreement Consent in respect of each Approved Agreement
(which is a Project Contract) or Additional Contract, as applicable.
(c) Such Guarantor shall enter into Approved Agreements as
contemplated by, and in accordance with, the then current Operational Plans. In
addition, such Guarantor may enter into and perform any Approved Agreement for
the sale or purchase of Energy-Related Products or fuel (including
transportation) or fuel (including transportation) having terms and conditions
other than those set forth in Schedule 5.30 of the Credit Agreement, provided,
that each such Approved Agreement has been approved by the Lead Arrangers, such
approval not to be unreasonably withheld, conditioned or delayed.
Section 7.23 Other Information. Furnish to the Administrative
Agent:
(a) on each anniversary of the Restructuring Effective Date, a
certificate from such Guarantor's insurers or insurance agents (i) evidencing
that the insurance policies in place satisfy the requirements of this Guarantee
Agreement and (ii) setting forth a summary of all
15
losses in excess of $500,000 incurred with respect to its portion of the
Portfolio Assets in the preceding year;
(b) any such other information or data with respect to its
business or operations (including supporting information as to compliance with
this Guarantee Agreement) as the Administrative Agent may reasonably request
from time to time; and
(c) upon the request of the Administrative Agent, within 10
days of the end of each month, a monthly transaction summary of confirmations
issued under Approved Master Agreements; and
Section 7.24 [Intentionally Omitted].
Section 7.25 Fuel Procurement and O&M Arrangements. (a)
Conduct the procurement, purchase and use of fuel and, to the extent covered by
the Fuel Plan, the operation of its portion of the Portfolio Assets in all
material respects in accordance with the Fuel Plan most recently approved in
accordance with Section 5.26 of the Credit Agreement.
(b) Perform operation and maintenance of its portion of the
Portfolio Assets, or contract for the provision thereof as permitted by the
Credit Agreement, this Guarantee Agreement and related Financing Documents, in
all material respects in accordance with the O&M Plan most recently approved in
accordance with Section 5.26 of the Credit Agreement.
Section 7.26 Power Marketing and Transmission Arrangements.
(a) Without limiting the provisions of this Section 7.26, such Guarantor (either
itself or through an Affiliate or agent) shall conduct the marketing or sale of
Energy-Related Products produced by its portion of the Portfolio Assets or the
purchase of any thereof that is necessary or advisable for the performance of
its material obligations under each Project Contract, Additional Contract and
Approved Agreement to which it is a party and in all material respects in
accordance with the most recently approved Power Marketing Plan.
(b) Maintain such access or other rights to transmission
capacity (including firm and/or non-firm and interstate and/or non-interstate
transmission capacity, as the case may be) as may be required for such Guarantor
to conduct successfully any marketing or sale of Energy-Related Products
produced by its portion of the Portfolio Assets, or the purchase of any thereof,
in accordance with any then current Power Marketing Plan and all applicable
Project Contracts, Additional Contracts and Approved Agreements.
SECTION 8. Negative Covenants. Each Guarantor covenants and agrees
that, so long as this Guarantee Agreement is in effect and any Lenders shall
have any Commitment outstanding under the Credit Agreement, and until the Notes,
together with interest, and all other Obligations are indefeasibly paid in full
and all Letters of Credit have been cancelled or have expired and all amounts
drawn thereunder have been indefeasibly reimbursed in full and the OPMW
Obligations have been indefeasibly paid in full, such Guarantor shall not:
Section 8.01 Limitation on Mergers. Merge or consolidate with
or into any other Person or liquidate, wind up, dissolve or otherwise transfer
or dispose of all or substantially
16
all of its property, assets or business, acquire all or substantially all of the
assets of any Person or abandon its portion of the Portfolio Assets except that
nothing in this Guarantee Agreement shall restrict mergers or consolidations,
liquidations, winding up, dissolutions, transfers or other dispositions by any
Guarantor with or to another Subsidiary of the Borrower or with or to the
Borrower, so long as such merger, consolidation, liquidation, winding up,
dissolution, transfer or other disposition does not have, in the reasonable
judgment of the Lead Arrangers, any adverse effect on the Liens granted under
the Financing Documents or the Collateral secured thereby.
Section 8.02 Limitation on Indebtedness. Create, incur, assume
or suffer to exist any Indebtedness, other than Permitted Indebtedness.
Section 8.03 Limitation on Liens. Create or permit to exist
any Lien or encumbrance on any portion of its Portfolio Assets or any other
assets of such Guarantor, other than Permitted Liens.
Section 8.04 Nature of Business. Change its legal form or
Governing Documents (other than to (i) change its name and/or (ii) add, replace
or eliminate offices and/or officers), change its fiscal year or engage in any
business other than the acquisition, ownership, development operation and
financing of its portion of the Portfolio Assets; provided however, that such
Governing Documents may be amended as provided herein, or otherwise may be
amended with the prior written approval of the Lead Arrangers, such approval not
to be unreasonably withheld. No Guarantor shall engage in the sale or trading of
any fuel which is necessary for the operation of any Portfolio Assets (including
reasonable reserves thereof as determined by such Guarantor in its reasonable
discretion in the exercise of Prudent Industry Practice); provided, that, any
sale or other transfer made in compliance with the covenants set forth in
Schedule 5.30 of the Credit Agreement shall not be deemed to violate this
Section 8.04).
Section 8.05 Project Contracts; Waiver; Modification;
Amendment.
(a) Terminate, or agree to any termination of, any Transaction
Document to which it is a party (except with respect to Project Contracts
terminated by the applicable counterparty pursuant to the express terms thereof)
or any of its Governmental Approvals, unless with respect to Project Contracts
(i) such termination is pursuant to the applicable Guarantor's compliance with
Section 7.05 hereof and such Project Contract is a Project Contract approved
pursuant to clause (iv) of the definition thereof and such termination could not
reasonably be expected to have a material adverse effect on any Portfolio Asset,
or (ii) the applicable Guarantor first obtains the written consent of the Lead
Arrangers (such consent not to be unreasonably withheld, conditioned or
delayed).
(b) Except as provided in Section 8.04 hereof, amend or
modify, or consent or agree to such amendment or modification of, or waive
timely performance by any Person of, any of the material obligations under or in
respect of any Project Contract or Operational Plan to which it is a party or
any material Governmental Approval, unless such Guarantor first obtains the
consent of the Lead Arrangers, which consent will not be unreasonably withheld,
delayed or conditioned, upon demonstration to the reasonable satisfaction of the
Lead Arrangers (in consultation with the Independent Engineer, or Power Market
and Fuel Consultant, as applicable) that the proposed action could not
reasonably be expected to have a Material Adverse
17
Effect; provided, however that no Guarantor may amend or modify Sections 1.07,
1.09, 2.02(b), 2.05, Article V(b) and Article VI of its Partnership Agreement.
Upon granting any such consent by the Lead Arrangers with respect to a Project
Contract, the Administrative Agent shall promptly grant consent to such
amendment or modification required under any Consent applicable to any such
Project Contract, such consent not be unreasonably withheld, conditioned or
delayed.
Section 8.06 Partnerships; Subsidiaries. Become a general or
limited partner in any partnership or a joint venturer in any joint venture,
acquire any ownership interest in any other Person or enter into any
profit-sharing or royalty agreement or other similar arrangement whereby any
Guarantor's income or profits are, or might be, shared with any other Person, or
enter into any management contract or similar arrangement whereby its business
or operations are managed by any other Person (other than the O&M Agreements or
as contemplated in any Operational Plan) or form any Subsidiary (other than
those validly existing on the Restructuring Effective Date).
Section 8.07 Loans, Advances or Investments. (a) Make or
permit to remain outstanding any loans, extensions of credit or advances to or
investments in (whether by acquisitions of any stocks, notes or other securities
or obligations) any Person, except Permitted Investments or as expressly
contemplated by this Guarantee Agreement.
(b) Prepay Operating Costs other than in circumstances where a
prepayment of such Operating Cost is made in amounts required to continue
operations of such Guarantor in the ordinary course of business or if the
failure to so prepay would reasonably be expected to result in the loss or
breach of the applicable contract or agreement (or the ability to timely obtain
the goods and services thereunder) or would reasonably be expected to result in
any material increase in the cost for replacement goods or services; provided,
that, any such prepayment shall be consistent with Prudent Industry Practices;
and provided, further, that no prepayments shall be made (i) to any Affiliate,
or (ii) when the aggregate amount of any such prepayment, when added (without
duplication) to the aggregate amount of all other prepayments then made under
this Section 8.07(b) and Section 6.07(b) of the Credit Agreement for which goods
or services have not been delivered or received, all amounts of Cash Collateral
then outstanding under Section 8.07(c) below and Section 6.07(b) of the Credit
Agreement, all prepayments then made pursuant to Section 6.07(b) of the OPMW
Restated Credit Agreement for which goods or services have not been delivered or
received, and all amounts of Cash Collateral then outstanding under Section
6.07(c) of the OPMW Restated Credit Agreement, would exceed $50,000,000.
(c) Use Revenues or proceeds of any Working Capital Loan as
Cash Collateral other than in circumstances where cash collateralization of any
applicable Contractual Obligation is made in amounts reasonably necessary to
adequately mitigate the applicable counterparties' exposure to such Guarantor
under the applicable contract, agreement or undertaking, and the failure to cash
collateralize would reasonably be expected to result in the loss or breach of
the applicable contract or agreement (or the ability to timely obtain the goods
and services thereunder) or any material increase in the cost for replacement
goods or services; and provided, that, any such cash collateralization shall be
consistent with Prudent Industry Practices; provided, further, that, no Cash
Collateral shall be provided (i) to any Affiliate, or (ii) when the aggregate
amount of any such Cash Collateral, when added (without duplication) to the
18
aggregate amount of all other Cash Collateral then outstanding under this
Section 8.07(c) and Section 6.07(c) of the Credit Agreement, all prepayments
then made under Section 8.07(b) above and Section 6.07(b) of the Credit
Agreement and for which the applicable good or service has not been delivered or
received, all prepayments then made pursuant to Section 6.07(b) of the OPMW
Restated Credit Agreement for which goods or services have not been delivered or
received, and all amounts of Cash Collateral then outstanding under Section
6.07(c) of the OPMW Restated Credit Agreement, would exceed $50,000,000.
(d) If such Guarantor enters into any contract or agreement
providing any prepayments or cash collateral to a third party for the purchase
of any goods or materials and such Guarantor subsequently enters into a separate
contract with respect to those same goods or materials with any Affiliate of
such Guarantor, then the contract with such Affiliate shall be on substantially
the same terms and conditions as the third party contract, unless such terms and
conditions would violate or breach Section 8.09 hereof, Section 6.09 of the
Credit Agreement or any similar contractual provision contained in any contract
to which such Affiliate is a party, in which case such terms and conditions will
be modified to the extent required to comply with Section 8.09 hereof, Section
6.09 of the Credit Agreement and any similar contract provisions. Such Guarantor
shall not enter into any contract or agreement for the purchase of any goods or
materials (including the provision of prepayments or cash collateral) in
consideration for any concession or improved terms or conditions (including
collateral requirements or pricing) in any separate contract or agreement with
any Affiliate of such Guarantor.
Section 8.08 Limitation on Capital Expenditures. Make any
Capital Expenditure other than such Capital Expenditures that are (a)
contemplated by the annual Operating Budget in effect for such fiscal year (as
administered pursuant to Section 5.11 of the Credit Agreement), (b)
Environmental Cap Ex, (c) provided no Event of Default has occurred and is
continuing, determined in writing by the Administrative Agent (after
consultation with the Independent Engineer) to be required by applicable
Requirements of Law or to be reasonable and necessary and to arise from
circumstances which could not reasonably have been anticipated, which
determination will not be unreasonably withheld, conditioned or delayed, or (d)
subject to Section 5.2(m) of the Deposit Account Agreement required as a result
of an Emergency.
Section 8.09 Affiliate Transactions. Except as expressly set
forth in Schedule 4.22 to the Credit Agreement, directly or indirectly enter
into any transaction with any Affiliate other than in the ordinary course of
business and on an arm's length basis. Unless otherwise approved by the Lead
Arrangers, directly or indirectly enter into any transactions with any Person
(other than an Affiliate) other than in the ordinary course of business and on
an arm's length basis.
Section 8.10 Distributions. Declare or pay any Distributions
in respect of any Person's ownership interest in such Guarantor (other than
Permitted Distributions).
Section 8.11 Limitation on Disposition of Assets. Except in
connection with any transaction permitted by Section 8.01 or in connection with
any Permitted Lien, convey, sell, lease, assign, transfer or otherwise dispose
of any of its assets (including, equipment, inventory and other physical assets
of similar nature), other than (a) Energy-Related Products, steam, emissions
credits, scrap metal and other scrap materials and excess fuel conveyed, sold,
leased,
19
assigned, transferred or otherwise disposed of in the ordinary course of such
Guarantor's business, (b) such assets that are replaced within 120 days by other
assets of like utility in such Guarantor's business; provided, that, this clause
(b) shall not permit any sale of assets for an aggregate sales price in excess
of $10,000,000 in any calendar year during the term hereof, less the aggregate
amount of all such asset sales of the Borrower and the other Guarantors
consummated during such year, (c) obsolete or surplus assets or assets not
required in connection with the operation of its portion of the Portfolio Assets
and (d) assets that do not have, in any single transaction or related series of
transactions, an aggregate sales price in excess of $25,000,000; provided
however, the Lead Arrangers may waive the limitation set forth in this clause
(d) in connection with any conveyance, sale, lease assignment, transfer or
disposition of assets in any single transaction or series of related
transactions with aggregate proceeds in excess of $25,000,000 so long as the
proceeds thereof are applied to the prepayment of Acquisition Loans. All
proceeds of any disposition of such assets pursuant to clause (a) above shall be
deposited into the Revenue Account for application therefrom in accordance with
the Deposit Account Agreement. All proceeds of any disposition of such assets
pursuant to clause (b) above shall be deposited into the O&M Reserve Account and
applied pursuant to the terms of the Deposit Account Agreement. All proceeds of
any disposition of such assets pursuant to clauses (c) and (d) above, shall be
applied to the prepayment of Loans to the extent required under Section 2.07(a)
of the Credit Agreement and shall be deposited into the Extraordinary Proceeds
Account pursuant to the Deposit Account Agreement. Notwithstanding the
foregoing, Erie shall be permitted to transfer interests in the NiMo Assets to
industrial development authorities in connection with any Approved IDA
Transaction.
Section 8.12 Operating Budget. Amend, adjust, modify or
re-allocate any portion of the Operating Budget except as specifically permitted
in Section 5.11(b) of the Credit Agreement.
Section 8.13 Environmental Insurance. Add any properties not
included within its portion of the Portfolio Assets to the insured properties
under the PLL Policy or any matters to the Cost Cap Policy which are not
identified as covered locations under the Cost Cap Policy without the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, that, such Guarantor
delivers to the Administrative Agent all reasonably requested information
regarding (1) pollution conditions or potential for pollution conditions on the
new properties or pertaining to the matters relating to Cost Cap Policy and (2)
the effects on the protections afforded to its portion of the Portfolio Assets
by adding such new properties to the PLL Policy or matters relating to the Cost
Cap Policy.
Section 8.14 Speculative Trading. Engage in any speculative
trading activities.
SECTION 9. Amendments, Etc. No amendment, modification or waiver of any
provision of this Guarantee Agreement and no consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and shall be executed and delivered in accordance with Section 9.02 of
the Credit Agreement, and then such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that, this Guarantee Agreement may be amended,
modified or waived with respect to any Guarantor, including by releasing any
20
Guarantor hereunder, without the approval of any other Guarantor and without
affecting the obligations of any other Guarantor hereunder.
SECTION 10. Notices, Etc. All notices hereunder, unless otherwise
specified, shall be given in the manner provided for in Section 9.01 of the
Credit Agreement and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or at any other address or
telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 11. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any other Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder and under the other Financing Documents are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 12. Right of Set-off. If an Event of Default shall have
occurred and be continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Secured
Party to or for the credit or the account of any Guarantor against any and all
the obligations of such Guarantor then existing under this Guarantee Agreement
and the other Financing Documents, irrespective of whether or not such Secured
Party shall have made any demand under this Guarantee Agreement or such other
Financing Document and although such obligations may be unmatured. The rights of
each Secured Party under this Section 12 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.
SECTION 13. Continuing Guarantee. This Guarantee Agreement is a
continuing guarantee and shall survive and remain in full force and effect until
the Guaranteed Obligations and all other amounts payable under this Guarantee
Agreement have been indefeasibly paid in full in cash, the Commitments have been
terminated, all Letters of Credit have been cancelled or have expired and all
amounts drawn thereunder have been indefeasibly reimbursed in full, any ConEd
Letter of Credit Disbursements have been indefeasibly reimbursed in full, and
shall be reinstated to the extent provided in Section 2(b).
SECTION 14. Assignments. This Guarantee Agreement and the terms,
covenants and conditions hereof shall be binding upon each Guarantor and its
successors and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their respective successors and assigns. Upon the assignment
by any Lender of all or any portion of its rights and obligations in accordance
with the Credit Agreement (including all or any portion of its Commitment, the
Loans owing to it and the Note or Notes held by it) to any other Person, such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise. Except as provided in
Section 8.11 hereof, none of the Guarantors shall be permitted to assign,
transfer or delegate any of its rights or obligations under this Guarantee
Agreement
21
without the prior written consent of the Administrative Agent and each Lender
(and any such purported assignment, transfer or delegation without such consent
shall be void).
SECTION 15. Contribution. (a) In order to provide for just and
equitable contribution among the Guarantors, the Guarantors agree that, to the
extent any Guarantor makes any payment hereunder on any date which, when added
to all preceding payments made by such Guarantor hereunder, would result in the
aggregate payments by such Guarantor hereunder exceeding its Percentage (as
defined below) of all payments then or theretofore made by all Guarantors
hereunder, such Guarantor shall have a right of contribution against each other
Guarantor whose aggregate payments then or theretofore made hereunder are less
than its Percentage of all payments by all Guarantors then or theretofore made
hereunder, in an amount such that, after giving effect to any such contribution
rights, each Guarantor will have paid only its Percentage of all payments by all
Guarantors then or theretofore made hereunder. A Guarantor's "Percentage" on any
date shall mean the percentage obtained by dividing (a) the Adjusted Net Assets
of such Guarantor on such date by (b) the sum of the Adjusted Net Assets of all
the Guarantors on such date. "Adjusted Net Assets" means, for each Guarantor on
any date, the lesser of (i) the amount by which the fair value of the property
of such Guarantor exceeds the total amount of liabilities, including contingent
liabilities, but excluding liabilities under this Guarantee Agreement, of such
Guarantor on such date and (ii) the amount by which the present fair salable
value of the assets of such Guarantor on such date exceeds the amount that will
be required to pay the probable liability of such Guarantor on its debts,
excluding debt in respect of this Guarantee Agreement, as they become absolute
and matured. The provisions set forth in this Section 15 are for the sole
benefit of the Guarantors and shall in no way affect the obligations of the
Guarantors hereunder to make payments in full to the Administrative Agent and
the Secured Parties as specified herein.
SECTION 16. Limitation of Liability. Each Guarantor hereby confirms
that it is the intention of such Guarantor that the guarantee by such Guarantor
pursuant to this Guarantee Agreement not constitute a fraudulent transfer or
conveyance for purposes of Title 11 of the United States Code, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or state law. To effectuate the foregoing intention, such Guarantor
hereby irrevocably agrees that the obligations of such Guarantor under this
Guarantee Agreement shall be limited to the maximum amount as will result in the
obligations of such Guarantor under this Guarantee Agreement not constituting
such a fraudulent transfer or conveyance. In the event that any Guarantor's
liability hereunder is limited pursuant to this Section 16 to an amount that is
less than the total amount of the Guaranteed Obligations, then it is understood
and agreed that the portion of the Guaranteed Obligations for which such
Guarantor is liable hereunder shall be the last portion of the Guaranteed
Obligations to be repaid.
SECTION 17. [Intentionally Omitted.]
SECTION 18. Counterparts. This Guarantee Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument. This Guarantee
Agreement shall be effective with respect to any Guarantor when a counterpart
hereof which bears the signature of such Guarantor shall have been delivered to
the Administrative Agent.
22
SECTION 19. Savings Clause. In the event any one or more of the
provisions contained in this Guarantee Agreement should be held invalid, illegal
or unenforceable in any respect with respect to any Guarantor, no party hereto
shall be required to comply with such provision with respect to such Guarantor
for so long as such provision is held to be invalid, illegal or unenforceable,
and the validity, legality and enforceability of the remaining provisions
contained herein, and of such invalid, illegal or unenforceable provision with
respect to any other Guarantor, shall not in any way be affected or impaired.
The parties shall endeavor in good-faith negotiations to replace any invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 20. Governing Law; Submission to Jurisdiction and Venue. (a)
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT
WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN EACH GUARANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE
OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, EACH GUARANTOR
AND EACH SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS GUARANTEE AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT EACH
GUARANTOR AND EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH
GUARANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) EACH GUARANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED
AGAINST SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY
SELECTED IN GOOD FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY,
OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED
PARTY. EACH GUARANTOR WAIVES ANY OBJECTION THAT IT MAY
23
HAVE TO THE LOCATION OF THE COURT IN WHICH ANY SECURED PARTY HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(d) THE GUARANTORS AND THE SECURED PARTIES EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
GUARANTEE AGREEMENT AND THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES
RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL
REGISTERED AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE
501, NEW YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH
GUARANTOR TO RECEIVE FOR AND ON BEHALF OF THE GUARANTOR SERVICE OF PROCESS IN
SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTEE AGREEMENT OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT
A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL
TO SUCH GUARANTOR AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 9.01. EACH
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH GUARANTOR AT
ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT
THEREOF.
(f) NOTHING IN THIS GUARANTEE AGREEMENT SHALL AFFECT THE RIGHT
OF ANY PARTY TO THIS GUARANTEE AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW (ii) OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
AGAINST ANY PARTY IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 20.
SECTION 21. Subordination by Guarantors. Each Guarantor hereby
subordinates in right of payment all indebtedness of the Borrower or any other
Guarantor owing to it, whether originally contracted with such Guarantor or
acquired by such Guarantor by assignment, transfer or otherwise, whether now
owed or hereafter arising, whether for principal, interest, fees, expenses or
otherwise, together with all renewals, extensions, increases or rearrangements
thereof, to the prior indefeasible payment in full in cash of the Guaranteed
Obligations, whether now owed or hereafter arising, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding referred to in Section 7.07 of the Credit Agreement), fees,
expenses or otherwise, together with all renewals, extensions, increases or
rearrangements thereof.
24
SECTION 22. Survival of Agreement. All covenants, agreements,
representations and warranties made by each Guarantor herein shall be considered
to have been relied upon by the Administrative Agent and the other Secured
Parties and shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes evidencing such Loans,
regardless of any investigation made by the Lenders or the Agents or on their
behalf, and shall continue in full force and effect until the Guaranteed
Obligations and any other amounts payable under this Guarantee Agreement or any
other Financing Document have been indefeasibly paid in full in cash and the
Commitments have been terminated, and, upon such occurrence, this Guarantee
Agreement shall terminate, subject to any reinstatement pursuant to Section 2(b)
above.
SECTION 23. Entire Agreement. This Guarantee Agreement and the other
Financing Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any agreement previously entered into among the
parties with respect to the subject matter hereof is superseded by this
Guarantee Agreement and the other Financing Documents. Nothing in this Guarantee
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto and the other Secured Parties, any rights, remedies,
obligations or liabilities under or by reason of this Guarantee Agreement.
SECTION 24. Headings. Section headings used herein, and the Table of
Contents, are for convenience of reference only, are not part of this Guarantee
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Guarantee Agreement.
SECTION 25. Amendment and Restatement. This Guarantee Agreement is an
amendment and restatement of the Subsidiary Guarantee Agreement, dated as of
July 28, 1999 (the "Original Subsidiary Guarantee"), among Erie, Carr Street and
the Administrative Agent, as supplemented by the Supplemental Agreement, dated
as of August 19, 1999, between Astoria and the Administrative Agent. It is the
intention of the parties that this Guarantee Agreement amend, restate, extend
and renew the terms and conditions of the Original Subsidiary Guarantee and the
liens and security interests created thereby, and is not intended to be a
novation or discharge of the obligations of the Guarantors thereunder or the
liens and security interests created thereby. The liens and security interests
of the Original Subsidiary Guarantee are hereby ratified, confirmed, renewed,
extended, and brought forward in full force and effect as security for the
Obligations.
25
IN WITNESS WHEREOF, each party hereto has caused this Guarantee
Agreement to be duly executed, attested and delivered by its officers thereunto
duly authorized as of the date first above written.
GUARANTORS:
ASTORIA GENERATING COMPANY, L.P.
By: Orion Power New York GP, Inc., its
general partner
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President -
Finance
Ph.:(713) 207-3160
Fax:(713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ERIE BOULEVARD HYDROPOWER, L.P.
By: Orion Power New York GP, Inc., its
general partner
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President -
Finance
Ph.:(713) 207-3160
Fax:(713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
CARR STREET GENERATING STATION, L.P.
By: Orion Power New York GP, Inc., its
general partner
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President -
Finance
Ph.:(713) 207-3160
Fax:(713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent,
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Telecopy: (704) 386-3324
EXHIBIT L-2
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
GUARANTEE AGREEMENT
DATED AS OF OCTOBER 28, 2002
AMONG
THE GUARANTORS NAMED HEREIN
AND
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
================================================================================
TABLE OF CONTENTS
<Table>
<Caption>
Section Page
SECTION 1. GUARANTEE.......................................................................................2
SECTION 2. GUARANTEE ABSOLUTE..............................................................................2
SECTION 3. WAIVERS.........................................................................................3
SECTION 4. SECURITY FOR GUARANTEE..........................................................................5
SECTION 5. SUBROGATION.....................................................................................6
SECTION 6. REPRESENTATIONS AND WARRANTIES..................................................................6
SECTION 7. PRESERVATION OF SECURITY INTERESTS; FURTHER ASSURANCES..........................................9
SECTION 8. OPMW RESTATED CREDIT AGREEMENT..................................................................9
SECTION 9. AMENDMENTS, ETC.................................................................................9
SECTION 10. NOTICES, ETC...................................................................................10
SECTION 11. NO WAIVER; REMEDIES............................................................................10
SECTION 12. RIGHT OF SET-OFF...............................................................................10
SECTION 13. CONTINUING GUARANTEE...........................................................................10
SECTION 14. ASSIGNMENTS....................................................................................11
SECTION 15. CONTRIBUTION...................................................................................11
SECTION 16. COUNTERPARTS...................................................................................11
SECTION 17. SAVINGS CLAUSE.................................................................................11
SECTION 18. GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE............................................11
SECTION 19. SUBORDINATION BY GUARANTORS....................................................................13
SECTION 20. INTERCREDITOR AGREEMENT........................................................................13
SECTION 21. SURVIVAL OF AGREEMENT..........................................................................13
SECTION 22. ENTIRE AGREEMENT...............................................................................14
SECTION 23. HEADINGS.......................................................................................14
</Table>
i
THIS GUARANTEE AGREEMENT (this "Guarantee Agreement") is dated as of
October 28, 2002 among ORION POWER MIDWEST LP, INC., a Delaware corporation (the
"OPMW Limited Partner"), ORION POWER MIDWEST GP, INC., a Delaware corporation
(the "OPMW General Partner"), ORION POWER MIDWEST, L.P., a Delaware limited
partnership ("OPMW"), and TWELVEPOLE CREEK, LLC, a Delaware limited liability
company ("Twelvepole") (OPMW, the OPMW Limited Partner, the OPMW General
Partner, and Twelvepole being referred to herein individually as a "Guarantor"
and collectively as the "Guarantors"), and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the "Administrative Agent") for the
benefit of the Secured Parties (as defined in the Credit Agreement referred to
below).
Reference is made to (i) that certain Amended and Restated Credit
Agreement, dated as of the Restructuring Effective Date (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Orion Power New York, L.P. (the "Borrower"), Banc of America Securities
LLC and BNP Paribas, as lead arrangers (the "Lead Arrangers") and joint book
runners, the financial institutions from time to time signatories thereto (the
"Lenders"), Bank of America, N.A., as Issuing Bank, the Administrative Agent,
BNP Paribas, as syndication agent, and Union Bank of California, N.A., CoBank,
ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as documentation
agents, pursuant to which the Lenders have agreed to renew, modify and extend
credit to the Borrower upon the terms and subject to the conditions set forth
therein, and (ii) that certain Second Amended and Restated Credit Agreement,
dated as of the Restructuring Effective Date (as amended, supplemented or
otherwise modified from time to time, the "OPMW Restated Credit Agreement")
among OPMW, Banc of America Securities LLC and BNP Paribas, as lead arrangers
(the "OPMW Lead Arrangers") and joint bookrunners, the financial institutions
from time to time signatories thereto (the "OPMW Lenders"), Bank of America,
N.A., as issuing bank and administrative agent (in such capacity, the "OPMW
Administrative Agent"), BNP Paribas, as syndication agent, and The Bank of Nova
Scotia, Mizuho Corporate Bank, Ltd, and Bayerische Hypo-Und Vereinsbank AG, New
York Branch, as documentation agents. Terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement
and the principles of construction set forth in Section 1.04 of the Credit
Agreement shall apply hereto; provided, however, that, unless otherwise set
forth therein, terms used in Section 6 shall have the meanings assigned to them
in the OPMW Restated Credit Agreement.
The obligations of the Lenders to continue to extend credit under the
Credit Agreement are conditioned on, among other things, the execution and
delivery by the Guarantors of a Guarantee Agreement in the form hereof. The
Guarantors and the Borrower are each wholly-owned indirect Subsidiaries of Orion
Power Capital, LLC ("Holdco"). As Subsidiaries of Holdco, the Guarantors
acknowledge that they will derive substantial benefits from the extension of
credit to the Borrower under the Credit Agreement. As consideration therefor and
in order to induce the Lenders to make Loans and continue to issue the Letters
of Credit, the Guarantors are willing to execute and deliver this Guarantee
Agreement.
Accordingly, the Guarantors, intending to be legally bound, hereby
agree with the Administrative Agent, for the ratable benefit of the Secured
Parties, as follows:
SECTION 1. Guarantee. Each of the Guarantors unconditionally
guarantees, jointly and severally, as a primary obligor and not merely as a
surety, the due and punctual payment by the Borrower of (a) the principal of and
interest (including interest accruing after the filing of a petition initiating
any proceeding referred to in Section 7.07 of the Credit Agreement) on the Loans
and all amounts drawn under all Letters of Credit, when and as due and payable,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (b) each payment required to be made by the Borrower under any
Interest Hedge Contract entered into by the Borrower with any Lender, and (c)
all other Obligations of the Borrower and payment obligations of the other
Credit Parties (other than the Sponsor) to the Secured Parties under the Credit
Agreement and the other Financing Documents (all the foregoing obligations being
collectively called the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses) incurred in enforcing
any rights under this Guarantee Agreement.
SECTION 2. Guarantee Absolute. (a) Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Financing Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Secured Parties with respect thereto. The obligations of the Guarantors under
this Guarantee Agreement are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Guarantee Agreement, irrespective of whether any action is
brought against the Borrower or any other Guarantor or whether the Borrower or
any other Guarantor is joined in any such action or actions. This Guarantee
Agreement is an absolute and unconditional guaranty of payment when due, and not
of collection, by each Guarantor, jointly and severally with any other Guarantor
of the Guaranteed Obligations in each and every particular. The obligations of
each Guarantor hereunder are several from those of the Borrower and are primary
obligations concerning which each Guarantor is the principal obligor. The
Secured Parties shall not be required to mitigate damages or take any action to
reduce, collect or enforce the Guaranteed Obligations.
(b) This Guarantee Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the
Administrative Agent or any other Secured Party upon the insolvency, bankruptcy
or reorganization of the Borrower or otherwise, all as though such payment had
not been made.
(c) The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
the existence of any claim, set-off or other right which any Guarantor may have
at any time against the Borrower or any other Guarantor, the Administrative
Agent or other Secured Party or any other corporation or person, whether in
connection herewith or any unrelated transactions; provided, that, nothing
herein shall prevent the assertion of any such claim by separate suit or
counterclaim. Without limiting the generality of the foregoing, each Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to any Secured Party
2
under the Financing Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
SECTION 3. Waivers. Each Guarantor hereby waives presentment to, demand
of payment from and protest to the Borrower or any other Guarantor of any of the
Guaranteed Obligations, and also waives promptness, diligence, notice of
acceptance of its guarantee, any other notice with respect to any of the
Guaranteed Obligations and this Guarantee Agreement and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto. Each Guarantor further waives
any right to require that resort be had by the Administrative Agent or any other
Secured Party to any security held for payment of the Guaranteed Obligations or
to any balance of any deposit, account or credit on the books of the
Administrative Agent or any other Secured Party in favor of the Borrower or any
other person. Each Guarantor hereby consents and agrees to each of the following
to the fullest extent permitted by applicable Requirements of Law, and agrees to
the fullest extent permitted by applicable Requirements of Law that such
Guarantor's obligations under this Guarantee Agreement shall not be released,
diminished, impaired, reduced or adversely affected by any of the following, and
waives any rights (including rights to notice) which such Guarantor might
otherwise have as a result of or in connection with any of the following:
(a) any renewal, extension, modification, increase, decrease,
alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any
contract or understanding with the Borrower, the Administrative Agent,
the other Secured Parties, or any of them, or any other person,
pertaining to the Guaranteed Obligations;
(b) any adjustment, indulgence, forbearance or compromise that
might be granted or given by the Administrative Agent or any other
Secured Party to the Borrower or any Guarantor or any person liable on
the Guaranteed Obligations; or the failure of the Administrative Agent
or any other Secured Party to assert any claim or demand or to exercise
any right or remedy against the Borrower or any Guarantor under the
provisions of any Financing Document or otherwise; or any rescission,
waiver, amendment or modification of, or any release from any of the
terms or provisions of, any Financing Document, any guarantee or any
other agreement, including with respect to any other Guarantor under
this Guarantee Agreement;
(c) the insolvency, bankruptcy arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
the Borrower or any Guarantor or any other person at any time liable
for the payment of all or part of the Guaranteed Obligations; or any
dissolution of the Borrower or any Guarantor, or any change,
restructuring or termination of the corporate structure or existence of
the Borrower or any Guarantor, or any sale, lease or transfer of any or
all of the assets of the Borrower or any Guarantor, or any change in
the shareholders, partners, or members of the Borrower or
3
any Guarantor; or any default, failure or delay, willful or otherwise,
in the performance of the Guaranteed Obligations;
(d) the invalidity, illegality or unenforceability of all or
any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever, including the fact that the Guaranteed Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating
the Guaranteed Obligations or any part thereof is ultra vires, the
officers or representatives executing the documents or otherwise
creating the Guaranteed Obligations acted in excess of their authority,
the Guaranteed Obligations violate applicable usury laws, the Borrower
has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from the Borrower, the creation, performance or repayment
of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed
Obligations or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or the documents or instruments pertaining to the
Guaranteed Obligations have been forged or otherwise are irregular or
not genuine or authentic;
(e) any full or partial release of the liability of the
Borrower on the Guaranteed Obligations or any part thereof, of any
co-guarantors, or of any other person now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally,
to pay, perform, guarantee or assure the payment of the Guaranteed
Obligations or any part thereof, it being recognized, acknowledged and
agreed by each Guarantor that such Guarantor may be required to pay the
Guaranteed Obligations in full without assistance or support of any
other person, and such Guarantor has not been induced to enter into
this Guarantee Agreement on the basis of a contemplation, belief,
understanding or agreement that any parties other than the Borrower
will be liable to perform the Guaranteed Obligations, or that the
Secured Parties will look to other parties to perform the Guaranteed
Obligations;
(f) the taking or accepting of any other security, collateral
or guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
(g) any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including negligent,
unreasonable or unjustifiable impairment) of any letter of credit,
collateral, property or security, at any time existing in connection
with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations;
(h) the failure of the Administrative Agent, any other Secured
Party or any other person to exercise diligence or reasonable care in
the preservation, protection, enforcement, sale or other handling or
treatment of all or any part of such collateral, property or security;
4
(i) the fact that any collateral, security, security interest
or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized
and agreed by each Guarantor that such Guarantor is not entering into
this Guarantee Agreement in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of
any of the Collateral;
(j) any payment by the Borrower to the Administrative Agent or
any other Secured Party being held to constitute a preference under
Title 11 of the United States Code or any similar Federal or state law,
or for any reason the Administrative Agent or any other Secured Party
being required to refund such payment or pay such amount to the
Borrower or someone else;
(k) any other action taken or omitted to be taken with respect
to the Guaranteed Obligations, or the security and collateral therefor,
whether or not such action or omission prejudices any Guarantor or
increases the likelihood that any Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof, it being the
unambiguous and unequivocal intention of each Guarantor that such
Guarantor shall be obligated to pay the Guaranteed Obligations when
due, notwithstanding any occurrence, circumstance, event, action or
omission whatsoever, whether or not contemplated, and whether or not
otherwise or particularly described herein, except for the full and
indefeasible payment and satisfaction of the Guaranteed Obligations in
cash;
(l) the fact that all or any of the Guaranteed Obligations
cease to exist by operation of law, including by way of a discharge,
limitation or tolling thereof under applicable bankruptcy laws; or
(m) any other circumstance (including any statute of
limitations) that might in any manner or to any extent otherwise
constitute a defense (other than a defense of indefeasible payment and
performance in full of the Guaranteed Obligations) available to, vary
the risk of, or operate as a discharge of, the Borrower or any
Guarantor as a matter of law or equity.
All waivers herein contained shall be without prejudice to the Administrative
Agent at its option to proceed against the Borrower, any Guarantor or any other
person, whether by separate action or by joinder.
SECTION 4. Security for Guarantee. Each of the Guarantors authorizes
the Administrative Agent, in accordance with the terms and subject to the
conditions set forth in the Credit Agreement and the OPNY Second Lien Documents,
(a) to take and hold security for the payment of this Guarantee Agreement and
the Guaranteed Obligations and to exchange, enforce, waive and release any such
security, (b) to apply such security and direct the order or manner of sale
thereof as the Administrative Agent in its reasonable discretion may determine
in accordance with the Financing Documents and (c) to release or substitute any
one or more
5
endorsees, other guarantors or other obligors. The Administrative Agent may, at
its election, in accordance with the terms and subject to the conditions set
forth in the Credit Agreement and the OPNY Second Lien Documents, foreclose on
any security held by it by one or more judicial or nonjudicial sales, or
exercise any other right or remedy available to it against the Borrower or any
of the Guarantors, or any security, without affecting or impairing in any way
the liability of any of the Guarantors hereunder, except to the extent the
Guaranteed Obligations have been indefeasibly paid in full in cash.
SECTION 5. Subrogation. In furtherance of the foregoing and not in
limitation of any other right which the Administrative Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any Guarantor to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each of the Guarantors
hereby promises to and will, upon receipt of written demand by the
Administrative Agent, forthwith pay, or cause to be paid, to the Administrative
Agent for distribution to the Lenders and the other Secured Parties, if and as
appropriate, in cash the amount of such unpaid Guaranteed Obligation. No
Guarantor shall exercise any claims or rights which it may now have or hereafter
acquire against the Borrower or any other Credit Party that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Guarantee Agreement or any other Financing Documents, including any
right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any other Secured Party against the Borrower or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including the right to take or receive from the
Borrower directly or indirectly, in cash or other property or by setoff or any
other manner, payment or security on account of such claim, remedy or right,
until the later of (a) the indefeasible cash payment in full of the Guaranteed
Obligations and all other amounts payable under this Guarantee Agreement and (b)
the termination of the Commitments. If any amount shall be paid to any Guarantor
at any time prior to the later of the events set forth in clauses (a) and (b) of
the preceding sentence, such amount shall be held in trust for the benefit of
the Administrative Agent and the other Secured Parties and shall forthwith be
paid to the Administrative Agent to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guarantee Agreement,
whether matured or unmatured, in accordance with the terms of the Financing
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guarantee Agreement thereafter arising. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Financing Documents and that the
waiver set forth in this Section 5 is knowingly made in contemplation of such
benefits.
SECTION 6. Representations and Warranties. Each Guarantor hereby
represents and warrants as follows:
(a) Existence; Due Qualification; Compliance With Law. Such Guarantor
(a) is duly formed, validly existing and in good standing under the laws of the
jurisdiction of its formation, (b) has all requisite power and authority to own
its property and assets, to borrow money and to
6
transact the business in which it is presently engaged and in which it proposes
to be engaged, (c) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (d) is in full compliance with its
Governing Documents, all Contractual Obligations, all applicable material
Requirements of Law and all Governmental Approvals, except to the extent that
the failure to comply with any of the foregoing could not reasonably be expected
to have a Material Adverse Effect.
(b) Power; Authority; No Violation; Binding Effect. The execution,
delivery and performance by such Guarantor of this Guarantee Agreement and the
OPNY Second Lien Documents to which it is a party and the consummation of the
transactions contemplated thereby (i) are within its powers, (ii) have been duly
authorized by all necessary corporate or partnership action, (iii) do not and
will not contravene (A) its Governing Documents or (B) any material Requirement
of Law, any of its material Contractual Obligation or any material Governmental
Approval binding on or affecting it and (iv) do not and will not conflict with
or be inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except Permitted Liens) upon any of its properties or assets pursuant to, the
terms of any material Contractual Obligation binding on or affecting it.
(c) Due Execution and Delivery. Such Guarantor has duly executed and
delivered this Guarantee Agreement and each OPNY Second Lien Document to which
it is a party. This Guarantee Agreement and each OPNY Second Lien Document to
which such Guarantor is a party constitutes the legal, valid and binding
obligation of each Guarantor (to the extent it is a party thereto), enforceable
against such Guarantor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(d) Governmental Approvals. Each Guarantor has all Governmental
Approvals required to authorize, and currently required to be maintained (and
currently expects to be able to obtain all Governmental Approvals required in
the future on or prior to the date and time required) under applicable
Requirements of Law in connection with (i) the execution, delivery and
performance by such Guarantor of this Guarantee Agreement and the other OPNY
Second Lien Documents to which it is a party, and (ii) the legality, validity,
binding effect or enforceability of this Guarantee Agreement and any other OPNY
Second Lien Document to which such Guarantor is a party except, in each case
where the failure to obtain such Governmental Approvals could not reasonably be
expected to have a material adverse effect on any Portfolio Asset. Except as set
forth on Schedule 4.04 of the OPMW Restated Credit Agreement, all applicable
waiting periods (including appeal periods) relating to any such Governmental
Approval or other approval which are required and have been obtained have
expired without any adverse action taken with respect thereto. All such
Governmental Approvals are in full force and effect and are not subject to any
appeal or similar proceeding,
7
except where the failure to be in full force and effect or any such appeal or
proceeding could not reasonably be expected to have a material adverse effect on
any Portfolio Asset. Such Guarantor is not in violation of any condition in any
material Governmental Approval, which violation could reasonably be expected to
have a material adverse effect on any Portfolio Asset.
(e) Solvency. As of the Restructuring Effective Date, such Guarantor is
and, after consummation of the transactions contemplated by this Guarantee
Agreement, will be Solvent. As used herein, "Solvent" shall mean, with respect
to any Person as of a particular date, that on such date (i) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (ii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature in their ordinary course, taking into account the
timing of and amounts of cash to be received by such Person and the timing of
and amounts of cash to be payable on or in respect of debts and liabilities of
such Person, (iii) such Person is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which such
Person's property would constitute unreasonably small capital after giving due
consideration to the industry in which such Person is engaged or is to engage,
(iv) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person and (v)
the present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts and liabilities as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(f) Conditions Precedent. There are no conditions precedent to the
effectiveness of this Guarantee Agreement that have not been satisfied or
waived.
(g) Independent Analysis. Such Guarantor has, independently and without
reliance upon the Administrative Agent or any other Secured Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guarantee Agreement. Such Guarantor has
investigated fully the benefits and advantages which will be derived by it from
execution of this Guarantee Agreement, and the Board of Directors of the general
partner of such Guarantor has decided that a direct or an indirect benefit will
accrue to such Guarantor by reason of the execution of this Guarantee Agreement.
(h) Intent; Consideration. (i) This Guarantee Agreement is not given
with actual intent to hinder, delay or defraud any Person to which any Guarantor
is or will become, on or after the date hereof, indebted; (ii) such Guarantor
has received at least a reasonably equivalent value in exchange for the giving
of this Guarantee Agreement; (iii) such Guarantor is not engaged in a business
or transaction, nor is about to engage in a business or transaction, for which
any property remaining with such Guarantor constitutes an unreasonably small
amount of
8
capital; and (iv) such Guarantor does not intend to incur debts that will be
beyond such Guarantor's ability to pay as such debts mature.
SECTION 7. Preservation of Security Interests; Further Assurances.
Except as provided for in the Intercreditor Agreement and except with respect to
dispositions of assets permitted under Section 6.11 of the OPMW Restated Credit
Agreement or Section 8.11 of the Subsidiary Guarantee (as defined in the OPMW
Credit Agreement), preserve, or cause to be preserved, the security interests
granted under the OPNY Second Lien Documents and undertake all actions which are
necessary or appropriate in the reasonable judgment of the Administrative Agent
to (i) maintain the Secured Parties' security interest in such Collateral in
full force and effect at all times (including the priority thereof) and (ii)
preserve and protect such Collateral and protect and enforce such Guarantor's
rights and title and the rights of the Secured Parties to such Collateral,
including the making or delivery of all filings and recordations, the payments
of fees and other charges and the issuance of supplemental documentation, in
each case in accordance with and subject to the terms of the Security Documents.
Upon notice from the Administrative Agent, take or cause to be taken all action
required or, in the reasonable opinion of the Administrative Agent, which is
desirable to maintain and preserve the Liens of the OPNY Second Lien Documents
and execute or cause to be executed any and all further instruments (including
financing statements, continuation statements and similar statements with
respect to any of the OPNY Second Lien Documents) requested by the
Administrative Agent for such purpose, in each case in accordance with and
subject to the terms of the Security Documents. Notwithstanding any provision of
this Guarantee Agreement or any other Financing Document, the Guarantor hereto
hereby acknowledges and agrees that (i) the Borrower Entities are in the process
of obtaining each of the consents identified in Schedule 5.18 to the Credit
Agreement as a consent the Borrower Entities are required to obtain, (ii) the
Borrower Entities shall use diligent and commercially reasonable efforts to
obtain such consents, and (iii) no Borrower Entity shall be deemed to be in
breach or violation of any provision of this Agreement or any other Financing
Document due to a failure to obtain any such consent except as a result of the
breach of such Borrower Entity's obligations under Section 5.18(b) of the Credit
Agreement.
SECTION 8. OPMW Restated Credit Agreement. After the indefeasible
payment in full in cash of the OPMY Obligations, all obligations of the
Guarantors under the OPMW Restated Credit Agreement and the other Financing
Documents (as defined in the OPMW Restated Credit Agreement) to deliver
certificates, plans, financial information, or other documents or information
to, or obtain the consent of, any of the OPMW Administrative Agent, the OPMW
Lenders, the Secured Parties (as defined in the OPMW Restated Credit Agreement)
and the OPMW Lead Arrangers shall be satisfied by delivery of the same to, or
obtaining the consent of, the Administrative Agent, the Lenders, the Secured
Parties and the Lead Arrangers hereunder, respectively.
SECTION 9. Amendments, Etc. No amendment, modification or waiver of any
provision of this Guarantee Agreement and no consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and shall be executed and delivered in accordance with Section 9.02 of
the Credit Agreement, and then such
9
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that,
this Guarantee Agreement may be amended, modified or waived with respect to any
Guarantor, including by releasing any Guarantor hereunder, without the approval
of any other Guarantor and without affecting the obligations of any other
Guarantor hereunder.
SECTION 10. Notices, Etc. All notices hereunder, unless otherwise
specified, shall be given in the manner provided for in Section 9.01 of the
Credit Agreement and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or at any other address or
telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 11. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any other Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder and under the other Financing Documents are cumulative
and are not exclusive of any other remedies provided by law. The obligations of
each Guarantor hereunder shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder or the
transactions effected in conjunction therewith subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.
SECTION 12. Right of Set-off. If an Event of Default shall have
occurred and be continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Secured
Party to or for the credit or the account of any Guarantor against any and all
the obligations of such Guarantor then existing under this Guarantee Agreement
and the other Financing Documents, irrespective of whether or not such Secured
Party shall have made any demand under this Guarantee Agreement or such other
Financing Document and although such obligations may be unmatured. The rights of
each Secured Party under this Section 12 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.
SECTION 13. Continuing Guarantee. This Guarantee Agreement is a
continuing guarantee and shall survive and remain in full force and effect until
the Guaranteed Obligations and all other amounts payable under this Guarantee
Agreement have been indefeasibly paid in full in cash, the Commitments have been
terminated, all Letters of Credit have been cancelled or have expired and all
amounts drawn thereunder have been indefeasibly reimbursed in full, any ConEd
Letter of Credit Disbursements have been indefeasibly reimbursed in full, and
shall be reinstated to the extent provided in Section 2(b).
10
SECTION 14. Assignments. This Guarantee Agreement and the terms,
covenants and conditions hereof shall be binding upon each Guarantor and its
successors and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their respective successors and assigns. Upon the assignment
by any Lender of all or any portion of its rights and obligations in accordance
with the Credit Agreement (including all or any portion of its Commitment, the
Loans owing to it and the Note or Notes held by it) to any other person, such
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise. None of the Guarantors shall
be permitted to assign, transfer or delegate any of its rights or obligations
under this Guarantee Agreement without the prior written consent of the
Administrative Agent and each Lender (and any such purported assignment,
transfer or delegation without such consent shall be void).
SECTION 15. Contribution. Rights of contribution among the Guarantors
are set forth in the OPMW Indemnity, Subrogation and Contribution Agreement.
SECTION 16. Counterparts. This Guarantee Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument. This Guarantee
Agreement shall be effective with respect to any Guarantor when a counterpart
hereof which bears the signature of such Guarantor shall have been delivered to
the Administrative Agent.
SECTION 17. Savings Clause. In the event any one or more of the
provisions contained in this Guarantee Agreement should be held invalid, illegal
or unenforceable in any respect with respect to any Guarantor, no party hereto
shall be required to comply with such provision with respect to such Guarantor
for so long as such provision is held to be invalid, illegal or unenforceable,
and the validity, legality and enforceability of the remaining provisions
contained herein, and of such invalid, illegal or unenforceable provision with
respect to any other Guarantor, shall not in any way be affected or impaired.
The parties shall endeavor in good-faith negotiations to replace any invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 18. Governing Law; Submission to Jurisdiction and Venue. (a)
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT
WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN EACH GUARANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS
11
(AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF
NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, EACH GUARANTOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTEE AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY
BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT EACH GUARANTOR AND
EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH GUARANTOR WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) EACH GUARANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY.
EACH GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS.
(d) THE GUARANTORS AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH GUARANTOR TO
RECEIVE FOR AND ON BEHALF OF THE GUARANTOR SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTEE
12
AGREEMENT OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO SUCH
GUARANTOR AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 10. EACH GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH GUARANTOR AT
ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT
THEREOF.
(f) NOTHING IN THIS GUARANTEE AGREEMENT SHALL AFFECT THE RIGHT OF ANY
PARTY TO THIS GUARANTEE AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW (ii) OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY
PARTY IN EITHER CASE SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS SECTION 18.
SECTION 19. Subordination by Guarantors. Each Guarantor hereby
subordinates in right of payment all indebtedness of the Borrower, any other
Credit Party or any other Guarantor owing to such Guarantor, whether originally
contracted with such Guarantor or acquired by such Guarantor by assignment,
transfer or otherwise, whether now owed or hereafter arising, whether for
principal, interest, fees, expenses or otherwise, together with all renewals,
extensions, increases or rearrangements thereof, to the prior indefeasible
payment in full in cash of the Guaranteed Obligations, whether now owed or
hereafter arising, whether for principal, interest (including interest accruing
after the filing of a petition initiating any proceeding referred to in Section
7.07 of the Credit Agreement), fees, expenses or otherwise, together with all
renewals, extensions, increases or rearrangements thereof.
SECTION 20. Intercreditor Agreement. (a) The rights and remedies
granted to the Administrative Agent hereunder and under OPNY Second Lien
Documents are subject to the terms and conditions of the Intercreditor
Agreement.
(b) The guaranty obligations hereunder are subordinate to the
prior cash payment of all obligations of the Guarantors to the OPMW Lenders
under and pursuant to the OPMW Credit Agreement.
SECTION 21. Survival of Agreement. All covenants, agreements,
representations and warranties made by each Guarantor herein shall be considered
to have been relied upon by the Administrative Agent and the other Secured
Parties and shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes evidencing such Loans,
regardless of any investigation made by the Lenders or the Agents or on their
behalf, and shall continue in full force and effect until the Guaranteed
Obligations and any other amounts payable under this Guarantee Agreement or any
other Financing Document have been indefeasibly paid in full in cash and the
Commitments have been terminated, and, upon such occurrence, this
13
Guarantee Agreement shall terminate, subject to any reinstatement pursuant to
Section 2(b) above.
SECTION 22. Entire Agreement. This Guarantee Agreement and the other
Financing Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any agreement previously entered into among the
parties with respect to the subject matter hereof is superseded by this
Guarantee Agreement and the other Financing Documents. Nothing in this Guarantee
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto and the other Secured Parties, any rights, remedies,
obligations or liabilities under or by reason of this Guarantee Agreement.
SECTION 23. Headings. Section headings used herein, and the Table of
Contents, are for convenience of reference only, are not part of this Guarantee
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Guarantee Agreement.
14
IN WITNESS WHEREOF, each party hereto has caused this Guarantee
Agreement to be duly executed, attested and delivered by its officers thereunto
duly authorized as of the date first above written.
GUARANTORS:
ORION POWER MIDWEST LP, INC.
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ORION POWER MIDWEST GP, INC.
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ORION POWER MIDWEST, L.P.
By: Orion Power MidWest GP, Inc., its
general partner
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
TWELVEPOLE CREEK, LLC
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent,
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT L-3
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
GUARANTEE AGREEMENT
DATED AS OF OCTOBER 28, 2002
AMONG
ORION POWER CAPITAL, LLC
AND
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
================================================================================
TABLE OF CONTENTS
<Table>
<Caption>
Section Page
SECTION 1. Guarantee.......................................................................................1
SECTION 2. Guarantee Absolute..............................................................................1
SECTION 3. Waivers.........................................................................................2
SECTION 4. Security for Guarantee..........................................................................5
SECTION 5. Subrogation.....................................................................................5
SECTION 6. Representations and Warranties..................................................................6
SECTION 7. Combined Debt Service Coverage Ratio............................................................8
SECTION 8. Preservation of Security Interests; Further Assurances..........................................8
SECTION 9. Amendments, Etc.................................................................................9
SECTION 10. Notices, Etc....................................................................................9
SECTION 11. No Waiver; Remedies.............................................................................9
SECTION 12. Right of Set-off................................................................................9
SECTION 13. Continuing Guarantee............................................................................9
SECTION 14. Assignments.....................................................................................9
SECTION 15. Contribution...................................................................................10
SECTION 16. Counterparts...................................................................................10
SECTION 17. Savings Clause.................................................................................10
SECTION 18. Governing Law; Submission to Jurisdiction and Venue............................................10
SECTION 19. Subordination by Guarantor.....................................................................12
SECTION 20. Intercreditor Agreement........................................................................12
SECTION 21. Survival of Agreement..........................................................................12
SECTION 22. Entire Agreement...............................................................................12
SECTION 23. Headings.......................................................................................12
</Table>
i
THIS GUARANTEE AGREEMENT (this "Guarantee Agreement") is dated as of
October 28, 2002 between ORION POWER CAPITAL, LLC, a Delaware limited liability
company (the "Guarantor") and BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, the "Administrative Agent") for the benefit of the Secured
Parties (as defined in the Credit Agreement referred to below).
Reference is made to that certain Amended and Restated Credit
Agreement, dated as of October 28, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Orion Power New York,
L.P. (the "Borrower"), Banc of America Securities LLC and BNP Paribas, as lead
arrangers (the "Lead Arrangers") and as joint book runners, the financial
institutions from time to time signatories thereto (the "Lenders"), Bank of
America, N.A., as issuing bank, the Administrative Agent, BNP Paribas, as
syndication agent, and Union Bank of California, N.A., CoBank, ACB and Deutsche
Bank AG New York and/or Cayman Island Branch, as documentation agents, pursuant
to which the Lenders have agreed to extend credit to the Borrower upon the terms
and subject to the conditions set forth therein. Terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement and the principles of construction set forth in Section 1.04 of the
Credit Agreement shall apply hereto. As used herein, "Other Credit Parties"
means any and all of the Credit Parties other than the Guarantor.
The obligations of the Lenders to continue to extend credit under the
Credit Agreement are conditioned on, among other things, the execution and
delivery by the Guarantor of a Guarantee Agreement in the form hereof. As the
indirect owner of 100% of the Capital Stock of the Borrower, the Guarantor
acknowledges that it will derive substantial benefits from the extension of
credit to the Borrower under the Credit Agreement. As consideration therefor and
in order to induce the Lenders to make Loans and continue to issue the Letters
of Credit, the Guarantor is willing to execute and deliver this Guarantee
Agreement.
Accordingly, the Guarantor, intending to be legally bound, hereby
agrees with the Administrative Agent, for the ratable benefit of the Secured
Parties, as follows:
SECTION 1. Guarantee. The Guarantor unconditionally guarantees, as a
primary obligor and not merely as a surety, the due and punctual payment by the
Borrower of (a) the principal of and interest (including interest accruing after
the filing of a petition initiating any proceeding referred to in Section 7.07
of the Credit Agreement) on the Loans and all amounts drawn under all Letters of
Credit, when and as due and payable, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (b) each payment required to
be made by the Borrower under any Interest Hedge Contract entered into by the
Borrower with any Lender, and (c) all other Obligations of the Borrower and the
payment obligations of the Other Credit Parties (other than the Sponsor) to the
Secured Parties under the Credit Agreement and the other Financing Documents
(all the foregoing obligations being collectively called the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred in enforcing any rights under this Guarantee
Agreement.
SECTION 2. Guarantee Absolute. (a) The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Financing
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Secured
Parties with respect thereto. The obligations of the Guarantor under this
Guarantee Agreement are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Guarantee Agreement, irrespective of whether any action is
brought against the Borrower or any Other Credit Party or whether the Borrower
or any Other Credit Party is joined in any such action or actions. This
Guarantee Agreement is an absolute and unconditional guaranty of payment when
due, and not of collection, by the Guarantor of the Guaranteed Obligations in
each and every particular. The obligations of the Guarantor hereunder are
several from those of the Borrower and are primary obligations concerning which
the Guarantor is the principal obligor. The Secured Parties shall not be
required to mitigate damages or take any action to reduce, collect or enforce
the Guaranteed Obligations.
(b) This Guarantee Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the
Administrative Agent or any other Secured Party upon the insolvency, bankruptcy
or reorganization of the Borrower or otherwise, all as though such payment had
not been made.
(c) The obligations of the Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
the existence of any claim, set-off or other right which the Guarantor may have
at any time against the Borrower or any Other Credit Party, the Administrative
Agent or other Secured Party or any other corporation or person, whether in
connection herewith or any unrelated transactions; provided, that, nothing
herein shall prevent the assertion of any such claim by separate suit or
counterclaim. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to any Secured Party under the
Financing Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
SECTION 3. Waivers. The Guarantor hereby waives presentment to, demand
of payment from and protest to the Borrower or any Other Credit Party of any of
the Guaranteed Obligations, and also waives promptness, diligence, notice of
acceptance of its guarantee, any other notice with respect to any of the
Guaranteed Obligations and this Guarantee Agreement and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto. The Guarantor further waives
any right to require that resort be had by the Administrative Agent or any other
Secured Party to any security held for payment of the Guaranteed Obligations or
to any balance of any deposit, account or credit on the books of the
Administrative Agent or any other Secured Party in favor of the Borrower or any
other person. The Guarantor hereby consents and agrees to each of the following
to the fullest extent permitted by applicable Requirements of Law, and agrees to
the fullest extent permitted by applicable Requirements of Law that the
Guarantor's obligations under this Guarantee Agreement shall not be released,
diminished, impaired, reduced or adversely affected by any of the following, and
waives any rights (including rights to notice) which the Guarantor might
otherwise have as a result of or in connection with any of the following:
2
(i) any renewal, extension, modification, increase, decrease,
alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any
contract or understanding with the Borrower, the Administrative Agent,
the other Secured Parties, or any of them, or any other person,
pertaining to the Guaranteed Obligations;
(ii) any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Administrative Agent or any other
Secured Party to the Borrower or any Other Credit Party or any person
liable on the Guaranteed Obligations; or the failure of the
Administrative Agent or any other Secured Party to assert any claim or
demand or to exercise any right or remedy against the Borrower or any
Other Credit Party under the provisions of any Financing Document or
otherwise; or any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any Financing
Document, any guarantee or any other agreement;
(iii) the insolvency, bankruptcy arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
the Borrower or any Other Credit Party or any other person at any time
liable for the payment of all or part of the Guaranteed Obligations; or
any dissolution of the Borrower or any Other Credit Party, or any
change, restructuring or termination of the corporate structure or
existence of the Borrower or any Other Credit Party, or any sale, lease
or transfer of any or all of the assets of the Borrower or any Other
Credit Party, or any change in the shareholders, partners, or members
of the Borrower or any Other Credit Party; or any default, failure or
delay, willful or otherwise, in the performance of the Guaranteed
Obligations;
(iv) the invalidity, illegality or unenforceability of all or
any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever, including the fact that the Guaranteed Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating
the Guaranteed Obligations or any part thereof is ultra vires, the
officers or representatives executing the documents or otherwise
creating the Guaranteed Obligations acted in excess of their authority,
the Guaranteed Obligations violate applicable usury laws, the Borrower
has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from the Borrower, the creation, performance or repayment
of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed
Obligations or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or the documents or instruments pertaining to the
Guaranteed Obligations have been forged or otherwise are irregular or
not genuine or authentic;
(v) any full or partial release of the liability of the
Borrower on the Guaranteed Obligations or any part thereof, of any
co-guarantors, or of any other person now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally,
to pay, perform, guarantee or assure the payment of the Guaranteed
3
Obligations or any part thereof, it being recognized, acknowledged and
agreed by the Guarantor that the Guarantor may be required to pay the
Guaranteed Obligations in full without assistance or support of any
other person, and the Guarantor has not been induced to enter into this
Guarantee Agreement on the basis of a contemplation, belief,
understanding or agreement that any parties other than the Borrower
will be liable to perform the Guaranteed Obligations, or that the
Secured Parties will look to other parties to perform the Guaranteed
Obligations;
(vi) the taking or accepting of any other security, collateral
or guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
(vii) any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including negligent,
unreasonable or unjustifiable impairment) of any letter of credit,
collateral, property or security, at any time existing in connection
with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations;
(viii) the failure of the Administrative Agent, any other
Secured Party or any other person to exercise diligence or reasonable
care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such collateral, property
or security;
(ix) the fact that any collateral, security, security interest
or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized
and agreed by the Guarantor that the Guarantor is not entering into
this Guarantee Agreement in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of
any of the Collateral;
(x) any payment by the Borrower to the Administrative Agent or
any other Secured Party being held to constitute a preference under
Title 11 of the United States Code or any similar Federal or state law,
or for any reason the Administrative Agent or any other Secured Party
being required to refund such payment or pay such amount to the
Borrower or someone else;
(xi) any other action taken or omitted to be taken with
respect to the Guaranteed Obligations, or the security and collateral
therefor, whether or not such action or omission prejudices the
Guarantor or increases the likelihood that the Guarantor will be
required to pay the Guaranteed Obligations pursuant to the terms
hereof, it being the unambiguous and unequivocal intention of the
Guarantor that the Guarantor shall be obligated to pay the Guaranteed
Obligations when due, notwithstanding any occurrence, circumstance,
event, action or omission whatsoever, whether or not contemplated, and
whether or not otherwise or particularly described herein, except for
the full and indefeasible payment and satisfaction of the Guaranteed
Obligations in cash;
4
(xii) the fact that all or any of the Guaranteed Obligations
cease to exist by operation of law, including by way of a discharge,
limitation or tolling thereof under applicable bankruptcy laws; or
(xiii) any other circumstance (including any statute of
limitations) that might in any manner or to any extent otherwise
constitute a defense (other than a defense of indefeasible payment and
performance in full of the Guaranteed Obligations) available to, vary
the risk of, or operate as a discharge of, the Borrower or the
Guarantor as a matter of law or equity.
All waivers herein contained shall be without prejudice to the Administrative
Agent at its option to proceed against the Borrower, the Guarantor or any other
person, whether by separate action or by joinder.
SECTION 4. Security for Guarantee. The Guarantor authorizes the
Administrative Agent, in accordance with the terms and subject to the conditions
set forth in the Credit Agreement and the Security Documents, (a) to take and
hold security for the payment of this Guarantee Agreement and the Guaranteed
Obligations and to exchange, enforce, waive and release any such security, (b)
to apply such security and direct the order or manner of sale thereof as the
Administrative Agent in its reasonable discretion may determine in accordance
with the other Financing Documents and (c) to release or substitute any one or
more endorsees, other guarantors or other obligors. The Administrative Agent
may, at its election, in accordance with the terms and subject to the conditions
set forth in the Credit Agreement and the Security Documents, foreclose on any
security held by it by one or more judicial or nonjudicial sales, or exercise
any other right or remedy available to it against the Borrower, any Other Credit
Party or the Guarantor, or any security, without affecting or impairing in any
way the liability of the Guarantor hereunder, except to the extent the
Guaranteed Obligations have been indefeasibly paid in full in cash.
SECTION 5. Subrogation. In furtherance of the foregoing and not in
limitation of any other right which the Administrative Agent or any other
Secured Party has at law or in equity against the Guarantor by virtue hereof,
upon the failure of the Borrower or any Other Credit Party to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will, upon receipt of written demand by the Administrative
Agent, forthwith pay, or cause to be paid, to the Administrative Agent for
distribution to the Lenders and the other Secured Parties, if and as
appropriate, in cash the amount of such unpaid Guaranteed Obligation. The
Guarantor shall not exercise any claims or rights which it may now have or
hereafter acquire against the Borrower or any Other Credit Party that arise from
the existence, payment, performance or enforcement of the Guarantor's
obligations under this Guarantee Agreement or any other Financing Documents,
including any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any other Secured Party against the Borrower, any Other
Credit Party or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including the right
to take or receive from the Borrower or any Other Credit Party, directly or
indirectly, in cash or other property or by setoff or any other manner,
5
payment or security on account of such claim, remedy or right until the later of
(a) the indefeasible cash payment in full of the Guaranteed Obligations and all
other amounts payable under this Guarantee Agreement and (b) the termination of
the Commitments. If any amount shall be paid by the Guarantor at any time prior
to the later of the events set forth in clauses (a) and (b) of the preceding
sentence, such amount shall be held in trust for the benefit of the
Administrative Agent and the other Secured Parties and shall forthwith be paid
to the Administrative Agent to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guarantee Agreement,
whether matured or unmatured, in accordance with the terms of the Intercreditor
Agreement and the Financing Documents, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this Guarantee Agreement
thereafter arising. The Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Financing
Documents and that the waiver set forth in this Section 5 is knowingly made in
contemplation of such benefits.
SECTION 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) Existence; Due Qualification; Compliance With Law. The Guarantor
(i) is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware, (ii) has all requisite power
and authority to own its property and assets, to borrow money and to transact
the business in which it is presently engaged and in which it proposes to be
engaged, (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a material
adverse effect on any Portfolio Asset and (iv) is in full compliance with its
Governing Documents, all Contractual Obligations, all applicable material
Requirements of Law and all Governmental Approvals in respect of the conduct of
its business and the ownership of its property, except to the extent that the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect.
(b) Power; Authority; No Violation; Binding Effect. The execution,
delivery and performance by the Guarantor of this Guarantee Agreement and the
other Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby (i) are within its powers, (ii)
have been duly authorized by all necessary limited liability company action,
(iii) do not and will not contravene (A) its Governing Documents or (B) any
material Requirement of Law, any of its material Contractual Obligation or any
material Governmental Approval binding on or affecting it, and (iv) do not and
will not conflict with or be inconsistent with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (except Permitted Liens) upon any of its properties or
assets pursuant to the terms of any material Contractual Obligation binding on
or affecting it.
(c) Due Execution and Delivery. The Guarantor has duly executed and
delivered this Guarantee Agreement and each other Transaction Document to which
it is a party. This Guarantee Agreement and each other Transaction Document to
which the Guarantor is a party constitutes the legal, valid and binding
obligation of the Guarantor (to the extent it is a party
6
thereto), enforceable against the Guarantor in accordance with its terms, except
as enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and (ii) general principles of equity.
(d) Governmental Approvals. No Governmental Approval (except such as
have been duly obtained, made or given, and are in full force and effect) is
required to authorize, or is required in connection with (i) the execution,
delivery or performance of this Guarantee Agreement by the Guarantor, and (ii)
the legality, validity, binding effect or enforceability of this Guarantee
Agreement, except in each case where the failure to obtain such Governmental
Approval could not reasonably be expected to have a material adverse effect on
any Portfolio Asset. Except as set forth in Schedule 4.04 to the Credit
Agreement, all applicable waiting periods relating to any such Governmental
Approval or other approval which are required and have been obtained have
expired without any adverse action taken with respect thereto.
(e) Solvency. As of the Restructuring Effective Date, the Guarantor is
and, after consummation of the transactions contemplated by this Guarantee
Agreement, will be Solvent. As used herein, "Solvent" shall mean, with respect
to any Person as of a particular date, that on such date (i) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (ii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature in their ordinary course, taking into account the
timing of and amounts of cash to be received by such Person and the timing of
and amounts of cash to be payable on or in respect of debts and liabilities of
such Person, (iii) such Person is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which such
Person's property would constitute unreasonably small capital after giving due
consideration to the industry in which such Person is engaged or is to engage,
(iv) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person and (v)
the present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts and liabilities as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(f) Conditions Precedent. There are no conditions precedent to the
effectiveness of this Guarantee Agreement that have not been satisfied or
waived.
(g) Independent Analysis. The Guarantor has, independently and without
reliance upon the Administrative Agent or any other Secured Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guarantee Agreement. The Guarantor has
investigated fully the benefits and advantages which will be derived by it from
execution of this Guarantee Agreement, and the Managers of the Guarantor have
decided that a direct or an indirect benefit will accrue to such Guarantor by
reason of the execution of this Guarantee Agreement.
7
(h) Intent; Consideration. (i) This Guarantee Agreement is not given
with actual intent to hinder, delay or defraud any Person to which the Guarantor
is or will become, on or after the date hereof, indebted; (ii) the Guarantor has
received at least a reasonably equivalent value in exchange for the giving of
this Guarantee Agreement; (iii) the Guarantor is not engaged in a business or
transaction, nor is about to engage in a business or transaction, for which any
property remaining with such Guarantor constitutes an unreasonably small amount
of capital; and (iv) the Guarantor does not intend to incur debts that will be
beyond the Guarantor's ability to pay as such debts mature.
SECTION 7. Combined Debt Service Coverage Ratio. So long as this
Guarantee Agreement is in effect and any Lenders shall have any Commitment
outstanding under the Credit Agreement, and until the Notes, together with
interest, and all other Obligations are indefeasibly paid in full in cash and
all Letters of Credit have been cancelled or have expired and all amounts drawn
thereunder have been indefeasibly reimbursed in full in cash, the Guarantor
shall cause to be maintained an average annual Combined Debt Service Coverage
Ratio of at least 1.50 to 1.00 calculated on a trailing twelve month basis for
any date of determination; provided that, if the date of determination occurs on
or prior to June 30, 2003, such ratio shall be calculated on the basis of actual
results over the period from and including July 1, 2002, to, but excluding such
date of determination.
SECTION 8. Preservation of Security Interests; Further Assurances(a) .
Except with respect to dispositions permitted under Section 6.11 of the Credit
Agreement, the Guarantor shall preserve, or cause to be preserved, the security
interests granted under the Security Documents and undertake all actions which
are necessary or appropriate in the reasonable judgment of the Administrative
Agent to (i) maintain the Secured Parties' security interest in the Collateral
in full force and effect at all times (including the priority thereof) and (ii)
preserve and protect the Collateral and protect and enforce the Guarantor's
rights and title and the rights of the Secured Parties to the Collateral,
including the making or delivery of all filings and recordations, the payments
of fees and other charges and the issuance of supplemental documentation in each
case in accordance with and subject to the terms of the Security Documents. Upon
notice from the Administrative Agent, the Guarantor shall take or cause to be
taken all action required or, in the reasonable opinion of the Administrative
Agent, which is desirable to maintain and preserve the Liens of the Security
Documents and execute or cause to be executed any and all further instruments
(including financing statements, continuation statements and similar statements
with respect to any of the Security Documents) requested by the Administrative
Agent for such purpose, in each case in accordance with and subject to the terms
of the Security Documents. Notwithstanding any provision of this Guarantee
Agreement or any other Financing Document, the Guarantor hereto hereby
acknowledges and agrees that (i) the Borrower Entities are in the process of
obtaining each of the consents identified in the Schedule 5.18 to the Credit
Agreement as a consent required to be obtained by the Borrower, (ii) the
Borrower Entities shall use diligent and commercially reasonable efforts to
obtain such consents, and (iii) no Borrower Entity shall be deemed to be in
breach or violation of any provision of this Agreement or any other Financing
Document due to a failure to obtain any such consent except as a result of the
breach of such Borrower Entity's obligations under Section 5.18(b) of the Credit
Agreement.
8
SECTION 9. Amendments, Etc. No amendment, modification or waiver of any
provision of this Guarantee Agreement and no consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and shall be executed and delivered in accordance with Section 9.02 of
the Credit Agreement, and then such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 10. Notices, Etc. All notices hereunder, unless otherwise
specified, shall be given in the manner provided for in Section 9.01 of the
Credit Agreement, and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or at any other address or
telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 11. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any other Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder and under the other Financing Documents are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 12. Right of Set-off. If an Event of Default shall have
occurred and be continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Secured
Party to or for the credit or the account of the Guarantor against any and all
the obligations of the Guarantor then existing under this Guarantee Agreement
and the other Financing Documents, irrespective of whether or not such Secured
Party shall have made any demand under this Guarantee Agreement or such other
Financing Document and although such obligations may be unmatured. The rights of
each Secured Party under this Section 12 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.
SECTION 13. Continuing Guarantee. This Guarantee Agreement is a
continuing guarantee and shall survive and remain in full force and effect until
the Guaranteed Obligations and all other amounts payable under this Guarantee
Agreement have been indefeasibly paid in full in cash, the Commitments have been
terminated, all Letters of Credit have been cancelled or have expired, any ConEd
Letter of Credit Disbursements have been reimbursed in full, and shall be
reinstated to the extent provided in Section 2(b).
SECTION 14. Assignments. This Guarantee Agreement and the terms,
covenants and conditions hereof shall be binding upon the Guarantor and its
successors and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their respective successors and assigns. Upon the assignment
by any Lender of all or any portion of its rights and obligations in accordance
with the Credit Agreement (including all or any portion of its Commitment, the
Loans owing to it and the Note or Notes held by it) to any other person, such
9
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise. The Guarantor shall not be
permitted to assign, transfer or delegate any of its rights or obligations under
this Guarantee Agreement without the prior written consent of the Administrative
Agent and each Lender (and any such purported assignment, transfer or delegation
without such consent shall be void).
SECTION 15. Contribution. Subject to Section 5, Guarantor waives all
right of contribution against the Other Credit Parties for payments made under
this Guarantee Agreement.
SECTION 16. Counterparts. This Guarantee Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument. This Guarantee
Agreement shall be effective with respect to the Guarantor when a counterpart
hereof which bears the signature of the Guarantor shall have been delivered to
the Administrative Agent.
SECTION 17. Savings Clause. In the event any one or more of the
provisions contained in this Guarantee Agreement should be held invalid, illegal
or unenforceable in any respect with respect to the Guarantor, no party hereto
shall be required to comply with such provision with respect to the Guarantor
for so long as such provision is held to be invalid, illegal or unenforceable.
The parties shall endeavor in good-faith negotiations to replace any invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 18. Governing Law; Submission to Jurisdiction and Venue. (a)
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT
WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE GUARANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE
OF NEW YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE GUARANTOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTEE AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY
BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE GUARANTOR AND
EACH SECURED PARTY ACKNOWLEDGE THAT
10
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
NEW YORK, NEW YORK. THE GUARANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(c) THE GUARANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST THE
GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. THE
GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(d) THE GUARANTOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE GUARANTOR TO
RECEIVE FOR AND ON BEHALF OF THE GUARANTOR SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTEE
AGREEMENT OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE GUARANTOR
AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 9.01. THE GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE GUARANTOR AT ITS SAID
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (ii)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY, IN EITHER
CASE SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS SECTION 18.
11
SECTION 19. Subordination by Guarantor. The Guarantor hereby
subordinates in right of payment all indebtedness of the Borrower or any Other
Credit Party owing to the Guarantor, whether originally contracted with the
Guarantor or acquired by the Guarantor by assignment, transfer or otherwise,
whether now owed or hereafter arising, whether for principal, interest, fees,
expenses or otherwise, together with all renewals, extensions, increases or
rearrangements thereof, to the prior indefeasible payment in full in cash of the
Guaranteed Obligations, whether now owed or hereafter arising, whether for
principal, interest (including interest accruing after the filing of a petition
initiating any proceeding referred to in Section 7.07 of the Credit Agreement),
fees, expenses or otherwise, together with all renewals, extensions, increases
or rearrangements thereof.
SECTION 20. Intercreditor Agreement. The rights and remedies granted to
the Administrative Agent hereunder and under the Security Documents are subject
to the terms and conditions of the Intercreditor Agreement.
SECTION 21. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Guarantor herein shall be considered
to have been relied upon by the Administrative Agent and the other Secured
Parties and shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes evidencing such Loans,
regardless of any investigation made by the Lenders or the Agents or on their
behalf, and shall continue in full force and effect until the Guaranteed
Obligations and any other amounts payable under this Guarantee Agreement or any
other Financing Document have been indefeasibly paid in full in cash and the
Commitments have been terminated, and, upon such occurrence, this Guarantee
Agreement shall terminate, subject to any reinstatement pursuant to Section 2(b)
above.
SECTION 22. Entire Agreement. This Guarantee Agreement and the other
Financing Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any agreement previously entered into among the
parties with respect to the subject matter hereof is superseded by this
Guarantee Agreement and the other Financing Documents. Nothing in this Guarantee
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto and the other Secured Parties, any rights, remedies,
obligations or liabilities under or by reason of this Guarantee Agreement.
SECTION 23. Headings. Section headings used herein, and the Table of
Contents, are for convenience of reference only, are not part of this Guarantee
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Guarantee Agreement.
12
IN WITNESS WHEREOF, each party hereto has caused this Guarantee
Agreement to be duly executed, attested and delivered by its officers thereunto
duly authorized as of the date first above written.
GUARANTOR:
ORION POWER CAPITAL, LLC
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent,
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT L-4
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
GUARANTEE AGREEMENT
DATED AS OF OCTOBER 28, 2002
AMONG
[ORION POWER NEW YORK LP, INC.]
[ORION POWER NEW YORK GP, INC.]
AND
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
================================================================================
TABLE OF CONTENTS
<Table>
<Caption>
Section Page
SECTION 1. Guarantee.......................................................................................1
SECTION 2. Guarantee Absolute..............................................................................2
SECTION 3. Waivers.........................................................................................2
SECTION 4. Security for Guarantee..........................................................................5
SECTION 5. Subrogation.....................................................................................5
SECTION 6. Representations and Warranties..................................................................6
SECTION 7. [TO BE INSERTED IN LP GUARANTEE]................................................................8
SECTION 8. Preservation of Security Interests; Further Assurances..........................................8
SECTION 9. Limitation on Recourse..........................................................................9
SECTION 10. Amendments, Etc.................................................................................9
SECTION 11. Notices, Etc....................................................................................9
SECTION 12. No Waiver; Remedies.............................................................................9
SECTION 13. Right of Set-off................................................................................9
SECTION 14. Continuing Guarantee............................................................................9
SECTION 15. Assignments....................................................................................10
SECTION 16. Counterparts...................................................................................10
SECTION 17. Savings Clause.................................................................................10
SECTION 18. Governing Law; Submission to Jurisdiction and Venue............................................10
SECTION 19. Subordination by Guarantor.....................................................................12
SECTION 20. Intercreditor Agreement........................................................................12
SECTION 21. Survival of Agreement..........................................................................12
SECTION 22. Entire Agreement...............................................................................12
SECTION 23. Headings.......................................................................................12
</Table>
i
THIS GUARANTEE AGREEMENT (this "Guarantee Agreement") is dated as of
October 28, 2002 between [ORION POWER NEW YORK LP, INC.] [ORION POWER NEW YORK
GP, INC.], a Delaware corporation (the "Guarantor") and BANK OF AMERICA, N.A.,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
benefit of the Secured Parties (as defined in the Credit Agreement referred to
below).
Reference is made to that certain Amended and Restated Credit
Agreement, dated as of the Restructuring Effective Date (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Orion Power New York, L.P. (the "Borrower"), Banc of America Securities
LLC and BNP Paribas, as lead arrangers (the "Lead Arrangers") and joint book
runners, the financial institutions from time to time signatories thereto (the
"Lenders"), Bank of America, N.A., as Issuing Bank, the Administrative Agent,
BNP Paribas, as syndication agent, and Union Bank of California, N.A., CoBank,
ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as documentation
agents, pursuant to which the Lenders have agreed to renew, modify and extend
credit to the Borrower upon the terms and subject to the conditions set forth
therein. Terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement and the principles of
construction set forth in Section 1.04 of the Credit Agreement shall apply
hereto. As used herein, "Other Credit Parties" means any and all of the Credit
Parties other than the Guarantor.
The obligations of the Lenders to continue to extend credit under the
Credit Agreement are conditioned on, among other things, the execution and
delivery by the Guarantor of a Guarantee Agreement in the form hereof. As the
direct owner of [99.0] [1.0]% of the Capital Stock of the Borrower, the
Guarantor acknowledges that it will derive substantial benefits from the
extension of credit to the Borrower under the Credit Agreement. As consideration
therefor and in order to induce the Lenders to make Loans and continue to issue
the Letters of Credit, the Guarantor is willing to execute and deliver this
Guarantee Agreement.
Accordingly, the Guarantor, intending to be legally bound, hereby
agrees with the Administrative Agent, for the ratable benefit of the Secured
Parties, as follows:
SECTION 1. Guarantee. The Guarantor unconditionally guarantees, as a
primary obligor and not merely as a surety, the due and punctual payment by the
Borrower of (a) the principal of and interest (including interest accruing after
the filing of a petition initiating any proceeding referred to in Section 7.07
of the Credit Agreement) on the Loans and all amounts drawn under all Letters of
Credit, when and as due and payable, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (b) each payment required to
be made by the Borrower under any Interest Hedge Contract entered into by the
Borrower with any Lender, and (c) all other Obligations of the Borrower and the
payment obligations of the Other Credit Parties (other than the Sponsor) to the
Secured Parties under the Credit Agreement and the other Financing Documents
(all the foregoing obligations being collectively called the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred in enforcing any rights under this Guarantee
Agreement.
SECTION 2. Guarantee Absolute. (a) The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Financing Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Secured Parties with respect thereto. The obligations of the Guarantor under
this Guarantee Agreement are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Guarantee Agreement, irrespective of whether any action is
brought against the Borrower or any Other Credit Party or whether the Borrower
or any Other Credit Party is joined in any such action or actions. This
Guarantee Agreement is an absolute and unconditional guaranty of payment when
due, and not of collection, by the Guarantor of the Guaranteed Obligations in
each and every particular. The obligations of the Guarantor hereunder are
several from those of the Borrower and are primary obligations concerning which
the Guarantor is the principal obligor. The Secured Parties shall not be
required to mitigate damages or take any action to reduce, collect or enforce
the Guaranteed Obligations.
(b) This Guarantee Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the
Administrative Agent or any other Secured Party upon the insolvency, bankruptcy
or reorganization of the Borrower or otherwise, all as though such payment had
not been made.
(c) The obligations of the Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
the existence of any claim, set-off or other right which the Guarantor may have
at any time against the Borrower or any Other Credit Party, the Administrative
Agent or other Secured Party or any other corporation or person, whether in
connection herewith or any unrelated transactions; provided, that, nothing
herein shall prevent the assertion of any such claim by separate suit or
counterclaim. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower to any Secured Party under the
Financing Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
SECTION 3. Waivers. The Guarantor hereby waives presentment to, demand
of payment from and protest to the Borrower or any Other Credit Party of any of
the Guaranteed Obligations, and also waives promptness, diligence, notice of
acceptance of its guarantee, any other notice with respect to any of the
Guaranteed Obligations and this Guarantee Agreement and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto. The Guarantor further waives
any right to require that resort be had by the Administrative Agent or any other
Secured Party to any security held for payment of the Guaranteed Obligations or
to any balance of any deposit, account or credit on the books of the
Administrative Agent or any other Secured Party in favor of the Borrower or any
other person. The Guarantor hereby consents and agrees to each of the following
to the fullest extent permitted by applicable Requirements of Law, and agrees to
the fullest extent permitted by applicable Requirements of Law that the
Guarantor's obligations under this Guarantee Agreement shall not be released,
diminished, impaired, reduced or adversely affected by any of the following, and
waives any rights (including rights to notice)
2
which the Guarantor might otherwise have as a result of or in connection with
any of the following:
(i) any renewal, extension, modification, increase, decrease,
alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any
contract or understanding with the Borrower, the Administrative Agent,
the other Secured Parties, or any of them, or any other person,
pertaining to the Guaranteed Obligations;
(ii) any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Administrative Agent or any other
Secured Party to the Borrower or any Other Credit Party or any person
liable on the Guaranteed Obligations; or the failure of the
Administrative Agent or any other Secured Party to assert any claim or
demand or to exercise any right or remedy against the Borrower or any
Other Credit Party under the provisions of any Financing Document or
otherwise; or any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any Financing
Document, any guarantee or any other agreement;
(iii) the insolvency, bankruptcy arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of power of
the Borrower or any Other Credit Party or any other person at any time
liable for the payment of all or part of the Guaranteed Obligations; or
any dissolution of the Borrower or any Other Credit Party, or any
change, restructuring or termination of the corporate structure or
existence of the Borrower or any Other Credit Party, or any sale, lease
or transfer of any or all of the assets of the Borrower or any Other
Credit Party, or any change in the shareholders, partners, or members
of the Borrower or any Other Credit Party; or any default, failure or
delay, willful or otherwise, in the performance of the Guaranteed
Obligations;
(iv) the invalidity, illegality or unenforceability of all or
any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever, including the fact that the Guaranteed Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating
the Guaranteed Obligations or any part thereof is ultra vires, the
officers or representatives executing the documents or otherwise
creating the Guaranteed Obligations acted in excess of their authority,
the Guaranteed Obligations violate applicable usury laws, the Borrower
has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from the Borrower, the creation, performance or repayment
of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed
Obligations or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or the documents or instruments pertaining to the
Guaranteed Obligations have been forged or otherwise are irregular or
not genuine or authentic;
(v) any full or partial release of the liability of the
Borrower on the Guaranteed Obligations or any part thereof, of any
co-guarantors, or of any other person
3
now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Guaranteed Obligations or any part thereof,
it being recognized, acknowledged and agreed by the Guarantor that the
Guarantor may be required to pay the Guaranteed Obligations in full
without assistance or support of any other person, and the Guarantor
has not been induced to enter into this Guarantee Agreement on the
basis of a contemplation, belief, understanding or agreement that any
parties other than the Borrower will be liable to perform the
Guaranteed Obligations, or that the Secured Parties will look to other
parties to perform the Guaranteed Obligations;
(vi) the taking or accepting of any other security, collateral
or guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
(vii) any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including negligent,
unreasonable or unjustifiable impairment) of any letter of credit,
collateral, property or security, at any time existing in connection
with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations;
(viii) the failure of the Administrative Agent, any other
Secured Party or any other person to exercise diligence or reasonable
care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such collateral, property
or security;
(ix) the fact that any collateral, security, security interest
or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized
and agreed by the Guarantor that the Guarantor is not entering into
this Guarantee Agreement in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of
any of the Collateral;
(x) any payment by the Borrower to the Administrative Agent or
any other Secured Party being held to constitute a preference under
Title 11 of the United States Code or any similar Federal or state law,
or for any reason the Administrative Agent or any other Secured Party
being required to refund such payment or pay such amount to the
Borrower or someone else;
(xi) any other action taken or omitted to be taken with
respect to the Guaranteed Obligations, or the security and collateral
therefor, whether or not such action or omission prejudices the
Guarantor or increases the likelihood that the Guarantor will be
required to pay the Guaranteed Obligations pursuant to the terms
hereof, it being the unambiguous and unequivocal intention of the
Guarantor that the Guarantor shall be obligated to pay the Guaranteed
Obligations when due, notwithstanding any occurrence, circumstance,
event, action or omission whatsoever, whether or not contemplated, and
whether or not otherwise or particularly described herein, except for
the full and indefeasible payment and satisfaction of the Guaranteed
Obligations in cash;
4
(xii) the fact that all or any of the Guaranteed Obligations
cease to exist by operation of law, including by way of a discharge,
limitation or tolling thereof under applicable bankruptcy laws; or
(xiii) any other circumstance (including any statute of
limitations) that might in any manner or to any extent otherwise
constitute a defense (other than a defense of indefeasible payment and
performance in full of the Guaranteed Obligations) available to, vary
the risk of, or operate as a discharge of, the Borrower or the
Guarantor as a matter of law or equity.
All waivers herein contained shall be without prejudice to the Administrative
Agent at its option to proceed against the Borrower, the Guarantor or any other
person, whether by separate action or by joinder.
SECTION 4. Security for Guarantee. The Guarantor authorizes the
Administrative Agent, in accordance with the terms and subject to the conditions
set forth in the Credit Agreement and the Security Documents, (a) to take and
hold security for the payment of this Guarantee Agreement and the Guaranteed
Obligations and to exchange, enforce, waive and release any such security, (b)
to apply such security and direct the order or manner of sale thereof as the
Administrative Agent in its reasonable discretion may determine in accordance
with the other Financing Documents and (c) to release or substitute any one or
more endorsees, other guarantors or other obligors. The Administrative Agent
may, at its election, in accordance with the terms and subject to the conditions
set forth in the Credit Agreement and the Security Documents, foreclose on any
security held by it by one or more judicial or nonjudicial sales, or exercise
any other right or remedy available to it against the Borrower, any Other Credit
Party or the Guarantor, or any security, without affecting or impairing in any
way the liability of the Guarantor hereunder, except to the extent the
Guaranteed Obligations have been indefeasibly paid in full in cash.
SECTION 5. Subrogation. In furtherance of the foregoing and not in
limitation of any other right which the Administrative Agent or any other
Secured Party has at law or in equity against the Guarantor by virtue hereof,
upon the failure of the Borrower or any Other Credit Party to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will, upon receipt of written demand by the Administrative
Agent, forthwith pay, or cause to be paid, to the Administrative Agent for
distribution to the Lenders and the other Secured Parties, if and as
appropriate, in cash the amount of such unpaid Guaranteed Obligation. The
Guarantor shall not exercise any claims or rights which it may now have or
hereafter acquire against the Borrower or any Other Credit Party that arise from
the existence, payment, performance or enforcement of the Guarantor's
obligations under this Guarantee Agreement or any other Financing Documents,
including any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any other Secured Party against the Borrower, any Other
Credit Party or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including the right
to take or receive from the Borrower or any Other Credit Party, directly or
indirectly, in cash or other property or by setoff or any other manner, payment
or security on account of such claim, remedy or right until the later of (a) the
5
indefeasible cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guarantee Agreement and (b) the termination of the
Commitments. If any amount shall be paid by the Guarantor at any time prior to
the later of the events set forth in clauses (a) and (b) of the preceding
sentence, such amount shall be held in trust for the benefit of the
Administrative Agent and the other Secured Parties and shall forthwith be paid
to the Administrative Agent to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guarantee Agreement,
whether matured or unmatured, in accordance with the terms of the Intercreditor
Agreement and the Financing Documents, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this Guarantee Agreement
thereafter arising. The Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Financing
Documents and that the waiver set forth in this Section 5 is knowingly made in
contemplation of such benefits.
SECTION 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) Existence; Due Qualification; Compliance With Law. The Guarantor
(i) is a corporation duly formed, validly existing and in good standing under
the laws of the State of Delaware, (ii) has all requisite power and authority to
own its property and assets, to borrow money and to transact the business in
which it is presently engaged and in which it proposes to be engaged, (iii) has
duly qualified and is authorized to do business and is in good standing in every
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified could not reasonably be expected to have a material adverse effect on
any Portfolio Asset and (iv) is in full compliance with its Governing Documents,
all Contractual Obligations, all applicable material Requirements of Law and all
Governmental Approvals in respect of the conduct of its business and the
ownership of its property, except to the extent that the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
(b) Power; Authority; No Violation; Binding Effect. The execution,
delivery and performance by the Guarantor of this Guarantee Agreement and the
other Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby (i) are within its powers, (ii)
have been duly authorized by all necessary corporate action, (iii) do not and
will not contravene (A) its Governing Documents or (B) any material Requirement
of Law, any of its material Contractual Obligation or any material Governmental
Approval binding on or affecting it, and (iv) do not and will not conflict with
or be inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except Permitted Liens) upon any of its properties or assets pursuant to the
terms of any material Contractual Obligation binding on or affecting it.
(c) Due Execution and Delivery. The Guarantor has duly executed and
delivered this Guarantee Agreement and each other Transaction Document to which
it is a party. This Guarantee Agreement and each other Transaction Document to
which the Guarantor is a party constitutes the legal, valid and binding
obligation of the Guarantor (to the extent it is a party thereto), enforceable
against the Guarantor in accordance with its terms, except as enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization,
6
moratorium or similar laws affecting creditors' rights generally and (ii)
general principles of equity.
(d) Governmental Approvals. No Governmental Approval (except such as
have been duly obtained, made or given, and are in full force and effect) is
required to authorize, or is required in connection with (i) the execution,
delivery or performance of this Guarantee Agreement by the Guarantor, and (ii)
the legality, validity, binding effect or enforceability of this Guarantee
Agreement, except in each case where the failure to obtain such Governmental
Approval could not reasonably be expected to have a material adverse effect on
any Portfolio Asset. Except as set forth in Schedule 4.04 to the Credit
Agreement, all applicable waiting periods relating to any such Governmental
Approval or other approval which are required and have been obtained have
expired without any adverse action taken with respect thereto.
(e) Solvency. As of the Restructuring Effective Date, the Guarantor is
and, after consummation of the transactions contemplated by this Guarantee
Agreement, will be Solvent. As used herein, "Solvent" shall mean, with respect
to any Person as of a particular date, that on such date (i) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (ii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature in their ordinary course, taking into account the
timing of and amounts of cash to be received by such Person and the timing of
and amounts of cash to be payable on or in respect of debts and liabilities of
such Person, (iii) such Person is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which such
Person's property would constitute unreasonably small capital after giving due
consideration to the industry in which such Person is engaged or is to engage,
(iv) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person and (v)
the present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts and liabilities as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(f) Conditions Precedent. There are no conditions precedent to the
effectiveness of this Guarantee Agreement that have not been satisfied or
waived.
(g) Independent Analysis. The Guarantor has, independently and without
reliance upon the Administrative Agent or any other Secured Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guarantee Agreement. The Guarantor has
investigated fully the benefits and advantages which will be derived by it from
execution of this Guarantee Agreement, and the Board of Directors of the
Guarantor has decided that a direct or an indirect benefit will accrue to such
Guarantor by reason of the execution of this Guarantee Agreement.
(h) Intent; Consideration. (i) This Guarantee Agreement is not given
with actual intent to hinder, delay or defraud any Person to which the Guarantor
is or will become, on or
7
after the date hereof, indebted; (ii) the Guarantor has received at least a
reasonably equivalent value in exchange for the giving of this Guarantee
Agreement; (iii) the Guarantor is not engaged in a business or transaction, nor
is about to engage in a business or transaction, for which any property
remaining with such Guarantor constitutes an unreasonably small amount of
capital; and (iv) the Guarantor does not intend to incur debts that will be
beyond the Guarantor's ability to pay as such debts mature.
SECTION 7. [TO BE INSERTED IN LP GUARANTEE]
[Limited Liability Company Conversion. The Guarantor shall convert its form of
organization to a limited liability company on or before December 31, 2002 on
terms reasonably acceptable to the Lead Arrangers, such acceptance not to be
unreasonably withheld, conditional or, in view of the stated deadlines, delayed.
In that regard, the Guarantor shall use commercially reasonable efforts to file
the necessary documentation with the Delaware Secretary of State on or before
December 1, 2002 and the Guarantor shall take actions so that its conversion
into a limited liability company shall become be effective on or before December
31, 2002 under the following conditions: (i) all obligations under the
Transaction Documents of the Guarantor continue in full force and effect with
respect to the Guarantor after the Guarantor is converted into a limited
liability company on the same terms as are applicable to the Guarantor as of the
Restructuring Effective Date, and the existing Liens under the Security
Documents remain in place with the same perfection and priority as is required
by the Financing Documents and (ii) such conversion is effected in a manner
(including, preservation of independent directors), that is in all respects
reasonably satisfactory to the Lead Arrangers (such satisfaction not to be
unreasonably withheld, conditioned, in view of the stated deadline, or delayed),
it being understood and agreed that the Security Documents that are required to
be modified to effect the conversion shall be modified in a manner that is
substantially similar to other Security Documents in effect as of the
Restructuring Effective Date.]
SECTION 8. Preservation of Security Interests; Further Assurances. The
Guarantor shall preserve, or cause to be preserved, the security interests
granted under the Security Documents and undertake all actions which are
necessary or appropriate in the reasonable judgment of the Administrative Agent
to (i) maintain the Secured Parties' security interest in the Collateral in full
force and effect at all times (including the priority thereof) and (ii) preserve
and protect the Collateral and protect and enforce the Guarantor's rights and
title and the rights of the Secured Parties to the Collateral, including the
making or delivery of all filings and recordations, the payments of fees and
other charges and the issuance of supplemental documentation, in each case in
accordance with and subject to the terms of the Security Documents. Upon notice
from the Administrative Agent, take or cause to be taken all action required or,
in the reasonable opinion of the Administrative Agent, which is desirable to
maintain and preserve the Liens of the Security Documents and execute or cause
to be executed any and all further instruments (including financing statements,
continuation statements and similar statements with respect to any of the
Security Documents) requested by the Administrative Agent for such purpose, in
each case in accordance with and subject to the terms of the Security Documents.
Notwithstanding any provision of this Guarantee Agreement or any other Financing
Document, the Guarantor hereto hereby acknowledges and agrees that (i) the
Borrower Entities are in the process of obtaining each of the consents
identified in Schedule 5.18 to the Credit Agreement as a Consent the Borrower
Entities are required to obtain, (ii) the Borrower Entities shall use diligent
and
8
commercially reasonable efforts to obtain such consents, and (iii) no Borrower
Entity shall be deemed to be in breach or violation of any provision of this
Agreement or any other Financing Document due to a failure to obtain any such
consent except as a result of the breach of such Borrower Entity's obligations
under Section 5.18(b) of the Credit Agreement.
SECTION 9. Limitation on Recourse. This Guarantee Agreement and the
Administrative Agent's recourse hereunder is limited solely to the Guarantor's
equity interest in the Borrower and Twelvepole.
SECTION 10. Amendments, Etc. No amendment, modification or waiver of
any provision of this Guarantee Agreement and no consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and shall be executed and delivered in accordance with Section 9.02 of
the Credit Agreement, and then such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 11. Notices, Etc. All notices hereunder, unless otherwise
specified, shall be given in the manner provided for in Section 9.01 of the
Credit Agreement, and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or at any other address or
telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
SECTION 12. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any other Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder and under the other Financing Documents are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 13. Right of Set-off. If an Event of Default shall have
occurred and be continuing, each Secured Party is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Secured
Party to or for the credit or the account of the Guarantor against any and all
the obligations of the Guarantor then existing under this Guarantee Agreement
and the other Financing Documents, irrespective of whether or not such Secured
Party shall have made any demand under this Guarantee Agreement or such other
Financing Document and although such obligations may be unmatured. The rights of
each Secured Party under this Section 13 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.
SECTION 14. Continuing Guarantee. This Guarantee Agreement is a
continuing guarantee and shall survive and remain in full force and effect until
the Guaranteed Obligations and all other amounts payable under this Guarantee
Agreement have been indefeasibly paid in
9
full in cash, the Commitments have been terminated, all Letters of Credit have
been cancelled or have expired, any DLC Letter of Credit Disbursements have been
reimbursed in full, and shall be reinstated to the extent provided in Section
2(b).
SECTION 15. Assignments. This Guarantee Agreement and the terms,
covenants and conditions hereof shall be binding upon the Guarantor and its
successors and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their respective successors and assigns. Upon the assignment
by any Lender of all or any portion of its rights and obligations in accordance
with the Credit Agreement (including all or any portion of its Commitment, the
Loans owing to it and the Note or Notes held by it) to any other person, such
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise. The Guarantor shall not be
permitted to assign, transfer or delegate any of its rights or obligations under
this Guarantee Agreement without the prior written consent of the Administrative
Agent and each Lender (and any such purported assignment, transfer or delegation
without such consent shall be void).
SECTION 16. Counterparts. This Guarantee Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument. This Guarantee
Agreement shall be effective with respect to the Guarantor when a counterpart
hereof which bears the signature of the Guarantor shall have been delivered to
the Administrative Agent.
SECTION 17. Savings Clause. In the event any one or more of the
provisions contained in this Guarantee Agreement should be held invalid, illegal
or unenforceable in any respect with respect to the Guarantor, no party hereto
shall be required to comply with such provision with respect to the Guarantor
for so long as such provision is held to be invalid, illegal or unenforceable.
The parties shall endeavor in good-faith negotiations to replace any invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 18. Governing Law; Submission to Jurisdiction and Venue. (a)
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT
WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS
OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE GUARANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE
OF NEW YORK.
10
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE GUARANTOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTEE AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY
BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE GUARANTOR AND
EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE GUARANTOR WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE GUARANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST THE
GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. THE
GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS.
(d) THE GUARANTOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS GUARANTEE
AGREEMENT AND THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE GUARANTOR TO
RECEIVE FOR AND ON BEHALF OF THE GUARANTOR SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTEE
AGREEMENT OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE GUARANTOR
AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 11. THE GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE GUARANTOR AT ITS SAID
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF RECEIPT THEREOF.
11
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (ii)
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY, IN EITHER CASE
SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS SECTION 18.
SECTION 19. Subordination by Guarantor. The Guarantor hereby
subordinates in right of payment all indebtedness of the Borrower or any Other
Credit Party owing to the Guarantor, whether originally contracted with the
Guarantor or acquired by the Guarantor by assignment, transfer or otherwise,
whether now owed or hereafter arising, whether for principal, interest, fees,
expenses or otherwise, together with all renewals, extensions, increases or
rearrangements thereof, to the prior indefeasible payment in full in cash of the
Guaranteed Obligations, whether now owed or hereafter arising, whether for
principal, interest (including interest accruing after the filing of a petition
initiating any proceeding referred to in Section 7.07 of the Credit Agreement),
fees, expenses or otherwise, together with all renewals, extensions, increases
or rearrangements thereof.
SECTION 20. Intercreditor Agreement. The rights and remedies granted to
the Administrative Agent hereunder and under the Security Documents are subject
to the terms and conditions of the Intercreditor Agreement.
SECTION 21. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Guarantor herein shall be considered
to have been relied upon by the Administrative Agent and the other Secured
Parties and shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes evidencing such Loans,
regardless of any investigation made by the Lenders or the Agents or on their
behalf, and shall continue in full force and effect until the Guaranteed
Obligations and any other amounts payable under this Guarantee Agreement or any
other Financing Document have been indefeasibly paid in full in cash and the
Commitments have been terminated, and, upon such occurrence, this Guarantee
Agreement shall terminate, subject to any reinstatement pursuant to Section 2(b)
above.
SECTION 22. Entire Agreement. This Guarantee Agreement and the other
Financing Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any agreement previously entered into among the
parties with respect to the subject matter hereof is superseded by this
Guarantee Agreement and the other Financing Documents. Nothing in this Guarantee
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto and the other Secured Parties, any rights, remedies,
obligations or liabilities under or by reason of this Guarantee Agreement.
SECTION 23. Headings. Section headings used herein, and the Table of
Contents, are for convenience of reference only, are not part of this Guarantee
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Guarantee Agreement.
12
IN WITNESS WHEREOF, each party hereto has caused this Guarantee
Agreement to be duly executed, attested and delivered by its officers thereunto
duly authorized as of the date first above written.
GUARANTOR:
[ORION POWER NEW YORK GP, INC.]
[ORION POWER NEW YORK LP, INC.]
By:
--------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent,
By:
--------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT L-5
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT
THIS INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT (this
"Agreement"), dated as of October 28, 2002, among ORION POWER NEW YORK, L.P., a
Delaware limited liability partnership (the "Borrower"), ORION POWER MIDWEST GP,
INC., a Delaware corporation ("MWGP"), ORION POWER MIDWEST LP, INC., a Delaware
corporation ("MWLP"), ORION POWER MIDWEST, L.P., a Delaware limited partnership
("OPMW"), TWELVEPOLE CREEK, LLC, a Delaware limited liability company
("Twelvepole"; Twelvepole, MWGP, MWLP and OPMW being referred to herein
individually as a "Guarantor" and collectively as the "Guarantors") and BANK OF
AMERICA, N.A., as Administrative Agent (in such capacity, the "Administrative
Agent") for the benefit of the Secured Parties (as defined in the Credit
Agreement referred to below).
Reference is made to (a) the Amended and Restated Credit Agreement,
dated as of the Restatement Effective Date (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"; capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement and the rules of construction set forth in Section
1.04 of the Credit Agreement shall apply hereto), among the Borrower, Banc of
America Securities LLC and BNP Paribas, as lead arrangers and joint book
runners, the financial institutions from time to time signatories thereto (the
"Lenders"), Bank of America, N.A., as issuing lender and administrative agent,
BNP Paribas, as syndication agent, and Union Bank of California, N.A., CoBank,
ACB and Deutsche Bank AG, New York and/or Cayman Island Branch, as documentation
agents, (b) the Guarantee Agreement, dated as of Restatement Effective Date,
among the Guarantors and the Administrative Agent (the "OPMW Guarantee
Agreement"), and (c) the Second Amended and Restated Credit Agreement, dated as
of the Restatement Effective Date (as amended, supplemented or otherwise
modified from time to time, the "OPMW Restated Credit Agreement") among OPMW,
Banc of America Securities LLC and BNP Paribas, as lead arrangers and joint book
runners, the financial institutions from time to time signatories thereto, as
lenders, Bank of America, N.A., as issuing lender and administrative agent, BNP
Paribas, as syndication agent, and The Bank of Nova Scotia, Mizuho Corporate
Bank, Ltd and Bayerische Hypo-Und Vereinsbank AG, New York Branch as
documentation agents.
The Lenders have agreed to extend credit to the Borrower pursuant to,
and upon the terms and subject to the conditions set forth in, the Credit
Agreement. The Guarantors have guaranteed the Loans of the Borrower and the
other Guaranteed Obligations (as defined in the OPMW Guarantee Agreement) under
the Credit Agreement pursuant to the OPMW Guarantee Agreement and have granted
Liens on and security interests in their assets to secure such guarantees
pursuant to the OPMW Second Lien Security Agreement and the Twelvepole Second
Lien Security Agreement. The obligations of the Lenders to extend credit under
the Credit Agreement are conditioned on, among other things, the execution and
delivery by the Borrower and the Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Administrative Agent
agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Borrower agrees that (a) in the event a payment shall
be made by any Guarantor under the OPMW Guarantee Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment, and (b) in the event any assets of any
Guarantor shall be sold pursuant to any Security Document to satisfy a claim of
any Secured Party, the Borrower shall indemnify such Guarantor in an amount
equal to the greater of the book value or the fair market value of the assets so
sold.
SECTION 2. Contribution and Subrogation. (a) Twelvepole. Twelvepole
agrees (subject to Section 3) that, in the event a payment shall be made by OPMW
under the OPMW Guarantee Agreement or assets of OPMW shall be sold pursuant to
any Collateral Document to satisfy a claim of any Secured Party and OPMW shall
not have been fully indemnified by the Borrower as provided in Section 1,
Twelvepole shall indemnify OPMW in an amount equal to the amount of such payment
or the greater of the book value or the fair market value of such assets, as the
case may be, in each case multiplied by a fraction of which the numerator shall
be the Adjusted Net Assets (as defined below) of Twelvepole on the date that
such obligation(s) supporting such claim were incurred under the OPMW Guarantee
Agreement and the denominator shall be the aggregate Adjusted Net Assets of
Twelvepole and OPMW on such date; provided that, for purposes of the above
calculation, the aggregate net worth of OPMW shall be exclusive of any aggregate
Adjusted Net Assets attributable to Twelvepole which might otherwise be included
in such a calculation. Twelvepole shall be subrogated to the rights of OPMW
under Section 1 to the extent of any such payment made pursuant to Section 2.
(b) OPMW. OPMW agrees (subject to Section 3) that, in the event a
payment shall be made by Twelvepole under the OPMW Guarantee Agreement or assets
of Twelvepole shall be sold pursuant to any Collateral Document to satisfy a
claim of any Secured Party and Twelvepole shall not have been fully indemnified
by the Borrower as provided in Section 1, OPMW shall indemnify Twelvepole in an
amount equal to the amount of such payment or the greater of the book value or
the fair market value of such assets, as the case may be, in each case
multiplied by a fraction of which the numerator shall be the Adjusted Net Assets
of OPMW on the date that such obligation(s) supporting such claim were incurred
under the OPMW Guarantee Agreement and the denominator shall be the aggregate
Adjusted Net Assets of OPMW and Twelvepole on such date; provided that, for
purposes of the above calculation, the aggregate Adjusted Net Assets of OPMW
shall be exclusive of any aggregate Adjusted Net Assets attributable to
Twelvepole which might otherwise be included in such a calculation. OPMW shall
be subrogated to the rights of Twelvepole under Section 1 to the extent of any
such payment made pursuant to Section 2.
(c) Acknowledgement. The Guarantors acknowledge and agree that no
Guarantor shall have any right of contribution against Astoria Generating, Erie
Boulevard or Carr Street
2
Generating with respect to payments under the Guarantee Agreement or any other
Financing Document.
(d) "Adjusted Net Assets" means, for each Guarantor on any date, the
lesser of (i) the amount by which the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including contingent
liabilities, but excluding liabilities under the OPMW Guarantee Agreement, of
such Guarantor on such date and (ii) the amount by which the present fair
salable value of the assets of such Guarantor on such date exceeds the amount
that will be required to pay the probable liability of such Guarantor on its
debts, excluding debt in respect of the OPMW Guarantee Agreement, as they become
absolute and matured.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in full
in cash of the Guaranteed Obligations and all other amounts payable under the
OPMW Guarantee Agreement. No failure on the part of the Borrower or any
Guarantor to make the payments required by Sections 1 and 2 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.
SECTION 4. Continuing Agreement; Reinstatement; Release. (a) This
Agreement is a continuing agreement and shall survive and remain in full force
and effect until the Guaranteed Obligations and all other amounts payable under
this Agreement have been indefeasibly paid in full in cash, the Commitments have
been terminated and all Letters of Credit have been cancelled or have expired
and all ConEd Letters of Credit Disbursements have been reimbursed in full.
(b) This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by the Administrative Agent or any
other Secured Party upon the insolvency, bankruptcy or reorganization of the
Borrower, any Guarantor or otherwise, all as though such payment had not been
made.
SECTION 5. Amendments, Etc. No amendment, modification or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and shall be executed and delivered in accordance with
Section 9.02 of the Credit Agreement, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 6. Notices, Etc. All notices hereunder, unless otherwise
specified, shall be given in the manner provided for in Section 9.01 of the
Credit Agreement and shall be given to such party at its address or telecopy
number set forth on the signature pages hereof or at any other address or
telecopy number which such party shall have specified for the purpose of
communications hereunder by notice to the other parties hereunder.
3
SECTION 7. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any other Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder and under the other Financing Documents are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 8. Assignments. This Agreement and the terms, covenants and
conditions hereof shall be binding upon the Borrower and each Guarantor and its
successors and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their respective successors and assigns. Upon the assignment
by any Lender of all or any portion of its rights and obligations under the
Credit Agreement (including all or any portion of its Commitment, the Loans
owing to it and the Note or Notes held by it) to any other Person, such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise. None of the Borrower or the
Guarantors shall be permitted to assign, transfer or delegate any of its rights
or obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender (and any such purported assignment,
transfer or delegation without such consent shall be void).
SECTION 9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument
SECTION 10. Savings Clause. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect with respect to any party hereto, no party hereto
shall be required to comply with such provision with respect to such party for
so long as such provision is held to be invalid, illegal or unenforceable, and
the validity, legality and enforceability of the remaining provisions contained
herein, and of such invalid, illegal or unenforceable provision with respect to
any other party, shall not in any way be affected or impaired. The parties shall
endeavor in good-faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 11. Governing Law; Submission to Jurisdiction and Venue. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN EACH
GUARANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
4
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, EACH GUARANTOR AND EACH
SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT EACH GUARANTOR AND EACH
SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH GUARANTOR WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) EACH GUARANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST
SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY.
EACH GUARANTOR WAIVE ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
IN WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS.
(d) EACH GUARANTOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED
AGENTS, INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW
YORK, NEW YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF EACH GUARANTOR, AS
APPLICABLE, TO RECEIVE FOR AND ON BEHALF OF SUCH GUARANTOR SERVICE OF PROCESS IN
SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF
SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO SUCH
GUARANTOR AT ITS ADDRESS SET FORTH IN ACCORDANCE WITH SECTION 6. EACH GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
5
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, SUCH
GUARANTOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF
RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT (I) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW (II) OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (C) OF THIS
SECTION 11.
SECTION 12. Entire Agreement. This Agreement and the other Financing
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any agreement previously entered into among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Financing Documents. Nothing in this Agreement, expressed or implied,
is intended to confer upon any party, other than the parties hereto and the
other Secured Parties, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
SECTION 13. Headings. Section headings used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
[Signature Page to Follow]
6
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed, attested and delivered by its officers thereunto duly authorized
as of the date first above written.
BORROWER: ORION POWER NEW YORK, L.P.,
a Delaware limited partnership
By: Orion Power New York GP, Inc., its general partner
By: ______________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
GUARANTORS: ORION POWER MIDWEST GP, INC.
By: ______________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ORION POWER MIDWEST LP, INC.,
By: ______________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ORION POWER MIDWEST, L.P.,
a Delaware limited partnership
By: Orion Power MidWest GP, Inc.,
its general partner
By: ______________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
TWELVEPOLE CREEK, LLC
By: ______________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent,
By: ______________________________________
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Fax: (704) 386-3324
Attn.: Laura Ryan
EXHIBIT L-6
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT
THIS INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT (this "Agreement"),
dated as of October 28, 2002, among ORION POWER CAPITAL, LLC, a Delaware limited
liability company ("Holdco"),ORION POWER MIDWEST GP, INC., a Delaware
corporation ("MWGP"), ORION POWER MIDWEST LP, INC., a Delaware corporation
("MWLP"), ORION POWER MIDWEST, L.P., a Delaware limited partnership ("OPMW"),
TWELVEPOLE CREEK, LLC, a Delaware limited liability company ("Twelvepole";
Twelvepole, MWGP, MWLP and OPMW being referred to herein individually as a
"Guarantor" and collectively as the "Guarantors") and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the "Administrative Agent") for the
benefit of the Secured Parties (as defined in the Credit Agreement referred to
below).
Reference is made to (a) the Amended and Restated Credit Agreement, dated
as of the Restatement Effective Date (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to them
in the Credit Agreement and the rules of construction set forth in Section 1.04
of the Credit Agreement shall apply hereto), among Orion Power New York, L.P.,
as borrower (the "Borrower"), Banc of America Securities LLC and BNP Paribas, as
lead arrangers and joint book runners, the financial institutions from time to
time signatories thereto (the "Lenders"), Bank of America, N.A., as issuing
lender and administrative agent, BNP Paribas, as syndication agent, and Union
Bank of California, N.A., CoBank, ACB and Deutsche Bank AG, New York and/or
Cayman Island Branch, as documentation agents, (b) the Guarantee Agreement,
dated as of Restatement Effective Date, among the Guarantors and the
Administrative Agent (the "OPMW Guarantee Agreement"), and (c) the Second
Amended and Restated Credit Agreement, dated as of the Restatement Effective
Date (as amended, supplemented or otherwise modified from time to time, the
"OPMW Restated Credit Agreement") among OPMW, Banc of America Securities LLC and
BNP Paribas, as lead arrangers and joint book runners, the financial
institutions from time to time signatories thereto, as lenders, Bank of America,
N.A., as issuing lender and administrative agent, BNP Paribas, as syndication
agent, and The Bank of Nova Scotia, Mizuho Corporate Bank, Ltd and Bayerische
Hypo-Und Vereinsbank AG, New York Branch, as documentation agents.
The Lenders have agreed to extend credit to the Borrower pursuant to, and
upon the terms and subject to the conditions set forth in, the Credit Agreement.
The Guarantors have guaranteed the Loans of the Borrower and the other
Guaranteed Obligations (as defined in the OPMW Guarantee Agreement) under the
Credit Agreement pursuant to the OPMW Guarantee Agreement and have granted Liens
on and security interests in their assets to secure such guarantees pursuant to
the OPMW Second Lien Security Agreement and the Twelvepole Second Lien Security
Agreement. The obligations of the Lenders to extend credit under the Credit
Agreement are conditioned on, among other things, the execution and delivery by
Holdco and the Guarantors of an agreement in the form hereof.
Accordingly, Holdco, each Guarantor and the Administrative Agent agree as
follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), Holdco agrees that (a) in the event a payment shall be
made by any Guarantor under the OPMW Guarantee Agreement, Holdco shall indemnify
such Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment, and (b) in the event any assets of any Guarantor
shall be sold pursuant to any Security Document to satisfy a claim of any
Secured Party, Holdco shall indemnify such Guarantor in an amount equal to the
greater of the book value or the fair market value of the assets so sold.
SECTION 2. Subordination. Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Section 1 and all other
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Guaranteed Obligations and all other amounts payable under the OPMW
Guarantee Agreement. No failure on the part of Holdco or any Guarantor to make
the payments required by Section 1 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to its obligations hereunder, and each
Guarantor shall remain liable for the full amount of the obligations of such
Guarantor hereunder.
SECTION 3. Continuing Agreement; Reinstatement; Release. (a) This Agreement
is a continuing agreement and shall survive and remain in full force and effect
until the Guaranteed Obligations and all other amounts payable under this
Agreement have been indefeasibly paid in full in cash, the Commitments have been
terminated and all Letters of Credit have been cancelled or have expired and all
ConEd Letters of Credit Disbursements have been reimbursed in full.
(b) This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by the Administrative Agent or any
other Secured Party upon the insolvency, bankruptcy or reorganization of Holdco,
any Guarantor or otherwise, all as though such payment had not been made.
SECTION 4. Amendments, Etc. No amendment, modification or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and shall be executed and delivered in accordance with
Section 9.02 of the Credit Agreement, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 5. Notices, Etc. All notices hereunder, unless otherwise specified,
shall be given in the manner provided for in Section 9.01 of the Credit
Agreement and shall be given to such party at its address or telecopy number set
forth on the signature pages hereof or at any other address or telecopy number
which such party shall have specified for the purpose of communications
hereunder by notice to the other parties hereunder.
2
SECTION 6. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Administrative Agent or any other Secured Party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder and under the other Financing Documents are cumulative
and are not exclusive of any other remedies provided by law.
SECTION 7. Assignments. This Agreement and the terms, covenants and
conditions hereof shall be binding upon Holdco and each Guarantor and its
successors and shall inure to the benefit of the Administrative Agent, the other
Secured Parties and their respective successors and assigns. Upon the assignment
by any Lender of all or any portion of its rights and obligations under the
Credit Agreement (including all or any portion of its Commitment, the Loans
owing to it and the Note or Notes held by it) to any other Person, such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise. None of Holdco or the Guarantors
shall be permitted to assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender (and any such purported assignment,
transfer or delegation without such consent shall be void).
SECTION 8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument
SECTION 9. Savings Clause. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect with respect to any party hereto, no party hereto shall be required
to comply with such provision with respect to such party for so long as such
provision is held to be invalid, illegal or unenforceable, and the validity,
legality and enforceability of the remaining provisions contained herein, and of
such invalid, illegal or unenforceable provision with respect to any other
party, shall not in any way be affected or impaired. The parties shall endeavor
in good-faith negotiations to replace any invalid, illegal or unenforceable
provisions with valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10. Governing Law. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY
SUCH REQUIREMENT OF LAW THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY
APPLICABLE. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN EACH GUARANTOR AND EACH
SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
3
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, HOLDCO, EACH GUARANTOR
AND EACH SECURED PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT EACH
GUARANTOR AND EACH SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. HOLDCO
AND EACH GUARANTOR WAIVE IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) HOLDCO AND EACH GUARANTOR AGREE THAT ANY SECURED PARTY SHALL HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED
AGAINST HOLDCO OR SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION
REASONABLY SELECTED IN GOOD FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY
SECURED PARTY. HOLDCO AND EACH GUARANTOR WAIVE ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH ANY SECURED PARTY HAS COMMENCED A PROCEEDING
DESCRIBED IN THIS PARAGRAPH INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(d) HOLDCO, EACH GUARANTOR AND THE SECURED PARTIES EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) HOLDCO AND EACH GUARANTOR hereby irrevocably designates NATIONAL
Registered Agents, Inc., with an address at 875 Avenue OF THE AMERICAS, SUITE
501, New York, New York 10001 as the designee, appointee and agent of HOLDCO AND
EACH GUARANTOR, AS APPLICABLE, to receive for and on behalf of HOLDCO OR SUCH
GUARANTOR service of process in such respective jurisdictions in any legal
action or proceeding with respect to THIS AGREEMENT or any documents related
thereto. It is understood that a copy of such process served on such agent will
be promptly forwarded by mail to HOLDCO OR SUCH GUARANTOR AT ITS ADDRESS SET
FORTH in accordance with Section 5. HOLDCO AND EACH GUARANTOR further
irrevocably
4
consent to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to HOLDCO AND SUCH GUARANTOR at its said
address, such service to become effective on the date of receipt thereof.
(f) Nothing in THIS AGREEMENT SHALL affect the right of any party to
THIS AGREEMENT (i) to serve process in any other manner permitted by law (ii) OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, in either case, solely as permitted in subsection (c) OF THIS
SECTION 10.
SECTION 11. Entire Agreement. This Agreement and the other Financing
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any agreement previously entered into among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Financing Documents. Nothing in this Agreement, expressed or implied,
is intended to confer upon any party, other than the parties hereto and the
other Secured Parties, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
SECTION 12. Headings. Section headings used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
[Signature Page to Follow]
5
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed, attested and delivered by its officers thereunto duly authorized as of
the date first above written.
BORROWER: ORION POWER CAPITAL, LLC,
- -------- a Delaware limited liability company
By: _______________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice
President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
GUARANTORS: ORION POWER MIDWEST GP, INC.
- ----------
By: ________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice
President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ORION POWER MIDWEST LP, INC.,
By: ________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice
President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ORION POWER MIDWEST, L.P.,
a Delaware limited partnership
By: Orion Power MidWest GP, Inc.,
its general partner
By: ________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice
President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
TWELVEPOLE CREEK, LLC
By: ________________________________
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn.: Senior Vice
President-Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
- -------------------- as Administrative Agent,
By: ________________________________
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Fax: (704) 386-3324
Attn: Laura Ryan
EXHIBIT M
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
AMENDED AND RESTATED
ASSIGNMENT AND SECURITY AGREEMENT
between
[ASTORIA GENERATING COMPANY, L.P./
CARR STREET GENERATING STATION, L.P./
ERIE BOULEVARD HYDROPOWER, L.P.]
and
BANK OF AMERICA, N.A.,
as Administrative Agent
-----------------------------------------
Dated as of October 28, 2002
-----------------------------------------
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS...............................................................................2
SECTION 2. ASSIGNMENT; SECURITY INTERESTS; INSURANCE PROCEEDS........................................5
2.01 PLEDGE; ASSIGNMENT; GRANT OF SECURITY INTERESTS...........................................5
2.02 POWER OF ATTORNEY.........................................................................9
SECTION 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS........................................11
3.01 NECESSARY FILINGS........................................................................11
3.02 NO LIENS.................................................................................12
3.03 OTHER FINANCING STATEMENTS...............................................................12
3.04 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE, RECORDS............................12
3.05 RECOURSE.................................................................................13
3.06 CONSENTS.................................................................................13
3.07 PLEDGED PERMITS..........................................................................14
3.08 BARGES...................................................................................14
3.09 FIXTURE LOCATIONS........................................................................14
3.10 FARM PRODUCTS; TIMBER; AS-EXTRACTED COLLATERAL...........................................14
3.11 COMMERCIAL TORT CLAIMS...................................................................15
3.12 LETTERS OF CREDIT........................................................................15
3.13 CHATTEL PAPER............................................................................15
3.14 BANK ACCOUNTS............................................................................15
SECTION 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS..................15
4.01 ADDITIONAL REPRESENTATIONS AND WARRANTIES................................................15
4.02 MAINTENANCE OF RECORDS...................................................................16
4.03 PAYMENTS UNDER ASSIGNED AGREEMENTS, RECEIVABLES AND GENERAL INTANGIBLES..................16
4.04 DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC...................................16
4.05 MODIFICATION OF TERMS, ETC...............................................................16
4.06 COLLECTION...............................................................................17
SECTION 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADEMARKS.........................17
5.01 INFRINGEMENTS............................................................................17
5.02 OTHER PATENTS, COPYRIGHTS AND TRADEMARKS.................................................17
5.03 REMEDIES.................................................................................17
SECTION 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT COLLATERAL; INSURANCE.......18
6.01 PROTECTION OF THE ADMINISTRATIVE AGENT'S INTERESTS.......................................18
i
6.02 FURTHER ACTIONS..........................................................................18
6.03 FINANCING STATEMENTS.....................................................................18
SECTION 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.............................................19
7.01 REMEDIES; OBTAINING THE ASSIGNMENT COLLATERAL UPON DEFAULT...............................19
7.02 REMEDIES, DISPOSITION OF THE ASSIGNMENT COLLATERAL.......................................20
7.03 WAIVER OF CLAIMS.........................................................................21
7.04 APPLICATION OF PROCEEDS..................................................................22
7.05 REMEDIES CUMULATIVE......................................................................22
7.06 DISCONTINUANCE OF PROCEEDINGS............................................................22
7.07 GRANT OF LICENSE OR SUB-LICENSE TO USE PATENT, TRADEMARK, COPYRIGHT AND
LICENSE COLLATERAL.......................................................................23
SECTION 8. INDEMNITY; EXPENSES......................................................................23
SECTION 9. MISCELLANEOUS............................................................................23
9.01 NOTICES..................................................................................23
9.02 WAIVER, AMENDMENT; SEVERABILITY..........................................................24
9.03 OBLIGATIONS ABSOLUTE.....................................................................24
9.04 SUCCESSORS AND ASSIGNS...................................................................25
9.05 HEADINGS DESCRIPTIVE, ETC................................................................25
9.06 GOVERNING LAW; SUBMISSION TO JURISDICTION AND VENUE......................................25
9.07 THE GRANTOR'S DUTIES.....................................................................27
9.08 TERMINATION; RELEASE.....................................................................27
9.09 EXECUTION IN COUNTERPARTS................................................................27
9.10 APPLICABILITY OF DEPOSIT ACCOUNT AGREEMENT...............................................28
9.11 LIMITATION OF RECOURSE...................................................................28
9.12 AMENDMENT AND RESTATEMENT................................................................28
Schedules
Schedule 1 Commercial Tort Claim Judgments
Schedule 2 Name; Jurisdiction of Organization; Location
Schedule 3 Filing Locations
[Schedule 4 Barges]
Exhibits
Exhibit A Assignment of Security Interest in United States Patents and Trademarks
Exhibit B Assignment of Security Interest in United States Copyrights
ii
AMENDED AND RESTATED
ASSIGNMENT AND SECURITY AGREEMENT
AMENDED AND RESTATED ASSIGNMENT AND SECURITY AGREEMENT, dated as of October
28, 2002 (this "Agreement"), between [ASTORIA GENERATING COMPANY, L.P./CARR
STREET GENERATING STATION, L.P./ERIE BOULEVARD HYDROPOWER, L.P.], a limited
partnership organized under the laws of the State of Delaware (the "Grantor"),
and BANK OF AMERICA, N.A., as administrative agent (in such capacity, together
with any successors and assigns, the "Administrative Agent") for the benefit of
the Secured Parties (as defined in the Credit Agreement referred to below).
WITNESSETH:
WHEREAS, Orion Power New York, L.P. (the "Borrower") has entered into an
Amended and Restated Credit Agreement, dated as of the Restructuring Effective
Date (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), with the Administrative Agent, Banc of America
Securities LLC and BNP Paribas, as lead arrangers and joint book runners, Bank
of America, N.A., as issuing bank, BNP Paribas, as syndication agent, Union Bank
of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman
Island Branch, as documentation agents, and the Lenders named on the signature
pages thereto and from time to time parties thereto (the "Lenders"), pursuant to
which the Lenders have agreed, inter alia, to renew, modify and extend credit
facilities that were issued to the Borrower to finance a portion of the purchase
price of the Portfolio Assets (as defined in the Credit Agreement) and to
provide working capital availability to the Borrower;
WHEREAS, the Grantor has entered into an Amended and Restated Subsidiary
Guarantee Agreement dated as of the Restructuring Effective Date (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Subsidiary Guarantee"), with the Administrative Agent and certain other
Subsidiaries of the Borrower, pursuant to which the Grantor has agreed to
guarantee the Obligations of the Borrower;
WHEREAS, the Borrower, each Subsidiary of the Borrower and the
Administrative Agent have entered into that certain Amended and Restated Deposit
Account Agreement, dated as of the Restructuring Effective Date (as the same may
be amended, supplemented or otherwise modified from time to time, the "Deposit
Account Agreement"), providing for, among other things, the establishment of the
Accounts (as defined in the Credit Agreement) and the application of the
proceeds of the Collateral (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligations of the Lenders
under the Credit Agreement that this Agreement shall have been entered into by
the parties hereto and shall be in full force and effect;
NOW, THEREFORE, in consideration of the benefits to the Grantor, the
receipt and sufficiency of which are hereby acknowledged, the Grantor hereby
makes the following assignments, representations and warranties to the
Administrative Agent, for the benefit of the Secured Parties, and hereby
covenants and agrees with the Administrative Agent, in each case, as follows:
Section 1. Definitions. (a) For all purposes of this Agreement, (i)
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement, (ii) unless otherwise specified or otherwise defined
herein or in the Credit Agreement, terms used in Article 9 of the UCC (as
hereinafter defined) are used herein as therein defined and (iii) the principles
of construction set forth in Section 1.04 of the Credit Agreement shall apply
hereto.
(b) In addition, the following terms shall have the meanings herein
specified:
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement.
"AGREEMENT" shall mean this Amended and Restated Assignment and Security
Agreement, as amended, supplemented or otherwise modified from time to time.
"ASSIGNED AGREEMENTS" shall have the meaning provided in Section
2.01(a)(xi).
"ASSIGNMENT COLLATERAL" shall have the meaning provided in Section
2.01(a)(xiv).
"ASSIGNMENT REVENUES" shall have the meaning provided in Section
2.01(a)(i).
["BARGES" shall have the meaning provided in Section 2.01(a)(xiii).]
"BORROWER" shall have the meaning provided in the Recitals of this
Agreement.
"COLLATERAL" shall have the meaning provided in Section 2.01(a).
"CONTRACT RIGHTS" shall mean all rights of the Grantor (including all
rights to payment) under each Assigned Agreement.
"COPYRIGHT LICENSES" shall mean any written agreement (a) granting any
right to any third party under any Copyright of the Grantor or (b) granting any
right to the Grantor under any Copyright of any third party.
"COPYRIGHTS" shall mean all right, title and interest of any person in and
to all of the following, whether now owned or hereafter acquired:
(i) the federally registered United States and foreign copyrights and any
renewals thereof;
(ii) all other United States and foreign copyrights;
(iii) all registrations and applications for registration of any such
copyright in the United States or any other country, including
registrations, recordings, supplemental derivative or collective work
registrations and pending applications for registrations in the
United States Copyright Office;
2
(iv) all computer programs, computer data bases, computer program flow
diagrams, source codes and object codes related to any or all of the
foregoing; and
(v) all tangible property embodying or incorporating any or all of the
foregoing.
"CREDIT AGREEMENT" shall have the meaning provided in the Recitals of this
Agreement.
"DEPOSIT ACCOUNT AGREEMENT" shall have the meaning provided in the Recitals
of this Agreement.
"DOCUMENTS" shall mean all of the books, ledgers, records, computer
programs, tapes, discs, punch cards, data processing software, transaction
files, master files and related property and rights (including computer and
peripheral equipment) of the Grantor pertaining to or referencing the
Collateral.
"EQUIPMENT" shall have the meaning provided in Section 2.01(a)(ii).
"GENERAL INTANGIBLES" shall have the meaning provided in Section
2.01(a)(vi).
"GRANTOR" shall have the meaning provided in the first paragraph of this
Agreement.
"INVENTORY" shall have the meaning provided in Section 2.01(a)(iii).
"LENDERS" shall have the meaning provided in the Recitals of this
Agreement.
"LICENSE" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense as to which the Grantor is now or
hereafter a party.
"NON-RECOURSE PARTY" shall have the meaning provided in Section 9.11.
"ORIGINAL AGREEMENT" shall have the meaning provided in Section 9.12.
"PATENT LICENSE" shall mean any written agreement (i) granting any right to
any third party under any Patent of the Grantor or (ii) granting any right to
the Grantor under any Patent of any third party.
"PATENTS" shall mean all right, title and interest of any person in and to
all of the following, whether now owned or hereafter acquired:
(i) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters
patent of the United States or any other country;
3
(ii) all other letters patent of the United States or any other country
and all other applications for letters patent of the United States or
any other country; and
(iii) all reissues, continuations, divisions, continuations-in-part or
extensions thereof and the inventions disclosed therein, including
the right to make, use and/or sell the inventions disclosed therein.
"PLEDGED PERMITS" shall have the meaning provided in Section 2.01(a)(vii).
"PROCEEDS" shall mean all proceeds, including (i) whatever is received upon
any collection, exchange, sale or other disposition of any of the Collateral and
any property into which any of the Collateral is converted, whether cash or
non-cash, (ii) any and all payments or other property (in whatever form) made or
due and payable on account of any insurance, indemnity, warranty or guaranty
payable to the Grantor with respect to any of the Collateral, (iii) any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other person or entity as a result of the
destruction, loss, theft or other involuntary conversion of whatever nature of
any asset or property which constitutes Collateral, (iv) any and all payments
(in any form whatsoever) made or due and payable in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority, (v) any claim of the
Grantor against third parties (A) for past, present or future infringement of
any Patent now or hereafter owned by the Grantor or licensed under a Patent
License, (B) for past, present or future infringement or dilution of any
Trademark now or hereafter owned by the Grantor or licensed under a Trademark
License or injury to the goodwill associated with any Trademark now or hereafter
owned by the Grantor, (C) for past, present or future infringement of any
Copyright now or hereafter owned by the Grantor or licensed under a Copyright
License and (D) for past, present or future breach of any License and (vi) any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
"RECEIVABLES" shall have the meaning provided in Section 2.01(a)(iv).
"RELATED CONTRACTS" shall have the meaning provided in Section 2.01(a)(v).
"SECURED OBLIGATIONS" shall have the meaning provided in Section 2.01(a).
"SUBSIDIARY GUARANTEE" shall have the meaning provided in the Recitals of
this Agreement.
"TRADEMARK LICENSE" shall mean any written agreement (a) granting any right
to any third party under any Trademark of the Grantor or (b) granting any right
to the Grantor under any Trademark of any third party.
"TRADEMARKS" shall mean all of the following now or hereafter owned by any
person (i) all trademarks, service marks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, trade dress,
logos, other source or business identifiers, designs and general intangibles of
like nature, now existing or hereafter
4
adopted or acquired, all registrations and recordings thereof, and all
applications filed in connection therewith, including registrations and
applications in the United States Patent and Trademark Office, any State of the
United States or any other country or any political subdivision thereof, and all
extensions or renewals thereof and (ii) all goodwill associated therewith.
"UCC" shall mean at any time the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York; provided that if, by
reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
Section 2. Assignment; Security Interests; Insurance Proceeds.
2.01 Pledge; Assignment; Grant of Security Interests. (a) To secure the
prompt and complete payment and performance when due of (i) all Obligations by
the Borrower, including all amounts payable or to become payable to the Secured
Parties by the Borrower under the Financing Documents, when and as the same
shall become due and payable (whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise), (ii) all obligations of the Grantor
under and pursuant to the Subsidiary Guarantee, (iii) all Fees, expenses,
indemnities and expense reimbursement obligations of the Borrower or any of its
Subsidiaries under the Credit Agreement or any other Financing Documents,
including this Agreement, in respect of the Loans, (iv) all other obligations,
covenants and agreements, monetary or otherwise, of the Borrower or any of its
Subsidiaries under any Financing Document to which it is a party, in each case,
whether now owing or hereafter existing, (v) all disbursements made by the
Secured Parties for the payment of taxes, common area charges, insurance
premiums, and all other fees, expenses or advances in connection with or
relating to the Collateral, and interest on such disbursements and other amounts
not timely paid in accordance with the terms of the Credit Agreement, this
Agreement and the other Financing Documents (excluding the OPH Membership
Interest Pledge Agreement), (vi) all sums with respect to the foregoing that
would become due but for the operation of the automatic stay under Section
362(a) of Title 11 of the United States Code, including interest, fees and other
charges that, but for the filing of a petition in bankruptcy with respect to the
Borrower would accrue on the foregoing whether or not a claim is alleged against
the Borrower for such sums in any such bankruptcy proceeding, and (vii) all
renewals, extensions, amendments, modifications and changes and supplements of,
or substitutions or replacements for, all or any part of the foregoing
(collectively, the "Secured Obligations"), the Grantor hereby assigns and
pledges to the Administrative Agent for the benefit of the Secured Parties, and
hereby grants to the Administrative Agent for the benefit of the Secured
Parties, a security interest in, and lien on, all of the Grantor's right, title
and interest in and to the following, whether now owned or hereafter acquired
(the "Collateral"):
(i) all cash income and receipts derived from the ownership and
ordinary course of operation of the Portfolio Assets, including revenues
from the
5
sale of energy and other products and services (including electric
capacity, ancillary services and transmission services and products),
Proceeds of business interruption insurance, interest and other income
earned on amounts on deposit in the Accounts and any amounts realized by
the Grantor under any Interest Hedge Contract (all of the above,
collectively, the "Assignment Revenues");
(ii) (A) all equipment, wherever located, now or hereafter existing,
(B) all fixtures, (C) to the extent not included in the foregoing or in
clause (iii), all goods, (D) all parts of any of the foregoing items
(A)-(C) and all attachments and accessions thereto, including, to the
extent not included in the foregoing, all other accessions and (E) all
rights in any of the foregoing items (A)-(D) now or hereafter owned or
possessed by the Grantor for its benefit (the property described in this
subclause (ii) being the "Equipment");
(iii) all inventory and other tangible personal property held for sale
by the Grantor, in all of it is forms, wherever located, and rights therein
owned or possessed by the Grantor or for its benefit including, but not
limited to, (A) with respect to the generation of electric power by the
Grantor, raw materials and work in process therefor, finished goods and
by-products thereof, and materials used or consumed in the manufacture or
production thereof, (B) goods in which the Grantor has an interest in mass
or a joint or other interest or right of any kind and (C) goods which are
returned to or repossessed by the Grantor, and all accessions to any of the
foregoing and products thereof and documents relating thereto (the property
described in this subclause (iii) being the "Inventory");
(iv) all accounts, Contract Rights, chattel paper, Documents,
instruments, letters of credit, letter-of-credit rights, documents and
other rights or obligations of every kind, now or hereafter existing,
whether or not arising out of or in connection with any sale, lease,
exchange or other disposition of electric power, or other Inventory, goods
or the provision or rendering of any service by or to the Grantor and all
tax refunds, tax refund claims or guarantee claims held by or granted to
the Grantor (any and all such accounts, Contract Rights, chattel paper,
Documents, instruments, obligations and other property described in this
subclause (iv) being the "Receivables");
(v) all rights now or hereafter existing in and to all security
agreements, leases and other contracts securing or otherwise relating to
any Receivables (the property described in this subclause (v) being the
"Related Contracts");
(vi) all general intangibles, intellectual or other property of any
kind or nature now owned or hereafter acquired by the Grantor, including
payment intangibles, software, permits, reversionary interests in pension
plan assets, inventions, designs, Patents, Copyrights, Trademarks, Licenses
and associated goodwill, trade secrets, confidential or proprietary
technical and business information, know-how, show-how or other data or
information, software,
6
customer lists, subscription lists, databases and related documentation,
registrations, franchises, and all other intellectual or other similar
property rights not otherwise described above, but excluding Receivables
(the property described in this subclause (vi) being the "General
Intangibles");
(vii) all generating, electricity, environmental and other licenses,
permits and approvals of any federal, state, municipal or other
governmental department, commission, board, bureau, agency, court or other
instrumentality, domestic or foreign, now or hereafter held by the Grantor
or in which the Grantor may have an interest and relating to the operation,
maintenance, or use and occupancy of the [Astoria Bundle/Carr Street
Generating Station/NiMo Assets], except that any such license, permit or
approval which as a matter of law is not assignable is hereby excluded from
such lien and security interest to the extent that and for such time as the
same shall not be so assignable, and all rights (whether or not earned by
performance) under any franchises, documents, licenses, contracts or
agreements now owned or hereafter acquired with the rights to all renewals
thereof assignable by law (the property described in this subclause (vii)
being the "Pledged Permits");
(viii) (A) all policies of insurance, now or hereafter held by the
Grantor (as required under Section 5.06 of the Credit Agreement and the
other Financing Documents), including casualty and liability, business
interruption and any title insurance, and including all Proceeds therefrom,
and (B) all rights, now or hereafter held, by the Grantor to any warranties
of any manufacturer or contractor or any other Person;
(ix) all books, correspondence, credit files, records, invoices and
other Documents, now or hereafter in the possession or control of the
Grantor or any Person acting for the Grantor and relating to the [Astoria
Bundle/Carr Street Generating Station/NiMo Assets] and all reports of the
Independent Engineer or any other Person and all other reports relating to
the acquisition, operations, viability, performance, maintenance and output
of the [Astoria Bundle/Carr Street Generating Station/NiMo Assets];
(x) all balances, credits, deposits, deposit and securities accounts,
investment property or moneys whether now existing or hereafter held in the
name or on behalf of the Grantor, whether (A) in the possession or control
of the Grantor, (B) in the possession or control of, or in transit to, the
Administrative Agent, or (C) held by third parties; all monies, documents,
instruments, investment property and financial assets required to be
deposited with or delivered to the Administrative Agent or any securities
intermediary pursuant to any term of this Agreement or any of the other
Financing Documents, including all amounts held or deposited in or credited
to the Accounts and all cash and all monies and Permitted Investments and
other financial assets and investment property and instruments held in or
credited to such Accounts;
7
(xi) each Project Contract to which it is a party, and each other
lease, power, fuel, transportation, management or other agreement now
existing or hereafter entered into by the Grantor relating to the
acquisition, operation, maintenance or use and occupancy of the [Astoria
Bundle/Carr Street Generating Station/NiMo Assets], as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof and of this Agreement and the Credit Agreement (the
agreements described in this subclause (xi), as so amended, supplemented or
modified, being the "Assigned Agreements"), including all rights of the
Grantor (A) to receive moneys due and to become due under or pursuant to
the Assigned Agreements, to compel performance and otherwise to exercise
all remedies thereunder, including all rights to make determinations, to
exercise any election or option contained in such agreements (including
termination thereof), to give or receive any notice or consent, to demand
and receive any property which is the subject of any of the Assigned
Agreements, to file any claims and generally to take any action which (in
the opinion of the Administrative Agent or any Secured Party) may be
necessary or advisable in connection with any of the foregoing, and (B) to
receive the Proceeds of any claim for damages arising out of or for breach
of any Assigned Agreement and Proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Assigned Agreements;
(xii) all commercial tort claims, including those more particularly
described in Schedule 1 hereto;
(xiii) to the extent not included in subclauses (i) through (xii)
above, or excepted therein, all other personal property of the Grantor of
any kind or description whatsoever, wherever located, whether now owned or
hereafter acquired, tangible or intangible [(including those certain barges
listed on Schedule 4 hereto (the "Barges")) Note: Schedule 4 is for the
Astoria Generating Security Agreement only]; and
(xiv) all accessions and additions to, substitutions for, and all
replacements, products and Proceeds of any and all of the Collateral
(including any proceeds which constitute property of the types described in
clauses (i) - (xiii), above) and, to the extent not otherwise included, all
(A) payments under insurance (whether or not the Administrative Agent is
the loss payee thereof or an additional insured thereunder), and any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the Collateral, (B) any other amounts from
time to time paid or payable under or in connection with any of the
Collateral, (C) cash and (D) all supporting obligations (all of the
foregoing items in clauses (ii) - (xiii) above and in this clause (xiv),
collectively, the "Assignment Collateral").
(b) The sale, assignment, conveyance, setting over, pledge and transfer to
the Administrative Agent under this Agreement extends to all Assignment Revenues
which the Grantor may acquire at any time during the continuation of this
Agreement. The security interest
8
of the Administrative Agent held under this Agreement extends to all Assignment
Collateral which the Grantor may acquire at any time during the continuation of
this Agreement.
(c) The Grantor agrees and confirms that the Consents constitute (i) notice
to each party to the Assigned Agreements that are the subject of a Consent of
(x) the sale assignment, conveyance, setting over, pledge and transfer by the
Grantor of the Assignment Revenues and the assignment, charge, conveyance,
setting over, pledge and transfer by the Grantor of all of the Grantor's right,
title and interest in and to the Assignment Revenues and (y) the assignment,
charge, conveyance, setting over, pledge and transfer by the Grantor by way of
security, of all the Grantor's right, title and interest in and to the
Assignment Collateral and (ii) unconditional and irrevocable instructions from
the Grantor to each such party, debtor or obligor that all payments due or to
become due and all amounts payable to the Grantor thereunder shall, until the
Obligations are indefeasibly paid in full in cash, be made directly to the
Revenue Account.
(d) The Assignment Revenues received pursuant to Section 2.01(a)(i) above
shall be applied in accordance with the provisions of the Deposit Account
Agreement.
2.02 Power of Attorney. The Grantor hereby irrevocably appoints the
Administrative Agent as its attorney-in-fact with right of substitution, so that
the Administrative Agent or any other Person empowered by the Administrative
Agent shall be authorized, without need of further authorization from the
Grantor, upon the occurrence and during the continuance of an Event of Default
and in preservation of the rights of the Administrative Agent and the Lenders
hereunder so long as such Event of Default is continuing and has not been waived
by an appropriate vote or other action by the Required Lenders (any action or
exercise of powers, rights or remedies under this Section 2.02 to be subject to,
and in accordance with, the terms of the Credit Agreement and all applicable
Requirements of Law):
(a) to effect the sale of any of the Assignment Collateral in one or
more transactions to the extent permitted by applicable Requirements of Law
and in any commercially reasonable manner as may be determined by the
attorney-in-fact, which, subject to the foregoing, may include the direct
sale without public auction of any such Assignment Collateral at such
price, and upon such terms as may be determined by the attorney-in-fact;
(b) to enter upon any premises where the Assignment Collateral or any
part thereof may be located without the need for a court order or other
form of authority otherwise than upon the authority granted herein;
(c) to take and retain actual possession and control of any such
Assignment Collateral as receivers without bond or otherwise, and transport
any of it to any location as determined by such attorney-in-fact;
(d) to make any repairs, additions and improvements on the Assignment
Collateral as such attorney-in-fact shall reasonably deem proper or
necessary;
(e) to administer, manage and use any of the Assignment Collateral;
9
(f) to conclude any agreement and collect any monies thereunder or
otherwise due to the Grantor in respect of, or generated through the usage
of, any of the Assignment Collateral;
(g) to exercise in any commercially reasonable manner any of the
rights of the Grantor arising under or in connection with the Assigned
Agreements and to designate or delegate to another Person or entity, in
substitution of such attorney-in-fact, the exercise in any commercially
reasonable manner of such rights of the Grantor, under such terms as such
attorney-in-fact shall deem proper or necessary;
(h) to collect, claim and receive all monies and avail of all benefits
that accrue, and that may become due and payable to the Grantor under the
Assigned Agreements and to hold the same as security for the timely payment
and discharge by the Grantor of the Secured Obligations, and the faithful
performance of the covenants and obligations of the Grantor as set forth in
any of the Financing Documents;
(i) to send written notice to all the obligors, instructing any or all
of them to pay all monies due and owing to the Grantor from time to time
under the Assigned Agreements, to the Revenue Account or such other account
as may be required or contemplated by the Deposit Account Agreement;
(j) to institute and maintain such suits and proceedings as such
attorney-in-fact shall deem expedient to prevent any impairment of the
Assignment Collateral or to preserve and protect such attorney-in-fact's
interest therein;
(k) to execute and deliver such deeds of conveyance or sale as may be
necessary or proper for the purpose of conveying full title and ownership,
free from any claims and rights of the Grantor, to any of the Assignment
Collateral, after foreclosure thereof; and
(l) in general, to sign such agreements and documents and perform such
acts and things required, necessary or, in the opinion of such
attorney-in-fact, advisable, to fully accomplish the purpose hereof.
The Grantor hereby confirms and ratifies any and all actions and things
performed or done by the Administrative Agent as the Grantor's attorney-in-fact
or any of its representatives in each case pursuant to the powers granted
hereunder.
This special power of attorney shall be deemed coupled with an interest,
and cannot be revoked by the Grantor until no Lender shall have any Commitment
outstanding and until the Notes, together with interest, and all other
Obligations are indefeasibly paid in full in cash. Upon the occurrence and
during the continuance of any Event of Default, the Grantor shall abstain from
exercising any rights under any of the Assigned Agreements which shall be
inconsistent with the exercise of the rights and functions herein granted to the
Administrative Agent as the attorney-in-fact, including abstaining from
collecting, claiming and receiving any monies under the Assigned Agreements,
provided, that, nothing herein shall prevent the Grantor from, except during the
exercise by the Administrative Agent of any such rights and functions,
10
undertaking the Grantor's operations in the ordinary course of business in
accordance with the Assigned Agreements. To the extent that the Grantor shall
receive any monies in respect thereof, notwithstanding the provisions of this
Section 2.02, the Grantor shall be deemed to have received such funds for the
account of the Administrative Agent and shall hold the same in trust and
promptly pay the same to the Administrative Agent for deposit in the Revenue
Account (or other account as may be required or contemplated by the Deposit
Account Agreement) and application pursuant to the Deposit Account Agreement,
including collecting, claiming and receiving monies under the Assigned
Agreements.
All reasonable costs, expenses, charges and fees paid or incurred by the
Administrative Agent in the exercise of any of the rights, remedies or powers
granted hereunder shall be for the account of the Grantor, and the Grantor
undertakes promptly on demand to pay the same or, as the case may be, to
reimburse the Administrative Agent and/or its agents, representatives,
successors and assignees as the case may be, for any monies paid by it with
interest thereon at the Default Rate from the date the same shall have been paid
by the Administrative Agent and/or its agents, representatives, successors and
assigns until actually paid by the Grantor to the extent that there are then
insufficient funds available in the Revenue Account for this purpose.
Section 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Grantor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement
and the satisfaction of the Secured Obligations, as follows:
3.01 Necessary Filings. As of the Restructuring Effective Date, all
filings, registrations, recordings and control necessary or appropriate to
create, (i) the sale, assignment, conveyance, setting over and transfer of the
Assignment Revenues by the Grantor to the Administrative Agent and (ii) the
security interest granted by the Grantor to the Administrative Agent hereby in
respect of the Assignment Collateral have been made or accomplished, and (A) the
sale, assignment, conveyance, setting over and transfer of the Assignment
Revenues to the Administrative Agent pursuant to this Agreement constitutes a
valid and enforceable sale, assignment, conveyance, setting over and transfer
and (B) the security interest granted to the Administrative Agent pursuant to
this Agreement in and to the Assignment Collateral constitutes a valid,
enforceable, and upon the filing of (1) all Financing Statements in the filing
offices noted on Schedule 3 and (2) if applicable, fully executed Assignments of
Security Interests, substantially in the forms of Exhibits A and B hereto, as
applicable, by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17
U.S.C. ss.ss. 205, as applicable, to perfect the security interests granted to
the Administrative Agent and the Secured Parties in the federally registered
Copyrights, Patents, Trademarks and Licenses, perfected security interest in the
Assignment Revenues and Assignment Collateral (except in each case, for (x)
Assignment Collateral which is not material and (y) vehicles and any emergency
response boat) superior and prior to the rights of all other Persons therein
and, in each case, subject to no other Liens, sales, assignments, conveyances,
settings over or transfers other than Permitted Liens.
11
3.02 No Liens. The Grantor is, as of the Restructuring Effective Date, as
to the Assignment Revenues and Assignment Collateral, and as to any Assignment
Collateral acquired by it from time to time after the date hereof, the Grantor
will be, the owner of all such Assignment Revenues and Assignment Collateral
free from any Lien or other right, title or interest of any Person (other than
Permitted Liens) and the Grantor shall defend such Assignment Revenues and
Assignment Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Administrative Agent.
Without limiting the generality of the foregoing, the Grantor shall not assign,
charge, convey, sell, set over, transfer, or grant any security interest in the
Assigned Agreements, any of the other Assignment Collateral or any of the
Assignment Revenues other than pursuant to the Security Documents or as
expressly permitted by the Credit Agreement.
3.03 Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Assignment Revenues or the Assignment Collateral and so long as any of the
Secured Obligations remain unpaid or any Commitments remain outstanding, the
Grantor will not authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Assignment Revenues or the
Assignment Collateral, in each case, except financing statements filed or to be
filed in respect of and covering the security interests granted hereby, or by
the other Security Documents, by the Grantor or Permitted Liens.
3.04 Jurisdiction of Organization; Chief Executive Office, Records. (a) The
jurisdiction of organization of the Grantor, the exact legal name of the
Grantor, any other names the Grantor has used in the last five years and the
addresses of the Grantor's chief executive office currently and for the last
five years are set forth on Schedule 2 hereto. The Grantor will not change its
name or its jurisdiction of organization or move its chief executive office
except to such new name, jurisdiction or location as may be permitted in
accordance with Section 3.04(b). The originals of all documents evidencing all
Receivables, General Intangibles and Contract Rights of the Grantor and the only
original books of account and records of the Grantor relating thereto are, and
will continue to be, kept at the locations disclosed in Schedule 2, or at such
new locations as the Grantor may establish in accordance with Section 3.04(b).
All Receivables, General Intangibles and Contract Rights of the Grantor are, and
will continue to be, maintained at, and controlled and directed (including for
general accounting purposes) from, such office locations shown above, or such
new locations as the Grantor may establish in accordance with Section 3.04(b).
(b) The Grantor shall not change its name or its jurisdiction of
organization or establish a new location for its offices until (i) it shall have
given to the Administrative Agent not less than thirty (30) days' prior written
notice of its intention so to do, clearly describing such new name, jurisdiction
or location and providing such other information in connection therewith as the
Administrative Agent may reasonably request and (ii) with respect to such new
name, jurisdiction or location, it shall have taken all action, reasonably
satisfactory to the Administrative Agent, to maintain the sale, assignment,
conveyance, setting over and transfer of the Assignment Revenues to the
Administrative Agent and the security interest of the
12
Administrative Agent in the Assignment Collateral intended to be granted hereby
at all times fully perfected, of first priority and in full force and effect.
3.05 Recourse. Without limitation of Section 9.11, this Agreement is made
with full recourse to the Grantor and pursuant to and in reliance upon all the
warranties, representations, covenants and agreements on the part of the Grantor
contained herein, in the Credit Agreement, in any of the other Financing
Documents and otherwise in writing in connection herewith or therewith.
3.06 Consents. (a) No other consent of any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority is required as of the date of the execution and delivery
of this Agreement (i) for the sale, assignment, conveyance, setting over and
transfer of the Assignment Revenues to the Administrative Agent, (ii) for the
grant by the Grantor of the pledge, assignment and security interest granted
hereby with respect to the Assignment Collateral (other than contracts that are
not material or are not Project Contracts) or for the execution, delivery or
performance of this Agreement by the Grantor, (iii) for the perfection or
maintenance of the sale, assignment, conveyance, setting over and transfer
effected hereby with respect to the Assignment Revenues and the pledge,
assignment and security interest created hereby with respect to the Assignment
Collateral (including the first priority nature of such sale, assignment,
conveyance, setting over and transfer by way of security with respect to the
Assignment Revenues and such pledge, assignment and security interest with
respect to the Assignment Collateral) other than the filing of appropriate
financing statements or similar filings in respect of the Assignment Revenues
and Assignment Collateral, in each case, other than contracts that are not
Project Contracts, or (iv) for the exercise by the Administrative Agent of the
rights provided for in this Agreement or the remedies in respect of the
Assignment Revenues and the Assignment Collateral pursuant to this Agreement.
(b) Except as otherwise expressly provided in the Credit Agreement or the
Deposit Account Agreement, the Grantor shall obtain, after the date of the
execution and delivery of this Agreement, such other consents, authorizations,
and approvals and obtain such other actions, and provide such notices to or make
such filings with, any Governmental Authority as may be necessary or reasonably
requested by the Administrative Agent or any Secured Party, after the date of
this Agreement (i) for the sale, assignment conveyance, setting over and
transfer of the Assignment Revenues to the Administrative Agent, (ii) for the
grant by the Grantor of the pledge, assignment and security interest granted
hereby or for the execution, delivery or performance of this Agreement by the
Grantor, (iii) for the perfection or maintenance of the sale, assignment,
conveyance, setting over and transfer effected hereby with respect to the
Assignment Revenues and the pledge, assignment and security interest created
hereby with respect to the Assignment Collateral (including the first priority
nature of such sale, assignment, conveyance, setting over and transfer by way of
security with respect to the Assignment Revenues and such pledge, assignment and
security interest with respect to the Assignment Collateral) or (iv) for the
exercise by the Administrative Agent of the rights, remedies and powers provided
for in this Agreement or the remedies in respect of the Assignment Revenues and
the Assignment Collateral pursuant to this Agreement.
13
(c) Notwithstanding any provision of this Agreement, each of the parties
hereto acknowledges and agrees that (i) any reference to assignment of any
right, title or interest in and to any agreement, contract, Contract Right,
chattel paper, Document, instrument, letter of credit, document, lease,
Governmental Approval or other similar right (collectively "Contract
Collateral"), such assignment shall constitute only a grant of a collateral
security interest and not an absolute assignment of rights under any Contract
Collateral, and (ii) to the extent any grant of a collateral security interest
in and to any Contract Collateral would result in the breach of the instrument,
contract, agreement or other document evidencing or creating such Contract
Collateral security interest shall be deemed to be made subject to obtaining any
required consent and approval under such instrument, contract, agreement or
other document for such grant of a security interest.
3.07 Pledged Permits. Upon the occurrence and during the continuance of an
Event of Default and after notice to the Grantor that the Administrative Agent
intends to exercise remedies pursuant to the Financing Documents, the Grantor
shall, at the request of the Administrative Agent, take such steps requested by
the Administrative Agent that are necessary to assist and cooperate, to the
extent within the Grantor's control using commercially reasonable efforts, in
the transfer of the Pledged Permits to the Administrative Agent or any other
party or parties designated by the Administrative Agent effective upon transfer
of title to the applicable [Astoria Bundle/Carr Street Generating Station/NiMo
Assets] to which such Pledged Permits relate, including the filing of a joint
application by the Grantor with the Administrative Agent or the Administrative
Agent's designees, for the transfer of the Pledged Permits pursuant to 18 C.F.R.
Part 9 or any successor or replacement regulations thereto, all pursuant to and
to the extent permitted by applicable Requirements of Law.
3.08 Barges. The Grantor will not do, or suffer or permit to be done,
anything that will impair the lien of the Secured Parties against the Barges.
Grantor will not document any collateral as a vessel under the flag of the
United States of America without the written consent of the Required Lenders.
Grantor will not operate any Barge outside the navigational limits of the
insurance policy or outside the State of New York without receiving the written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, conditioned or delayed. [Astoria Agreement only.]
3.09 Fixture Locations. Schedule 3 hereto sets forth a true and complete
list of all street addresses where fixtures exist for [the Astoria Bundle/the
Carr Street Generating Station/each of the NiMo Assets].
3.10 Farm Products; Timber; As-Extracted Collateral. As of the
Restructuring Effective Date, none of the Assignment Revenues or the Assignment
Collateral constitutes, or is Proceeds of, farm products, timber to be cut or
as-extracted collateral. If at any time after the Restructuring Effective Date
any of the Assignment Revenues or the Assignment Collateral is farm products,
timber to be cut or as-extracted collateral, in each case with a value in excess
of $500,000 (as reasonably determined by the Grantor), the Grantor shall take
all actions required in accordance with Section 6.02.
14
3.11 Commercial Tort Claims. As to any judgment in respect of any
commercial tort claim having a value in excess of $500,000 of the Grantor which
may arise, the Grantor will notify the Administrative Agent within 45 days of
any such commercial tort claim judgment being entered in favor of the Grantor,
and the Grantor will execute and deliver to the Administrative Agent such
additional security agreements or amendments to this Agreement in form and
substance reasonably satisfactory to the Administrative Agent which identify and
assign, pledge and create a valid, perfected security interest in such judgments
in respect of commercial tort claims of the Grantor as they arise.
3.12 Letters of Credit. The Grantor will deliver to the Administrative
Agent each letter of credit having a stated amount in excess of $500,000 in
which it is the beneficiary thereof, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Administrative Agent. The Grantor will take any
and all actions necessary (or requested by the Administrative Agent), from time
to time, to cause the Administrative Agent to obtain exclusive control of any
letter-of-credit rights which have a value exceeding $500,000 owned by the
Grantor in a manner acceptable to the Administrative Agent.
3.13 Chattel Paper. The Grantor will deliver to the Administrative Agent
all tangible chattel paper having a value in excess of $500,000 duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance reasonably satisfactory to the Administrative Agent. The
Grantor will also deliver to the Administrative Agent all security agreements
securing any such chattel paper and execute UCC financing statement amendments
assigning to the Administrative Agent any UCC financing statements filed by the
Grantor in connection with such security agreements. The Grantor will mark
conspicuously all such chattel paper with a legend, in form and substance
reasonably satisfactory to the Administrative Agent, indicating that such
chattel paper is subject to the security interests created hereunder.
3.14 Bank Accounts. The Grantor shall not maintain any deposit accounts or
securities accounts other than the Accounts.
Section 4. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS.
4.01 Additional Representations and Warranties: As of the time when each
Receivable and General Intangible arises, the Grantor shall be deemed to have
represented and warranted, to the knowledge of the Grantor and unless otherwise
promptly disclosed by the Grantor in writing to the Administrative Agent upon
the Grantor obtaining actual knowledge thereof, that such Receivable or General
Intangible, as the case may be, and all records, papers and documents relating
thereto (if any) are genuine and in all respects what they purport to be, and
that all records, papers and documents (if any) relating thereto (i) will
represent the genuine, legal, valid and binding obligation of the account debtor
evidencing indebtedness unpaid and owed by the respective account debtor arising
out of the performance of labor or services or the sale or lease and delivery of
electricity or capacity, or any other merchandise listed therein, or both, and
(ii) are in compliance and will conform with all Requirements of Law, except to
the
15
extent that the failure to comply or conform therewith could not reasonably be
expected to have a Material Adverse Effect.
4.02 Maintenance of Records. The Grantor will keep and maintain at its own
cost and expense records consistent with GAAP of the Assigned Agreements and the
Receivables, including the originals of all documentation (including each
Assigned Agreement) with respect thereto, records of all payments received, all
credits granted thereon, but subject in each case to customary record retention
policies, and all other dealings therewith. The Grantor will make the same
available to the Administrative Agent for inspection pursuant to Section 5.08 of
the Credit Agreement.
4.03 Payments Under Assigned Agreements, Receivables and General
Intangibles. (a) Non-Payment to the Administrative Agent. If the Grantor shall
receive payment directly from any party to an Assigned Agreement (including any
letter of credit issued for the benefit of the Grantor in accordance with the
terms thereof) or from any account debtor or other obligor under any Receivable,
General Intangible or any other payments under such Assigned Agreements,
Receivables and General Intangibles, the Grantor shall receive such payments in
a constructive trust for the benefit of the Lenders, shall segregate such
payments from such party's other funds, and shall promptly transmit and deliver
such payments to the Administrative Agent in the same form as so received (with
any necessary endorsement).
(b) Application of Funds. All amounts received by the Administrative Agent
pursuant to this Section 4.03 or Section 4.04 shall be deposited into the
Revenue Account and applied as set forth in the Deposit Account Agreement.
4.04 Direction to Account Debtors; Contracting Parties; etc. The Grantor
agrees that the Administrative Agent may, upon reasonable notice to the Grantor
of its failure to do so, directly notify the obligors with respect to any
Receivables, General Intangibles and/or under any Assigned Agreements to make
payments with respect thereto as provided in Sections 2.01(c) and 4.03. Upon the
occurrence and during the continuance of any Event of Default, the
Administrative Agent may apply, without notice to or assent by the Grantor, any
or all amounts then in, or thereafter deposited in, the Accounts in the manner
provided in the Deposit Account Agreement. The reasonable costs and expenses
(including reasonable attorneys' fees) of collection, whether incurred by the
Grantor or the Administrative Agent, shall be borne by the Grantor.
4.05 Modification of Terms, etc. Except as otherwise provided in the Credit
Agreement or as permitted in Section 4.06 hereof, (a) the Grantor shall not
rescind or cancel any Indebtedness in any fiscal year in an amount, in the
aggregate, in excess of $500,000 for borrowed money, or modify in any manner
adverse to the Grantor or the Secured Parties any material term thereof, or make
any adjustment materially adverse to the Grantor or the Secured Parties with
respect thereto, or grant any extension for performance of the same, or
compromise or settle any dispute, claim, suit or legal proceeding relating
thereto, or sell any Receivable, General Intangible or Assigned Agreements, or
interest therein, without the prior written consent of the Administrative Agent,
which consent the Administrative Agent will not unreasonably withhold, delay or
condition, and (b) the Grantor will duly fulfill all material obligations on its
16
part to be fulfilled under or in connection with the Receivables, the General
Intangibles and the Assigned Agreements and will do nothing to impair the
security interests of the Administrative Agent (including the creation,
attachment and priority thereof) in the Receivables, the General Intangibles or
the Assigned Agreements.
4.06 Collection. The Grantor shall endeavor to cause to be collected from
the account debtor named in the Grantor's Receivables and General Intangibles or
obligor under any Assigned Agreements, and paid by such account debtor directly
to the Revenue Account, as and when due (including amounts which are delinquent,
such amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable, General Intangible or Assigned Agreements, and apply promptly upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Receivable, General Intangible or under such Assigned Agreements, except
that, unless an Event of Default shall have occurred and be continuing (and
shall not have been waived by an appropriate vote or other action by the
Required Lenders in accordance with Section 9.02 of the Credit Agreement), the
Grantor may allow in the ordinary course of business as adjustments to amounts
owing under the Grantor's Receivables, General Intangibles and Assigned
Agreements an extension or renewal of the time or times of payment, or
settlement adjustment, release, compromise, settlement or other similar action
for less than the total unpaid balance, which the Grantor finds appropriate to
enhance collectibility in accordance with sound business judgment. The
reasonable costs and expenses (including reasonable attorneys fees) of
collection, whether incurred by the Grantor or the Administrative Agent, shall
be borne by the Grantor.
Section 5. SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND
TRADEMARKS.
5.01 Infringements. Within ten (10) Business Days after a Responsible
Officer of the Borrower obtains actual knowledge thereof, the Grantor shall
notify the Administrative Agent and the Lenders in writing of all pertinent
details available to it, with respect to any infringement or other violation of
the Grantor's rights in, or any claim of any such infringement of, any, Patent,
Copyright or Trademark, whether or not such right is presently held by the
Grantor or third party. As to each such instance, absent the Required Lenders'
authorization to proceed otherwise (as required pursuant to Section 9.02 of the
Credit Agreement), which authorization shall not be unreasonably withheld,
delayed or conditioned, and to the extent permitted by applicable Requirements
of Law, the Grantor shall use commercially reasonable efforts to pursue a
remedy.
5.02 Other Patents, Copyrights and Trademarks. If the Grantor hereafter
acquires rights in any Patent, Copyright or Trademark, the Grantor shall deliver
to the Administrative Agent and the Lenders within 60 days, a copy of such
Patent, Copyright or Trademark and a first priority perfected security interest
therein or a collateral assignment thereof, as appropriate.
5.03 Remedies. If an Event of Default shall occur and be continuing (and
shall not have been waived by an appropriate vote or other action as required
pursuant to Section 9.02 of the Credit Agreement), the Administrative Agent,
acting pursuant to and in accordance with
17
the terms of the Deposit Account Agreement, the other Financing Documents and
applicable Requirements of Law may (a) declare the entire right, title, and
interest of the Grantor in any Patents, Copyrights and Trademarks vested in the
Administrative Agent, in which event such right, title, and interest immediately
shall vest in the Administrative Agent; and (b) take and practice or use or sell
any or all of such Patents, Copyrights or Trademarks, or take and use or sell
the Grantor's rights in such Patents, Copyrights or Trademarks, along with the
goodwill and all other elements of the Grantor's ongoing business symbolized by
such assets and secured under this Agreement, and the right to carry on the
business of the Grantor in connection with which such assets have been used. The
Grantor shall execute any other and further documents which the Administrative
Agent may request further to confirm the foregoing and to transfer to the
Administrative Agent ownership of the Grantor's rights to such Trademarks,
Patents and/or Copyrights.
Section 6. PROVISIONS CONCERNING ALL ASSIGNMENT REVENUES AND ASSIGNMENT
COLLATERAL; INSURANCE.
6.01 Protection of the Administrative Agent's Interests. The Grantor will
do nothing to impair the rights of the Administrative Agent or the Lenders in
the Assignment Revenues and the Assignment Collateral, provided, however, that
nothing herein shall prevent the Grantor, prior to the exercise by the
Administrative Agent of any such rights, from undertaking the Grantor's
operations in the ordinary course of business in accordance with the Assigned
Agreements. The Grantor assumes all liability and responsibility in connection
with the Assignment Revenues and the Assignment Collateral and the liability of
the Grantor with respect to the Secured Obligations shall in no way be affected
or diminished by reason of the fact that such Assignment Revenues and Assignment
Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever
unavailable to the Grantor.
6.02 Further Actions. The Grantor will, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Administrative Agent and the
Lenders from time to time such lists, descriptions and designations of the
Assignment Revenues and the Assignment Collateral, warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title, bailee
and warehousemen acknowledgements, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps, relating to the Assignment Revenues and the Assignment
Collateral and other property or rights covered by the interests hereby granted,
which is necessary to perfect, preserve or protect its ownership and security
interests in the Assignment Revenues and the Assignment Collateral, or
as-extracted collateral, through filing, possession, control or otherwise or is
otherwise reasonably requested by the Administrative Agent; provided, that the
foregoing shall not require the Grantor to obtain any Additional Contract
Consent except as reasonably requested by the Administrative Agent, and, to the
extent so requested, the Grantor shall use commercially reasonable efforts to
obtain such Additional Contract Consent.
6.03 Financing Statements. The Grantor agrees to execute and deliver to the
Administrative Agent, on behalf of the Lenders, financing statements,
continuation statements, amendments thereto, filings with the United States
Patent and Trademark Office or United States
18
Copyright Office (or any successor office or any similar office in any other
country) or similar statements or instruments of registration under the law of
any jurisdiction, in form reasonably acceptable to the Administrative Agent, as
it may from time to time reasonably request or as are necessary or desirable in
its reasonable opinion to establish, maintain, perfect, continue, enforce or
protect the security interests contemplated hereunder as valid, enforceable,
first priority security interests as provided herein and the other rights and
security contemplated herein, all in accordance with the UCC as enacted in any
and all relevant jurisdictions or any other applicable Requirement of Law. The
Grantor authorizes the Administrative Agent to authenticate and file any such
financing statements without the signature of the Grantor and naming the Grantor
as debtor and the Administrative Agent as secured party. The Grantor will pay
any applicable filing fees and related expenses under this Section 6.03. Unless
specifically permitted under applicable Requirements of Law, the Grantor shall
not file any amendments or terminations of financing statements filed to
establish and maintain the security interests contemplated hereunder without the
Administrative Agent's authorization, and any such filing made without the
Administrative Agent's authorization, is ineffective.
Section 7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
7.01 Remedies; Obtaining the Assignment Collateral Upon Default. The
Grantor agrees that, if any Event of Default shall have occurred and be
continuing (and shall not have been waived by an appropriate vote or other
action by the Required Lenders), then and in every such case, subject to the
terms and provisions of the Credit Agreement and any applicable Requirement of
Law then in effect, the Administrative Agent, in addition to any rights now or
hereafter existing under any applicable Requirement of Law, shall have all
rights as a secured creditor under the UCC or any other applicable Requirement
of Law in all relevant jurisdictions and may, acting pursuant to and in
accordance with the terms of the Credit Agreement:
(a) personally, or by agents or attorneys, immediately retake
possession of the Assignment Collateral or any part thereof, from the
Grantor or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may enter
upon the Grantor's premises where any of the Assignment Collateral is
located and remove the same and use in connection with such removal any and
all services, supplies, aids and other facilities of the Grantor; and
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including any other Assigned Agreement, the General
Intangibles and the Receivables) constituting the Assignment Revenues and
Assignment Collateral to make any payment required by the terms of such
instrument or agreement directly to the Administrative Agent for deposit in
the Revenue Account (or any other account required or contemplated by the
Deposit Account Agreement) and application pursuant to the Deposit Account
Agreement; and
(c) apply all monies, securities and instruments in the Revenue
Account, and each other Account, in accordance with the Deposit Account
Agreement; and
19
(d) sell, assign or otherwise liquidate, or direct the Grantor to
sell, assign or otherwise liquidate, any or all of the Assignment
Collateral or any part thereof, and take possession of the proceeds of any
such sale or liquidation for deposit in the Revenue Account (or any other
account required or contemplated by the Deposit Account Agreement) and
application pursuant to the Deposit Account Agreement; and
(e) take possession of the Assignment Collateral or any part thereof,
by directing the Grantor in writing to deliver the same to the
Administrative Agent at any place or places designated by the
Administrative Agent, in which event the Grantor shall at its own expense:
(i) forthwith cause the same to be moved to the place or places
so designated by the Administrative Agent and there delivered to the
Administrative Agent,
(ii) store and keep any Assignment Collateral so delivered to the
Administrative Agent (to the extent not physically delivered to the
Administrative Agent) at such place or places pending further action
by the Administrative Agent as provided in Section 7.02, and
(iii) while such Assignment Collateral shall be so stored and
kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in
good condition;
it being understood that the Grantor's obligation to so deliver the
Assignment Collateral is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction, the
Administrative Agent shall be entitled to a decree requiring specific
performance by the Grantor of such obligation.
7.02 Remedies, Disposition of the Assignment Collateral. Any Assignment
Collateral repossessed by the Administrative Agent under or pursuant to Section
7.01, and any other Assignment Collateral whether or not so repossessed by the
Administrative Agent, may be sold, assigned, leased or otherwise disposed of
under one or more contracts or as an entirety, and without the necessity of
gathering at the place of sale the property to be sold, and in general in such
manner, at such time or times, at such place or places and on such terms as the
Administrative Agent, acting in good faith, may, upon written direction in
compliance with any applicable Requirement of Law, determine to be commercially
reasonable. Subject to the foregoing, any of the Assignment Collateral may be
sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Administrative Agent or after any overhaul or repair
which the Administrative Agent, acting in good faith, shall determine to be
commercially reasonable. Any such disposition which shall be a private sale or
other private proceeding permitted by such requirements shall be made upon not
less than 10 days' written notice to the Grantor (except that, if the
Administrative Agent shall determine, in its sole discretion, that any of the
Collateral threatens to decline quickly in value or to become worthless, any
such sale may be made upon three days' notice to the Grantor) specifying the
time at which such disposition is to be made and the intended sale price or
other consideration therefor, and
20
shall be subject, for the 10 days after the giving of such notice, to
the right of the Grantor or any nominee of the Grantor to acquire the
Assignment Collateral involved at a price or for such other consideration
at least equal to the intended sale price or other consideration so
specified. To the extent permitted by applicable Requirements of Law, the
Administrative Agent on behalf of the Lenders may bid for and become the
purchaser of the Assignment Collateral or any item thereof, offered for
sale in accordance with this Section 7.02. If, under mandatory requirements
of any applicable Requirement of Law, the Administrative Agent shall be
required to make disposition of the Assignment Collateral within a period
of time which does not permit the giving of notice to the Grantor as
hereinabove specified, the Administrative Agent need give the Grantor only
such notice of disposition as shall be reasonably practicable in view of
such mandatory requirements of any applicable Requirement of Law.
The Grantor hereby irrevocably appoints the Administrative Agent as its
attorney-in-fact, so that the Administrative Agent, or any Person empowered by
the Administrative Agent, shall, during the continuance of an Event of Default,
be authorized to sell, assign, lease or otherwise dispose of the Assignment
Collateral or any part thereof pursuant to the provisions of the preceding
paragraph, and, in general, to do or cause to be done all such acts and things
which are otherwise required to be done by the Grantor under this Agreement.
7.03 Waiver of Claims. Except as otherwise provided in this Agreement or in
any other Financing Document, THE GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE REQUIREMENTS OF LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE ADMINISTRATIVE AGENT TAKING POSSESSION OR THE ADMINISTRATIVE AGENT'S
DISPOSITION OF ANY OF THE ASSIGNMENT COLLATERAL, IN EACH CASE AS PERMITTED BY
APPLICABLE REQUIREMENTS OF LAW, INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE GRANTOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR ANY POLITICAL SUBDIVISION OF ANY SUCH JURISDICTION, and the Grantor hereby
further waives, to the extent permitted by applicable Requirements of Law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the gross negligence or willful
misconduct of the Administrative Agent, any Lender, or any Person acting on
its behalf or instruction;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Administrative
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
Requirement of Law in order to prevent or delay the enforcement of this
Agreement (including any right to claim that such enforcement should be
stayed pending the outcome of any other action or proceeding (including any
arbitration proceeding)) or the absolute sale of the Assignment Collateral
or any portion thereof, and the Grantor, for itself and all who may claim
under
21
it, insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such applicable Requirements of Law.
To the extent permitted under applicable Requirements of Law, any sale of, or
the grant of options to purchase, or any other realization upon, any Assignment
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the Grantor therein and thereto, and shall be a
perpetual bar both at law and in equity against the Grantor and against any and
all Persons claiming or attempting to claim the Assignment Collateral so sold,
optioned or realized upon, or any part thereof, from, through and under the
Grantor.
7.04 Application of Proceeds. Notwithstanding any other provision of this
Agreement, all payments made under or in connection with this Agreement, and all
moneys collected by the Administrative Agent upon any sale or other disposition
of the Collateral pursuant to this Agreement, including Sections 7.01 and 7.02
shall be applied in accordance with the Financing Documents, including that any
proceeds of Collateral which remains after payment in full in cash of the
Obligations will be paid to the Collateral Agent for the benefit of the OPMW
Secured Parties for distribution pursuant to the Intercreditor Agreement and the
OPMW Second Lien Documents, and such proceeds shall constitute proceeds under
the OPMW Second Lien Documents. For the avoidance of doubt, it is understood
that the Grantor shall remain liable to the extent of any deficiency between the
amount of the Proceeds of the Assignment Collateral and the aggregate amount of
the Secured Obligations.
7.05 Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Financing Document and no course of dealing between
the Grantor and the Administrative Agent or any Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Financing Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent or any Lender would
otherwise have. No notice to or demand on the Grantor in any case shall entitle
the Grantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or any Lender to any other or further action in any circumstances without notice
or demand.
7.06 Discontinuance of Proceedings. In case the Administrative Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Administrative Agent, then and in every such case the Grantor,
the Administrative Agent and each holder of any of the Obligations shall be
restored to their former positions and rights hereunder with respect to the
Assignment Collateral subject to the security interest created under this
Agreement, and all rights, remedies and powers of the Administrative Agent shall
continue as if no such proceeding had been instituted.
22
7.07 Grant of License or Sub-License to Use Patent, Trademark, Copyright
and License Collateral. For the purpose of enabling the Administrative Agent to
exercise rights and remedies under this Article VII at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, the Grantor hereby grants to the Administrative Agent an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Grantor) to use, license or sub-license any Patent,
Trademark, Copyright or License (to the extent the Grantor has authority to
sub-license any such License) now owned or licensed or hereafter acquired or
licensed by the Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license or sub-license by the
Administrative Agent shall be exercised, at the option of the Administrative
Agent, only upon the occurrence and during the continuation of an Event of
Default; provided that any license, sub-license or other transaction entered
into by the Administrative Agent while such Event of Default was continuing in
accordance herewith shall be binding upon the Grantor notwithstanding any
subsequent cure of an Event of Default. The Administrative Agent agrees to apply
the net Proceeds received from any such license as provided in Section 7.04
hereof.
Section 8. INDEMNITY; EXPENSES.
(a) The Grantor agrees to indemnify and hold harmless the Administrative
Agent and each Secured Party from and against any and all claims, losses and
liabilities arising out of or resulting from the Collateral or the Grantor's
pledge and assignment under this Agreement (including enforcement against the
Grantor of this Agreement), except claims, losses or liabilities resulting from
the gross negligence or willful misconduct of any Secured Party or any other
Person designated by any Secured Party to act on its behalf pursuant to this
Agreement.
(b) The Grantor will upon demand pay to the Administrative Agent or any
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Administrative Agent or any Secured Party may incur in connection with (i)
the administration of this Agreement, (ii) the sale of, collection from, or
other realization upon, any of the Collateral of the Grantor, (iii) the exercise
or enforcement (whether through negotiations, legal proceedings or otherwise) of
any of the rights of the Administrative Agent or any Secured Party hereunder
against the Grantor or (iv) the failure by the Grantor to perform or observe any
of the provisions hereof.
Section 9. MISCELLANEOUS.
9.01 Notices. All notices hereunder, unless otherwise specified, shall be
given in the manner provided for in Section 9.01 of the Credit Agreement.
Promptly after the execution of any and all material amendments, supplements and
waivers, of and to the Assignment Revenues or Assignment Collateral, originals,
if reasonably available and, if not, copies of such amendments, supplements and
waivers shall be delivered to the Administrative Agent.
23
9.02 Waiver, Amendment; Severability. No amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be
undertaken and accomplished in accordance with the requirements of Section 9.02
of the Credit Agreement. No delay on the part of any Secured Party in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial waiver by such Secured Party of any right, power or
remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy. In case any provision hereof shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations of such provision or obligation in
any other jurisdiction shall not in any way be affected or impaired thereby.
9.03 Obligations Absolute. To the extent permitted by applicable
Requirements of Law, the obligations of the Grantor under this Agreement are
independent of the Secured Obligations, and a separate action or actions may be
brought and prosecuted against the Grantor to enforce this Agreement,
irrespective of whether any action is brought against the Borrower, any other
pledgor or any guarantor of the Secured Obligations or whether the Borrower, any
other pledgor or any guarantor of the Secured Obligations is joined in any such
action or actions. All rights of the Administrative Agent and the assignment,
hypothecation and security interest hereunder, and all obligations of the
Grantor hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the Credit
Agreement, any other Financing Document or any other agreement or instrument
relating to any thereof, the absence of any action to enforce the same, any
release of the Grantor or any other Credit Party, the recovery of any judgment
against the Grantor or any other Credit Party, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Grantor;
(b) any occurrence or condition whatsoever, including (i) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of,
or any change in, any of the obligations of the Grantor or any other Credit
Party contained in this Agreement, the Credit Agreement or any other Financing
Document, (ii) any impairment, modification, release or limitation of the
liability of the Grantor or any other Credit Party or any of their estates in
bankruptcy, or any remedy for the enforcement thereof, resulting from the
operation of any present or future provision of any applicable bankruptcy law,
as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by the Grantor, the Administrative Agent or any other
Secured Party of any rights or remedies, (iv) the assignment or the purported
assignment of any property as security for the Secured Obligations, including
all or any part of the rights of the Grantor under this Agreement, (v) the
extension of the time for payment by the Grantor or any other Credit Party or
any other guarantor of any payments or other sums or any part thereof owing or
payable under any of the terms and provisions of any Financing Document or of
the time for performance by the Grantor or any other Credit Party of any other
obligations under or arising out of any terms or provisions or the extension of
the renewal of any thereof, (vi) the modification or amendment (whether material
or otherwise) of any duty, agreement or obligation of the Grantor or any other
Credit Party set forth in any Financing Document, (vii) the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially
24
all of the assets, marshalling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar proceeding
affecting the Grantor or any other Credit Party or any of their respective
assets, or the disaffirmancy of this Agreement or any Financing Document in any
such proceeding, (viii) the release or discharge of the Grantor or any other
Credit Party from the performance or observance of any agreement, covenant, term
or condition contained in any of such instruments by operation of law, (ix) the
unenforceability of this Agreement or any Financing Document or (x) any other
circumstance which might otherwise constitute a legal or equitable discharge of
a surety or guarantor; or
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Secured Obligations.
9.04 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto and shall inure to the benefit of the Lenders; provided,
however, that the Grantor may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each of the Lenders. Any Lender may transfer, assign or grant all or
such relevant part of its rights hereunder in connection with an assignment or
transfer of all or any part of its interest in its Loans in accordance with the
provisions of the Credit Agreement, and such assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein or
otherwise. All agreements, statements, representations and warranties made by
the Grantor herein or in any certificate or other instrument delivered by the
Grantor or on its behalf under this Agreement shall be considered to have been
relied upon by the Lenders and shall survive the execution and delivery of this
Agreement, the Credit Agreement and the other Financing Documents regardless of
any investigation made by the Lenders or on their behalf.
9.05 Headings Descriptive, etc. The headings of the several sections and
subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
9.06 Governing Law; Submission to Jurisdiction and Venue. (a) THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK OTHER THAN ANY SUCH REQUIREMENT OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION ARE MANDATORILY APPLICABLE AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE GRANTOR AND EACH SECURED PARTY IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT,
25
EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW
YORK.
(b) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH, THE GRANTOR AND EACH SECURED
PARTY AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE GRANTOR AND EACH
SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. THE GRANTOR WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE GRANTOR AGREES THAT ANY SECURED PARTY SHALL HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE REQUIREMENT OF LAW, TO PROCEED AGAINST THE
GRANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE ANY SECURED PARTY TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY SECURED PARTY. THE GRANTOR
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY
SECURED PARTY HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(d) THE GRANTOR AND THE SECURED PARTIES EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(e) THE GRANTOR HEREBY IRREVOCABLY DESIGNATES NATIONAL REGISTERED AGENTS,
INC., WITH AN ADDRESS AT 875 AVENUE OF THE AMERICAS, SUITE 501, NEW YORK, NEW
YORK 10001 AS THE DESIGNEE, APPOINTEE AND AGENT OF THE GRANTOR TO RECEIVE FOR
AND ON BEHALF OF THE GRANTOR SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENTS RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE GRANTOR AT ITS ADDRESS
SET FORTH IN ACCORDANCE WITH
26
SECTION 9.01. THE GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE GRANTOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE ON THE DATE OF
RECEIPT THEREOF.
(f) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT (i) TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (ii) TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE AGAINST ANY PARTY IN ANY OTHER
JURISDICTION, IN EITHER CASE, SOLELY AS PERMITTED IN SUBSECTION (c) OF THIS
SECTION 9.06.
9.07 The Grantor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that the Grantor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Assignment Revenues or the Assignment Collateral and the Administrative Agent
and the Lenders shall have no obligations or liabilities (except obligations or
liabilities resulting from the gross negligence or willful misconduct of the
Administrative Agent and the Lenders) with respect to any Assignment Revenues or
Assignment Collateral by reason of or arising out of or in connection with this
Agreement, nor shall the Administrative Agent or the Lenders be required or
obligated in any manner to perform or fulfill any of the obligations of the
Grantor under or with respect to any Assignment Revenues or Assignment
Collateral.
9.08 Termination; Release. This Agreement shall create a continuing pledge,
assignment of hypothecation of and security interest in the Collateral and shall
remain in full force and effect until no Lender shall have any Commitment
outstanding and until the Notes, together with interest, and all other secured
obligations are indefeasibly paid in full in cash. This Agreement shall
terminate when all Secured Obligations have been indefeasibly paid in full in
cash and all Commitments have been terminated, and the Administrative Agent, at
the written request and expense of the Grantor, will promptly authorize, execute
and deliver, as applicable, to the Grantor the proper instruments (which may
include Uniform Commercial Code termination statements on form UCC-3)
acknowledging the termination of this Agreement, and will promptly duly assign,
transfer and deliver (without recourse and without any representation or
warranty) free from any interest of the Administrative Agent or Lien granted
hereunder such of the Assignment Revenues or Assignment Collateral as may be in
possession of the Administrative Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, in accordance with the
Intercreditor Agreement or, if the OPMW Second Lien Documents shall have been
terminated pursuant to the terms thereof, to the Grantor together with such
notices to third parties as may be necessary to countermand any notices
previously sent to them pursuant hereto.
9.09 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
27
9.10 Applicability of Deposit Account Agreement. In amplification of, and
notwithstanding any other provisions of this Agreement, in connection with its
obligations hereunder, the Administrative Agent shall have all of the rights,
powers, privileges, exculpations, protections and indemnities as are provided
for or referred to in the Deposit Account Agreement.
9.11 Limitation of Recourse. The obligations of the Grantor hereunder are
obligations solely of the Grantor and shall not constitute a debt or obligation
of any direct or indirect, partner, shareholder or other equity owner of the
Grantor or any of their respective directors, officers, agents or employees
(each such Person, a "Non-Recourse Party"). No Non-Recourse Party shall be
liable for any amount payable by the Grantor under this Agreement and the
Secured Parties shall not seek a money judgment or deficiency or personal
judgment against any Non-Recourse Party for payment of the indebtedness payable
by the Grantor evidenced by this Agreement. No property or assets of any
Non-Recourse Party, other than as contemplated in the Financing Documents, shall
be sold, levied upon or otherwise used to satisfy any judgment rendered in
connection with any action brought against the Grantor with respect to this
Agreement or the other Financing Documents. The foregoing acknowledgments,
agreements and waivers shall be enforceable by any Non-Recourse Party.
Notwithstanding the foregoing, nothing in this Section shall limit or affect or
be construed to limit or affect the obligations and liabilities of any Credit
Party or any other Non-Recourse Party (a) in accordance with the terms of any
Transaction Document creating such liabilities and obligations to which such
Credit Party or Non-Recourse Party is a party, (b) arising from liability
pursuant to any applicable Requirement of Law for such Credit Party's or such
Non-Recourse Party's fraudulent actions, knowing misrepresentations or willful
misconduct or (c) with respect to amounts distributed to it in violation of
Section 6.10 of the Credit Agreement.
9.12 Amendment and Restatement. This Agreement is an amendment and
restatement of the Assignment and Security Agreement, dated as of July 28, 1999
(the "Original Agreement") between the Grantor and the Administrative Agent. It
is the intention of the parties that this Agreement amend, restate, extend and
renew the terms and conditions of the Original Agreement and the liens and
security interests created thereby, and is not intended to be a novation or
discharge of the obligations of the Grantor thereunder or the liens and security
interests created thereby. The liens and security interests of the Original
Agreement are hereby ratified, confirmed, renewed, extended, and brought forward
in full force and effect as security for the Obligations.
[Remainder of page intentionally left blank.]
28
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
GRANTOR:
[ASTORIA GENERATING COMPANY, L.P./
CARR STREET GENERATING STATION, L.P./
ERIE BOULEVARD HYDROPOWER, L.P.]
By: Orion Power New York GP, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
Address: 1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President -
Finance
Telephone: (713) 207-3160
Telecopy: (713) 207-0988
With a copy to:
Address: 1111 Louisiana Street
Houston, TX 77022
Attn: General Counsel
Telephone: (713) 207-7265
Telecopy: (713) 393-0140
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as Administrative Agent,
By:
------------------------------------
Name:
Title:
Address: 101 North Tryon Street
NC1-001-08-19
Charlotte, NC 28255
Attn: Laura S. Ryan
Telecopy: (704) 386-3324
EXHIBIT N-1-A
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
AMENDED AND RESTATED MORTGAGE, SECURITY
AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF
LEASES AND RENTS
(COLLATERAL IS OR INCLUDES FIXTURES)
DATED AS OF OCTOBER 28, 2002
FROM
ASTORIA GENERATING COMPANY, L.P.,
MORTGAGOR
TO
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
FOR THE BENEFIT OF THE SECURED PARTIES,
MORTGAGEE
BOROUGH OF BROOKLYN, COUNTY OF KINGS, CITY AND STATE OF NEW YORK
BOROUGH AND COUNTY OF QUEENS, CITY AND STATE OF NEW YORK
THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED OR TO
BE IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT
MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH DWELLING UNIT HAVING ITS
OWN SEPARATE COOKING FACILITIES.
- --------------------------------------------------------------------------------
Record and return to:
McGuireWoods LLP
Bank of America Corporate Center
100 North Tryon Street
Suite 2900
Charlotte, NC 28202
Attn: Marvin L. Rogers
TABLE OF CONTENTS
Article Section Page
Article I. OBLIGATIONS AND THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR.........................7
SECTION 1.01 Obligations..................................................................................7
SECTION 1.02 Continuing Security..........................................................................7
SECTION 1.03 Maximum Secured Amount.......................................................................8
Article II. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR................................................8
SECTION 2.01 Title........................................................................................8
SECTION 2.02 Credit Agreement.............................................................................9
SECTION 2.03 Payment of Taxes, Liens and Charges.........................................................10
SECTION 2.04 Payment of Closing Costs....................................................................11
SECTION 2.05 Maintenance and Operations; Plans; Use......................................................11
SECTION 2.06 Insurance...................................................................................12
SECTION 2.07 New York Insurance Waiver...................................................................12
SECTION 2.08 [INTENTIONALLY OMITTED.]....................................................................12
SECTION 2.09 Assignment of Leases and Rents..............................................................12
SECTION 2.10 Restrictions on Transfers and Encumbrances..................................................12
SECTION 2.11 Security Agreement..........................................................................12
SECTION 2.12 Filing and Recording........................................................................13
SECTION 2.13 Mortgage of Definite Amount.................................................................14
SECTION 2.14 Trust Fund..................................................................................14
SECTION 2.15 Further Assurances..........................................................................14
SECTION 2.16 Additions to Mortgaged Property.............................................................15
SECTION 2.17 No Claims Against the Mortgagee.............................................................15
SECTION 2.18 Change in Tax Law...........................................................................15
SECTION 2.19 Survey of Mortgaged Property................................................................16
SECTION 2.20 Contract Collateral.........................................................................16
Article III. DEFAULTS AND REMEDIES...............................................................................16
SECTION 3.01 Events of Default...........................................................................16
SECTION 3.02 Demand for Payment..........................................................................16
SECTION 3.03 Rights to Take Possession, Operate and Apply Revenues.......................................17
SECTION 3.04 Right to Cure the Mortgagor's Failure to Perform............................................18
SECTION 3.05 Right to a Receiver.........................................................................18
SECTION 3.06 Foreclosure and Sale........................................................................19
SECTION 3.07 Other Remedies..............................................................................20
SECTION 3.08 Application of Sale Proceeds and Rents......................................................21
SECTION 3.09 The Mortgagor as Tenant Holding Over........................................................21
SECTION 3.10 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws.........................................................................21
i
Article Section Page
SECTION 3.11 Discontinuance of Proceedings...............................................................22
SECTION 3.12 Suits to Protect the Mortgaged Property.....................................................22
SECTION 3.13 Filing Proofs of Claim......................................................................22
SECTION 3.14 Possession by the Mortgagee.................................................................22
SECTION 3.15 Waiver......................................................................................22
SECTION 3.16 Remedies Cumulative.........................................................................23
Article IV. MISCELLANEOUS........................................................................................24
SECTION 4.01 Partial Invalidity..........................................................................24
SECTION 4.02 Notices.....................................................................................24
SECTION 4.03 Successors and Assigns......................................................................24
SECTION 4.04 Counterparts................................................................................24
SECTION 4.05 Satisfaction and Cancellation...............................................................24
SECTION 4.06 Definitions.................................................................................25
SECTION 4.07 Other Financing Documents...................................................................25
SECTION 4.08 Subrogation.................................................................................26
SECTION 4.09 Mortgagee Powers............................................................................26
SECTION 4.10 Enforceability of Mortgage..................................................................26
SECTION 4.11 Amendments..................................................................................27
SECTION 4.12 Applicable Law..............................................................................27
SECTION 4.13 Limitation of Recourse......................................................................27
SECTION 4.14 Amendment and Restatement...................................................................27
AMENDED AND RESTATED
MORTGAGE, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT
OF LEASES AND RENTS
THIS AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING
AND ASSIGNMENT OF LEASES AND RENTS dated as of October 28, 2002 (this
"Mortgage"), is made by ASTORIA GENERATING COMPANY, L.P., a Delaware limited
partnership, having an office at 225 Greenfield Parkway, Suite 201, Liverpool,
NY 13008 (the "Mortgagor"), to BANK OF AMERICA, N.A., as Administrative Agent
for the benefit of the Secured Parties referred to in the Credit Agreement (as
defined below), having an office at 101 North Tryon Street, NC1-001-08-19,
Charlotte, NC 28255 (in such capacity, together with its successors, substitutes
and assigns, the "Mortgagee").
RECITALS:
A. Reference is hereby made, for all purposes, to (i) that certain
Amended and Restated Credit Agreement dated as of October 28, 2002 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among Orion Power New York, L.P., a Delaware limited
partnership, as borrower ("Borrower"), Banc of America Securities LLC and BNP
Paribas, as Lead Arrangers and Joint Book Runners, each other financial
institution which is a signatory thereto or which may hereafter become an
assignee pursuant to Section 9.06 of the Credit Agreement (each, a "Lender" and
collectively the "Lenders"), Bank of America, N.A., as Issuing Bank, and the
Mortgagee, as Issuing Bank and Administrative Agent, Union Bank of California,
N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
Documentation Agents and BNP Paribas, as Syndication Agent, (ii) that certain
Guarantee Agreement dated October 28, 2002 from the Mortgagor in favor of the
Mortgagee (the "Guarantee") and (iii) all other documents and instruments that
are collectively defined as the "Financing Documents" in the Credit Agreement.
All capitalized terms not expressly defined in this Mortgage shall have the
meaning given to them and shall be subject to the rules of construction set
forth in the Credit Agreement. Pursuant to the Credit Agreement, the Acquisition
Lenders have extended, upon the terms and subject to the conditions of the
Credit Agreement, credit to Borrower in the aggregate principal amount of up to
$352,549,541.00 in the form of Acquisition Loans, as evidenced by promissory
notes having a final maturity date of no later than October 28, 2005 (the
"Acquisition Loans"). In addition to the Acquisition Loans and pursuant to the
Credit Agreement, the Working Capital Lenders have also extended, or agreed to
extend, credit to Borrower in the form of certain Working Capital Loans in an
aggregate principal amount of up to $30,000,000.00, having a final maturity date
of no later than October 28, 2005 (the "Working Capital Loans"). The Acquisition
Loans and the Working Capital Loans are hereinafter referred to collectively as
the "Loans".
B. The Mortgagor is a subsidiary of Borrower and has or will receive
both direct and indirect benefits from the Loans made to Borrower.
C. The obligation of the Acquisition Lenders to make the Loans is
conditioned upon, among other things, the execution and delivery by the
Mortgagor of this Mortgage to secure, subject to the limitations set forth in
Section 1.03, the due and punctual payment and performance of the Obligations
(defined below).
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the indebtedness evidenced by the
Notes and the other Financing Documents and in order to secure the due and
punctual payment and performance of the Obligations and intending to be legally
bound hereby, the Mortgagor hereby mortgages, gives, grants, bargains, sells,
aliens, enfeoffs, confirms, transfers, sets over, pledges, assigns, hypothecates
and conveys as security, grants a security interest in, hypothecates, mortgages,
pledges and sets over unto the Mortgagee, with power of sale, and with mortgage
covenants, subject, however, to Permitted Encumbrances (as hereinafter defined)
and other Permitted Liens all the following described property whether now owned
or held or hereafter acquired (collectively, the "Mortgaged Property"):
(1) the parcel or parcels of land located in Queens and Kings
Counties, New York, as more particularly described on Exhibit A-1
through Exhibit A-3 attached hereto (the "Land"), together with all
rights appurtenant thereto, including without limitation, all strips
and gores within or adjoining the Land, all estate, right, title,
interest, claim or demand of the Mortgagor in the streets, roads,
sidewalks, alleys and ways adjacent thereto (whether or not vacated and
whether public or private and whether open or proposed), all easements
over adjoining land granted by any easement agreements, covenants or
restrictive agreements, all of the tenements, hereditaments, easements,
reciprocal easement agreements, rights pursuant to any trackage
agreement, rights to the use of common drive entries, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in
any way pertaining thereto, all reversions, remainders, dower and right
of dower, curtesy and right of curtesy, all of the air space and right
to use air space above such property, all transferable development
rights arising therefrom or transferred thereto, all water and water
rights and water rights applications (whether riparian, appropriative
or otherwise, and whether or not appurtenant), all pumps, pumping
plants, pipes, flumes and ditches thereunto appertaining, all rights
and ditches for irrigation, all utility rights, sewer rights, and any
shares of stock evidencing the same, all oil, gas and other minerals
and mineral substances (which term shall include all gypsum, anhydrite,
coal, lignite, hydrocarbon or other fossil materials or substances,
fissionable materials or substances and all other minerals of any kind
or character, whether gaseous, liquid or hard minerals, whether similar
or dissimilar to those named, whether now or hereafter found to
2
exist and whether associated with the surface or mineral estate) in,
on or under the Land or produced, saved or severed from the Land, all
mineral, mining, gravel, oil, gas, hydrocarbon rights and other rights
to produce or share in the production of anything related to such
property, all drainage, crop, timber, agricultural, and horticultural
rights with respect to such property, and all other appurtenances
appurtenant to such property, including without limitation, any now or
hereafter belonging or in any way appertaining thereto, and all claims
or demands of the Mortgagor, either at law or in equity, in possession
or expectancy, now or hereafter acquired, of, in or to the same (the
Land and all of the foregoing being sometimes referred to herein
collectively as the "Premises");
(2) all of the Mortgagor's right, title and interest in and to
all buildings, improvements, fixtures and other structures or
improvements of any kind now or hereafter erected or located upon the
Land, including, but not limited to, all building materials, water,
sanitary and storm sewers, drainage, electricity, steam, gas, telephone
and other utility facilities, parking areas, roads, driveways, walks
and other site improvements; and all additions and betterments thereto
and all renewals, substitutions and replacements thereof, owned or to
be owned by the Mortgagor or in which the Mortgagor has or shall
acquire an interest, to the extent of the Mortgagor's interest therein,
now or hereafter erected or located upon the Land (collectively, the
"Improvements");
(3) AND AS INDEPENDENT AND SEPARATE SECURITY for the payment
of the Indebtedness and the performance of the obligations and
covenants and agreements secured hereby, all of the Mortgagor's right,
title and interest in and to the following (collectively, the "Personal
Property"):
(a) all personal property and fixtures of every kind
and nature whatsoever which are now or hereafter located on,
attached to, incorporated in (regardless of where located) or
affixed to the Premises or the Improvements or used or useful
in connection with the ownership, construction, maintenance,
repair, reconstruction, alteration, addition, improvement,
operation, mining, use or occupancy of the Premises or the
Improvements, including, without limitation, all goods,
inventory, construction materials, equipment, mining
equipment, tools, furniture, furnishings, fittings, fixtures,
supplies, computers and computer programs, carpeting,
draperies, blinds, window treatments, racking and shelving
systems, heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, incinerating and/or compacting
plants, systems and equipment, elevators, escalators,
appliances, stoves, ranges, refrigerators, vacuum, window
washing and other cleaning and building service systems, call
systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, cables, antennae,
pipes, ducts, conduits, machinery, apparatus, motors, dynamos,
engines, compressors, generators, boilers, stokers, furnaces,
pumps, tanks, appliances, garbage systems and pest control
systems and all of the Mortgagor's present and
3
future "goods", "equipment" and "fixtures" (as such terms
are defined in the New York Uniform Commercial Code) and
other personal property, including without limitation any
such personal property and fixtures which are leased, and
all repairs, attachments, betterments, renewals,
replacements, substitutions and accessions thereof and
thereto; and
(b) all general intangibles now owned or hereafter
acquired by the Mortgagor and relating to the design,
development, operation, management and use of the Premises or
the Improvements, including, but not limited to, all contract
rights, trademarks, trade names, logos and other rights
relating to the name and style under which the Premises and
the Improvements are operated;
(4) all of the Mortgagor's right, title and interest in and to
all approvals, authorizations, building permits, certificates of
occupancy, zoning variances, use permits, certifications, entitlements,
exemptions, franchises, licenses, orders, variances, plat plan
approvals, environmental approvals, air pollution authorities to
construct and permits to operate, sewer and waste discharge permits,
national pollutant discharge elimination system permits, water permits,
zoning and land use entitlements and all other permits, whether now
existing or hereafter issued to or obtained by or on behalf of the
Mortgagor, that relate to or concern in any way the Premises or the
Improvements and are given or issued by any governmental or
quasi-governmental authority, whether now existing or hereafter created
(as the same may be amended, modified, renewed or extended from time to
time, and including all substitutions and replacements therefor), all
rights under and pursuant to all construction, service, engineering,
consulting, management, access, supply, leasing, architectural and
other similar contracts relating in any way to the design,
construction, management, operation, occupancy and/or use of the
Premises and Improvements, all rights under all purchase agreements,
sales agreements, option contracts, land contracts and contracts for
the sale of oil, gas and other minerals, or any of them, that relate to
or concern in any way the Premises or the Improvements, all abstracts
of title, architectural, engineering or construction drawings, plans,
specifications, operating manuals, computer programs, computer data,
maps, surveys, soil tests, feasibility studies, appraisals,
environmental studies, engineering reports and similar materials
relating to any portion of or all of the Premises and Improvements, and
all payment and performance bonds or warranties or guarantees relating
to the Premises or the Improvements, all to the extent assignable
(collectively, the "Permits, Plans and Contracts");
(5) all of the Mortgagor's interest in and rights under all
leases or licenses (under which the Mortgagor is landlord or licensor)
and subleases (under which the Mortgagor is sublandlord), concession,
franchise, management, mineral or other agreements relating to the use
or occupancy of the Premises or the Improvements or any part thereof
for any purpose, or the extraction or taking of any gas, oil, water or
other minerals from the Premises, whether now or hereafter
4
existing or entered into (including any use or occupancy arrangements
created pursuant to Section 365(d) of the Bankruptcy Code (as defined
in Section 1.01) or otherwise in connection with the commencement or
continuance of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar proceedings, or any
assignment for the benefit of creditors, in respect of any tenant or
occupant of any portion of the Premises or the Improvements), and all
guaranties thereof and all amendments, modifications, supplements,
extensions or renewals thereof (collectively, the "Leases"), and all
rents, issues, profits, revenues, charges, fees, receipts, royalties,
proceeds from the sale of oil, gas and/or other minerals (whether
gaseous, liquid or hard minerals, whether similar or dissimilar to
those named and whether associated with the surface or mineral
estate), accounts receivable, cash or security deposits and other
deposits (subject to the prior right of the tenants making such
deposits) and income, and other benefits now or hereafter derived from
any portion of the Premises or the Improvements or the use or
occupancy thereof (including any payments received pursuant to Section
502(b) of the Bankruptcy Code or otherwise in connection with the
commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar
proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or other occupants of any portion of the
Premises or the Improvements and all claims as a creditor in
connection with any of the foregoing) and all payments of a similar
nature, now or hereafter, including during any period of redemption,
derived from the Premises or the Improvements or any other portion of
the Mortgaged Property and all proceeds from the cancellation,
surrender, sale or other disposition of the Leases (collectively, the
"Rents");
(6) all of the Mortgagor's right, title and interest in and to
all refunds or rebates of real and personal property taxes or charges
in lieu of taxes, heretofore or now or hereafter assessed or levied
against all or any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts,
including interest thereon, and the right to receive the same, whether
such refunds or rebates relate to fiscal periods before or during the
term of this Mortgage;
(7) all of the Mortgagor's right, title and interest in and to
all insurance policies and the proceeds thereof, now or hereafter in
effect with respect to all or any of the Premises, the Improvements,
the Personal Property, the Leases, the Rents and the Permits, Plans and
Contracts, including, without limitation, any and all title insurance
proceeds, and all unearned premiums and premium refunds, accrued,
accruing or to accrue under such insurance policies, and all awards
made for any taking of or damage to all or any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, by eminent domain, or by any purchase in
lieu thereof, and all awards resulting from a change of grade of
streets or for severance damages, and all other proceeds of the
conversion, voluntary or involuntary, of all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans
5
and Contracts, into cash or other liquidated claims, and all
judgments, damages, awards, settlements and compensation (including
interest thereon) heretofore or hereafter made to the present and all
subsequent owners of the Premises, Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts,
or any part thereof for any injury to or decrease in the value thereof
for any reason;
(8) all of the Mortgagor's right, title and interest in and
to the following:
(a) all right, in the name and on behalf of the
Mortgagor, to appear in and defend any action or proceeding
brought with respect to all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and
the Permits, Plans and Contracts, and to commence any action
or proceeding to protect the interest of the Mortgagor in all
or any of the Premises, Improvements, the Personal Property,
the Leases, the Rents and the Permits, Plans and Contracts;
(b) all right and power to encumber further all or
any of the Premises, Improvements, the Personal Property, the
Leases, the Rents and the Permits, Plans and Contracts, or any
part thereof;
(c) all rights, titles, interests, estates or other
claims, both in law and in equity, which the Mortgagor now has
or may hereafter acquire in any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents or
the Permits, Plans and Contracts, or in and to any greater
estate in all or any of the Premises, the Improvements, the
Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts;
(d) all property hereafter acquired or constructed by
the Mortgagor of the type described above which shall
forthwith, upon acquisition or construction thereof by the
Mortgagor and without any act or deed by any party, become
subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were
specifically described in this Mortgage and were specifically
conveyed or encumbered hereby; and
(9) all accessions, additions or attachments to, and proceeds
or products of, any of the foregoing.
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby granted and conveyed or intended to be, unto the Mortgagee,
its successors and assigns for the uses and purposes herein set forth, for the
benefit and security of the Mortgagee, subject only to the Permitted
Encumbrances (as hereinafter defined) and other Permitted Liens, upon the terms
and conditions set forth herein.
6
ARTICLE I.
OBLIGATIONS AND THE REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 1.01 Obligations. This Mortgage is executed, acknowledged and
delivered by the Mortgagor to secure and enforce, and the Mortgaged Property is
security for, the due and punctual payment and performance of (i) all
obligations of Borrower under the Credit Agreement, the Acquisition Notes and
other Financing Documents to pay or repay the principal of, and accrued and
unpaid interest on, the Acquisition Loans, when and as due, whether at maturity,
by acceleration, upon one or more dates set for prepayment or otherwise, (ii)
all obligations of the Mortgagor under and pursuant to the Guarantee (other than
with respect to Working Capital Loans), (iii) all Fees, reasonable expenses,
indemnities and expense reimbursement obligations of Borrower or any of its
Subsidiaries under the Credit Agreement or any other Financing Documents,
including this Mortgage, in respect of the Acquisition Loans, (iv) all other
obligations, covenants and agreements, monetary or otherwise, of Borrower or any
of its Subsidiaries under any Financing Document to which it is a party, in each
case, whether now owing or hereafter existing (other than with respect to the
Working Capital Loans), (v) all extensions of credit, disbursements, and
advances made by the Mortgagee for the payment of taxes (excluding income,
franchise, estate, inheritance, transfer or similar entity taxes), common area
charges, maintenance charges, insurance premiums, and all other fees, reasonable
expenses or advances in connection with or relating to the Mortgaged Property,
and interest on such disbursements and other amounts not timely paid in
accordance with the terms of the Credit Agreement, this Mortgage and the
Financing Documents (excluding the OPH Membership Interest Pledge Agreement),
(vi) all sums with respect to the foregoing that would become due but for the
operation of the automatic stay under Section 362(a) of Title 11 of the United
States Code (the "Bankruptcy Code"), including interest, fees and other charges
that, but for the filing of a petition in bankruptcy with respect to Borrower
would accrue on the foregoing whether or not a claim is alleged against Borrower
for such sums in any such bankruptcy proceeding; (vi) other costs incurred for
the protection of the Mortgaged Property or the lien of this Mortgage and
expenses incurred by the Mortgagee by reason of the occurrence of an Event of
Default, and (vii) all increases, restatements, refinancings, renewals,
extensions, amendments, modifications and changes and supplements of, or
substitutions or replacements for, or related or in connection with all or any
part of the Notes, the Credit Agreement and other Financing Documents (the
obligations referred to in clauses (i) through (vii) inclusive, expressly
excluding any principal or interest obligations relating to the Working Capital
Loans, shall hereinafter collectively be called the "Obligations" and
individually as "Obligation").
SECTION 1.02 Continuing Security. This Mortgage shall secure and shall
continue to secure the entire outstanding amount of the Obligations up to the
maximum principal amount of $100,000,000 until all of the Obligations have been
paid in full.
7
SECTION 1.03 Maximum Secured Amount. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, THE MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS SECURED
BY THIS MORTGAGE AT THE TIME OF EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY
HEREAFTER BECOME SECURED BY THIS MORTGAGE AT ANY TIME IS ONE HUNDRED MILLION AND
NO/100 DOLLARS ($100,000,000); PROVIDED, THAT, SUCH LIMITATION SHALL NOT LIMIT
THE SECURITY OF THIS MORTGAGE WITH RESPECT TO (A) INTEREST ON THE AFORESAID
PRINCIPAL INDEBTEDNESS AT THE RATES SET FORTH IN THE CREDIT AGREEMENT AND THE
ACQUISITION NOTES, AND (B) REPAYMENT TO THE MORTGAGEE AFTER THE OCCURRENCE OF A
DEFAULT OF SUMS ADVANCED OR PAID FOR REAL ESTATE TAXES, CHARGES AND ASSESSMENTS
THAT MAY BE IMPOSED BY LAW UPON THE MORTGAGED PROPERTY, AND (C) REPAYMENT TO THE
MORTGAGEE AFTER THE OCCURRENCE OF A DEFAULT OF SUMS ADVANCED OR PAID FOR
INSURANCE PREMIUMS WITH RESPECT TO THE MORTGAGED PROPERTY, AND (D) REPAYMENT TO
THE MORTGAGEE AFTER THE OCCURRENCE OF A DEFAULT OF ALL REASONABLE LEGAL COSTS OR
EXPENSES OF COLLECTION OF THE INDEBTEDNESS SECURED BY THIS MORTGAGE OR OF THE
DEFENSE OR PROSECUTION OF THE RIGHTS AND LIEN CREATED BY THIS MORTGAGE, AND (E)
REPAYMENT TO THE MORTGAGEE OF SUMS ADVANCED OR PAID TO WHICH THE MORTGAGEE
BECOMES SUBROGATED, UPON PAYMENT, UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY,
OR UNDER EXPRESS STATUTORY AUTHORITY.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR
The Mortgagor agrees, covenants, represents and warrants, as follows:
SECTION 2.01 Title.
(a) The Mortgagor has good, marketable, indefeasible, fee
simple title to the Land and Improvements and good and marketable title
to or valid leasehold easement or right-of-way interests in, all of the
other Mortgaged Property, except in each case where the failure to have
such title or interest could not reasonably be expected to have a
material adverse effect on the Mortgaged Property. This Mortgage is and
will remain a valid and enforceable first lien on the Mortgaged
Property subject to no Liens other than the exceptions and encumbrances
set forth in Exhibit B attached hereto (collectively, the "Permitted
Encumbrances") and other Permitted Liens.
(b) [INTENTIONALLY OMITTED.]
(c) The Mortgagor has good and lawful right and full power and
authority to encumber or grant a security interest in the Mortgaged
Property. The
8
Mortgagor will forever warrant and defend its title to the Mortgaged
Property, the rights of the Mortgagee therein under this Mortgage and
the validity and priority of the lien of this Mortgage thereon against
the claims of all persons and parties except those having rights under
the Permitted Encumbrances or other Permitted Liens to the extent of
those rights.
(d) This Mortgage, when duly recorded in the appropriate
public records and when financing statements are duly filed in the
appropriate public records, will create a valid, perfected and
enforceable lien upon and security interest in all the material
Mortgaged Property in which a security interest can be perfected.
SECTION 2.02 Credit Agreement.
(a) This Mortgage is given pursuant to the Credit Agreement.
Subject to, and without limiting, Section 3.07 hereof, each and every
term and provision of the Credit Agreement, including, the rights,
remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties thereto shall be
considered as if a part of this Mortgage. Subject to the limitations
set forth in Section 1.03, this Mortgage secures all present and future
Indebtedness of Borrower and the Mortgagor in respect of loan
disbursements made by the Lenders under the Acquisition Loan Notes, and
all other Obligations from time to time owing to the Lenders under the
Financing Documents (other than with respect to Working Capital Loans).
(b) If any remedy or right of the Mortgagee pursuant hereto is
acted upon by the Mortgagee or if any actions or proceedings (including
any bankruptcy, insolvency or reorganization proceedings) are commenced
in which the Mortgagee is made a party and is obliged to defend or
uphold or enforce this Mortgage or the rights of the Mortgagee
hereunder or the terms of any Lease, or if a condemnation proceeding is
instituted affecting the Mortgaged Property, the Mortgagor will pay all
sums, including reasonable attorneys' fees and disbursements, actually
incurred (not as imposed by statute) by the Mortgagee related to the
exercise of any remedy or right of the Mortgagee pursuant hereto or for
the expense of any such action or proceeding together with all other
costs (not as imposed by statute), disbursements and allowances,
interest thereon from the date of demand for payment thereof at the
Default Rate, and such sums and the interest thereon shall, to the
extent permissible by applicable Requirements of Law, be a lien on the
Mortgaged Property prior to any right, title to, interest in or claim
upon the Mortgaged Property attaching or accruing subsequent to the
recording of this Mortgage and, subject to the limitations set forth in
Section 1.03, shall be secured by this Mortgage to the extent permitted
by applicable Requirements of Law.
(c) Any payment of amounts due under this Mortgage not made on
or before the due date for such payments shall accrue interest daily
without notice
9
from the due date until paid at the Default Rate, and such interest at
the Default Rate shall be immediately due upon demand by the Mortgagee.
SECTION 2.03 Payment of Taxes, Liens and Charges.
(a) The Mortgagor will pay and discharge (whether by it or any
Affiliate, or otherwise) from time to time prior to the time when the
same shall become delinquent, and before any interest or penalty
accrues thereon or attaches thereto, all taxes, assessments and
governmental charges, levies, or obligations lawfully imposed upon or
assessed against the Mortgagor, the Mortgaged Property or any part
thereof or upon the Rents from the Mortgaged Property or arising in
respect of the occupancy, use or possession thereof and all lawful
claims or obligations that, if unpaid, would become a Lien upon the
Mortgaged Property or upon any part thereof; except as the validity or
amount of such taxes, assessments, charges, levies or obligations may
be contested by the Mortgagor in accordance with Section 5.12 of the
Credit Agreement. Upon the reasonable written request of the
Administrative Agent, the Mortgagor shall promptly deliver to the
Administrative Agent, at the same place as designated in Section 3.02
below, reasonably satisfactory evidence that all payments required
under this Section 1.06 have been timely made.
(b) In the event of the passage of any state, Federal,
municipal or other governmental law, order, rule or regulation
subsequent to the date hereof (i) deducting from the value of real
property for the purpose of taxation any lien or encumbrance thereon or
in any manner changing or modifying the laws now in force governing the
taxation of this Mortgage or debts secured by mortgages or deeds of
trust (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing
a tax to be paid by the Mortgagee, either directly or indirectly, on
this Mortgage or any of the Financing Documents or to require an amount
of taxes to be withheld or deducted therefrom, upon obtaining actual
knowledge thereof, the Mortgagor will promptly notify the Mortgagee of
such event. In such event the Mortgagor shall (i) agree to enter into
such further instruments as may be reasonably necessary or desirable to
obligate the Mortgagor to make any applicable additional payments and
(ii) the Mortgagor shall make all such additional payments, except as
such law, order, rule, regulation or payment may be contested by the
Mortgagor in good faith and by appropriate proceedings and pursuant to
which Acceptable Reserves have been established.
(c) The Mortgagor shall not apply for or claim any deduction,
by reason of this Mortgage, from the taxable value of any or part of
the Mortgaged Property. It is expressly agreed that no credit shall be
claimed or allowed on the interest payable under the Credit Agreement,
the Financing Documents and the Notes because of any taxes or other
charges paid. If any law is hereafter enacted: (i) deducting from the
value of real estate, for the purposes of taxation, any lien or
encumbrance thereon; (ii) revising or changing in any way the laws and
10
ordinances now in force for the taxation of mortgages or the debts
secured thereby, or the manner of collection of such taxes; or (iii)
imposing a tax directly or indirectly on the Mortgagee with respect to
the Mortgaged Property, the value of the Mortgagee's interest therein,
or the indebtedness secured by this Mortgage; then, and in any such
event, the entire unpaid balance of the indebtedness secured hereby
shall, at the option of the Mortgagee, upon ten (10) Business Days
notice to the Mortgagor, become immediately due and payable unless, to
the extent permitted by such law or ordinance, the Mortgagor is
authorized to, and does, pay directly, or reimburse the Mortgagee for,
the full amount of any such tax, assessment, charge or lien. If at any
time by any Requirement of Law stamps are required on the Notes or any
other Financing Document, the Mortgagor shall, upon ten (10) Business
Days written notice from the Mortgagee, pay for all such stamps
together with any interest and penalties payable in connection
therewith.
SECTION 2.04 Payment of Closing Costs. The Mortgagor shall pay all
reasonable costs in connection with, relating to or arising out of the
preparation, execution and recording of this Mortgage, including title company
premiums and charges, inspection costs, survey costs, recording fees and taxes
(including without limitation all New York Mortgage Recording Taxes), reasonable
attorneys', engineers', appraisers' and consultants' fees and disbursements and
all other similar reasonable expenses of every kind.
SECTION 2.05 Maintenance and Operations; Plans; Use.
(a) The Mortgagor will, subject to Section 6.11 of the Credit
Agreement, (i) operate and maintain the Mortgaged Property in
accordance with Prudent Industry Practice and all applicable material
Requirements of Law, except where being contested in good faith and by
appropriate proceedings and as to which Acceptable Reserves have been
established, or except when the failure to so operate and maintain the
Mortgaged Property could not be reasonably expected to have a material
adverse effect on the Mortgaged Property and (ii) keep proper books of
records and accounts in which full, true and correct entries shall be
made of all entries shall be made of all of its transactions in
accordance with GAAP.
(b) The Mortgagor shall at all times comply with its material
obligations under all recorded restrictions, conditions, easements and
covenants ("Restrictive Covenants") encumbering the Land and shall duly
enforce its rights under all Restrictive Covenants encumbering other
property for the benefit of the Land and/or the Improvements, except
where the failure to so comply could not reasonably be expected to have
a material adverse effect on the Mortgaged Property. If the Mortgagor
receives any notice (whether oral or written) that any Restrictive
Covenant has been violated, which violation would be reasonably likely
to have a material adverse effect on the Mortgaged Property, the
Mortgagor shall promptly notify the Mortgagee and take such steps as
the Mortgagee may reasonably require to correct such violation.
11
SECTION 2.06 Insurance. The Mortgagor will keep the Mortgaged Property
insured against such risks, and in the manner, required by the terms of Section
5.06 of the Credit Agreement. All premiums due under all insurance policies
required to be maintained under Section 5.06 of the Credit Agreement shall be
paid timely by, or on behalf of, the Mortgagor.
SECTION 2.07 New York Insurance Waiver. The provisions of subsection 4
of Section 254 of the Real Property Law of New York covering the insurance of
buildings against loss by fire that are inconsistent with the provisions of this
Mortgage shall not apply to the terms of this Mortgage. Nothing contained
herein, except for the immediately preceding sentence, shall be construed as
depriving the Mortgagee of any right or advantage available under Section 254 of
the Real Property Law of the State of New York, and all covenants herein that
differ therefrom shall be construed as conferring additional and not substitute
rights and advantages.
SECTION 2.08 [INTENTIONALLY OMITTED.]
SECTION 2.09 Assignment of Leases and Rents.
(a) The Mortgagor hereby irrevocably and absolutely grants,
transfers and assigns to the Mortgagee all of its right, title and
interest in and to all Leases, together with any and all extensions and
renewals thereof for purposes of securing and discharging the
performance by Borrower and the Mortgagor of the Obligations. The
Mortgagor has not assigned or executed any assignment of, and will not
assign or execute any assignment of, any Lease or its respective Rents
to anyone other than to the Mortgagee, except as otherwise permitted
under the Credit Agreement and the other Financing Documents.
(b) This Mortgage is intended to be, and shall operate as, the
agreement described in Section 291-f of the Real Property Law of the
State of New York and shall be entitled to the benefits afforded
thereby.
SECTION 2.10 Restrictions on Transfers and Encumbrances. The Mortgagor
shall not create or permit to exist any Lien on the Mortgaged Property, other
than any Permitted Lien or Permitted Encumbrance; provided, however, that the
Mortgagor may grant easements and licenses, enter into easements, leases,
subleases, and enter into other similar agreements relating to the Mortgaged
Property in the ordinary course of business to the extent the same would not
reasonably be expected to have a material adverse effect on the Mortgaged
Property and the same shall be deemed Permitted Encumbrances hereunder.
SECTION 2.11 Security Agreement. This Mortgage is both a mortgage and
grant of real property and a grant of a security interest in personal property,
and shall constitute and serve as a "Security Agreement" (a) with regard to
fixtures, within the meaning of the New York Uniform Commercial Code (the "NY
UCC") and (b) with regard to personal property, within the meaning of the
Delaware Uniform Commercial
12
Code (the "DE UCC"). The Mortgagor hereby grants unto the Mortgagee a security
interest in and to all the Mortgaged Property described in this Mortgage that is
not real property, and simultaneously with the recording of this Mortgage, the
Mortgagor has filed or will file, or has caused or will cause to be filed, UCC
financing statements, and will file continuation statements prior to the lapse
thereof, at the appropriate offices in the State of Delaware to perfect the
security interest granted by this Mortgage in all the Mortgaged Property that is
not real property. The Mortgagor hereby appoints the Mortgagee as its true and
lawful attorney-in-fact and agent, for the Mortgagor and in its name, place and
stead, in any and all capacities, to execute any document and to file the same
in the appropriate offices (to the extent it may lawfully do so), and to perform
each and every act and thing requisite and necessary to be done to perfect the
security interest hereby granted. The Mortgagor hereby authorizes the Mortgagee
to file one or more financing or continuation statements and amendments thereto,
relative to all or any part of the Mortgaged Property without the signature of
the Mortgagor where permitted by applicable Requirements of Law. The Mortgagee
shall have all rights with respect to the part of the Mortgaged Property that is
the subject of a security interest afforded by the NY UCC and the DE UCC in
addition to, but not in limitation of, the other rights afforded the Mortgagee
hereunder. The Mortgagor agrees, to the extent permitted by applicable
Requirements of Law, that: (i) all of the goods described within the definition
of the word "Personal Property" are or are to become fixtures on the Land; (ii)
this Mortgage upon filing or recording in the office designated for the filing
or recording of a record of a mortgage on related real property shall constitute
a financing statement filed as a "fixture filing" within the meaning of Sections
9-102 and 9-502 of the DE UCC, and in accordance with Section 9-501 of the NY
UCC and (iii) the Mortgagor is the record owner of the Premises. Additionally,
this Mortgage shall constitute a financing statement covering fixtures and/or
minerals or the like (including oil and gas) and/or accounts resulting from the
sale thereof at the wellhead or minehead and, as such, shall be filed or
recorded in the office designated for the filing or recording of a record of a
mortgage on related real property and in the office of the Delaware Secretary of
State. The registration number assigned to the Mortgagor by the Secretary of
State of Delaware is 3011018.
SECTION 2.12 Filing and Recording. Subject to and in accordance with
the terms of Section 5.28 of the Credit Agreement, the Mortgagor will cause this
Mortgage, any other security instrument creating a security interest in or
evidencing the lien hereof upon the Mortgaged Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and to protect fully the liens and security interests of the Mortgagee
hereby granted in and upon the Mortgaged Property. The Mortgagor will pay all
filing, registration, stamps and/or recording fees, and all reasonable expenses
incidental to the execution and acknowledgment of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property, and any instrument of further assurance and all Federal, state, county
and municipal recording, documentary or intangible taxes and other taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution, delivery and recording of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance.
13
SECTION 2.13 Mortgage of Definite Amount. (a) If, by reason of the
additional sums that may become secured by the lien of this Mortgage pursuant to
the terms hereof, a court or other governmental authority having jurisdiction at
any time shall determine that this Mortgage falls within the limit of Section
256 of the Tax Law of the State of New York, then (subject to Section 1.03
hereof) the Mortgagee reserves the right, in its discretion, to elect not to
have such additional sums secured by this Mortgage and thereby reduce the
Obligations secured hereby to a definite amount equal to the principal amount of
One Hundred Million Dollars ($100,000,000.00), plus any disbursements made to
protect the security of this Mortgage, with interest on such disbursements at
the Default Rate, plus any such other sums as by statute or judicial
interpretation now or hereafter may be permitted to be secured by the lien of a
mortgage without incurring any additional mortgage recording tax. Any election
by the Mortgagee to so reduce the indebtedness secured by this Mortgage shall in
no event be deemed a release, waiver or discharge by the Mortgagee of the
Mortgagor's obligation to pay or reimburse the Mortgagee for such sums.
(b) Any sums that may become due and payable pursuant to the
terms of the Credit Agreement, this Mortgage or the other Financing Documents
and that are in the nature of interest (i) shall for the purpose of determining
the amount of mortgage recording tax due and payable on this Mortgage, be
considered as additional interest, whether or not so denominated, (ii) shall be
secured by the lien of this Mortgage to the fullest extent possible without
causing this Mortgage to be covered by Section 256 of the Tax Law of the State
of New York and (iii) shall not be deemed principal and shall not accrue any
interest.
SECTION 2.14 Trust Fund. Pursuant to Section 13 of the Lien Law of the
State of New York, the Mortgagor shall receive the advances secured by this
Mortgage and shall hold such advances as a trust fund to be applied first for
the purpose of paying the cost of any improvement and shall apply such advances
first to the payment of the cost of any such improvement on the Premises before
using any part of the total of the same for any other purpose.
SECTION 2.15 Further Assurances. Upon demand by the Mortgagee, the
Mortgagor will, at the sole cost of the Mortgagor and without expense to the
Mortgagee, do, execute, acknowledge and/or deliver all such further acts, deeds,
conveyances, deeds of trust, assignments, notices of assignment, transfers and
assurances as the Mortgagee shall from time to time reasonably require for the
better assuring, conveying, assigning, transferring and confirming unto the
Mortgagee the property and rights hereby conveyed or assigned or intended now or
hereafter so to be, or which the Mortgagor may be or may hereafter become bound
to convey or assign to the Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Mortgage, or for filing,
registering or recording this Mortgage, and on demand, the Mortgagor will also
execute and deliver and hereby appoints the Mortgagee as its true and lawful
attorney-in-fact and agent for the Mortgagor and in its name, place and stead,
in any and all capacities, to execute and file to the extent it may do so under
applicable Requirements of Law and under
14
the terms of the Credit Agreement or this Mortgage, one or more financing
statements, chattel mortgages or comparable security instruments reasonably
required by the Mortgagee to evidence or perfect the liens and security
interests hereby granted and to perform each and every act and thing requisite
and necessary to be done to accomplish the same.
SECTION 2.16 Additions to Mortgaged Property. All right, title and
interest of the Mortgagor in and to all extensions, improvements, betterments,
renewals, substitutes and replacements of, and all additions and appurtenances
to, the Mortgaged Property hereafter acquired by or released to the Mortgagor or
constructed, assembled or placed by the Mortgagor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by the Mortgagor, shall become
subject to the liens and security interests of this Mortgage as fully and
completely and with the same effect as though now owned by the Mortgagor and
specifically described in the grant of the Mortgaged Property above, but at any
and all times the Mortgagor will execute and deliver to the Mortgagee any and
all such further assurances, deeds of trust, conveyances or assignments thereof
as the Mortgagee may reasonably require for the purpose of expressly and
specifically subjecting the same to the liens and security interests of this
Mortgage.
SECTION 2.17 No Claims Against the Mortgagee. Nothing contained in this
Mortgage shall constitute any consent or request by the Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Mortgaged Property or any part
thereof, nor as giving the Mortgagor any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Mortgagee in respect thereof.
SECTION 2.18 Change in Tax Law. Upon the enactment of or change in
(including, without limitation, a change in interpretation of) any applicable
law (a) deducting or allowing the Mortgagor to deduct from the value of the
Mortgaged Property for the purpose of taxation any lien or security interest
thereon or (b) subjecting the Mortgagee to any tax (excluding income, franchise,
estate, inheritance, transfer or similar entity taxes) or changing the basis of
taxation of mortgages, deeds of trust, or other liens or debts secured thereby,
or the manner of collection of such taxes, in each such case, so as to affect
this Mortgage, the Obligations or the Mortgagee (excluding income, franchise,
estate, inheritance, transfer or similar entity taxes), and the result is to
increase the taxes imposed upon or the cost to the Mortgagee of maintaining the
Obligations, or to reduce the amount of any payments receivable hereunder, then,
and in any such event, if the Mortgagee has received notice of such change from,
or demand for payment of amounts arising from such change from, the relevant
Governmental Authority, then the Mortgagor shall, upon the earlier to occur of
(i) ten (10) Business Days after the Mortgagee delivers to the Mortgagor notice
of Mortgagee's receipt of such notice or demand and (ii) the date such payment
is due, or, if the Mortgagee has not received any
15
notice or demand from a Governmental Authority, then the Mortgagor shall, on
demand, pay to the Mortgagee additional amounts to compensate for such increased
costs or reduced amounts, provided that if any such payment or reimbursement
shall be unlawful, or taxable to the Mortgagee and not reimbursed as set forth
herein, or would constitute usury or render the Obligations wholly or partially
usurious under applicable law, then the Mortgagee may, within ten (10) Business
Days after notice thereof require the Mortgagor to pay or reimburse the
Mortgagee for payment of the lawful and non-usurious portion thereof. If the
Mortgagor fails to pay such amounts within such time, then the Mortgagee may
declare the Obligations immediately due and payable.
SECTION 2.19 Survey of Mortgaged Property. To the best of Mortgagor's
knowledge, other than as set forth in Exhibit C attached hereto, there are no
unrecorded improvements, additions, easements, or rights of way located on the
Mortgaged Property that are not shown on that certain survey dated July 15, 1999
prepared by Geod Corporation and updated on October, 2002.
SECTION 2.20 Contract Collateral. Notwithstanding any provision of this
Agreement, but subject to and without limiting Section 1.14, each of the parties
hereto acknowledges and agrees that (i) any reference to assignment of any
right, title or interest in and to any agreement, contract, contract right,
chattel paper, instrument, letter of credit, document, lease, Governmental
Approval or other similar right (collectively "Contract Collateral"), such
assignment shall constitute only a grant of a collateral security interest and
not an absolute assignment of rights under any Contract Collateral, and (ii)
except as otherwise provided in the DE UCC to the extent any grant of a
collateral security interest in and to any Contract Collateral would result in
the breach of the instrument, contract, agreement or other document evidencing
or creating such Contract Collateral, such security interest shall be deemed to
be made subject to obtaining any required consent and approval under such
instrument, contract, agreement or other document for such grant of a security
interest.
ARTICLE III.
DEFAULTS AND REMEDIES
SECTION 3.01 Events of Default. It shall be an Event of Default under
this Mortgage if any Event of Default (as defined in the Credit Agreement) shall
exist under the Credit Agreement.
SECTION 3.02 Demand for Payment. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights and
remedies the Mortgagee may have pursuant to the Financing Documents, or as
provided at law or in equity, and without limitation, the Obligations and all
other amounts payable with respect to this Mortgage shall become due and payable
to the extent provided in the Credit Agreement. The Mortgagor hereby waives
notice of presentment, demand, protest, acceleration and notice of acceleration.
In case the Mortgagor shall fail forthwith to pay such amounts or any amounts
due under any provision of this Mortgage upon the
16
Mortgagee's demand, but in accordance with the Credit Agreement, the Mortgagee,
in addition to any other rights or remedies provided herein or at law or equity,
shall be entitled and empowered to institute an action or proceeding at law or
in equity as advised by counsel for the collection of the sums so due and
unpaid, to prosecute any such action or proceedings to judgment or final decree,
to enforce any such judgment or final decree against the Mortgagor and to
collect, in any manner provided by law, all moneys adjudged or decreed to be
payable.
SECTION 3.03 Rights to Take Possession, Operate and Apply Revenues.
(a) If an Event of Default shall occur and be continuing, the
Mortgagor shall, upon demand of the Mortgagee forthwith surrender to
the Mortgagee actual possession of the Mortgaged Property and, if and
to the maximum extent permitted by applicable Requirements of Law, the
Mortgagee itself, or by such officers or agents as it may appoint, may
then enter and take possession of all the Mortgaged Property with or
without the appointment of a receiver or an application therefor,
exclude the Mortgagor and its agents and employees wholly therefrom,
and have access to the books, papers and accounts of the Mortgagor.
(b) If the Mortgagor shall for any reason fail to surrender or
deliver the Mortgaged Property or any part thereof after such demand by
the Mortgagee as provided in the preceding clause (a), the Mortgagee
may obtain a judgment or decree conferring upon the Mortgagee the right
to immediate possession or requiring the Mortgagor to deliver immediate
possession of the Mortgaged Property to the Mortgagee, to the entry of
which judgment or decree the Mortgagor hereby specifically consents.
The Mortgagor will promptly pay all out-of-pocket costs and other
reasonable expenses in connection with enforcing this Mortgage,
including all reasonable fees and expenses of attorneys and paralegals
(including reasonable charges for inside counsel); and subject to the
limitations set forth in Section 1.03, all such expenses and
compensation shall, until paid, be secured by this Mortgage.
(c) If an Event of Default shall occur and be continuing, the
Mortgagee may hold, store, use, operate, manage and control the
Mortgaged Property, conduct the business thereof and, from time to
time, (i) make all necessary, proper and reasonable maintenance,
repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon, (ii) purchase or otherwise acquire
additional fixtures, personalty and other property, (iii) insure or
keep the Mortgaged Property insured, (iv) manage and operate the
Mortgaged Property and exercise all the rights and powers of the
Mortgagor to the same extent as the Mortgagor could in its own name or
otherwise with respect to the same or (v) enter into any and all
agreements with respect to the exercise by others of any of the powers
herein granted to the Mortgagee, all as may from time to time be
directed or determined by the Mortgagee to be in its best interest and
the Mortgagor hereby appoints the Mortgagee as its true and lawful
attorney-
17
in-fact and agent, for the Mortgagor and in its name, place and stead,
in any and all capacities, to perform any of the foregoing acts.
Regardless of whether or not the Mortgagee has entered or taken
possession, the Mortgagee may receive and, so long as any Event of
Default exists, collect and receive all the Rents, issues, profits and
revenues from the Mortgaged Property, including those past due as well
as those accruing thereafter, and, after deducting (i) all expenses of
taking, holding, managing and operating the Mortgaged Property
(including reasonable compensation for the services of all persons
employed for such purposes), (ii) the costs of all such maintenance,
repairs, renewals, replacements, additions, betterments, improvements,
purchases and acquisitions, (iii) the costs of insurance, (iv) such
taxes, assessments and other similar charges as the Mortgagee may at
its option pay, (v) other proper charges upon the Mortgaged Property or
any part thereof and (vi) the reasonable compensation, expenses and
disbursements of the attorneys and agents of the Mortgagee, the
Mortgagee shall apply the remainder of the moneys and proceeds so
received in accordance with the terms and conditions of the Deposit
Account Agreement and the Intercreditor Agreement.
(d) Whenever, before any sale of the Mortgaged Property under
Section 2.06 hereof, all Obligations that are then due shall have been
paid and all Events of Default fully cured, the Mortgagee will
surrender possession of the Mortgaged Property back to the Mortgagor,
its successors or assigns. The same right of taking possession shall,
however, arise again if any subsequent Event of Default shall occur and
be continuing.
SECTION 3.04 Right to Cure the Mortgagor's Failure to Perform. Upon the
occurrence and during the continuance of an Event of Default, at any time
thereafter and without notice, should the Mortgagor fail in the payment,
performance or observance of any term, covenant or condition required by this
Mortgage or the Credit Agreement or any other Financing Document (with respect
to the Mortgaged Property), the Mortgagee may pay, perform or observe the same,
and, subject to the limitations set forth in Section 1.03, all payments made or
costs or expenses incurred by the Mortgagee in connection therewith shall be
secured hereby and shall be, without demand, immediately repaid by the Mortgagor
to the Mortgagee with interest thereon at the Default Rate. The Mortgagee shall
make the determination as to the necessity for any such actions and of the
amounts to be paid. Subject to the notice provisions of the first sentence of
this Section 2.04, to the maximum extent permitted by Requirements of Law, the
Mortgagee is hereby empowered to enter and to authorize others to enter upon the
Premises or the Improvements or any part thereof for the purpose of performing
or observing any such defaulted term, covenant or condition without having any
obligation to so perform or observe and without thereby becoming liable to the
Mortgagor, to any person in possession holding under the Mortgagor or to any
other person.
SECTION 3.05 Right to a Receiver. If an Event of Default shall occur
and be continuing the Mortgagee, upon application to a court of competent
jurisdiction, shall be entitled as a matter of right to the appointment of a
receiver to take possession of and
18
to operate the Mortgaged Property and to collect and apply the Rents. The
Mortgagor hereby consents to such appointment and acknowledges and agrees that
the Mortgagee shall be entitled to such appointment without notice and without
regard for the adequacy of security for the Obligations or the solvency of the
Mortgagor or any party liable for the Obligations and without regard to the then
value of the Mortgaged Property and without regard to whether the Mortgagor has
committed waste or allowed deterioration of the Mortgaged Property; and the
Mortgagee or an agent of the Mortgagee may be appointed as such receiver. The
receiver shall have all of the rights and powers permitted under the laws of the
state wherein the Mortgaged Property is located. The Mortgagor will pay to the
Mortgagee upon demand all expenses, including receiver's fees, reasonable
attorneys' fees and disbursements that are actually incurred (not as imposed by
statute), costs and agent's compensation incurred pursuant to the provisions of
this Section 2.05; and, subject to the limitations set forth in Section 1.03,
all such expenses shall be secured by this Mortgage and shall be, without
demand, immediately repaid by the Mortgagor to the Mortgagee with interest
thereon at the Default Rate.
SECTION 3.06 Foreclosure and Sale.
(a) If an Event of Default shall occur and be continuing, the
Mortgagee may elect to sell the Mortgaged Property or any part of the
Mortgaged Property by exercise of the power of foreclosure or of sale
granted to the Mortgagee by applicable Requirements of Law, this
Mortgage or the Security Agreement. In such case, the Mortgagee may
commence one or more actions to foreclose this Mortgage at law or in
equity, or the Mortgagee may proceed and sell the Mortgaged Property,
in accordance with applicable Requirements of Law, to satisfy any
Obligation. The Mortgagee or an officer appointed by a judgment of
foreclosure to sell the Mortgaged Property, may sell all or such parts
of the Mortgaged Property as may be chosen by the Mortgagee in its sole
discretion at the time and place of sale fixed by it in a notice of
sale, either as a whole or in separate lots, parcels or items as the
Mortgagee shall deem expedient, and in such order as it may determine,
at public auction to the highest bidder. The Mortgagee or an officer
appointed by a judgment of foreclosure to sell the Mortgaged Property
may postpone any foreclosure or other sale of all or any portion of the
Mortgaged Property by public announcement at such time and place of
sale, and from time to time as permitted by applicable Requirements of
Law thereafter may postpone such sale by public announcement or
subsequently noticed sale. Except as otherwise required by applicable
Requirements of Law, without further notice, the Mortgagee or an
officer appointed to sell the Mortgaged Property may make such sale at
the time fixed by the last postponement, or may, in its discretion,
give a new notice of sale. Any Person, including the Mortgagor or the
Mortgagee or any designee or affiliate thereof, may purchase any
portion of the Mortgaged Property at such sale.
(b) The Mortgaged Property may be sold subject to unpaid taxes
and the Permitted Encumbrances and other Permitted Liens and after
deducting all the costs, fees and expenses of the Mortgagee, including,
costs of evidence of title in
19
connection with the sale, the Mortgagee or an officer that makes any
sale shall apply the proceeds of sale in the manner set forth in
Section 2.08 hereof.
(c) Any foreclosure or other sale of less than the whole of
the Mortgaged Property or any defective or irregular sale made
hereunder shall not exhaust the power of foreclosure or of sale
provided for herein; and subsequent sales may be made hereunder until
the Obligations have been satisfied, or the entirety of the Mortgaged
Property has been sold. All sums collected by the Mortgagee under this
Mortgage or other Financing Documents or under the Notes on account of
principal or interest or other amounts owing hereunder including costs
of collection and reasonable attorneys' fees, shall be applied in
accordance with the terms and conditions of the Deposit Account
Agreement and the Intercreditor Agreement.
(d) If an Event of Default shall occur and be continuing, the
Mortgagee may instead of, or in addition to, exercising the rights
described in Section 2.06(a) above and either with or without entry or
taking possession as herein permitted and as permitted by applicable
Requirements of Law, proceed by a suit or suits in law or in equity or
by any other appropriate proceeding or remedy (i) to specifically
enforce payment of some or all of the terms of the Financing Documents
or the performance of any term, covenant, condition or agreement of
this Mortgage or any other right or (ii) to pursue any other remedy
available to it, at law or in equity, all as the Mortgagee shall
determine most effectual for such purposes.
SECTION 3.07 Other Remedies.
(a) In case an Event of Default shall occur and be continuing,
the Mortgagee may also exercise, to the extent not prohibited by
applicable Requirements of Law, any or all of the remedies available to
a secured party under the UCC, including, to the extent not prohibited
by applicable Requirements of Law, the following:
(i) In the case of personal property, exercise
those rights and remedies under other applicable Security
Documents.
(ii) To make such payments and do such acts as the
Mortgagee may deem necessary to protect its security interest
in the Personal Property including paying, purchasing,
contesting or compromising any encumbrance, charge or lien
that is prior or superior to the security interest granted
hereunder, and, in exercising any such powers or authority,
paying all expenses incurred in connection therewith.
(iii) To enter upon any or all of the Premises or
Improvements to exercise the Mortgagee's rights hereunder.
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(b) In connection with a sale of the Mortgaged Property and
the application of the proceeds of sale as provided in Section 2.08 of
this Mortgage, the Mortgagee shall be entitled to enforce payment of
and to receive up to the principal amount of the Obligations, plus all
other charges, payments and costs due under this Mortgage, and to
recover a deficiency judgment for any portion of the aggregate
principal amount of the Obligations remaining unpaid, with interest.
SECTION 3.08 Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any of the Mortgaged Property, the Mortgagee shall
receive the proceeds of sale, no purchaser shall be required to see to the
application of the proceeds and the Mortgagee shall apply the proceeds of the
sale together with any Rents that may have been collected and any other sums
that then may be held by the Mortgagee under this Mortgage in accordance with
the Deposit Account Agreement and the Intercreditor Agreement.
Upon any sale of the Mortgaged Property by the Mortgagee (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Mortgagee or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Mortgaged Property so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Mortgagee or such
officer or be answerable in any way for the misapplication thereof.
SECTION 3.09 The Mortgagor as Tenant Holding Over. If the Mortgagor
remains in possession of any of the Mortgaged Property after any foreclosure
sale by the Mortgagee, at the Mortgagee's election the Mortgagor shall be deemed
a tenant holding over and shall forthwith surrender possession to the purchaser
or purchasers at such sale or be summarily dispossessed or evicted according to
provisions of Requirements of Law applicable to tenants holding over.
SECTION 3.10 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws.
(a) The Mortgagor will not object to any sale of the Mortgaged
Property pursuant hereto, and for itself and all who may claim under
it, the Mortgagor waives, to the extent that it lawfully may under
applicable Requirements of Law, all right to have the Mortgaged
Property marshalled or to have the Mortgaged Property sold as separate
estates, parcels, tracts or units in the event of any foreclosure of
this Mortgage.
(b) To the full extent permitted by applicable Requirements of
Law, neither the Mortgagor nor anyone claiming through or under it
shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension, homestead-exemption or
redemption laws now or hereafter in force in order to prevent or hinder
the enforcement or foreclosure of this Mortgage, the absolute sale of
the Mortgaged Property or the final and absolute putting of the
purchasers
21
into possession thereof immediately after any sale; and the Mortgagor,
for itself and all who may at any time claim through or under it,
hereby waives to the full extent that it may lawfully do so, the
benefit of all such laws and any and all right to have the assets
covered by the security interest created hereby marshalled upon any
foreclosure of this Mortgage.
SECTION 3.11 Discontinuance of Proceedings. In case the Mortgagee shall
proceed to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall be discontinued or
abandoned for any reason, or shall be determined adversely to the Mortgagee,
then and in every such case the Mortgagor and the Mortgagee shall be restored to
their former positions and rights hereunder, and all rights, powers and remedies
of the Mortgagee shall continue as if no such proceeding had been taken.
SECTION 3.12 Suits to Protect the Mortgaged Property. During the
continuance of an Event of Default, the Mortgagee shall have power (a) to
institute and maintain suits and proceedings to prevent any impairment of the
Mortgaged Property by any acts which may be unlawful or in violation of this
Mortgage, (b) to preserve or protect its interest in the Mortgaged Property and
in the Rents arising therefrom and (c) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of or
compliance with such enactment, rule or order would impair the security or be
prejudicial to the interest of the Mortgagee hereunder.
SECTION 3.13 Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting the Mortgagor, the Mortgagee shall, to the extent
permitted by applicable Requirements of Law, be entitled to file such proofs of
claim and other documents as may be necessary or advisable in order to have the
claims of the Mortgagee allowed in such proceedings for the Obligations secured
by this Mortgage at the date of the institution of such proceedings and for any
interest accrued, late charges and additional interest or other amounts due or
that may become due and payable hereunder after such date.
SECTION 3.14 Possession by the Mortgagee. Notwithstanding the
appointment of any receiver, liquidator or trustee of the Mortgagor, any of its
property or the Mortgaged Property, the Mortgagee shall be entitled, to the
extent not prohibited by applicable Requirements of Law, to remain in possession
and control of all parts of the Mortgaged Property now or hereafter granted
under this Mortgage in accordance with the terms hereof and applicable
Requirements of Law and the Intercreditor Agreement.
SECTION 3.15 Waiver.
(a) No delay or failure by the Mortgagee to exercise any
right, power or remedy accruing upon or during the continuance of any
Event of Default shall exhaust or impair any such right, power or
remedy or be construed to be a waiver
22
of any such Event of Default or acquiescence therein; and every right,
power and remedy given by this Mortgage to the Mortgagee may be
exercised from time to time and as often as may be deemed expedient by
the Mortgagee. No consent or waiver by the Mortgagee to or of any
breach, default or Event of Default by the Mortgagor in the performance
of the Obligations shall be deemed or construed to be a consent or
waiver to or of any other breach, default or Event of Default in the
performance of the same or any other Obligations by the Mortgagor
hereunder. No failure on the part of the Mortgagee to complain of any
act or failure to act or to declare an Event of Default, irrespective
of how long such failure continues, shall constitute a waiver by the
Mortgagee of its rights hereunder or impair any rights, powers or
remedies consequent on any future Event of Default by the Mortgagor.
(b) Even if the Mortgagee (i) grants some forbearance or an
extension of time for the payment of any sums secured hereby, (ii)
takes other or additional security for the payment of any sums secured
hereby, (iii) waives or does not exercise some right granted herein or
under the Financing Documents, (iv) releases a part of the Mortgaged
Property from this Mortgage, (v) agrees to change some of the terms,
covenants, conditions or agreements of any of the Financing Documents,
(vi) consents to the filing of a map, plat or replat affecting the
Premises, (vii) consents to the granting of an easement or other right
affecting the Premises or (viii) makes or consents to an agreement
subordinating the Mortgagee's lien on the Mortgaged Property hereunder;
no such act or omission shall preclude the Mortgagee from exercising
any other right, power or privilege herein granted or intended to be
granted in the event and during the continuance of any Event of Default
then made or of any subsequent Event of Default; nor, except as
otherwise expressly provided in an instrument executed by the
Mortgagee, shall this Mortgage be altered thereby. In the event of the
sale or transfer by operation of law or otherwise of all or part of the
Mortgaged Property, the Mortgagee is hereby authorized and empowered to
deal with any vendee or transferee with reference to the Mortgaged
Property secured hereby, or with reference to any of the terms,
covenants, conditions or agreements hereof, as fully and to the same
extent as it might deal with the original parties hereto and without in
any way releasing or discharging any liabilities, obligations or
undertakings.
SECTION 3.16 Remedies Cumulative. No right, power or remedy conferred
upon or reserved to the Mortgagee by this Mortgage is intended to be exclusive
of any other right, power or remedy, and each and every such right, power and
remedy shall be cumulative and concurrent and in addition to any other right,
power and remedy given hereunder or now or hereafter existing at law or in
equity or by statute; may, to the maximum extent permitted by applicable
Requirements of Law, be pursued separately, successively or together against the
Mortgagor or the Mortgaged Property, or both, at the sole discretion of
Mortgagee, and may be exercised as often as occasion therefor shall arise. The
delay or failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
23
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01 Partial Invalidity. If any provision hereof or of any of
the other Financing Documents is invalid or unenforceable in any jurisdiction or
under any circumstances, the other provisions hereof or of those Financing
Documents shall remain in full force and effect in such jurisdiction and the
remaining provisions hereof will be liberally construed in favor of the
Mortgagee in order to carry out the provisions hereof and of such other
Financing Documents. The invalidity of any provision of this Mortgage in any
jurisdiction or under any circumstances will not affect the validity or
enforceability of any such provision in any other jurisdiction or under any
other circumstances. If any lien, encumbrance or security interest evidenced or
created by this Mortgage is invalid or unenforceable, in whole or in part, as to
any part of the Obligations, or is invalid or unenforceable, in whole or in
part, as to any part of the Mortgaged Property, such portion, if any, of the
Obligations as is not secured by all of the Mortgaged Property hereunder shall
be paid prior to the payment of the portion of the Obligations and shall, unless
prohibited by applicable laws or unless the Mortgagee, in its sole and absolute
discretion, otherwise elects, be deemed to have been first paid on and applied
to payment in full of the unsecured or partially secured portion of the
Obligations, and the remainder to the secured portion of the Obligations.
SECTION 4.02 Notices. All notices hereunder, unless otherwise
specified, shall be given in the manner provided in Section 9.01 of the Credit
Agreement and shall be given to the Mortgagee at its address or telecopy number
set forth in the Credit Agreement and to the Mortgagor at its address or
telecopy number set forth in the signature page hereof or at any address or
telecopy number which such party shall have specified.
SECTION 4.03 Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the
successors and permitted assigns of the Mortgagor and the successors and assigns
of the Mortgagee.
SECTION 4.04 Counterparts. This Mortgage may be executed in any number
of counterparts and all such counterparts shall together constitute but one and
the same instrument.
SECTION 4.05 Satisfaction and Cancellation.
(a) The mortgaging to the Mortgagee of the Mortgaged Property
as security and for the benefit of the Mortgagee created and
consummated by this Mortgage shall be null and void when all the
Obligations (other than contingent liabilities that, by their nature,
may accrue after principal and interest the Obligations have been
repaid in full) have been indefeasibly paid in full in cash in
24
accordance with the terms of the Financing Documents and all
Commitments have been terminated.
(b) In connection with any termination or release pursuant to
paragraph (a) to the extent applicable, this Mortgage shall be marked
"satisfied" by the Mortgagee, and this Mortgage shall be satisfied of
record at the request and at the expense of the Mortgagor. The
Mortgagee shall execute any documents reasonably requested by the
Mortgagor to accomplish the foregoing or to accomplish any release
contemplated by paragraph (a) or (b) of this Section 3.05 and the
Mortgagor will pay all costs and expenses, including reasonable
attorneys' fees and disbursements actually incurred (not as imposed by
statute), incurred by the Mortgagee in connection with the preparation
and execution of such documents. Upon any such termination or release,
the Mortgagee will promptly duly assign, transfer and deliver (without
recourse and without any representation or warranty) free from any
interest of the Administrative Agent or Lien granted hereunder such of
the Collateral as may be in possession of the Administrative Agent in
accordance with the Intercreditor Agreement or, if the OPNY Second Lien
Documents shall have terminated pursuant to the terms thereof, to the
Mortgagor.
SECTION 4.06 Definitions. As used in this Mortgage, the singular shall
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including without
limitation" or "including but not limited to"; (b) "provisions" shall mean
"provisions, terms, covenants and/or conditions"; (c) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage or deed of trust"; (d)
"obligation" shall mean "obligation, duty, covenant and/or condition"; and (e)
"any of the Mortgaged Property" shall mean "the Mortgaged Property or any part
thereof or interest therein." Any act that the Mortgagee is permitted to perform
hereunder may be performed at any time and from time to time by the Mortgagee or
any person or entity designated by the Mortgagee. Any act which is prohibited to
the Mortgagor hereunder is also prohibited to all lessees of any of the
Mortgaged Property. Each appointment of the Mortgagee as attorney-in-fact for
the Mortgagor under the Mortgage is irrevocable, with power of substitution and
coupled with an interest.
SECTION 4.07 Other Financing Documents. The Mortgagor acknowledges that
in addition to this Mortgage, other Financing Documents secure the Obligations.
The Mortgagor agrees that the lien of this Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever of the Mortgagee and, without limiting the generality of
the foregoing, the lien hereof shall not be impaired by any acceptance by the
Mortgagee of any security for or guarantees of any of the Obligations hereby
secured, or by any failure, neglect or omission on the part of the Mortgagee to
realize upon or protect any Obligation hereby secured or any collateral security
therefor including the other Financing Documents. The lien hereof shall not in
any manner be impaired or affected by any release (except as to the property
released), sale, pledge, surrender, compromise,
25
settlement, renewal, extension, indulgence, alteration, changing, modification
or disposition of any of the Obligations secured or of any of the collateral
security therefor, including the other Financing Documents or of any guarantee
thereof, and the Mortgagee may at its discretion foreclose, exercise any power
of sale, or exercise any other remedy available to it under any or all of the
other Financing Documents without first exercising or enforcing any of its
rights and remedies hereunder. Such exercise of the Mortgagee's rights and
remedies under any or all of the other Financing Documents shall not in any
manner impair the Obligations hereby secured or the lien of this Mortgage and
any exercise of the rights or remedies of the Mortgagee hereunder shall not
impair the lien of any of the other Financing Documents or any of the
Mortgagee's rights and remedies thereunder. The undersigned specifically
consents and agrees that the Mortgagee may exercise its rights and remedies
hereunder and under the other Financing Documents separately or concurrently and
in any order that it may deem appropriate, and the undersigned waives any rights
of subrogation until the Obligations are paid in full in cash. In the event of a
conflict between the terms and provisions of this Mortgage and the Credit
Agreement, both documents shall be read together and construed, to the fullest
extent possible, to be in concert with each other. In the event of a conflict
that cannot be so resolved, the terms and provisions of the Credit Agreement
shall control and govern.
SECTION 4.08 Subrogation. This Mortgage is made with full substitution
and subrogation of the Mortgagee in and to all covenants and warranties by
others heretofore given or made in respect of the Mortgaged Property or any part
thereof.
SECTION 4.09 Mortgagee Powers. Without affecting the liability of any
other Person liable for the payment of any obligations herein mentioned and
without affecting the lien or charge of this Mortgage upon any portion of the
Mortgaged Property not then or theretofore released as security for the full
amount of all unpaid Obligations, from time to time, regardless of consideration
and without notice to or consent by the holder of any subordinate lien,
encumbrance, right, title or interest in or to the Mortgaged Property, the
Mortgagee may (a) release any Persons liable for or on any Obligation, (b)
extend the maturity or alter any of the terms of any Obligation, (c) modify the
interest rate payable on the principal balance of the Obligations, (d) grant
other indulgences, (e) release or reconvey, or cause to be released or
reconveyed at any time at the Mortgagee's option any parcel, portion or all of
the Mortgaged Property, (f) take or release any other or additional security for
any obligations herein mentioned or (g) make compositions or other arrangements
with debtors in relation thereto.
SECTION 4.10 Enforceability of Mortgage. This Mortgage is deemed to be
and may be enforced from time to time as an assignment, chattel mortgage,
contract, deed of trust, deed to secure debt, financing statement, real estate
mortgage or security agreement, and from time to time as any one or more
thereof, as is appropriate under applicable laws. A carbon, photographic or
other reproduction of this Mortgage or any financing statement in connection
herewith shall be sufficient as a financing statement for any and all purposes.
26
SECTION 4.11 Amendments. No amendment, modification or waiver of any
provision of this Mortgage and no consent to any departure by the Mortgagor or
the Mortgagee therefrom shall in any event be effective unless the same shall be
in writing and shall be executed and delivered in accordance with Section 9.02
of the Credit Agreement, and then such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 4.12 Applicable Law. THIS MORTGAGE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 4.13 Limitation of Recourse. The obligations of the Mortgagor
are the obligations solely of the Mortgagor (other than as expressly assumed by
any Credit Party or OPMW Credit Party pursuant to any Financing Document) and
shall not constitute a debt or obligation of any direct or indirect member,
partner or shareholder of Mortgagor or any of their respective directors,
officers, agents or employees (each such Person, a "Non-Recourse Party"). No
Non-Recourse Party shall be liable for any amount payable by the Mortgagor under
this Mortgage and the Secured Parties shall not seek a money judgment or
deficiency or personal judgment against any Non-Recourse Party for payment of
the indebtedness payable by the Mortgagor evidenced by this Mortgage. No
property or assets of any Non-Recourse Party other than as contemplated in the
Financing Documents, shall be sold, levied upon or otherwise used to satisfy any
judgment rendered in connection with any action brought against the Mortgagor
with respect to this Mortgage or the other Financing Documents. The foregoing
acknowledgments, agreements and waivers shall be enforceable by any Non-Recourse
Party. Notwithstanding the foregoing, nothing in this Section shall limit or
affect or be construed to limit or affect the obligations and liabilities of any
Credit Party, OPMW Credit Party or any other Non-Recourse Party (a) in
accordance with the terms of any Transaction Document or Financing Document
creating such liabilities and obligations to which such Credit Party, OPMW
Credit Party or Non-Recourse Party is a party, or (b) arising from liability
pursuant to applicable Requirements of Law for such Credit Party's, OPMW Credit
Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the Credit Agreement.
SECTION 4.14 Amendment and Restatement. This Mortgage is an amendment
and restatement of the Mortgage, Security Agreement, Fixture Filing and
Assignment of Leases and Rents, dated as of August 20, 1999 (the "Original
Mortgage") among the Mortgagor and the Mortgagee recorded in (i) the Office of
the City Register, County of Kings, New York, in Reel 4573, Page 1122 and (ii)
the Office of the City Register, County of Queens in Reel 5376, Page 1582. It is
the intention of the parties that this Mortgage amend, restate, extend and renew
the terms and conditions of the Original Mortgage and the liens and security
interests created thereby, and is not intended to be a novation or discharge of
the obligations of the Mortgagor thereunder or the liens and security interests
created thereby. The liens and security interests of the Original
27
Mortgage are hereby ratified, confirmed, renewed, extended, and brought forward
in full force and effect as security for the Obligations.
28
IN WITNESS WHEREOF, this Mortgage has been duly authorized and has been
executed and delivered, under seal, to the Mortgagee by the Mortgagor on the
date first above written.
ASTORIA GENERATING COMPANY, L.P.
By: Orion Power New York GP, Inc., its general
partner
By:____________________________________________
Name:
Title
1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
Attachments:
Exhibit A - The Land
Exhibit B - The Permitted Encumbrances
STATE OF _______________________________)
:SS.:
COUNTY OF _____________________________)
On the _____ day of ______________, in the year 20___,
___________________________personally appeared before me in the
______________(city) in ______________(state) and is personally known to me or
proved to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is (are) subscribed to this Mortgage, and being by me duly sworn, did
depose and acknowledge to me that ___he resides at
______________________________________, that he is the ________________ of the
corporation described in and which executed the foregoing instrument as the
general partner of _________________________________, a Delaware limited
partnership; and that ___he signed h___ name thereto by authority of the board
of directors of said corporation, and that ___he, as such ____________ of the
General Partner, being authorized to do so, executed the foregoing Mortgage in
the name of such limited partnership by h(im)(er) self in his/her capacity as
____________ of the General Partner, on behalf of said limited partnership.
------------------------------
NOTARY PUBLIC
My Commission Expires:
EXHIBIT A
Legal Description
See attached.
EXHIBIT B
Permitted Encumbrances
Gowanus:
Schedule B, Part 1 of Commonwealth Land Title Insurance Company ALTA
Loan Policy No. NY020250, dated October 28, 2002, such policy is hereby
incorporated by reference into this Exhibit B as if fully set forth
herein.
Astoria:
Schedule B, Part 1 of Commonwealth Land Title Insurance Company ALTA
Loan Policy No. NY020251, dated October 28, 2002, such policy is hereby
incorporated by reference into this Exhibit B as if fully set forth
herein.
Narrows:
Schedule B, Part 1 of Commonwealth Land Title Insurance Company ALTA
Loan Policy No. NY020249, dated October 28, 2002, such policy is hereby
incorporated by reference into this Exhibit B as if fully set forth
herein.
EXHIBIT C
Title Affidavit for Astoria
1. Access Agreement made by and between Berrians I Gas Turbines Power LLC
and Orion Power New York, dated 3/7/2002 and 3/4/2002 (unrecorded).
(Affects Parcel 2).
EXHIBIT N-1-B
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
AMENDED AND RESTATED SUPPLEMENTAL MORTGAGE,
SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS
(COLLATERAL IS OR INCLUDES FIXTURES)
DATED AS OF OCTOBER 28, 2002
FROM
ASTORIA GENERATING COMPANY, L.P.,
MORTGAGOR
TO
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
FOR THE BENEFIT OF THE SECURED PARTIES,
MORTGAGEE
BOROUGH OF BROOKLYN, COUNTY OF KINGS, CITY AND STATE OF NEW YORK
BOROUGH AND COUNTY OF QUEENS, CITY AND STATE OF NEW YORK
THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED
OR TO BE IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE
AGGREGATE NOT MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH
DWELLING UNIT HAVING ITS OWN SEPARATE COOKING FACILITIES.
- --------------------------------------------------------------------------------
Record and return to:
McGuireWoods LLP
Bank of America Corporate Center
100 North Tryon Street, Suite 2900
Charlotte, NC 28202
Attn: Marvin L. Rogers
TABLE OF CONTENTS
<Table>
<Caption>
Article Section Page
Article I. OBLIGATIONS AND THE REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE MORTGAGOR 6
SECTION 1.01 Obligations...............................................6
SECTION 1.02 Continuing Security.......................................7
SECTION 1.03 Maximum Secured Amount....................................7
Article II. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR 8
SECTION 2.01 Title.....................................................8
SECTION 2.02 Credit Agreement..........................................8
SECTION 2.03 Payment of Taxes, Liens and Charges.......................9
SECTION 2.04 Payment of Closing Costs.................................10
SECTION 2.05 Maintenance and Operations; Plans; Use...................10
SECTION 2.06 Insurance................................................10
SECTION 2.07 New York Insurance Waiver................................10
SECTION 2.08 [INTENTIONALLY OMITTED.].................................11
SECTION 2.09 Assignment of Leases and Rents...........................11
SECTION 2.10 Restrictions on Transfers and Encumbrances...............11
SECTION 2.11 Security Agreement.......................................11
SECTION 2.12 Filing and Recording.....................................12
SECTION 2.13 Mortgage of Definite Amount..............................12
SECTION 2.14 Trust Fund...............................................13
SECTION 2.15 Further Assurances.......................................13
SECTION 2.16 Additions to Mortgaged Property..........................13
SECTION 2.17 No Claims Against the Mortgagee..........................14
SECTION 2.18 Change in Tax Law........................................14
SECTION 2.19 Survey of Mortgaged Property.............................14
SECTION 2.20 Contract Collateral......................................14
Article III. DEFAULTS AND REMEDIES 15
SECTION 3.01 Events of Default........................................15
SECTION 3.02 Demand for Payment.......................................15
SECTION 3.03 Rights to Take Possession, Operate and Apply Revenues....15
SECTION 3.04 Right to Cure the Mortgagor's Failure to Perform.........16
SECTION 3.05 Right to a Receiver......................................17
SECTION 3.06 Foreclosure and Sale.....................................17
SECTION 3.07 Other Remedies...........................................18
SECTION 3.08 Application of Sale Proceeds and Rents...................19
SECTION 3.09 The Mortgagor as Tenant Holding Over.....................19
SECTION 3.10 Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws......................................19
SECTION 3.11 Discontinuance of Proceedings............................20
</Table>
i
SECTION 3.12 Suits to Protect the Mortgaged Property..................20
SECTION 3.13 Filing Proofs of Claim...................................20
SECTION 3.14 Possession by the Mortgagee..............................20
SECTION 3.15 Waiver...................................................20
SECTION 3.16 Remedies Cumulative......................................21
Article IV. MISCELLANEOUS 21
SECTION 4.01 Partial Invalidity.......................................21
SECTION 4.02 Notices..................................................22
SECTION 4.03 Successors and Assigns...................................22
SECTION 4.04 Counterparts.............................................22
SECTION 4.05 Satisfaction and Cancellation............................22
SECTION 4.06 Definitions..............................................23
SECTION 4.07 Other Financing Documents................................23
SECTION 4.08 Subrogation..............................................24
SECTION 4.09 Mortgagee Powers.........................................24
SECTION 4.10 Enforceability of Mortgage...............................24
SECTION 4.11 Amendments...............................................24
SECTION 4.12 Applicable Law...........................................24
SECTION 4.13 Limitation of Recourse...................................24
SECTION 4.14 Amendment and Restatement................................25
ii
AMENDED AND RESTATED SUPPLEMENTAL MORTGAGE,
SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT
OF LEASES AND RENTS
THIS AMENDED AND RESTATED SUPPLEMENTAL MORTGAGE, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS dated as of October 28, 2002
(this "Mortgage"), is made by ASTORIA GENERATING COMPANY, L.P., a Delaware
limited partnership, having an office at 225 Greenfield Parkway, Suite 201,
Liverpool, NY 13008 (the "Mortgagor"), to BANK OF AMERICA, N.A., as
Administrative Agent for the benefit of the Secured Parties referred to in the
Credit Agreement (as defined below), having an office at 101 North Tryon Street,
NC1-001-08-19, Charlotte, NC 28255 (in such capacity, together with its
successors, substitutes and assigns, the "Mortgagee").
RECITALS:
A. Reference is hereby made, for all purposes, to (i) that certain Amended
and Restated Credit Agreement dated as of October 28, 2002 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Orion Power New York, L.P., a Delaware limited
partnership, as borrower ("Borrower"), Banc of America Securities LLC and BNP
Paribas, as Lead Arrangers and Joint Book Runners, each other financial
institution which is a signatory thereto or which may hereafter become an
assignee pursuant to Section 9.06 of the Credit Agreement (each, a "Lender" and
collectively the "Lenders"), Bank of America, N.A., as Issuing Bank, and the
Mortgagee, as Issuing Bank and Administrative Agent, Union Bank of California,
N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
Documentation Agents and BNP Paribas, as Syndication Agent, (ii) that certain
Guarantee Agreement dated October 28, 2002 from the Mortgagor in favor of the
Mortgagee (the "Guarantee") and (iii) all other documents and instruments that
are collectively defined as the "Financing Documents" in the Credit Agreement.
All capitalized terms not expressly defined in this Mortgage shall have the
meaning given to them and shall be subject to the rules of construction set
forth in the Credit Agreement. Pursuant to the Credit Agreement, the Acquisition
Lenders have extended, upon the terms and subject to the conditions of the
Credit Agreement, credit to Borrower in the aggregate principal amount of up to
$352,549,541.00 in the form of Acquisition Loans, as evidenced by promissory
notes having a final maturity date of no later than October 28, 2002 (the
"Acquisition Loans"). In addition to the Acquisition Loans and pursuant to the
Credit Agreement, the Working Capital Lenders have also extended, or agreed to
extend, credit to Borrower in the form of certain Working Capital Loans in an
aggregate principal amount of up to $30,000,000.00, having a final maturity date
of no later than October 28, 2005 (the "Working Capital Loans"). The Acquisition
Loans and the Working Capital Loans are hereinafter referred to collectively as
the "Loans".
B. The Mortgagor is a subsidiary of Borrower and has or will receive both
direct and indirect benefits from the Loans made to Borrower.
C. The obligation of the Acquisition Lenders to make the Loans is
conditioned upon, among other things, the execution and delivery by the
Mortgagor of this Mortgage to secure, subject to the limitations set forth in
Section 1.03, the due and punctual payment and performance of the Obligations
(defined below).
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the indebtedness evidenced by the Notes
and the other Financing Documents and in order to secure the due and punctual
payment and performance of the Obligations and intending to be legally bound
hereby, the Mortgagor hereby mortgages, gives, grants, bargains, sells, aliens,
enfeoffs, confirms, transfers, sets over, pledges, assigns, hypothecates and
conveys as security, grants a security interest in, hypothecates, mortgages,
pledges and sets over unto the Mortgagee, with power of sale, and with mortgage
covenants, subject, however, to Permitted Encumbrances (as hereinafter defined)
and other Permitted Liens, all the following described property whether now
owned or held or hereafter acquired (collectively, the "Mortgaged Property"):
(1) the parcel or parcels of land located in Queens and Kings
Counties, New York, as more particularly described on Exhibit A-1 through
Exhibit A-3 attached hereto (the "Land"), together with all rights
appurtenant thereto, including without limitation, all strips and gores
within or adjoining the Land, all estate, right, title, interest, claim or
demand of the Mortgagor in the streets, roads, sidewalks, alleys and ways
adjacent thereto (whether or not vacated and whether public or private and
whether open or proposed), all easements over adjoining land granted by any
easement agreements, covenants or restrictive agreements, all of the
tenements, hereditaments, easements, reciprocal easement agreements, rights
pursuant to any trackage agreement, rights to the use of common drive
entries, rights-of-way and other rights, privileges and appurtenances
thereunto belonging or in any way pertaining thereto, all reversions,
remainders, dower and right of dower, curtesy and right of curtesy, all of
the air space and right to use air space above such property, all
transferable development rights arising therefrom or transferred thereto,
all water and water rights and water rights applications (whether riparian,
appropriative or otherwise, and whether or not appurtenant), all pumps,
pumping plants, pipes, flumes and ditches thereunto appertaining, all
rights and ditches for irrigation, all utility rights, sewer rights, and
any shares of stock evidencing the same, all oil, gas and other minerals
and mineral substances (which term shall include all gypsum, anhydrite,
coal, lignite, hydrocarbon or other fossil materials or substances,
fissionable materials or substances and all other minerals of any kind or
character, whether gaseous, liquid or hard minerals, whether similar or
dissimilar to those named, whether now or hereafter found to exist and
whether associated with the surface or mineral estate) in, on or under the
Land or produced, saved or severed from the Land, all mineral, mining,
gravel, oil, gas, hydrocarbon rights and other rights to produce or share
in the production of anything related to such property, all drainage, crop,
timber, agricultural, and horticultural rights with respect to such
property, and all other appurtenances appurtenant to such property,
including without limitation, any now or hereafter belonging or in any way
appertaining thereto, and all claims or demands of Mortgagor, either at law
or in
2
equity, in possession or expectancy, now or hereafter acquired, of, in or
to the same (the Land and all of the foregoing being sometimes referred to
herein collectively as the "Premises");
(2) all of the Mortgagor's right, title and interest in and to all
buildings, improvements, fixtures and other structures or improvements of
any kind now or hereafter erected or located upon the Land, including, but
not limited to, all building materials, water, sanitary and storm sewers,
drainage, electricity, steam, gas, telephone and other utility facilities,
parking areas, roads, driveways, walks and other site improvements; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof, owned or to be owned by the Mortgagor or in which the
Mortgagor has or shall acquire an interest, to the extent of the
Mortgagor's interest therein, now or hereafter erected or located upon the
Land (collectively, the "Improvements");
(3) AND AS INDEPENDENT AND SEPARATE SECURITY for the payment of the
Indebtedness and the performance of the obligations and covenants and
agreements secured hereby, all of the Mortgagor's right, title and interest
in and to the following (collectively, the "Personal Property"):
(a) all personal property and fixtures of every kind and nature
whatsoever which are now or hereafter located on, attached to,
incorporated in (regardless of where located) or affixed to the
Premises or the Improvements or used or useful in connection with the
ownership, construction, maintenance, repair, reconstruction,
alteration, addition, improvement, operation, mining, use or occupancy
of the Premises or the Improvements, including, without limitation,
all goods, inventory, construction materials, equipment, mining
equipment, tools, furniture, furnishings, fittings, fixtures,
supplies, computers and computer programs, carpeting, draperies,
blinds, window treatments, racking and shelving systems, heating,
lighting, plumbing, ventilating, air conditioning, refrigerating,
incinerating and/or compacting plants, systems and equipment,
elevators, escalators, appliances, stoves, ranges, refrigerators,
vacuum, window washing and other cleaning and building service
systems, call systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, cables, antennae, pipes, ducts,
conduits, machinery, apparatus, motors, dynamos, engines, compressors,
generators, boilers, stokers, furnaces, pumps, tanks, appliances,
garbage systems and pest control systems and all of the Mortgagor's
present and future "goods", "equipment" and "fixtures" (as such terms
are defined in the New York Uniform Commercial Code) and other
personal property, including without limitation any such personal
property and fixtures which are leased, and all repairs, attachments,
betterments, renewals, replacements, substitutions and accessions
thereof and thereto; and
(b) all general intangibles now owned or hereafter acquired by
the Mortgagor and relating to the design, development, operation,
management and use of the Premises or the Improvements, including, but
not limited to, all contract
3
rights, trademarks, trade names, logos and other rights relating to
the name and style under which the Premises and the Improvements are
operated;
(4) all of the Mortgagor's right, title and interest in and to all
approvals, authorizations, building permits, certificates of occupancy,
zoning variances, use permits, certifications, entitlements, exemptions,
franchises, licenses, orders, variances, plat plan approvals, environmental
approvals, air pollution authorities to construct and permits to operate,
sewer and waste discharge permits, national pollutant discharge elimination
system permits, water permits, zoning and land use entitlements and all
other permits, whether now existing or hereafter issued to or obtained by
or on behalf of Mortgagor, that relate to or concern in any way the
Premises or the Improvements and are given or issued by any governmental or
quasi-governmental authority, whether now existing or hereafter created (as
the same may be amended, modified, renewed or extended from time to time,
and including all substitutions and replacements therefor), all rights
under and pursuant to all construction, service, engineering, consulting,
management, access, supply, leasing, architectural and other similar
contracts relating in any way to the design, construction, management,
operation, occupancy and/or use of the Premises and Improvements, all
rights under all purchase agreements, sales agreements, option contracts,
land contracts and contracts for the sale of oil, gas and other minerals,
or any of them, that relate to or concern in any way the Premises or the
Improvements, all abstracts of title, architectural, engineering or
construction drawings, plans, specifications, operating manuals, computer
programs, computer data, maps, surveys, soil tests, feasibility studies,
appraisals, environmental studies, engineering reports and similar
materials relating to any portion of or all of the Premises and
Improvements, and all payment and performance bonds or warranties or
guarantees relating to the Premises or the Improvements, all to the extent
assignable (collectively, the "Permits, Plans and Contracts");
(5) all of the Mortgagor's interest in and rights under all leases or
licenses (under which the Mortgagor is landlord or licensor) and subleases
(under which the Mortgagor is sublandlord), concession, franchise,
management, mineral or other agreements relating to the use or occupancy of
the Premises or the Improvements or any part thereof for any purpose, or
the extraction or taking of any gas, oil, water or other minerals from the
Premises, whether now or hereafter existing or entered into (including any
use or occupancy arrangements created pursuant to Section 365(d) of the
Bankruptcy Code (as defined in Section 1.01) or otherwise in connection
with the commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar proceedings,
or any assignment for the benefit of creditors, in respect of any tenant or
occupant of any portion of the Premises or the Improvements), and all
guaranties thereof and all amendments, modifications, supplements,
extensions or renewals thereof (collectively, the "Leases"), and all rents,
issues, profits, revenues, charges, fees, receipts, royalties, proceeds
from the sale of oil, gas and/or other minerals (whether gaseous, liquid or
hard minerals, whether similar or dissimilar to those named and whether
associated with the surface or mineral estate), accounts receivable, cash
or security deposits and other deposits (subject to the prior right of the
tenants making such deposits) and income, and other benefits now or
hereafter derived from any portion of the Premises or the Improvements or
the use or occupancy thereof (including any payments
4
received pursuant to Section 502(b) of the Bankruptcy Code or otherwise in
connection with the commencement or continuance of any bankruptcy,
reorganization, arrangement, insolvency, dissolution, receivership or
similar proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or other occupants of any portion of the Premises or
the Improvements and all claims as a creditor in connection with any of the
foregoing) and all payments of a similar nature, now or hereafter,
including during any period of redemption, derived from the Premises or the
Improvements or any other portion of the Mortgaged Property and all
proceeds from the cancellation, surrender, sale or other disposition of the
Leases (collectively, the "Rents");
(6) all of the Mortgagor's right, title and interest in and to all
refunds or rebates of real and personal property taxes or charges in lieu
of taxes, heretofore or now or hereafter assessed or levied against all or
any of the Premises, the Improvements, the Personal Property, the Leases,
the Rents and the Permits, Plans and Contracts, including interest thereon,
and the right to receive the same, whether such refunds or rebates relate
to fiscal periods before or during the term of this Mortgage;
(7) all of the Mortgagor's right, title and interest in and to all
insurance policies and the proceeds thereof, now or hereafter in effect
with respect to all or any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts,
including, without limitation, any and all title insurance proceeds, and
all unearned premiums and premium refunds, accrued, accruing or to accrue
under such insurance policies, and all awards made for any taking of or
damage to all or any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts, by
eminent domain, or by any purchase in lieu thereof, and all awards
resulting from a change of grade of streets or for severance damages, and
all other proceeds of the conversion, voluntary or involuntary, of all or
any of the Premises, Improvements, the Personal Property, the Leases, the
Rents and the Permits, Plans and Contracts, into cash or other liquidated
claims, and all judgments, damages, awards, settlements and compensation
(including interest thereon) heretofore or hereafter made to the present
and all subsequent owners of the Premises, Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts, or
any part thereof for any injury to or decrease in the value thereof for any
reason;
(8) all of the Mortgagor's right, title and interest in and to the
following:
(a) all right, in the name and on behalf of the Mortgagor, to
appear in and defend any action or proceeding brought with respect to
all or any of the Premises, Improvements, the Personal Property, the
Leases, the Rents and the Permits, Plans and Contracts, and to
commence any action or proceeding to protect the interest of Mortgagor
in all or any of the Premises, Improvements, the Personal Property,
the Leases, the Rents and the Permits, Plans and Contracts;
(b) all right and power to encumber further all or any of the
Premises, Improvements, the Personal Property, the Leases, the Rents
and the Permits, Plans and Contracts, or any part thereof;
5
(c) all rights, titles, interests, estates or other claims, both
in law and in equity, which the Mortgagor now has or may hereafter
acquire in any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents or the Permits, Plans and Contracts,
or in and to any greater estate in all or any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts;
(d) all property hereafter acquired or constructed by the
Mortgagor of the type described above which shall forthwith, upon
acquisition or construction thereof by the Mortgagor and without any
act or deed by any party, become subject to the lien and security
interest of this Mortgage as if such property were now owned by the
Mortgagor and were specifically described in this Mortgage and were
specifically conveyed or encumbered hereby; and
(9) all accessions, additions or attachments to, and proceeds or
products of, any of the foregoing.
TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges
hereby granted and conveyed or intended to be, unto the Mortgagee, its
successors and assigns for the uses and purposes herein set forth, for the
benefit and security of the Mortgagee, subject only to the Permitted
Encumbrances (as hereinafter defined) and other Permitted Liens, upon the terms
and conditions set forth herein.
ARTICLE I.
OBLIGATIONS AND THE REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 1.01 Obligations. This Mortgage is executed, acknowledged and
delivered by the Mortgagor to secure and enforce, and the Mortgaged Property is
security for, the due and punctual payment and performance of (i) all
obligations of Borrower under the Credit Agreement, the Acquisition Notes and
other Financing Documents to pay or repay the principal of, and accrued and
unpaid interest on, the Acquisition Loans, when and as due, whether at maturity,
by acceleration, upon one or more dates set for prepayment or otherwise, (ii)
all obligations of the Mortgagor under and pursuant to the Guarantee (other than
with respect to Working Capital Loans), (iii) all Fees, reasonable expenses,
indemnities and expense reimbursement obligations of Borrower or any of its
Subsidiaries under the Credit Agreement or any other Financing Documents,
including this Mortgage, in respect of the Acquisition Loans, (iv) all other
obligations, covenants and agreements, monetary or otherwise, of Borrower or any
of its Subsidiaries under any Financing Document to which it is a party, in each
case, whether now owing or hereafter existing (other than with respect to the
Working Capital Loans), (v) all extensions of credit, disbursements, and
advances made by the Mortgagee for the payment of taxes (excluding income,
franchise, estate, inheritance, transfer or similar entity taxes), common area
charges, maintenance charges, insurance premiums, and all other fees, reasonable
expenses or advances in connection with or relating to the Mortgaged Property,
and interest on such
6
disbursements and other amounts not timely paid in accordance with the terms of
the Credit Agreement, this Mortgage and the Financing Documents (excluding the
OPH Membership Interest Pledge Agreement), (vi) all sums with respect to the
foregoing that would become due but for the operation of the automatic stay
under Section 362(a) of Title 11 of the United States Code (the "Bankruptcy
Code"), including interest, fees and other charges that, but for the filing of a
petition in bankruptcy with respect to Borrower would accrue on the foregoing
whether or not a claim is alleged against Borrower for such sums in any such
bankruptcy proceeding; (vi) other costs incurred for the protection of the
Mortgaged Property or the lien of this Mortgage and expenses incurred by the
Mortgagee by reason of the occurrence of an Event of Default, and (vii) all
increases, refinancings, renewals, extensions, amendments, modifications,
restatements, changes and supplements of, or substitutions or replacements for,
or related or in connection with all or any part of the Notes, the Credit
Agreement and other Financing Documents (the obligations referred to in clauses
(i) through (vii) inclusive, expressly excluding any principal or interest
obligations relating to the Working Capital Loans, shall hereinafter
collectively be called the "Obligations" and individually as "Obligation").
SECTION 1.02 Continuing Security. This Mortgage is given as a second
priority mortgage, and in addition to, that certain first priority mortgage of
even date herewith from the Mortgagor to the Mortgagee (the "First Mortgage"),
and shall continue to secure the entire outstanding amount of the Obligations,
subject and in addition to the First Mortgage, up to the maximum principal
amount of $260,000,000 until all of the Obligations have been paid in full. This
Mortgage is subordinate to the First Mortgage.
SECTION 1.03 Maximum Secured Amount. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, THE MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS SECURED
BY THIS MORTGAGE AT THE TIME OF EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY
HEREAFTER BECOME SECURED BY THIS MORTGAGE AT ANY TIME IS TWO HUNDRED SIXTY
MILLION AND NO/100 DOLLARS ($260,000,000); PROVIDED, THAT, SUCH LIMITATION SHALL
NOT LIMIT THE SECURITY OF THIS MORTGAGE WITH RESPECT TO (A) INTEREST ON THE
AFORESAID PRINCIPAL INDEBTEDNESS AT THE RATES SET FORTH IN THE CREDIT AGREEMENT
AND THE ACQUISITION NOTES, AND (B) REPAYMENT TO THE MORTGAGEE AFTER THE
OCCURRENCE OF A DEFAULT OF SUMS ADVANCED OR PAID FOR REAL ESTATE TAXES, CHARGES
AND ASSESSMENTS THAT MAY BE IMPOSED BY LAW UPON THE MORTGAGED PROPERTY, AND (C)
REPAYMENT TO THE MORTGAGEE AFTER THE OCCURRENCE OF A DEFAULT OF SUMS ADVANCED OR
PAID FOR INSURANCE PREMIUMS WITH RESPECT TO THE MORTGAGED PROPERTY, AND (D)
REPAYMENT TO THE MORTGAGEE AFTER THE OCCURRENCE OF A DEFAULT OF ALL REASONABLE
LEGAL COSTS OR EXPENSES OF COLLECTION OF THE INDEBTEDNESS SECURED BY THIS
MORTGAGE OR OF THE DEFENSE OR PROSECUTION OF THE RIGHTS AND LIEN CREATED BY THIS
MORTGAGE, AND (E) REPAYMENT TO THE MORTGAGEE OF SUMS ADVANCED OR PAID TO WHICH
THE MORTGAGEE BECOMES SUBROGATED, UPON PAYMENT, UNDER RECOGNIZED PRINCIPLES OF
LAW OR EQUITY, OR UNDER EXPRESS STATUTORY AUTHORITY.
7
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR
The Mortgagor agrees, covenants, represents and warrants as follows:
SECTION 2.01 Title.
(a) The Mortgagor has good, marketable, indefeasible, fee simple title to
the Land and Improvements and good and marketable title to or valid leasehold
easement or right-of-way interests in, all of the other Mortgaged Property,
except in each case where the failure to have such title or interest could not
reasonably be expected to have a material adverse effect on the Mortgaged
Property. This Mortgage is and will remain a valid and enforceable first lien on
the Mortgaged Property subject to no Liens other than the exceptions and
encumbrances set forth in Exhibit B attached hereto (collectively, the
"Permitted Encumbrances") and other Permitted Liens.
(b) [INTENTIONALLY OMITTED.]
(c) The Mortgagor has good and lawful right and full power and authority to
encumber or grant a security interest in the Mortgaged Property. The Mortgagor
will forever warrant and defend its title to the Mortgaged Property, the rights
of the Mortgagee therein under this Mortgage and the validity and priority of
the lien of this Mortgage thereon against the claims of all persons and parties
except those having rights under the Permitted Encumbrances or other Permitted
Liens to the extent of those rights.
(d) This Mortgage, when duly recorded in the appropriate public records and
when financing statements are duly filed in the appropriate public records, will
create a valid, perfected and enforceable lien upon and security interest in all
the material Mortgaged Property in which a security interest can be perfected.
SECTION 2.02 Credit Agreement.
(a) This Mortgage is given pursuant to the Credit Agreement. Subject to and
without limiting, Section 3.07 hereof, each and every term and provision of the
Credit Agreement, including the rights, remedies, obligations, covenants,
conditions, agreements, indemnities, representations and warranties of the
parties thereto shall be considered as if a part of this Mortgage. Subject to
the limitations set forth in Section 1.03, this Mortgage secures all present and
future Indebtedness of Borrower and the Mortgagor in respect of loan
disbursements made by the Lenders under the Acquisition Loan Notes, and all
other Obligations from time to time owing to the Lenders under the Financing
Documents (other than with respect to Working Capital Loans).
(b) If any remedy or right of the Mortgagee pursuant hereto is acted upon
by the Mortgagee or if any actions or proceedings (including any bankruptcy,
insolvency or reorganization proceedings) are commenced in which the Mortgagee
is made a party and is obliged to defend or uphold or enforce this Mortgage or
the rights of the Mortgagee
8
hereunder or the terms of any Lease, or if a condemnation proceeding is
instituted affecting the Mortgaged Property, the Mortgagor will pay all sums,
including reasonable attorneys' fees and disbursements, actually incurred (not
as imposed by statute) by the Mortgagee related to the exercise of any remedy or
right of the Mortgagee pursuant hereto or for the expense of any such action or
proceeding together with all other costs (not as imposed by statute),
disbursements and allowances, interest thereon from the date of demand for
payment thereof at the Default Rate, and such sums and the interest thereon
shall, to the extent permissible by applicable Requirements of Law, be a lien on
the Mortgaged Property prior to any right, title to, interest in or claim upon
the Mortgaged Property attaching or accruing subsequent to the recording of this
Mortgage and, subject to the limitations set forth in Section 1.03, shall be
secured by this Mortgage to the extent permitted by applicable Requirements of
Law.
(c) Any payment of amounts due under this Mortgage not made on or before
the due date for such payments shall accrue interest daily without notice from
the due date until paid at the Default Rate, and such interest at the Default
Rate shall be immediately due upon demand by the Mortgagee.
SECTION 2.03 Payment of Taxes, Liens and Charges.
(a) The Mortgagor will pay and discharge (whether by it or any Affiliate,
or otherwise) from time to time prior to the time when the same shall become
delinquent, and before any interest or penalty accrues thereon or attaches
thereto, all taxes, assessments and governmental charges, levies, or obligations
lawfully imposed upon or assessed against the Mortgagor, the Mortgaged Property
or any part thereof or upon the Rents from the Mortgaged Property or arising in
respect of the occupancy, use or possession thereof and all lawful claims or
obligations that, if unpaid, would become a Lien upon the Mortgaged Property or
upon any part thereof; except as the validity or amount of such taxes,
assessments, charges, levies or obligations may be contested by the Mortgagor in
accordance with Section 5.12 of the Credit Agreement. Upon the reasonable
written request of the Administrative Agent, the Mortgagor shall promptly
deliver to the Administrative Agent, at the same place as designated in Section
3.02 below, reasonably satisfactory evidence that all payments required under
this Section 1.06 have been timely made.
(b) In the event of the passage of any state, Federal, municipal or other
governmental law, order, rule or regulation subsequent to the date hereof (i)
deducting from the value of real property for the purpose of taxation any lien
or encumbrance thereon or in any manner changing or modifying the laws now in
force governing the taxation of this Mortgage or debts secured by mortgages or
deeds of trust (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing a tax to
be paid by the Mortgagee, either directly or indirectly, on this Mortgage or any
of the Financing Documents or to require an amount of taxes to be withheld or
deducted therefrom, upon obtaining actual knowledge thereof, the Mortgagor will
promptly notify the Mortgagee of such event. In such event the Mortgagor shall
(i) agree to enter into such further instruments as may be reasonably
9
necessary or desirable to obligate the Mortgagor to make any applicable
additional payments and (ii) the Mortgagor shall make all such additional
payments, except as such law, order, rule, regulation or payment may be
contested by the Mortgagor in good faith and by appropriate proceedings and
pursuant to which Acceptable Reserves have been established.
SECTION 2.04 Payment of Closing Costs. The Mortgagor shall pay all
reasonable costs in connection with, relating to or arising out of the
preparation, execution and recording of this Mortgage, including title company
premiums and charges, inspection costs, survey costs, recording fees and taxes
(including without limitation all New York Mortgage Recording Taxes), reasonable
attorneys', engineers', appraisers' and consultants' fees and disbursements and
all other similar reasonable expenses of every kind.
SECTION 2.05 Maintenance and Operations; Plans; Use.
(a) The Mortgagor will, subject to Section 6.11 of the Credit
Agreement, (i) operate and maintain the Mortgaged Property in accordance
with Prudent Industry Practice and all applicable material Requirements of
Law, except where being contested in good faith and by appropriate
proceedings and as to which Acceptable Reserves have been established, or
except when the failure to so operate and maintain the Mortgaged Property
could not be reasonably expected to have a material adverse effect on the
Mortgaged Property and (ii) keep proper books of records and accounts in
which full, true and correct entries shall be made of all entries shall be
made of all of its transactions in accordance with GAAP.
(b) The Mortgagor shall at all times comply with its material
obligations under all recorded restrictions, conditions, easements and
covenants ("Restrictive Covenants") encumbering the Land and shall duly
enforce its rights under all Restrictive Covenants encumbering other
property for the benefit of the Land and/or the Improvements, except where
the failure to so comply could not reasonably be expected to have a
material adverse effect on the Mortgaged Property. If the Mortgagor
receives any notice (whether oral or written) that any Restrictive Covenant
has been violated, which violation would be reasonably likely to have a
material adverse effect on the Mortgaged Property, the Mortgagor shall
promptly notify the Mortgagee and take such steps as the Mortgagee may
reasonably require to correct such violation.
SECTION 2.06 Insurance. The Mortgagor will keep the Mortgaged Property
insured against such risks, and in the manner, required by the terms of Section
5.06 of the Credit Agreement. All premiums due under all insurance policies
required to be maintained under Section 5.06 of the Credit Agreement shall be
paid timely by, or on behalf of, the Mortgagor.
SECTION 2.07 New York Insurance Waiver. The provisions of subsection 4 of
Section 254 of the Real Property Law of New York covering the insurance of
buildings against loss by fire that are inconsistent with the provisions of this
Mortgage shall not apply to the terms of this Mortgage. Nothing contained
herein, except for the immediately preceding sentence, shall be construed as
depriving the Mortgagee of any right or advantage available under Section 254 of
10
the Real Property Law of the State of New York, and all covenants herein that
differ therefrom shall be construed as conferring additional and not substitute
rights and advantages.
SECTION 2.08 [INTENTIONALLY OMITTED.]
SECTION 2.09 Assignment of Leases and Rents.
(a) The Mortgagor hereby irrevocably and absolutely grants, transfers
and assigns to the Mortgagee all of its right, title and interest in and to
all Leases, together with any and all extensions and renewals thereof for
purposes of securing and discharging the performance by Borrower and the
Mortgagor of the Obligations. The Mortgagor has not assigned or executed
any assignment of, and will not assign or execute any assignment of, any
Lease or its respective Rents to anyone other than to the Mortgagee, except
as otherwise permitted under the Credit Agreement and the other Financing
Documents.
(b) This Mortgage is intended to be, and shall operate as, the
agreement described in Section 291-f of the Real Property Law of the State
of New York and shall be entitled to the benefits afforded thereby.
SECTION 2.10 Restrictions on Transfers and Encumbrances. The Mortgagor
shall not create or permit to exist any Lien on the Mortgaged Property, other
than any Permitted Lien or Permitted Encumbrance; provided, however, that the
Mortgagor may grant easements and licenses, enter into easements, leases,
subleases, and enter into other similar agreements relating to the Mortgaged
Property in the ordinary course of business to the extent the same would not
reasonably be expected to have a material adverse effect on the Mortgaged
Property and the same shall be deemed Permitted Encumbrances hereunder.
SECTION 2.11 Security Agreement. This Mortgage is both a mortgage and grant
of real property and a grant of a security interest in personal property, and
shall constitute and serve as a "Security Agreement" (a) with regard to
fixtures, within the meaning of the New York Uniform Commercial Code (the "NY
UCC") and (b) with regard to personal property, within the meaning of the
Delaware Uniform Commercial Code (the "DE UCC"). The Mortgagor hereby grants
unto the Mortgagee a security interest in and to all the Mortgaged Property
described in this Mortgage that is not real property, and simultaneously with
the recording of this Mortgage, the Mortgagor has filed or will file, or has
caused or will cause to be filed, UCC financing statements, and will file
continuation statements prior to the lapse thereof, at the appropriate offices
in the State of Delaware to perfect the security interest granted by this
Mortgage in all the Mortgaged Property that is not real property. The Mortgagor
hereby appoints the Mortgagee as its true and lawful attorney-in-fact and agent,
for the Mortgagor and in its name, place and stead, in any and all capacities,
to execute any document and to file the same in the appropriate offices (to the
extent it may lawfully do so), and to perform each and every act and thing
requisite and necessary to be done to perfect the security interest hereby
granted. The Mortgagor hereby authorizes the Mortgagee to file one or more
financing or continuation statements and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Mortgagor where
permitted by applicable Requirements of Law. The Mortgagee shall have
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all rights with respect to the part of the Mortgaged Property that is the
subject of a security interest afforded by the NY UCC and the DE UCC in addition
to, but not in limitation of, the other rights afforded the Mortgagee hereunder.
The Mortgagor agrees, to the extent permitted by applicable Requirements of Law,
that: (i) all of the goods described within the definition of the word "Personal
Property" are or are to become fixtures on the Land; (ii) this Mortgage upon
filing or recording in the office designated for the filing or recording of a
record of a mortgage on related real property shall constitute a financing
statement filed as a "fixture filing" within the meaning of Sections 9-102 and
9-502 of the UCC, and in accordance with Section 9-501 of the NY UCC and (iii)
the Mortgagor is the record owner of the Premises. Additionally, this Mortgage
shall constitute a financing statement covering fixtures and/or minerals or the
like (including oil and gas) and/or accounts resulting from the sale thereof at
the wellhead or minehead and, as such, shall be filed or recorded in the office
designated for the filing or recording of a record of a mortgage on related real
property and the office of the Delaware Secretary of State. The registration
number assigned to the Mortgagor by the Secretary of State of Delaware is
3011018.
SECTION 2.12 Filing and Recording. Subject to and in accordance with the
terms of Section 5.28 of the Credit Agreement, the Mortgagor will cause this
Mortgage, any other security instrument creating a security interest in or
evidencing the lien hereof upon the Mortgaged Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and to protect fully the liens and security interests of the Mortgagee
hereby granted in and upon the Mortgaged Property. The Mortgagor will pay all
filing, registration, stamps and/or recording fees, and all reasonable expenses
incidental to the execution and acknowledgment of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property, and any instrument of further assurance and all Federal, state, county
and municipal recording, documentary or intangible taxes and other taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution, delivery and recording of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance.
SECTION 2.13 Mortgage of Definite Amount. (a) If, by reason of the
additional sums that may become secured by the lien of this Mortgage pursuant to
the terms hereof, a court or other governmental authority having jurisdiction at
any time shall determine that this Mortgage falls within the limit of Section
256 of the Tax Law of the State of New York, then (subject to Section 1.03
hereof) the Mortgagee reserves the right, in its discretion, to elect not to
have such additional sums secured by this Mortgage and thereby reduce the
Obligations secured hereby to a definite amount equal to the principal amount of
Two Hundred Sixty Million Dollars ($260,000,000.00), plus any disbursements made
to protect the security of this Mortgage, with interest on such disbursements at
the Default Rate, plus any such other sums as by statute or judicial
interpretation now or hereafter may be permitted to be secured by the lien of a
mortgage without incurring any additional mortgage recording tax. Any election
by the Mortgagee to so reduce the indebtedness secured by this Mortgage shall in
no event be deemed a release, waiver or discharge by the Mortgagee of the
Mortgagor's obligation to pay or reimburse the Mortgagee for such sums.
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(b) Any sums that may become due and payable pursuant to the terms of
the Credit Agreement, this Mortgage or the other Financing Documents and
that are in the nature of interest (i) shall for the purpose of determining
the amount of mortgage recording tax due and payable on this Mortgage, be
considered as additional interest, whether or not so denominated, (ii)
shall be secured by the lien of this Mortgage to the fullest extent
possible without causing this Mortgage to be covered by Section 256 of the
Tax Law of the State of New York and (iii) shall not be deemed principal
and shall not accrue any interest.
SECTION 2.14 Trust Fund. Pursuant to Section 13 of the Lien Law of the
State of New York, the Mortgagor shall receive the advances secured by this
Mortgage and shall hold such advances as a trust fund to be applied first for
the purpose of paying the cost of any improvement and shall apply such advances
first to the payment of the cost of any such improvement on the Premises before
using any part of the total of the same for any other purpose.
SECTION 2.15 Further Assurances. Upon demand by the Mortgagee, the
Mortgagor will, at the sole cost of the Mortgagor and without expense to the
Mortgagee, do, execute, acknowledge and/or deliver all such further acts, deeds,
conveyances, deeds of trust, assignments, notices of assignment, transfers and
assurances as the Mortgagee shall from time to time reasonably require for the
better assuring, conveying, assigning, transferring and confirming unto the
Mortgagee the property and rights hereby conveyed or assigned or intended now or
hereafter so to be, or which the Mortgagor may be or may hereafter become bound
to convey or assign to the Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Mortgage, or for filing,
registering or recording this Mortgage, and on demand, the Mortgagor will also
execute and deliver and hereby appoints the Mortgagee as its true and lawful
attorney-in-fact and agent for the Mortgagor and in its name, place and stead,
in any and all capacities, to execute and file to the extent it may do so under
applicable Requirements of Law and under the terms of the Credit Agreement or
this Mortgage, one or more financing statements, chattel mortgages or comparable
security instruments reasonably required by the Mortgagee to evidence or perfect
the liens and security interests hereby granted and to perform each and every
act and thing requisite and necessary to be done to accomplish the same.
SECTION 2.16 Additions to Mortgaged Property. All right, title and interest
of the Mortgagor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property hereafter acquired by or released to the Mortgagor or
constructed, assembled or placed by the Mortgagor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by the Mortgagor, shall become
subject to the liens and security interests of this Mortgage as fully and
completely and with the same effect as though now owned by the Mortgagor and
specifically described in the grant of the Mortgaged Property above, but at any
and all times the Mortgagor will execute and deliver to the Mortgagee any and
all such further assurances, deeds of trust, conveyances or assignments thereof
as the Mortgagee may reasonably require for the purpose of expressly and
specifically subjecting the same to the liens and security interests of this
Mortgage.
13
SECTION 2.17 No Claims Against the Mortgagee. Nothing contained in this
Mortgage shall constitute any consent or request by the Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Mortgaged Property or any part
thereof, nor as giving the Mortgagor any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Mortgagee in respect thereof.
SECTION 2.18 Change in Tax Law. Upon the enactment of or change in
(including, without limitation, a change in interpretation of) any applicable
law (a) deducting or allowing the Mortgagor to deduct from the value of the
Mortgaged Property for the purpose of taxation any lien or security interest
thereon or (b) subjecting the Mortgagee to any tax (excluding income, franchise,
estate, inheritance, transfer or similar entity taxes) or changing the basis of
taxation of mortgages, deeds of trust, or other liens or debts secured thereby,
or the manner of collection of such taxes, in each such case, so as to affect
this Mortgage, the Obligations or the Mortgagee (excluding income, franchise,
estate, inheritance, transfer or similar entity taxes), and the result is to
increase the taxes imposed upon or the cost to the Mortgagee of maintaining the
Obligations, or to reduce the amount of any payments receivable hereunder, then,
and in any such event, if the Mortgagee has received notice of such change from,
or demand for payment of amounts arising from such change from, the relevant
Governmental Authority, then the Mortgagor shall, upon the earlier to occur of
(i) ten (10) Business Days after the Mortgagee delivers to the Mortgagor notice
of Mortgagee's receipt of such notice or demand and (ii) the date such payment
is due, or, if the Mortgagee has not received any notice or demand from a
Governmental Authority, then the Mortgagor shall, on demand, pay to the
Mortgagee additional amounts to compensate for such increased costs or reduced
amounts, provided that if any such payment or reimbursement shall be unlawful,
or taxable to the Mortgagee and not reimbursed as set forth herein, or would
constitute usury or render the Obligations wholly or partially usurious under
applicable law, then the Mortgagee may, within ten (10) Business Days after
notice thereof require, the Mortgagor to pay or reimburse the Mortgagee for
payment of the lawful and non-usurious portion thereof. If the Mortgagor fails
to pay such amounts within such time, then the Mortgagee may declare the
Obligations immediately due and payable.
SECTION 2.19 Survey of Mortgaged Property. To the best of Mortgagor's
knowledge, there are no unrecorded improvements, additions, easements, or rights
of way located on the Mortgaged Property that are not shown on that certain
survey dated July 15, 1999 prepared by Geod Corporation and updated on October,
2002.
SECTION 2.20 Contract Collateral. Notwithstanding any provision of this
Agreement, but subject to and without limiting Section 1.14, each of the parties
hereto acknowledges and agrees that (i) any reference to assignment of any
right, title or interest in and to any agreement, contract, contract right,
chattel paper, instrument, letter of credit, document, lease, Governmental
Approval or other similar right (collectively "Contract Collateral"), such
assignment shall constitute only a grant of a collateral security interest and
not an absolute assignment of rights under any Contract Collateral, and (ii)
except as otherwise provided in the DE UCC, to the extent any grant of a
collateral security interest in and to any Contract Collateral
14
would result in the breach of the instrument, contract, agreement or other
document evidencing or creating such Contract Collateral, such security interest
shall be deemed to be made subject to obtaining any required consent and
approval under such instrument, contract, agreement or other document for such
grant of a security interest.
ARTICLE III.
DEFAULTS AND REMEDIES
SECTION 3.01 Events of Default. It shall be an Event of Default under this
Mortgage if any Event of Default (as defined in the Credit Agreement) shall
exist under the Credit Agreement.
SECTION 3.02 Demand for Payment. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights and
remedies the Mortgagee may have pursuant to the Financing Documents, or as
provided at law or in equity, and without limitation, the Obligations and all
other amounts payable with respect to this Mortgage shall become due and payable
to the extent provided in the Credit Agreement. The Mortgagor hereby waives
notice of presentment, demand, protest, acceleration and notice of acceleration.
In case the Mortgagor shall fail forthwith to pay such amounts or any amounts
due under any provision of this Mortgage upon the Mortgagee's demand, but in
accordance with the Credit Agreement, the Mortgagee, in addition to any other
rights or remedies provided herein or at law or equity, shall be entitled and
empowered to institute an action or proceeding at law or in equity as advised by
counsel for the collection of the sums so due and unpaid, to prosecute any such
action or proceedings to judgment or final decree, to enforce any such judgment
or final decree against the Mortgagor and to collect, in any manner provided by
law, all moneys adjudged or decreed to be payable.
SECTION 3.03 Rights to Take Possession, Operate and Apply Revenues.
(a) If an Event of Default shall occur and be continuing, the
Mortgagor shall, upon demand of the Mortgagee forthwith surrender to the
Mortgagee actual possession of the Mortgaged Property and, if and to the
maximum extent permitted by applicable Requirements of Law, the Mortgagee
itself, or by such officers or agents as it may appoint, may then enter and
take possession of all the Mortgaged Property with or without the
appointment of a receiver or an application therefor, exclude the Mortgagor
and its agents and employees wholly therefrom, and have access to the
books, papers and accounts of the Mortgagor.
(b) If the Mortgagor shall for any reason fail to surrender or deliver
the Mortgaged Property or any part thereof after such demand by the
Mortgagee as provided in the preceding clause (a), the Mortgagee may obtain
a judgment or decree conferring upon the Mortgagee the right to immediate
possession or requiring the Mortgagor to deliver immediate possession of
the Mortgaged Property to the Mortgagee, to the entry of which judgment or
decree the Mortgagor hereby specifically consents. The Mortgagor will
promptly pay all out-of-pocket costs and other reasonable expenses in
connection with enforcing this Mortgage, including all reasonable fees and
expenses of attorneys and
15
paralegals (including reasonable charges for inside counsel); and subject to the
limitations set forth in Section 1.03, all such expenses and compensation shall,
until paid, be secured by this Mortgage.
(c) If an Event of Default shall occur and be continuing, the
Mortgagee may hold, store, use, operate, manage and control the Mortgaged
Property, conduct the business thereof and, from time to time, (i) make all
necessary, proper and reasonable maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon,
(ii) purchase or otherwise acquire additional fixtures, personalty and
other property, (iii) insure or keep the Mortgaged Property insured, (iv)
manage and operate the Mortgaged Property and exercise all the rights and
powers of the Mortgagor to the same extent as the Mortgagor could in its
own name or otherwise with respect to the same or (v) enter into any and
all agreements with respect to the exercise by others of any of the powers
herein granted to the Mortgagee, all as may from time to time be directed
or determined by the Mortgagee to be in its best interest and the Mortgagor
hereby appoints the Mortgagee as its true and lawful attorney-in-fact and
agent, for the Mortgagor and in its name, place and stead, in any and all
capacities, to perform any of the foregoing acts. Regardless of whether or
not the Mortgagee has entered or taken possession, the Mortgagee may
receive and, so long as any Event of Default exists, collect and receive
all the Rents, issues, profits and revenues from the Mortgaged Property,
including those past due as well as those accruing thereafter, and, after
deducting (i) all expenses of taking, holding, managing and operating the
Mortgaged Property (including reasonable compensation for the services of
all persons employed for such purposes), (ii) the costs of all such
maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases and acquisitions, (iii) the costs of insurance,
(iv) such taxes, assessments and other similar charges as the Mortgagee may
at its option pay, (v) other proper charges upon the Mortgaged Property or
any part thereof and (vi) the reasonable compensation, expenses and
disbursements of the attorneys and agents of the Mortgagee, the Mortgagee
shall apply the remainder of the moneys and proceeds so received in
accordance with the terms and conditions of the Deposit Account Agreement
and the Intercreditor Agreement.
(d) Whenever, before any sale of the Mortgaged Property under Section
2.06 hereof, all Obligations that are then due shall have been paid and all
Events of Default fully cured, the Mortgagee will surrender possession of
the Mortgaged Property back to the Mortgagor, its successors or assigns.
The same right of taking possession shall, however, arise again if any
subsequent Event of Default shall occur and be continuing.
SECTION 3.04 Right to Cure the Mortgagor's Failure to Perform. Upon the
occurrence and during the continuance of an Event of Default, at any time
thereafter and without notice, should the Mortgagor fail in the payment,
performance or observance of any term, covenant or condition required by this
Mortgage or the Credit Agreement or any other Financing Document (with respect
to the Mortgaged Property), the Mortgagee may pay, perform or observe the same,
and, subject to the limitations set forth in Section 1.03, all payments made or
costs or expenses incurred by the Mortgagee in connection therewith shall be
secured hereby and shall be, without demand, immediately repaid by the Mortgagor
to the Mortgagee with interest thereon at
16
the Default Rate. The Mortgagee shall make the determination as to the necessity
for any such actions and of the amounts to be paid. Subject to the notice
provisions of the first sentence of this Section 2.04, to the maximum extent
permitted by Requirements of Law, the Mortgagee is hereby empowered to enter and
to authorize others to enter upon the Premises or the Improvements or any part
thereof for the purpose of performing or observing any such defaulted term,
covenant or condition without having any obligation to so perform or observe and
without thereby becoming liable to the Mortgagor, to any person in possession
holding under the Mortgagor or to any other person.
SECTION 3.05 Right to a Receiver. If an Event of Default shall occur and be
continuing the Mortgagee, upon application to a court of competent jurisdiction,
shall be entitled as a matter of right to the appointment of a receiver to take
possession of and to operate the Mortgaged Property and to collect and apply the
Rents. The Mortgagor hereby consents to such appointment and acknowledges and
agrees that the Mortgagee shall be entitled to such appointment without notice
and without regard for the adequacy of security for the Obligations or the
solvency of the Mortgagor or any party liable for the Obligations and without
regard to the then value of the Mortgaged Property and without regard to whether
the Mortgagor has committed waste or allowed deterioration of the Mortgaged
Property; and the Mortgagee or an agent of the Mortgagee may be appointed as
such receiver. The receiver shall have all of the rights and powers permitted
under the laws of the state wherein the Mortgaged Property is located. The
Mortgagor will pay to the Mortgagee upon demand all expenses, including
receiver's fees, reasonable attorneys' fees and disbursements that are actually
incurred (not as imposed by statute), costs and agent's compensation incurred
pursuant to the provisions of this Section 2.05; and, subject to the limitations
set forth in Section 1.03, all such expenses shall be secured by this Mortgage
and shall be, without demand, immediately repaid by the Mortgagor to the
Mortgagee with interest thereon at the Default Rate.
SECTION 3.06 Foreclosure and Sale.
(a) If an Event of Default shall occur and be continuing, the
Mortgagee may elect to sell the Mortgaged Property or any part of the
Mortgaged Property by exercise of the power of foreclosure or of sale
granted to the Mortgagee by applicable Requirements of Law, this Mortgage
or the Security Agreement. In such case, the Mortgagee may commence one or
more actions to foreclose this Mortgage at law or in equity, or the
Mortgagee may proceed and sell the Mortgaged Property, in accordance with
applicable Requirements of Law, to satisfy any Obligation. The Mortgagee or
an officer appointed by a judgment of foreclosure to sell the Mortgaged
Property, may sell all or such parts of the Mortgaged Property as may be
chosen by the Mortgagee in its sole discretion at the time and place of
sale fixed by it in a notice of sale, either as a whole or in separate
lots, parcels or items as the Mortgagee shall deem expedient, and in such
order as it may determine, at public auction to the highest bidder. The
Mortgagee or an officer appointed by a judgment of foreclosure to sell the
Mortgaged Property may postpone any foreclosure or other sale of all or any
portion of the Mortgaged Property by public announcement at such time and
place of sale, and from time to time as permitted by applicable
17
Requirements of Law thereafter may postpone such sale by public
announcement or subsequently noticed sale. Except as otherwise required by
applicable Requirements of Law, without further notice, the Mortgagee or an
officer appointed to sell the Mortgaged Property may make such sale at the
time fixed by the last postponement, or may, in its discretion, give a new
notice of sale. Any Person, including the Mortgagor or the Mortgagee or any
designee or affiliate thereof, may purchase any portion of the Mortgaged
Property at such sale.
(b) The Mortgaged Property may be sold subject to unpaid taxes and the
Permitted Encumbrances and other Permitted Liens, and after deducting all
the costs, fees and expenses of the Mortgagee, including costs of evidence
of title in connection with the sale, the Mortgagee or an officer that
makes any sale shall apply the proceeds of sale in the manner set forth in
Section 2.08 hereof.
(c) Any foreclosure or other sale of less than the whole of the
Mortgaged Property or any defective or irregular sale made hereunder shall
not exhaust the power of foreclosure or of sale provided for herein; and
subsequent sales may be made hereunder until the Obligations have been
satisfied, or the entirety of the Mortgaged Property has been sold. All
sums collected by the Mortgagee under this Mortgage or other Financing
Documents or under the Notes on account of principal or interest or other
amounts owing hereunder including costs of collection and reasonable
attorneys' fees, shall be applied in accordance with the terms and
conditions of the Deposit Account Agreement and the Intercreditor
Agreement.
(d) If an Event of Default shall occur and be continuing, the
Mortgagee may instead of, or in addition to, exercising the rights
described in Section 2.06(a) above and either with or without entry or
taking possession as herein permitted and as permitted by applicable
Requirements of Law, proceed by a suit or suits in law or in equity or by
any other appropriate proceeding or remedy (i) to specifically enforce
payment of some or all of the terms of the Financing Documents or the
performance of any term, covenant, condition or agreement of this Mortgage
or any other right or (ii) to pursue any other remedy available to it, at
law or in equity, all as the Mortgagee shall determine most effectual for
such purposes.
SECTION 3.07 Other Remedies.
(a) In case an Event of Default shall occur and be continuing, the
Mortgagee may also exercise, to the extent not prohibited by applicable
Requirements of Law, any or all of the remedies available to a secured
party under the UCC, including, to the extent not prohibited by applicable
Requirements of Law, the following:
(i) In the case of personal property, exercise those rights and
remedies under other applicable Security Documents.
(ii) To make such payments and do such acts as the Mortgagee may
deem necessary to protect its security interest in the Personal
Property including paying, purchasing, contesting or compromising any
encumbrance, charge or lien that is prior or superior to the security
interest granted hereunder, and, in
18
exercising any such powers or authority, paying all expenses incurred
in connection therewith.
(iii) To enter upon any or all of the Premises or Improvements to
exercise the Mortgagee's rights hereunder.
(b) In connection with a sale of the Mortgaged Property and the
application of the proceeds of sale as provided in Section 2.08 of this
Mortgage, the Mortgagee shall be entitled to enforce payment of and to
receive up to the principal amount of the Obligations, plus all other
charges, payments and costs due under this Mortgage, and to recover a
deficiency judgment for any portion of the aggregate principal amount of
the Obligations remaining unpaid, with interest.
SECTION 3.08 Application of Sale Proceeds and Rents. After any foreclosure
sale of all or any of the Mortgaged Property, the Mortgagee shall receive the
proceeds of sale, no purchaser shall be required to see to the application of
the proceeds and the Mortgagee shall apply the proceeds of the sale together
with any Rents that may have been collected and any other sums that then may be
held by the Mortgagee under this Mortgage in accordance with the Deposit Account
Agreement and the Intercreditor Agreement.
Upon any sale of the Mortgaged Property by the Mortgagee (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Mortgagee or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Mortgaged Property so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Mortgagee or such
officer or be answerable in any way for the misapplication thereof.
SECTION 3.09 The Mortgagor as Tenant Holding Over. If the Mortgagor remains
in possession of any of the Mortgaged Property after any foreclosure sale by the
Mortgagee, at the Mortgagee's election the Mortgagor shall be deemed a tenant
holding over and shall forthwith surrender possession to the purchaser or
purchasers at such sale or be summarily dispossessed or evicted according to
provisions of Requirements of Law applicable to tenants holding over.
SECTION 3.10 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws.
(a) The Mortgagor will not object to any sale of the Mortgaged
Property pursuant hereto, and for itself and all who may claim under it,
the Mortgagor waives, to the extent that it lawfully may under applicable
Requirements of Law, all right to have the Mortgaged Property marshalled or
to have the Mortgaged Property sold as separate estates, parcels, tracts or
units in the event of any foreclosure of this Mortgage.
(b) To the full extent permitted by applicable Requirements of Law,
neither the Mortgagor nor anyone claiming through or under it shall or will
set up, claim or seek to take advantage of any appraisement, valuation,
stay, extension, homestead-exemption or redemption laws now or hereafter in
force in order to prevent or hinder the
19
enforcement or foreclosure of this Mortgage, the absolute sale of the
Mortgaged Property or the final and absolute putting of the purchasers into
possession thereof immediately after any sale; and the Mortgagor, for
itself and all who may at any time claim through or under it, hereby waives
to the full extent that it may lawfully do so, the benefit of all such laws
and any and all right to have the assets covered by the security interest
created hereby marshalled upon any foreclosure of this Mortgage.
SECTION 3.11 Discontinuance of Proceedings. In case the Mortgagee shall
proceed to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall be discontinued or
abandoned for any reason, or shall be determined adversely to the Mortgagee,
then and in every such case the Mortgagor and the Mortgagee shall be restored to
their former positions and rights hereunder, and all rights, powers and remedies
of the Mortgagee shall continue as if no such proceeding had been taken.
SECTION 3.12 Suits to Protect the Mortgaged Property. During the
continuance of an Event of Default, the Mortgagee shall have power (a) to
institute and maintain suits and proceedings to prevent any impairment of the
Mortgaged Property by any acts which may be unlawful or in violation of this
Mortgage, (b) to preserve or protect its interest in the Mortgaged Property and
in the Rents arising therefrom and (c) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of or
compliance with such enactment, rule or order would impair the security or be
prejudicial to the interest of the Mortgagee hereunder.
SECTION 3.13 Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting the Mortgagor, the Mortgagee shall, to the extent
permitted by applicable Requirements of Law, be entitled to file such proofs of
claim and other documents as may be necessary or advisable in order to have the
claims of the Mortgagee allowed in such proceedings for the Obligations secured
by this Mortgage at the date of the institution of such proceedings and for any
interest accrued, late charges and additional interest or other amounts due or
that may become due and payable hereunder after such date.
SECTION 3.14 Possession by the Mortgagee. Notwithstanding the appointment
of any receiver, liquidator or trustee of the Mortgagor, any of its property or
the Mortgaged Property, the Mortgagee shall be entitled, to the extent not
prohibited by applicable Requirements of Law, to remain in possession and
control of all parts of the Mortgaged Property now or hereafter granted under
this Mortgage in accordance with the terms hereof and applicable Requirements of
Law and the Intercreditor Agreement.
SECTION 3.15 Waiver.
(a) No delay or failure by the Mortgagee to exercise any right, power
or remedy accruing upon or during the continuance of any Event of Default
shall exhaust or impair any such right, power or remedy or be construed to
be a waiver of any such Event of Default or acquiescence therein; and every
right, power and remedy given by this Mortgage to the Mortgagee may be
exercised from time to time and as often as may be
20
deemed expedient by the Mortgagee. No consent or waiver by the Mortgagee to
or of any breach, default or Event of Default by the Mortgagor in the
performance of the Obligations shall be deemed or construed to be a consent
or waiver to or of any other breach, default or Event of Default in the
performance of the same or any other Obligations by the Mortgagor
hereunder. No failure on the part of the Mortgagee to complain of any act
or failure to act or to declare an Event of Default, irrespective of how
long such failure continues, shall constitute a waiver by the Mortgagee of
its rights hereunder or impair any rights, powers or remedies consequent on
any future Event of Default by the Mortgagor.
(b) Even if the Mortgagee (i) grants some forbearance or an extension
of time for the payment of any sums secured hereby, (ii) takes other or
additional security for the payment of any sums secured hereby, (iii)
waives or does not exercise some right granted herein or under the
Financing Documents, (iv) releases a part of the Mortgaged Property from
this Mortgage, (v) agrees to change some of the terms, covenants,
conditions or agreements of any of the Financing Documents, (vi) consents
to the filing of a map, plat or replat affecting the Premises, (vii)
consents to the granting of an easement or other right affecting the
Premises or (viii) makes or consents to an agreement subordinating the
Mortgagee's lien on the Mortgaged Property hereunder; no such act or
omission shall preclude the Mortgagee from exercising any other right,
power or privilege herein granted or intended to be granted in the event
and during the continuance of any Event of Default then made or of any
subsequent Event of Default; nor, except as otherwise expressly provided in
an instrument executed by the Mortgagee, shall this Mortgage be altered
thereby. In the event of the sale or transfer by operation of law or
otherwise of all or part of the Mortgaged Property, the Mortgagee is hereby
authorized and empowered to deal with any vendee or transferee with
reference to the Mortgaged Property secured hereby, or with reference to
any of the terms, covenants, conditions or agreements hereof, as fully and
to the same extent as it might deal with the original parties hereto and
without in any way releasing or discharging any liabilities, obligations or
undertakings.
SECTION 3.16 Remedies Cumulative. No right, power or remedy conferred upon
or reserved to the Mortgagee by this Mortgage is intended to be exclusive of any
other right, power or remedy, and each and every such right, power and remedy
shall be cumulative and concurrent and in addition to any other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or by
statute; may, to the maximum extent permitted by applicable Requirements of Law,
be pursued separately, successively or together against the Mortgagor or the
Mortgaged Property, or both, at the sole discretion of Mortgagee, and may be
exercised as often as occasion therefor shall arise. The delay or failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release thereof.
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01 Partial Invalidity. If any provision hereof or of any of the
other Financing Documents is invalid or unenforceable in any jurisdiction or
under any circumstances, the other provisions hereof or of those Financing
Documents shall remain in full force and effect
21
in such jurisdiction and the remaining provisions hereof will be liberally
construed in favor of the Mortgagee in order to carry out the provisions hereof
and of such other Financing Documents. The invalidity of any provision of this
Mortgage in any jurisdiction or under any circumstances will not affect the
validity or enforceability of any such provision in any other jurisdiction or
under any other circumstances. If any lien, encumbrance or security interest
evidenced or created by this Mortgage is invalid or unenforceable, in whole or
in part, as to any part of the Obligations, or is invalid or unenforceable, in
whole or in part, as to any part of the Mortgaged Property, such portion, if
any, of the Obligations as is not secured by all of the Mortgaged Property
hereunder shall be paid prior to the payment of the portion of the Obligations
and shall, unless prohibited by applicable laws or unless the Mortgagee, in its
sole and absolute discretion, otherwise elects, be deemed to have been first
paid on and applied to payment in full of the unsecured or partially secured
portion of the Obligations, and the remainder to the secured portion of the
Obligations.
SECTION 4.02 Notices. All notices hereunder, unless otherwise specified,
shall be given in the manner provided in Section 9.01 of the Credit Agreement
and shall be given to the Mortgagee at its address or telecopy number set forth
in the Credit Agreement and to the Mortgagor at its address or telecopy number
set forth in the signature page hereof or at any address or telecopy number
which such party shall have specified.
SECTION 4.03 Successors and Assigns. All of the grants, covenants, terms,
provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the
successors and permitted assigns of the Mortgagor and the successors and assigns
of the Mortgagee.
SECTION 4.04 Counterparts. This Mortgage may be executed in any number of
counterparts and all such counterparts shall together constitute but one and the
same instrument.
SECTION 4.05 Satisfaction and Cancellation.
(a) The mortgaging to the Mortgagee of the Mortgaged Property as
security and for the benefit of the Mortgagee created and consummated by
this Mortgage shall be null and void when all the Obligations (other than
contingent liabilities that, by their nature, may accrue after principal
and interest the Obligations have been repaid in full) have been
indefeasibly paid in full in cash in accordance with the terms of the
Financing Documents and all Commitments have been terminated.
(b) In connection with any termination or release pursuant to
paragraph (a) to the extent applicable, this Mortgage shall be marked
"satisfied" by the Mortgagee, and this Mortgage shall be satisfied of
record at the request and at the expense of the Mortgagor. The Mortgagee
shall execute any documents reasonably requested by the Mortgagor to
accomplish the foregoing or to accomplish any release contemplated by
paragraph (a) or (b) of this Section 3.05 and the Mortgagor will pay all
costs and expenses, including reasonable attorneys' fees and disbursements
actually incurred (not as imposed by statute), incurred by the Mortgagee in
connection with the preparation and execution of such documents. Upon any
such termination or release, the Mortgagee will
22
promptly duly assign, transfer and deliver (without recourse and without
any representation or warranty) free from any interest of the
Administrative Agent or Lien granted hereunder such of the Collateral as
may be in possession of the Administrative Agent in accordance with the
Intercreditor Agreement or, if the OPNY Second Lien Documents shall have
terminated pursuant to the terms thereof, to the Mortgagor.
SECTION 4.06 Definitions. As used in this Mortgage, the singular shall
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including without
limitation" or "including but not limited to"; (b) "provisions" shall mean
"provisions, terms, covenants and/or conditions"; (c) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage or deed of trust"; (d)
"obligation" shall mean "obligation, duty, covenant and/or condition"; and (e)
"any of the Mortgaged Property" shall mean "the Mortgaged Property or any part
thereof or interest therein." Any act that the Mortgagee is permitted to perform
hereunder may be performed at any time and from time to time by the Mortgagee or
any person or entity designated by the Mortgagee. Any act which is prohibited to
the Mortgagor hereunder is also prohibited to all lessees of any of the
Mortgaged Property. Each appointment of the Mortgagee as attorney-in-fact for
the Mortgagor under the Mortgage is irrevocable, with power of substitution and
coupled with an interest.
SECTION 4.07 Other Financing Documents. The Mortgagor acknowledges that in
addition to this Mortgage, other Financing Documents secure the Obligations. The
Mortgagor agrees that the lien of this Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever of the Mortgagee and, without limiting the generality of
the foregoing, the lien hereof shall not be impaired by any acceptance by the
Mortgagee of any security for or guarantees of any of the Obligations hereby
secured, or by any failure, neglect or omission on the part of the Mortgagee to
realize upon or protect any Obligation hereby secured or any collateral security
therefor including the other Financing Documents. The lien hereof shall not in
any manner be impaired or affected by any release (except as to the property
released), sale, pledge, surrender, compromise, settlement, renewal, extension,
indulgence, alteration, changing, modification or disposition of any of the
Obligations secured or of any of the collateral security therefor, including the
other Financing Documents or of any guarantee thereof, and the Mortgagee may at
its discretion foreclose, exercise any power of sale, or exercise any other
remedy available to it under any or all of the other Financing Documents without
first exercising or enforcing any of its rights and remedies hereunder. Such
exercise of the Mortgagee's rights and remedies under any or all of the other
Financing Documents shall not in any manner impair the Obligations hereby
secured or the lien of this Mortgage and any exercise of the rights or remedies
of the Mortgagee hereunder shall not impair the lien of any of the other
Financing Documents or any of the Mortgagee's rights and remedies thereunder.
The undersigned specifically consents and agrees that the Mortgagee may exercise
its rights and remedies hereunder and under the other Financing Documents
separately or concurrently and in any order that it may deem appropriate, and
the undersigned waives any rights of subrogation until the Obligations are paid
in full in cash. In the event of a conflict between the terms and provisions of
this Mortgage and the Credit Agreement, both documents shall be read together
and construed, to the fullest extent possible, to be in concert with each other.
In the event of a conflict that cannot be so resolved, the terms and provisions
of the Credit Agreement shall control and govern.
23
SECTION 4.08 Subrogation. This Mortgage is made with full substitution and
subrogation of the Mortgagee in and to all covenants and warranties by others
heretofore given or made in respect of the Mortgaged Property or any part
thereof.
SECTION 4.09 Mortgagee Powers. Without affecting the liability of any other
Person liable for the payment of any obligations herein mentioned and without
affecting the lien or charge of this Mortgage upon any portion of the Mortgaged
Property not then or theretofore released as security for the full amount of all
unpaid Obligations, from time to time, regardless of consideration and without
notice to or consent by the holder of any subordinate lien, encumbrance, right,
title or interest in or to the Mortgaged Property, the Mortgagee may (a) release
any Persons liable for or on any Obligation, (b) extend the maturity or alter
any of the terms of any Obligation, (c) modify the interest rate payable on the
principal balance of the Obligations, (d) grant other indulgences, (e) release
or reconvey, or cause to be released or reconveyed at any time at the
Mortgagee's option any parcel, portion or all of the Mortgaged Property, (f)
take or release any other or additional security for any obligations herein
mentioned or (g) make compositions or other arrangements with debtors in
relation thereto.
SECTION 4.10 Enforceability of Mortgage. This Mortgage is deemed to be and
may be enforced from time to time as an assignment, chattel mortgage, contract,
deed of trust, deed to secure debt, financing statement, real estate mortgage or
security agreement, and from time to time as any one or more thereof, as is
appropriate under applicable laws. A carbon, photographic or other reproduction
of this Mortgage or any financing statement in connection herewith shall be
sufficient as a financing statement for any and all purposes.
SECTION 4.11 Amendments. No amendment, modification or waiver of any
provision of this Mortgage and no consent to any departure by the Mortgagor or
the Mortgagee therefrom shall in any event be effective unless the same shall be
in writing and shall be executed and delivered in accordance with Section 9.02
of the Credit Agreement, and then such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 4.12 Applicable Law. THIS MORTGAGE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 4.13 Limitation of Recourse. The obligations of the Mortgagor
hereunder are obligations solely of the Mortgagor (other than as expressly
assumed by any Credit Party or OPMW Credit Party pursuant to any Financing
Document) and shall not constitute a debt or obligation of any direct or
indirect member, partner or shareholder of Mortgagor or any of their respective
directors, officers, agents or employees (each such Person, a "Non-Recourse
Party"). No Non-Recourse Party shall be liable for any amount payable by the
Mortgagor under this Mortgage and the Secured Parties shall not seek a money
judgment or deficiency or personal judgment against any Non-Recourse Party for
payment of the indebtedness payable by the Mortgagor evidenced by this Mortgage.
No property or assets of any Non-Recourse Party other than as contemplated in
the Financing Documents, shall be sold, levied upon or otherwise used to
24
satisfy any judgment rendered in connection with any action brought against the
Mortgagor with respect to this Mortgage or the other Financing Documents. The
foregoing acknowledgments, agreements and waivers shall be enforceable by any
Non-Recourse Party. Notwithstanding the foregoing, nothing in this Section shall
limit or affect or be construed to limit or affect the obligations and
liabilities of any Credit Party, OPMW Credit Party or any other Non-Recourse
Party (a) in accordance with the terms of any Transaction Document or Financing
Document creating such liabilities and obligations to which such Credit Party,
OPMW Credit Party or Non-Recourse Party is a party, or (b) arising from
liability pursuant to applicable Requirements of Law for such Credit Party's,
OPMW Credit Party's or such Non-Recourse Party's fraudulent actions, knowing
misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the Credit Agreement.
SECTION 4.14 Amendment and Restatement. This Mortgage is an amendment and
restatement of the Supplemental Mortgage, Security Agreement, Fixture Filing and
Assignment of Leases and Rents, dated as of August 19, 1999 (the "Original
Mortgage") among the Mortgagor and the Mortgagee. It is the intention of the
parties that this Mortgage amend, restate, extend and renew the terms and
conditions of the Original Mortgage and the liens and security interests created
thereby, and is not intended to be a novation or discharge of the obligations of
the Mortgagor thereunder or the liens and security interests created thereby.
The liens and security interests of the Original Mortgage are hereby ratified,
confirmed, renewed, extended, and brought forward in full force and effect as
security for the Obligations.
25
IN WITNESS WHEREOF, this Mortgage has been duly authorized and has been
executed and delivered, under seal, to the Mortgagee by the Mortgagor on the
date first above written.
ASTORIA GENERATING COMPANY, L.P.
By: Orion Power New York GP, Inc., its general
partner
By:______________________________________
Name:
Title
1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
Attachments:
Exhibit A - The Land
Exhibit B - The Permitted Encumbrances
STATE OF _______________________________)
:SS.:
COUNTY OF _____________________________)
On the _____ day of ______________, in the year 20___,
___________________________personally appeared before me in the
______________(city) in ______________(state) and is personally known to me or
proved to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is (are) subscribed to this Mortgage, and being by me duly sworn, did
depose and acknowledge to me that ___he resides at ____________________________,
that he is the ________________ of the corporation described in and which
executed the foregoing instrument as the general partner of
_________________________________, a Delaware limited partnership; and that
___he signed h___ name thereto by authority of the board of directors of said
corporation, and that ___he, as such ____________ of the General Partner, being
authorized to do so, executed the foregoing Mortgage in the name of such limited
partnership by h(im)(er) self in his/her capacity as ____________ of the General
Partner, on behalf of said limited partnership.
______________________________
NOTARY PUBLIC
My Commission Expires:
EXHIBIT A-1
Legal Description
See attached.
EXHIBIT B
Permitted Encumbrances
EXHIBIT N-2
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
OPEN-END MORTGAGE, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS
THIS MORTGAGE SECURES FUTURE ADVANCES
DATED AS OF OCTOBER 28, 2002
FROM
ORION POWER MIDWEST, L.P.,
MORTGAGOR
TO
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
FOR THE BENEFIT OF THE SECURED PARTIES,
MORTGAGEE
[TOWNSHIP OF __________ AND IN THE BOROUGH OF _________, COUNTY OF ____________,
COMMONWEALTH OF PENNSYLVANIA]
- --------------------------------------------------------------------------------
McGuireWoods LLP
100 North Tryon Street, Suite 2900
Charlotte, North Carolina 28202
Attn: Marvin L. Rogers, Esquire
THIS MORTGAGE SECURES FUTURE AND/OR REVOLVING ADVANCES (All notices to be given
to the Mortgagee pursuant to 42 Pa. C.S.A.ss.8143 shall be given as set forth in
Section 4.03 of this Mortgage).
TABLE OF CONTENTS
ARTICLE I OBLIGATIONS AND FUTURE ADVANCES......................................6
Section 1.01 Obligations................................................6
Section 1.02 Continuing Security........................................6
Section 1.03 Future Advances; Open-End Mortgage;
Maximum Amount Secured.....................................6
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR..........6
Section 2.01 Title......................................................6
Section 2.02 Credit Agreement...........................................7
Section 2.03 Payment of Taxes, Liens and Charges........................8
Section 2.04 Payment of Closing Costs...................................9
Section 2.05 Maintenance and Operations; Plans; Use.....................9
Section 2.06 Insurance..................................................9
Section 2.07 [INTENTIONALLY OMITTED.]..................................10
Section 2.08 [INTENTIONALLY OMITTED.]..................................10
Section 2.09 Assignment of Leases and Rents............................10
Section 2.10 Restrictions on Transfers and Encumbrances................10
Section 2.11 Security Agreement........................................10
Section 2.12 Filing and Recording......................................11
Section 2.13 Contract Collateral.......................................11
Section 2.14 [INTENTIONALLY OMITTED]...................................12
Section 2.15 Further Assurances........................................12
Section 2.16 Additions to Mortgaged Property...........................12
Section 2.17 No Claims Against the Mortgagee...........................12
Section 2.18 Change in Tax Law.........................................13
Section 2.19 Survey of Mortgaged Property..............................13
ARTICLE III DEFAULTS AND REMEDIES.............................................13
Section 3.01 Events of Default.........................................13
Section 3.02 Demand for Payment........................................14
Section 3.03 Possession................................................14
Section 3.04 Right to Cure the Mortgagor's Failure to Perform..........15
Section 3.05 Right to a Receiver.......................................16
Section 3.06 Foreclosure and Sale......................................16
Section 3.07 Other Remedies............................................17
Section 3.08 Application of Sale Proceeds and Rents....................18
Section 3.09 The Mortgagor as Tenant Holding Over......................18
Section 3.10 Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws.......................................18
Section 3.11 Discontinuance of Proceedings.............................18
Section 3.12 Suits to Protect the Mortgaged Property...................19
Section 3.13 Filing Proofs of Claim....................................19
Section 3.14 Possession by the Mortgagee...............................19
Section 3.15 Waiver....................................................19
Section 3.16 Remedies Cumulative.......................................20
ARTICLE IV MISCELLANEOUS......................................................20
Section 4.01 Subordination.............................................20
Section 4.02 Partial Invalidity........................................21
Section 4.03 Notices...................................................21
Section 4.04 Successors and Assigns....................................22
Section 4.05 Counterparts..............................................22
Section 4.06 Satisfaction and Cancellation.............................22
Section 4.07 Definitions...............................................22
Section 4.08 Other Financing Documents.................................22
Section 4.09 Subrogation...............................................23
Section 4.10 Mortgagee Powers..........................................23
Section 4.11 Enforceability of Mortgage................................23
Section 4.12 Amendments................................................24
Section 4.13 Applicable Law............................................24
Section 4.14 Limitation of Recourse....................................24
ii
OPEN-END MORTGAGE, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT
OF LEASES AND RENTS
THIS OPEN-END MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT
OF LEASES AND RENTS dated as of October 28, 2002 (this "Mortgage"), is made by
ORION POWER MIDWEST, L.P., a Delaware limited partnership, having an office at
2000 Cliff Mine Road, Suite 200, Pittsburgh, PA 15275 (the "Mortgagor"), to BANK
OF AMERICA, N.A., as Administrative Agent for the benefit of the Secured Parties
referred to in the Credit Agreement (as defined below), having an office at 101
North Tryon Street, NC1-001-08-19, Charlotte, NC 28255 (in such capacity,
together with its successors, substitutes and assigns, the "Mortgagee").
RECITALS:
A. Reference is hereby made, for all purposes, to (i) that certain
Amended and Restated Credit Agreement dated as of October 28, 2002 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among Orion Power New York, L.P., as borrower (the
"Borrower"), Banc of America Securities LLC and BNP Paribas, as Lead Arrangers
and Joint Book Runners, each other financial institution which is a signatory
thereto or which may hereafter become an assignee pursuant to Section 9.06 of
the Credit Agreement (each, a "Lender" and collectively the "Lenders"), and the
Mortgagee, as Issuing Bank and Administrative Agent, Union Bank of California,
N.A., CoBank, ACB and Deutsche Bank AG New York and/or Cayman Island Branch, as
Documentation Agents and BNP Paribas, as Syndication Agent, (ii) all other
documents and instruments that are collectively defined as the "Financing
Documents" in the Credit Agreement. All capitalized terms not expressly defined
in this Mortgage shall have the meaning given to them in the Credit Agreement;
provided that the following terms shall have the meanings set forth in the OPMW
Restated Credit Agreement: "Acceptable Reserves", "Default Rate", "Liens",
"Permitted Liens", "Prudent Industry Practice" and "Requirements of Law".
Pursuant to the Credit Agreement, the Acquisition Lenders have extended upon the
terms and subject to the conditions of the Credit Agreement, credit to Borrower
in the aggregate principal amount of up to $352,549,541.00 in the form of
Acquisition Loans as evidenced by promissory notes having a final maturity date
of no later than October 28, 2005 (the "Acquisition Loans") and the Working
Capital Lenders have extended or agreed to extend, credit to the Borrower in an
aggregate principal amount of up to $30,000,000.00 in the form of Working
Capital Loans made by the Working Capital Lenders, as evidenced by promissory
notes having a final maturity date of no later than October 28, 2005 (the
"Working Capital Loans" and, together with the Acquisition Loans, the "Loans").
B. The Mortgagor, together with Twelvepole Creek, LLC, Orion Power
Midwest GP, Inc. and Orion Power Midwest LP, Inc., have entered into a Guarantee
Agreement dated as of October 28, 2002 (the "Guarantee") in favor of the
Mortgagee for the benefit of the Secured Parties.
C. The obligation of the Lenders to make the Loans is conditioned upon,
among other things, the execution and delivery by the Mortgagor of this Mortgage
to secure, subject to
the limitations set forth in Section 1.02, the due and punctual payment and
performance of the Obligations (defined below).
GRANTING CLAUSES
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged and in order to secure the due and punctual payment and
performance of the Obligations and intending to be legally bound hereby, the
Mortgagor hereby mortgages, gives, grants, bargains, sells, aliens, enfeoffs,
confirms, transfers, sets over, pledges, assigns, hypothecates and conveys as
security, grants a security interest in, hypothecates, mortgages, pledges and
sets over unto the Mortgagee and with mortgage covenants, subject, however, to
Permitted Encumbrances (as hereinafter defined) and other Permitted Liens, a
second priority lien in all the following described property whether now owned
or held or hereafter acquired (collectively, the "Mortgaged Property"):
(1) the parcel or parcels of land located in [ ] County,
Pennsylvania, as more particularly described on Exhibit A hereto (the "Land"),
together with all rights appurtenant thereto, including without limitation, all
strips and gores within or adjoining the Land, all estate, right, title,
interest, claim or demand of the Mortgagor in the streets, roads, sidewalks,
alleys and ways adjacent thereto (whether or not vacated and whether public or
private and whether open or proposed), all easements over adjoining land granted
by any easement agreements, covenants or restrictive agreements, all of the
tenements, hereditaments, easements, reciprocal easement agreements, rights
pursuant to any trackage agreement, rights to the use of common drive entries,
rights-of-way and other rights, privileges and appurtenances thereunto belonging
or in any way pertaining thereto, all reversions, remainders, dower and right of
dower, curtesy and right of curtesy, all of the air space and right to use air
space above such property, all transferable development rights arising therefrom
or transferred thereto, all water and water rights and water rights applications
(whether riparian, appropriative or otherwise, and whether or not appurtenant),
all pumps, pumping plants, pipes, flumes and ditches thereunto appertaining, all
rights and ditches for irrigation, all utility rights, sewer rights, and any
shares of stock evidencing the same, all oil, gas and other minerals and mineral
substances (which term shall include all gypsum, anhydrite, coal, lignite,
hydrocarbon or other fossil materials or substances, fissionable materials or
substances and all other minerals of any kind or character, whether gaseous,
liquid or hard minerals, whether similar or dissimilar to those named, whether
now or hereafter found to exist and whether associated with the surface or
mineral estate) in, on or under the Land or produced, saved or severed from the
Land, all mineral, mining, gravel, oil, gas, hydrocarbon rights and other rights
to produce or share in the production of anything related to such property, all
drainage, crop, timber, agricultural, and horticultural rights with respect to
such property, and all other appurtenances appurtenant to such property,
including without limitation, any now or hereafter belonging or in any way
appertaining thereto, and all claims or demands of the Mortgagor, either at law
or in equity, in possession or expectancy, now or hereafter acquired, of, in or
to the same (the Land and all of the foregoing being sometimes referred to
herein collectively as the "Premises");
(2) all of the Mortgagor's right, title and interest in and to all
buildings, improvements, fixtures and other structures or improvements of any
kind now or hereafter
2
erected or located upon the Land, including, but not limited to, all building
materials, water, sanitary and storm sewers, drainage, electricity, steam, gas,
telephone and other utility facilities, parking areas, roads, driveways, walks
and other site improvements; and all additions and betterments thereto and all
renewals, substitutions and replacements thereof, owned or to be owned by the
Mortgagor or in which the Mortgagor has or shall acquire an interest, to the
extent of the Mortgagor's interest therein, now or hereafter erected or located
upon the Land (collectively, the "Improvements");
(3) AND AS INDEPENDENT AND SEPARATE SECURITY for the payment of the
Indebtedness and the performance of the obligations and the covenants and
agreements secured hereby, all of the Mortgagor's right, title and interest in
and to the following (collectively, the "Personal Property"):
(a) all personal property and fixtures of every kind and nature
whatsoever which are now or hereafter located on, attached to, incorporated in
(regardless of where located) or affixed to the Premises or the Improvements or
used or useful in connection with the ownership, construction, maintenance,
repair, reconstruction, alteration, addition, improvement, operation, mining,
use or occupancy of the Premises or the Improvements, including, without
limitation, all goods, inventory, construction materials, equipment, mining
equipment, tools, furniture, furnishings, fittings, fixtures, supplies,
computers and computer programs, carpeting, draperies, blinds, window
treatments, racking and shelving systems, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, incinerating and/or compacting
plants, systems and equipment, elevators, escalators, appliances, stoves,
ranges, refrigerators, vacuum, window washing and other cleaning and building
service systems, call systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, cables, antennae, pipes, ducts, conduits,
machinery, apparatus, motors, dynamos, engines, compressors, generators,
boilers, stokers, furnaces, pumps, tanks, appliances, garbage systems and pest
control systems and all of the Mortgagor's present and future "goods",
"equipment" and "fixtures" (as such terms are defined in the Pennsylvania
Uniform Commercial Code) and other personal property, including without
limitation any such personal property and fixtures which are leased, and all
repairs, attachments, betterments, renewals, replacements, substitutions and
accessions thereof and thereto; and
(b) all general intangibles now owned or hereafter acquired by
the Mortgagor and relating to the design, development, operation, management and
use of the Premises or the Improvements, including, but not limited to, all
contract rights, trademarks, trade names, logos and other rights relating to the
name and style under which the Premises and the Improvements are operated;
(4) all of the Mortgagor's right, title and interest in and to all
approvals, authorizations, building permits, certificates of occupancy, zoning
variances, use permits, certifications, entitlements, exemptions, franchises,
licenses, orders, variances, plat plan approvals, environmental approvals, air
pollution authorities to construct and permits to operate, sewer and waste
discharge permits, national pollutant discharge elimination system permits,
water permits, zoning and land use entitlements and all other permits, whether
now existing or hereafter issued to or obtained by or on behalf of the
Mortgagor, that relate to or concern in any way the Premises or the Improvements
and are given or issued by any governmental or quasi-governmental authority,
whether now existing or hereafter created (as the same may be amended, modified,
renewed or extended from time to time, and including all substitutions and
replacements therefor), all rights under and pursuant to all construction,
service, engineering, consulting, management, access, supply, leasing,
architectural and other similar contracts relating in any way to the design,
construction, management, operation, occupancy and/or use of the Premises and
Improvements, all rights under all purchase agreements, sales agreements, option
contracts, land contracts and contracts for the sale of oil, gas and other
minerals, or any of them, that relate to or concern in any
3
way the Premises or the Improvements, all abstracts of title, architectural,
engineering or construction drawings, plans, specifications, operating manuals,
computer programs, computer data, maps, surveys, soil tests, feasibility
studies, appraisals, environmental studies, engineering reports and similar
materials relating to any portion of or all of the Premises and Improvements,
and all payment and performance bonds or warranties or guarantees relating to
the Premises or the Improvements, all to the extent assignable (collectively,
the "Permits, Plans and Contracts");
(5) the Mortgagor's interest in and rights under all leases or licenses
(under which the Mortgagor is landlord or licensor) and subleases (under which
the Mortgagor is sublandlord), concession, franchise, management, mineral or
other agreements relating to the use or occupancy of the Premises or the
Improvements or any part thereof for any purpose, or the extraction or taking of
any gas, oil, water or other minerals from the Premises, whether now or
hereafter existing or entered into (including any use or occupancy arrangements
created pursuant to Section 365(d) of the Bankruptcy Code (as defined in Section
1.01) or otherwise in connection with the commencement or continuance of any
bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership
or similar proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or occupant of any portion of the Premises or the
Improvements), and all guaranties thereof and all amendments, modifications,
supplements, extensions or renewals thereof (collectively, the "Leases"), and
all rents, issues, profits, revenues, charges, fees, receipts, royalties,
proceeds from the sale of oil, gas and/or other minerals (whether gaseous,
liquid or hard minerals, whether similar or dissimilar to those named and
whether associated with the surface or mineral estate), accounts receivable,
cash or security deposits and other deposits (subject to the prior right of the
tenants making such deposits) and income, and other benefits now or hereafter
derived from any portion of the Premises or the Improvements or the use or
occupancy thereof (including any payments received pursuant to Section 502(b) of
the Bankruptcy Code or otherwise in connection with the commencement or
continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings, or any assignment for the
benefit of creditors, in respect of any tenant or other occupants of any portion
of the Premises or the Improvements and all claims as a creditor in connection
with any of the foregoing) and all payments of a similar nature, now or
hereafter, including during any period of redemption, derived from the Premises
or the Improvements or any other portion of the Mortgaged Property and all
proceeds from the cancellation, surrender, sale or other disposition of the
Leases (collectively, the "Rents");
(6) all of the Mortgagor's right, title and interest in and to all refunds
or rebates of real and personal property taxes or charges in lieu of taxes,
heretofore or now or hereafter assessed or levied against all or any of the
Premises, the Improvements, the Personal
4
Property, the Leases, the Rents and the Permits, Plans and Contracts, including
interest thereon, and the right to receive the same, whether such refunds or
rebates relate to fiscal periods before or during the term of this Mortgage;
(7) all of the Mortgagor's right, title and interest in and to all
insurance policies and the proceeds thereof, now or hereafter in effect with
respect to all or any of the Premises, the Improvements, the Personal Property,
the Leases, the Rents and the Permits, Plans and Contracts, including, without
limitation, any and all title insurance proceeds, and all unearned premiums and
premium refunds, accrued, accruing or to accrue under such insurance policies,
and all awards made for any taking of or damage to all or any of the Premises,
the Improvements, the Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts, by eminent domain, or by any purchase in lieu thereof, and
all awards resulting from a change of grade of streets or for severance damages,
and all other proceeds of the conversion, voluntary or involuntary, of all or
any of the Premises, Improvements, the Personal Property, the Leases, the Rents
and the Permits, Plans and Contracts, into cash or other liquidated claims, and
all judgments, damages, awards, settlements and compensation (including interest
thereon) heretofore or hereafter made to the present and all subsequent owners
of the Premises, Improvements, the Personal Property, the Leases, the Rents and
the Permits, Plans and Contracts, or any part thereof for any injury to or
decrease in the value thereof for any reason;
(8) all of the Mortgagor's right, title and interest in and to the
following:
(a) all right, in the name and on behalf of the Mortgagor, to appear
in and defend any action or proceeding brought with respect to all or any of the
Premises, Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, and to commence any action or proceeding to
protect the interest of the Mortgagor in all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts;
(b) all right and power to encumber further all or any of the
Premises, Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, or any part thereof;
(c) all rights, titles, interests, estates or other claims, both in
law and in equity, which the Mortgagor now has or may hereafter acquire in any
of the Premises, the Improvements, the Personal Property, the Leases, the Rents
or the Permits, Plans and Contracts, or in and to any greater estate in all or
any of the Premises, the Improvements, the Personal Property, the Leases, the
Rents and the Permits, Plans and Contracts;
(d) all property hereafter acquired or constructed by the Mortgagor
of the type described above which shall forthwith, upon acquisition or
construction thereof by the Mortgagor and without any act or deed by any party,
become subject to the lien and security interest of this Mortgage as if such
property were now owned by the Mortgagor and were specifically described in this
Mortgage and were specifically conveyed or encumbered hereby; and
5
(9) all accessions, additions or attachments to, and proceeds or products
of, any of the foregoing.
TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges
hereby granted and conveyed or intended to be, unto the Mortgagee, its
successors and assigns for the uses and purposes herein set forth, for the
benefit and security of the Mortgagee, subject only to the Permitted
Encumbrances (as hereinafter defined) and other Permitted Liens, upon the terms
and conditions set forth herein.
ARTICLE I
OBLIGATIONS AND FUTURE ADVANCES
Section 1.01 Obligations. This Mortgage is executed, acknowledged and
delivered by the Mortgagor to secure and enforce, and the Mortgaged Property is
security for, the due and punctual payment and performance of all obligations of
the Mortgagor under the Guarantee (the "Obligations"). Section 1.02 Continuing
Security'
Section 1.02 Continuing Security. Subject to the limitations set forth in
Section 1.03 below, this Mortgage shall secure and shall continue to secure the
entire outstanding amount of the Obligations until all of the Obligations have
been paid in full.
Section 1.03 Future Advances; Open-End Mortgage; Maximum Amount Secured.
This Mortgage is an open-end mortgage as that term is defined in 42 Pa. C.S.A.
ss.8143(f), and secures future and/or working capital loan advances made by the
Mortgagee which are due and payable under the Guarantee. This Mortgage secures
the payment of all sums due pursuant to the Guarantee and all modifications,
increases, refinancings, renewals, extensions, amendments or restatements
thereof, up to a maximum principal amount of __________________________ Dollars
($__________________), and other extensions of credit secured by the Mortgage
made for the payment of taxes, assessments, maintenance charges, insurance
premiums and other costs incurred for the protection of the Mortgaged Property
or the lien of this Mortgage and expenses incurred by the Mortgagee by reason of
the occurrence of an Event of Default, together with all other sums due or
secured under or by this Mortgage.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR
The Mortgagor agrees, covenants, represents and warrants as follows:
Section 2.01 Title.
(a) The Mortgagor has good, marketable, indefeasible, fee simple title to
the Land and Improvements and good and marketable title to or valid leasehold,
easement or right-of-way interests in, all of the other Mortgaged Property,
except in each case where the failure to have such title or interest could not
reasonably be expected to have a material adverse effect on the Mortgaged
Property. This Mortgage is and will remain a valid and enforceable lien on the
Mortgaged Property subject to no Liens other than the exceptions and
encumbrances set forth in
6
Exhibit B attached hereto (collectively, the "Permitted Encumbrances") and other
Permitted Liens, including the Amended and Restated Mortgage (as defined below).
(b) [INTENTIONALLY OMITTED.]
(c) The Mortgagor has good and lawful right and full power and authority
to encumber or grant a security interest in the Mortgaged Property. The
Mortgagor will forever warrant and defend its title to the Mortgaged Property,
the rights of the Mortgagee therein under this Mortgage and the validity and
priority of the lien of this Mortgage thereon against the claims of all persons
and parties except those having rights under the Permitted Encumbrances or other
Permitted Liens and including the Amended and Restated Mortgage (as defined
below) to the extent of those rights.
(d) This Mortgage, when duly recorded in the appropriate public records
and when financing statements are duly filed in the appropriate public records,
will create a valid, perfected and enforceable lien upon and security interest
in all the material Mortgaged Property in which a security interest can be
perfected.
Section 2.02 Credit Agreement.
(a) This Mortgage is given pursuant to the Credit Agreement. Subject to,
and without limiting Section 4.07 hereof, each and every term and provision of
the Credit Agreement, including the rights, remedies, obligations, covenants,
conditions, agreements, indemnities, representations and warranties of the
parties thereto shall be considered as if a part of this Mortgage. Subject to
the limitations set forth in Section 1.02, this Mortgage secures all present and
future Indebtedness of the Mortgagor in respect of the Guarantee and all other
Obligations from time to time owing under the Guarantee.
(b) If any remedy or right of the Mortgagee pursuant hereto is acted upon
by the Mortgagee or if any actions or proceedings (including any bankruptcy,
insolvency or reorganization proceedings) are commenced in which the Mortgagee
is made a party and is obliged to defend or uphold or enforce this Mortgage or
the rights of the Mortgagee hereunder or the terms of any Lease, or if a
condemnation proceeding is instituted affecting the Mortgaged Property, the
Mortgagor will pay all sums, including reasonable attorneys' fees and
disbursements, actually incurred (not as imposed by statute) by the Mortgagee
related to the exercise of any remedy or right of the Mortgagee pursuant hereto
or for the expense of any such action or proceeding together with all other
costs (not as imposed by statute), disbursements and allowances, interest
thereon from the date of demand for payment thereof at the Default Rate, and
such sums and the interest thereon shall, to the extent permissible by
applicable Requirements of Law, be a lien on the Mortgaged Property prior to any
right, title to, interest in or claim upon the Mortgaged Property attaching or
accruing subsequent to the recording of this Mortgage and, subject to the
limitations set forth in Section 1.02, shall be secured by this Mortgage to the
extent permitted by applicable Requirements of Law.
(c) Any payment of amounts due under this Mortgage not made on or before
the due date for such payments shall accrue interest daily without notice from
the due date until paid at
7
the Default Rate, and such interest at the Default Rate shall be immediately due
upon demand by the Mortgagee.
Section 2.03 Payment of Taxes, Liens and Charges.
(a) The Mortgagor will pay and discharge (whether by it or any Affiliate,
or otherwise) from time to time prior to the time when the same shall become
delinquent, and before any interest or penalty accrues thereon or attaches
thereto, all taxes, assessments and governmental charges, levies or obligations
lawfully imposed upon or assessed against the Mortgagor, the Mortgaged Property
or any part thereof or upon the Rents from the Mortgaged Property or arising in
respect of the occupancy, use or possession thereof and all lawful claims or
obligations that, if unpaid, would become a Lien upon the Mortgaged Property or
upon any part thereof, except as the validity or amount of such taxes,
assessments, charges, levies or obligations may be contested by the Mortgagor in
accordance with Section 5.12 of the Credit Agreement. Upon the reasonable
written request of the Administrative Agent, the Mortgagor shall promptly
deliver to the Administrative Agent, at the same place as designated in Section
4.02 below, reasonably satisfactory evidence that all payments required under
this Section 2.03 have been timely made.
(b) In the event of the passage of any state, Federal, municipal or other
governmental law, order, rule or regulation subsequent to the date hereof (i)
deducting from the value of real property for the purpose of taxation any lien
or encumbrance thereon or in any manner changing or modifying the laws now in
force governing the taxation of this Mortgage or debts secured by mortgages or
deeds of trust (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing a tax to
be paid by the Mortgagee, either directly or indirectly, on this Mortgage or any
of the Financing Documents or to require an amount of taxes to be withheld or
deducted therefrom, upon obtaining actual knowledge thereof, the Mortgagor will
promptly notify the Mortgagee of such event. In such event the Mortgagor shall
(i) agree to enter into such further instruments as may be reasonably necessary
or desirable to obligate the Mortgagor to make any applicable additional
payments and (ii) the Mortgagor shall make all such additional payments, except
as such law, order, rule, regulation or payment may be contested by the
Mortgagor in good faith and by appropriate proceedings and pursuant to which
Acceptable Reserves have been established.
(c) The Mortgagor shall not apply for or claim any deduction, by reason of
this Mortgage, from the taxable value of any or part of the Mortgaged Property.
It is expressly agreed that no credit shall be claimed or allowed on amounts
payable under the Guarantee because of any taxes or other charges paid. If any
law is hereafter enacted: (i) deducting from the value of real estate, for the
purposes of taxation, any lien or encumbrance thereon; (ii) revising or changing
in any way the laws and ordinances now in force for the taxation of mortgages or
the debts secured thereby, or the manner of collection of such taxes; or (iii)
imposing a tax directly or indirectly on the Mortgagee with respect to the
Mortgaged Property, the value of the Mortgagee's interest therein, or the
indebtedness secured by the Guarantee or secured by this Mortgage; then, and in
any such event, the entire unpaid balance of the indebtedness secured hereby
shall, at the option of the Mortgagee, upon ten (10) Business Days notice to the
Mortgagor, become immediately due and payable unless, to the extent permitted by
8
such law or ordinance, the Mortgagor is authorized to, and does, pay directly,
or reimburse the Mortgagee for, the full amount of any such tax, assessment,
charge or lien. If at any time by any Requirement of Law stamps are required on
the Guarantee, the Mortgagor shall, upon ten (10) Business Days written notice
from the Mortgagee, pay for all such stamps together with any interest and
penalties payable in connection therewith.
Section 2.04 Payment of Closing Costs. The Mortgagor shall pay all
reasonable costs in connection with, relating to or arising out of the
preparation, execution and recording of this Mortgage, including title company
premiums and charges, inspection costs, survey costs, recording fees and taxes
(including any applicable mortgage recording taxes), reasonable attorneys',
engineers', appraisers' and consultants' fees and disbursements and all other
similar reasonable expenses of every kind.
Section 2.05 Maintenance and Operations; Plans; Use
(a) The Mortgagor will, subject to the terms and conditions of the OPMW
Restated Credit Agreement, (i) operate and maintain the Mortgaged Property in
accordance with Prudent Industry Practice and the relevant permits (in all
material respects and subject to contest rights set forth in the OPMY Restated
Credit Agreement) and (ii) maintain books, records, plans and specifications
relating thereto, in accordance with Prudent Industry Practice.
(b) The Mortgagor will, subject to Section 6.11 of the OPMW Restated
Credit Agreement, (i) operate and maintain the Mortgaged Property in accordance
with Prudent Industry Practice and all applicable material Requirements of Law,
except where being contested in good faith and by appropriate proceedings and as
to which Acceptable Reserves have been established, or except when the failure
to so operate and maintain the Mortgaged Property could not be reasonably
expected to have a material adverse effect on the Mortgaged Property, and (ii)
keep proper books of records and accounts in which full, true and correct
entries shall be made of all entries shall be made of all of its transactions in
accordance with GAAP.
(c) The Mortgagor shall at all times comply with its material obligations
under all recorded restrictions, conditions, easements and covenants
("Restrictive Covenants") encumbering the Land and shall duly enforce its rights
under all Restrictive Covenants encumbering other property for the benefit of
the Land and/or the Improvements, except where the failure to so comply could
not reasonably be expected to have a material adverse effect on the Mortgaged
Property. If the Mortgagor receives any notice (whether oral or written) that
any Restrictive Covenant has been violated, which violation would be reasonably
likely to have a material adverse effect on the Mortgaged Property, the
Mortgagor shall promptly notify the Mortgagee and take such steps as the
Mortgagee may reasonably require to correct such violation.
Section 2.06 Insurance. The Mortgagor will keep the Mortgaged Property
insured against such risks, and in the manner, required by the terms of Section
5.06 of the OPMW Restated Credit Agreement. All premiums due under all insurance
policies required to be maintained under Section 5.06 of the OPMW Restated
Credit Agreement shall be paid timely by, or on behalf of, the Mortgagor.
9
Section 2.07 [INTENTIONALLY OMITTED.]
Section 2.08 [INTENTIONALLY OMITTED.]
Section 2.09 Assignment of Leases and Rents. The Mortgagor hereby
irrevocably and absolutely grants, transfers and assigns to the Mortgagee all of
its right, title and interest in and to all Leases, together with any and all
extensions and renewals thereof for purposes of securing and discharging the
performance by the Mortgagor of the Obligations. The Mortgagor has not assigned
or executed any assignment of, and will not assign or execute any assignment of,
any Lease or its respective Rents to anyone other than to the Mortgagee, except
as otherwise permitted under the OPMW Restated Credit Agreement and the other
Financing Documents (as defined in the OPMW Restated Credit Agreement).
Section 2.10 Restrictions on Transfers and Encumbrances. The Mortgagor
shall not create or permit to exist any Lien on the Mortgaged Property, other
than any Permitted Lien or Permitted Encumbrance; provided, however, that the
Mortgagor may grant and enter into easements, licenses, subleases, and other
similar agreements relating to the Mortgaged Property in the ordinary course of
business to the extent the same would not reasonably be expected to have a
material adverse effect on the Mortgaged Property and the same shall be deemed
Permitted Encumbrances hereunder.
Section 2.11 Security Agreement (a) This Mortgage is both a mortgage and
grant of real property and a grant of a security interest in personal property,
and shall constitute and serve as a "Security Agreement" (a) with regard to
fixtures, within the meaning of the Pennsylvania Uniform Commercial Code (the
"PA UCC") and (b) with regard to personal property, within the meaning of the
Delaware Uniform Commercial Code (the "DE UCC"). The Mortgagor hereby grants
unto the Mortgagee a security interest in and to all the Mortgaged Property
described in this Mortgage that is not real property, and simultaneously with
the recording of this Mortgage, the Mortgagor has filed or will file, or has
caused or will cause to be filed, UCC financing statements, and will file
continuation statements prior to the lapse thereof, at the appropriate offices
in the State of Delaware to perfect the security interest granted by this
Mortgage in all the Mortgaged Property that is not real property. The Mortgagor
hereby appoints the Mortgagee as its true and lawful attorney-in-fact and agent,
for the Mortgagor and in its name, place and stead, in any and all capacities,
to execute any document and to file the same in the appropriate offices (to the
extent it may lawfully do so), and to perform each and every act and thing
requisite and necessary to be done to perfect the security interest hereby
granted. The Mortgagor hereby authorizes the Mortgagee to file one or more
financing or continuation statements and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Mortgagor where
permitted by applicable Requirements of Law. The Mortgagee shall have all rights
with respect to the part of the Mortgaged Property that is the subject of a
security interest afforded by the PA UCC and the DE UCC in addition to, but not
in limitation of, the other rights afforded the Mortgagee hereunder. The
Mortgagor agrees, to the extent permitted by applicable Requirements of Law,
that: (i) all of the goods described within the definition of the word "Personal
Property" are or are to become fixtures on the Land; (ii) this Mortgage upon
filing or recording in the office designated for the filing or recording of a
record of a mortgage on related real property shall constitute a financing
statement filed as a "fixture filing" within the
10
meaning of Sections 9-102(40) and 9-502, and in accordance with Section 9-501,
of the PA UCC and (iii) the Mortgagor is the record owner of the Premises.
Additionally, this Mortgage shall constitute a financing statement covering
fixtures and/or minerals or the like (including oil and gas) and/or accounts
resulting from the sale thereof at the wellhead or minehead and, as such, shall
be filed or recorded in the office designated for the filing or recording of a
record of a mortgage on related real property and in the office of the Delaware
Secretary of State. The registration number assigned to the Mortgagor by the
Secretary of State of Delaware is 3122001.
(b) Notwithstanding any provision of this Mortgage, the Mortgagor shall
not be in breach or default of any obligation under this Mortgage for any
failure by the Mortgagor to (i) notify any Person of the Lien and security
interest purported to be granted under this Mortgage or to cause or direct any
cash, receipts or other monies to be paid to the Mortgagee, (ii) obtain any
consent to assignment of any Collateral, (iii) deliver to the Mortgagee any
Collateral in the possession of which is required for the perfection of the Lien
and security interest granted by this Mortgage during any period when the
Amended and Restated Mortgage is in effect.
Section 2.12 Filing and Recording(a) (a) The Mortgagor will cause this
Mortgage, any other security instrument creating a security interest in or
evidencing the lien hereof upon the Mortgaged Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and to protect fully the liens and security interests of the Mortgagee
hereby granted in and upon the Mortgaged Property. The Mortgagor will pay all
filing, registration, stamps and/or recording fees, and all reasonable expenses
incidental to the execution and acknowledgment of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property, and any instrument of further assurance and all Federal, state, county
and municipal recording, documentary or intangible taxes and other taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution, delivery and recording of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance.
(b) It is acknowledged and agreed that, unless and until permitted in
accordance with the terms and conditions of Section 4.01 and the Intercreditor
Agreement, any certificates, instruments or other documents or things evidencing
Collateral shall be delivered and endorsed to, or be registered as a first Lien
in favor of, and shall remain in the possession of, the Mortgagor (as defined in
the Amended and Restated Mortgage) and that notwithstanding any provision of any
Financing Document, no breach, Default or Event of Default shall occur or exist
as a result thereof.
Section 2.13 Contract Collateral. Notwithstanding any provision of this
Agreement, but subject to and without limiting Section 2.11, each of the parties
hereto acknowledges and agrees that (i) any reference to assignment of any
right, title or interest in and to any agreement, contract, contract right,
chattel paper, instrument, letter of credit, document, lease, Governmental
Approval or other similar right (collectively "Contract Collateral"), such
assignment shall constitute only a grant of a collateral security interest and
not an absolute assignment of rights under any Contract Collateral, and (ii)
except as otherwise provided in the DE UCC, to the extent any grant of a
collateral security interest in and to any Contract Collateral would result in
the
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breach of the instrument, contract, agreement or other document evidencing or
creating such Contract Collateral, such security interest shall be deemed to be
made subject to obtaining any required consent and approval under such
instrument, contract, agreement or other document for such grant of a security
interest.
Section 2.14 [INTENTIONALLY OMITTED].
Section 2.15 Further Assurances. Upon demand by the Mortgagee, the
Mortgagor will at the sole cost of the Mortgagor and without expense to the
Mortgagee, do, execute, acknowledge and/or deliver all such further acts, deeds,
conveyances, deeds of trust, assignments, notices of assignment, transfers and
assurances as the Mortgagee shall from time to time reasonably require for the
better assuring, conveying, assigning, transferring and confirming unto the
Mortgagee the property and rights hereby conveyed or assigned or intended now or
hereafter so to be, or which the Mortgagor may be or may hereafter become bound
to convey or assign to the Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Mortgage, or for filing,
registering or recording this Mortgage, and on demand, the Mortgagor will also
execute and deliver and hereby appoints the Mortgagee as its true and lawful
attorney-in-fact and agent for the Mortgagor and in its name, place and stead,
in any and all capacities, to execute and file to the extent it may do so under
applicable Requirements of Law and under the terms of the Credit Agreement or
this Mortgage, one or more financing statements, chattel mortgages or comparable
security instruments reasonably required by the Mortgagee to evidence or perfect
the liens and security interests hereby granted and to perform each and every
act and thing requisite and necessary to be done to accomplish the same.
Section 2.16 Additions to Mortgaged Property. All right, title and interest
of the Mortgagor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property hereafter acquired by or released to the Mortgagor or
constructed, assembled or placed by the Mortgagor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by the Mortgagor, shall become
subject to the liens and security interests of this Mortgage as fully and
completely and with the same effect as though now owned by the Mortgagor and
specifically described in the grant of the Mortgaged Property above, but at any
and all times the Mortgagor will execute and deliver to the Mortgagee any and
all such further assurances, deeds of trust, conveyances or assignments thereof
as the Mortgagee may reasonably require for the purpose of expressly and
specifically subjecting the same to the liens and security interests of this
Mortgage.
Section 2.17 No Claims Against the Mortgagee. Nothing contained in this
Mortgage shall constitute any consent or request by the Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Mortgaged Property or any part
thereof, nor as giving the Mortgagor any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Mortgagee in respect thereof.
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Section 2.18 Change in Tax Law. Upon the enactment of or change in
(including a change in interpretation of) any applicable law (a) deducting or
allowing the Mortgagor to deduct from the value of the Mortgaged Property for
the purpose of taxation any lien or security interest thereon or (b) subjecting
the Mortgagee to any tax (excluding income, franchise, estate, inheritance,
transfer or similar entity taxes), or changing the basis of taxation of
mortgages, deeds of trust, or other liens or debts secured thereby, or the
manner of collection of such taxes, in each such case, so as to affect this
Mortgage, the Obligations or the Mortgagee (excluding income, franchise, estate,
inheritance, transfer or similar entity taxes) and the result is to increase the
taxes imposed upon or the cost to the Mortgagee of maintaining the Obligations,
or to reduce the amount of any payments receivable hereunder, then, and in any
such event, if the Mortgagee has received notice of such change from, or demand
for payment of amounts arising from such change from, the relevant Governmental
Authority, then the Mortgagor shall, upon the earlier to occur of (i) ten (10)
Business Days after the Mortgagee delivers to the Mortgagor notice of
Mortgagee's receipt of such notice or demand, and (ii) the date such payment is
due, if the Mortgagee has not received any notice or demand from a Governmental
Authority, then the Mortgagor shall, on demand, pay to the Mortgagee additional
amounts to compensate for such increased costs or reduced amounts, provided that
if any such payment or reimbursement shall be unlawful, or taxable to the
Mortgagee and not reimbursed as set forth herein, or would constitute usury or
render the Obligations wholly or partially usurious under applicable law, then
the Mortgagee may require the Mortgagor to pay or reimburse the Mortgagee for
payment of the lawful and non-usurious portion thereof within ten (10) Business
Days after notice thereof. If the Mortgagor fails to pay such amounts within
such time, then the Mortgagee may declare the Obligations immediately due and
payable.
Section 2.19 Survey of Mortgaged Property. [Niles/Brunot]
To the best of Mortgagor's knowledge, except as otherwise disclosed in the
affidavit attached as Schedule 2.19 (the "Title Affidavit"), there are no
unrecorded improvements, additions, easements or rights of way located on the
Mortgaged Property that are not shown on that certain survey dated _________
prepared by __________. The Title Affidavit is true and correct in all material
respects.
[All others]
To the best of Mortgagor's knowledge, there are no unrecorded improvements,
additions, easements or rights of way located on the Mortgaged Property that are
not shown on that certain survey dated _________ prepared by __________________.
ARTICLE III
DEFAULTS AND REMEDIES
Section 3.01 Events of Default. It shall be an Event of Default under this
Mortgage if any Event of Default (as defined in the Credit Agreement) shall
exist under the Credit Agreement, or, without notice or any opportunity to cure,
the delivery by or on behalf of the Mortgagor of a notice pursuant to 42 Pa.
C.S.A. Section 8143 et seq., as amended, electing to limit the indebtedness
secured by this Mortgage.
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Section 3.02 Demand for Payment. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights and
remedies the Mortgagee may have pursuant to the Financing Documents, or as
provided at law or in equity, and without limitation, the Obligations and all
other amounts payable with respect to this Mortgage shall become due and payable
to the extent provided in the Credit Agreement. The Mortgagor hereby waives
notice of presentment, demand, protest, acceleration and notice of acceleration.
In case the Mortgagor shall fail forthwith to pay such amounts or any amounts
due under any provision of this Mortgage upon the Mortgagee's demand, but in
accordance with the Credit Agreement, the Mortgagee, in addition to any other
rights or remedies provided herein or at law or equity, shall be entitled and
empowered to institute an action or proceeding at law or in equity as advised by
counsel for the collection of the sums so due and unpaid, to prosecute any such
action or proceedings to judgment or final decree, to enforce any such judgment
or final decree against the Mortgagor and to collect, in any manner provided by
law, all moneys adjudged or decreed to be payable.
Section 3.03 Possession.
(a) If an Event of Default shall occur and be continuing, the Mortgagee
may enter into possession of the Mortgaged Property, to the maximum extent
permitted under applicable Requirements of Law with or without legal action, and
by force if necessary; collect therefrom all rentals (which term shall also
include sums payable for use, operation and occupation, and all profits, issue
and proceeds related thereto) and, after deducting all costs of collection and
administration expense, apply the net rentals to any one or more of the
following items in such manner and in such order of priority as the Mortgagee,
in the Mortgagee's sole discretion, may elect: the payment of any sums due under
any prior lien, taxes, water and sewer rents, charges and claims, insurance
premiums and all other carrying charges, and to the maintenance, repair or
restoration of the Mortgaged Property, and on account and in reduction of the
principal and interest, or both, hereby secured; in and for that purpose
Mortgagor hereby assigns to the Mortgagee all rentals due and to become due
under any lease or leases or rights to use and occupation of the Mortgaged
Property hereafter created, as well as all rights and remedies provided in such
lease or leases or at law or in equity for the collection of the rentals. If for
any reason after such action has been commenced it shall be discontinued or
suspended, or possession of the Mortgaged Property shall remain in or be
restored to the Mortgagor, the Mortgagee shall have the right for the same Event
of Default (during the continuance thereof) or any subsequent Event of Default
to bring an amicable action in ejectment before or after the institution of
proceedings to foreclose this Mortgage or to enforce the Notes, or other
Financing Document, or after a sheriff's sale or judicial sale or other
foreclosure sale of the Mortgaged Property in which the Mortgagee is the
successful bidder, it being the understanding of the parties that the
authorization to pursue such proceedings for obtaining possession is an
essential part of the remedies for enforcement of the Mortgage and shall survive
any execution sale to the Mortgagee. The foregoing remedy shall not be deemed to
have been exhausted by any single exercise thereof, whether or not any such
exercise shall be held by any court to be invalid, voidable or void, but may be
exercised from time to time, as often as the Mortgagee shall elect, until all
sums payable or that may become payable by the Mortgagor have been paid in full.
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(b) If an Event of Default shall occur and be continuing, the Mortgagee
may hold, store, use, operate, manage and control the Mortgaged Property,
conduct the business thereof and, from time to time, (i) make all necessary,
proper and reasonable maintenance, repairs, renewals, replacements, additions,
betterments and improvements thereto and thereon, (ii) purchase or otherwise
acquire additional fixtures, personalty and other property, (iii) insure or keep
the Mortgaged Property insured, (iv) manage and operate the Mortgaged Property
and exercise all the rights and powers of the Mortgagor to the same extent as
the Mortgagor could in its own name or otherwise with respect to the same or (v)
enter into any and all agreements with respect to the exercise by others of any
of the powers herein granted to the Mortgagee, all as may from time to time be
directed or determined by the Mortgagee to be in its best interest and the
Mortgagor hereby appoints the Mortgagee as its true and lawful attorney-in-fact
and agent, for the Mortgagor and in its name, place and stead, in any and all
capacities, to perform any of the foregoing acts. Regardless of whether or not
the Mortgagee has entered or taken possession, the Mortgagee may receive and, so
long as any Event of Default exists, collect and receive all the Rents, issues,
profits and revenues from the Mortgaged Property, including those past due as
well as those accruing thereafter, and, after deducting (i) all expenses of
taking, holding, managing and operating the Mortgaged Property (including
reasonable compensation for the services of all persons employed for such
purposes), (ii) the costs of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases and acquisitions,
(iii) the costs of insurance, (iv) such taxes, assessments and other similar
charges as the Mortgagee may at its option pay, (v) other proper charges upon
the Mortgaged Property or any part thereof and (vi) the reasonable compensation,
expenses and disbursements of the attorneys and agents of the Mortgagee, the
Mortgagee shall apply the remainder of the moneys and proceeds so received in
accordance with the terms and conditions of the Deposit Account Agreement and
the Intercreditor Agreement.
(c) Whenever, before any sale of the Mortgaged Property under Section 3.06
hereof, all Obligations that are then due shall have been paid and all Events of
Default fully cured, the Mortgagee will surrender possession of the Mortgaged
Property back to the Mortgagor, its successors or assigns. The same right of
taking possession shall, however, arise again if any subsequent Event of Default
shall occur and be continuing.
Section 3.04 Right to Cure the Mortgagor's Failure to Perform. Upon the
occurrence and during the continuance of an Event of Default, at any time
thereafter and without notice, should the Mortgagor fail in the payment,
performance or observance of any term, covenant or condition required by this
Mortgage or the Credit Agreement or any other Financing Document (with respect
to the Mortgaged Property), the Mortgagee may pay, perform or observe the same,
and, subject to the limitations set forth in Section 1.02, all payments made or
costs or expenses incurred by the Mortgagee in connection therewith shall be
secured hereby and shall be, without demand, immediately repaid by the Mortgagor
to the Mortgagee with interest thereon at the Default Rate. The Mortgagee shall
make the determination as to the necessity for any such actions and of the
amounts to be paid. Subject to the notice provisions of the first sentence of
this Section 3.04, to the maximum extent permitted by Requirements of Law, the
Mortgagee is hereby empowered to enter and to authorize others to enter upon the
Premises or the Improvements or any part thereof for the purpose of performing
or observing any such defaulted term, covenant or condition without having any
obligation to so perform or observe and without
15
thereby becoming liable to the Mortgagor, to any person in possession holding
under the Mortgagor or to any other person.
Section 3.05 Right to a Receiver. If an Event of Default shall occur and be
continuing the Mortgagee, upon application to a court of competent jurisdiction,
shall be entitled as a matter of right to the appointment of a receiver to take
possession of and to operate the Mortgaged Property and to collect and apply the
Rents. The Mortgagor hereby consents to such appointment and acknowledges and
agrees that the Mortgagee shall be entitled to such appointment without notice
and without regard for the adequacy of security for the Obligations or the
solvency of the Mortgagor or any party liable for the Obligations and without
regard to the then value of the Mortgaged Property and without regard to whether
the Mortgagor has committed waste or allowed deterioration of the Mortgaged
Property; and the Mortgagee or an agent of the Mortgagee may be appointed as
such receiver. The receiver shall have all of the rights and powers permitted
under the laws of the Commonwealth of Pennsylvania. The Mortgagor will pay to
the Mortgagee upon demand all expenses, including receiver's fees, reasonable
attorneys' fees and disbursements that are actually incurred (not as imposed by
statute), costs and agent's compensation incurred pursuant to the provisions of
this Section 3.05; and, subject to the limitations set forth in Section 1.02,
all such expenses shall be secured by this Mortgage and shall be, without
demand, immediately repaid by the Mortgagor to the Mortgagee with interest
thereon at the Default Rate.
Section 3.06 Foreclosure and Sale.
(a) If an Event of Default shall occur and be continuing, the Mortgagee
may elect to sell the Mortgaged Property or any part of the Mortgaged Property
by exercise of the power of foreclosure or of sale granted to the Mortgagee by
applicable Requirements of Law, this Mortgage or the Security Agreement. In such
case, the Mortgagee may commence one or more actions to foreclose this Mortgage
at law or in equity, or the Mortgagee may proceed and sell the Mortgaged
Property, in accordance with applicable Requirements of Law, to satisfy any
Obligation. The Mortgagee or an officer appointed by a judgment of foreclosure
to sell the Mortgaged Property, may sell all or such parts of the Mortgaged
Property as may be chosen by the Mortgagee, in its sole discretion, at the time
and place of sale fixed by it in a notice of sale, either as a whole or in
separate lots, parcels or items as the Mortgagee shall deem expedient, and in
such order as it may determine, at public auction to the highest bidder. The
Mortgagee or an officer appointed by a judgment of foreclosure to sell the
Mortgaged Property may postpone any foreclosure or other sale of all or any
portion of the Mortgaged Property by public announcement at such time and place
of sale, and from time to time as permitted by applicable Requirements of Law
thereafter may postpone such sale by public announcement or subsequently noticed
sale. Except as otherwise required by applicable Requirements of Law, without
further notice, the Mortgagee or an officer appointed to sell the Mortgaged
Property may make such sale at the time fixed by the last postponement, or may,
in its discretion, give a new notice of sale. Any Person, including the
Mortgagor or the Mortgagee or any designee or affiliate thereof, may purchase
any portion of the Mortgaged Property at such sale.
(b) The Mortgaged Property may be sold subject to unpaid taxes and the
Permitted Encumbrances and other Permitted Liens, and after deducting all the
costs, fees and expenses of
16
the Mortgagee, including costs of evidence of title in connection with the sale,
the Mortgagee or an officer that makes any sale shall apply the proceeds of sale
in the manner set forth in Section 3.08 hereof.
(c) Any foreclosure or other sale of less than the whole of the Mortgaged
Property or any defective or irregular sale made hereunder shall not exhaust the
power of foreclosure or of sale provided for herein; and subsequent sales may be
made hereunder until the Obligations have been satisfied, or the entirety of the
Mortgaged Property has been sold. All sums collected by the Mortgagee under this
Mortgage or other Financing Documents or under the Notes on account of principal
or interest or other amounts owing hereunder including costs of collection and
reasonable attorneys' fees, shall be applied in accordance with the terms and
conditions of the Deposit Account Agreement and the Intercreditor Agreement.
(d) If an Event of Default shall occur and be continuing, the Mortgagee
may instead of, or in addition to, exercising the rights described in Section
3.06(a) above and either with or without entry or taking possession as herein
permitted and as permitted by applicable Requirements of Law, proceed by a suit
or suits in law or in equity or by any other appropriate proceeding or remedy
(i) to specifically enforce payment of some or all of the terms of the Financing
Documents or the performance of any term, covenant, condition or agreement of
this Mortgage or any other right or (ii) to pursue any other remedy available to
it, at law or in equity, all as the Mortgagee shall determine most effectual for
such purposes.
Section 3.07 Other Remedies.
(a) In case an Event of Default shall occur and be continuing, the
Mortgagee may also exercise, to the extent not prohibited by applicable
Requirements of Law, any or all of the remedies available to a secured party
under the UCC, including, to the extent not prohibited by applicable
Requirements of Law, the following:
(i) In the case of personal property, exercise those rights and
remedies under other applicable Security Documents.
(ii) To make such payments and do such acts as the Mortgagee may
deem necessary to protect its security interest in the Personal Property
including paying, purchasing, contesting or compromising any encumbrance,
charge or lien that is prior or superior to the security interest granted
hereunder, and, in exercising any such powers or authority, paying all
expenses incurred in connection therewith.
(iii) To enter upon any or all of the Premises or Improvements to
exercise the Mortgagee's rights hereunder.
(b) In connection with a sale of the Mortgaged Property and the
application of the proceeds of sale as provided in Section 3.08 of this
Mortgage, the Mortgagee shall be entitled to enforce payment of and to receive
up to the principal amount of the Obligations, plus all other charges, payments
and costs due under this Mortgage, and to recover a deficiency judgment for any
portion of the aggregate principal amount of the Obligations remaining unpaid,
with interest.
17
Section 3.08 Application of Sale Proceeds and Rents.
(a) After any foreclosure sale of all or any of the Mortgaged Property,
the Mortgagee shall receive the proceeds of sale, no purchaser shall be required
to see to the application of the proceeds and the Mortgagee shall apply the
proceeds of the sale together with any Rents that may have been collected and
any other sums that then may be held by the Mortgagee under this Mortgage in
accordance with the Deposit Account Agreement and the Intercreditor Agreement.
(b) Upon any sale of the Mortgaged Property by the Mortgagee (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Mortgagee or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Mortgaged Property so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Mortgagee or such
officer or be answerable in any way for the misapplication thereof.
Section 3.09 The Mortgagor as Tenant Holding Over. If the Mortgagor remains
in possession of any of the Mortgaged Property after any foreclosure sale by the
Mortgagee, at the Mortgagee's election the Mortgagor shall be deemed a tenant
holding over and shall forthwith surrender possession to the purchaser or
purchasers at such sale or be summarily dispossessed or evicted according to
provisions of Requirements of Law applicable to tenants holding over.
Section 3.10 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws.
(a) The Mortgagor will not object to any sale of the Mortgaged Property
pursuant hereto, and for itself and all who may claim under it, the Mortgagor
waives, to the extent that it lawfully may under applicable Requirements of Law,
all right to have the Mortgaged Property marshalled or to have the Mortgaged
Property sold as separate estates, parcels, tracts or units in the event of any
foreclosure of this Mortgage.
(b) To the full extent permitted by applicable Requirements of Law,
neither the Mortgagor nor anyone claiming through or under it shall or will set
up, claim or seek to take advantage of any appraisement, valuation, stay,
extension, homestead-exemption or redemption laws now or hereafter in force in
order to prevent or hinder the enforcement or foreclosure of this Mortgage, the
absolute sale of the Mortgaged Property or the final and absolute putting of the
purchasers into possession thereof immediately after any sale; and the
Mortgagor, for itself and all who may at any time claim through or under it,
hereby waives to the full extent that it may lawfully do so, the benefit of all
such laws and any and all right to have the assets covered by the security
interest created hereby marshalled upon any foreclosure of this Mortgage.
Section 3.11 Discontinuance of Proceedings. In case the Mortgagee shall
proceed to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall be discontinued or
abandoned for any reason, or shall be determined adversely to the Mortgagee,
then and in every such case the Mortgagor and the Mortgagee shall be restored to
their former positions and rights hereunder, and all rights, powers and remedies
of the Mortgagee shall continue as if no such proceeding had been taken.
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Section 3.12 Suits to Protect the Mortgaged Property. During the
continuance of an Event of Default, the Mortgagee shall have power (a) to
institute and maintain suits and proceedings to prevent any impairment of the
Mortgaged Property by any acts which may be unlawful or in violation of this
Mortgage, (b) to preserve or protect its interest in the Mortgaged Property and
in the Rents arising therefrom and (c) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of or
compliance with such enactment, rule or order would impair the security or be
prejudicial to the interest of the Mortgagee hereunder.
Section 3.13 Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting the Mortgagor, the Mortgagee shall, to the extent
permitted by applicable Requirements of Law, be entitled to file such proofs of
claim and other documents as may be necessary or advisable in order to have the
claims of the Mortgagee allowed in such proceedings for the Obligations secured
by this Mortgage at the date of the institution of such proceedings and for any
interest accrued, late charges and additional interest or other amounts due or
that may become due and payable hereunder after such date.
Section 3.14 Possession by the Mortgagee. Notwithstanding the appointment
of any receiver, liquidator or trustee of the Mortgagor, any of its property or
the Mortgaged Property, the Mortgagee shall be entitled, to the extent not
prohibited by applicable Requirements of Law, to remain in possession and
control of all parts of the Mortgaged Property now or hereafter granted under
this Mortgage in accordance with the terms hereof and applicable Requirements of
Law and the Intercreditor Agreement.
Section 3.15 Waiver.
(a) No delay or failure by the Mortgagee to exercise any right, power or
remedy accruing upon or during the continuance of any Event of Default shall
exhaust or impair any such right, power or remedy or be construed to be a waiver
of any such Event of Default or acquiescence therein; and every right, power and
remedy given by this Mortgage to the Mortgagee may be exercised from time to
time and as often as may be deemed expedient by the Mortgagee. No consent or
waiver by the Mortgagee to or of any breach, default or Event of Default by the
Mortgagor in the performance of the Obligations shall be deemed or construed to
be a consent or waiver to or of any other breach, default or Event of Default in
the performance of the same or any other Obligations by the Mortgagor hereunder.
No failure on the part of the Mortgagee to complain of any act or failure to act
or to declare an Event of Default, irrespective of how long such failure
continues, shall constitute a waiver by the Mortgagee of its rights hereunder or
impair any rights, powers or remedies consequent on any future Event of Default
by the Mortgagor.
(b) Even if the Mortgagee (i) grants some forbearance or an extension of
time for the payment of any sums secured hereby, (ii) takes other or additional
security for the payment of any sums secured hereby, (iii) waives or does not
exercise some right granted herein or under the Financing Documents, (iv)
releases a part of the Mortgaged Property from this Mortgage, (v) agrees to
change some of the terms, covenants, conditions or agreements of any of the
Financing
19
Documents, (vi) consents to the filing of a map, plat or replat affecting the
Premises, (vii) consents to the granting of an easement or other right affecting
the Premises or (viii) makes or consents to an agreement subordinating the
Mortgagee's lien on the Mortgaged Property hereunder; no such act or omission
shall preclude the Mortgagee from exercising any other right, power or privilege
herein granted or intended to be granted in the event and during the continuance
of any Event of Default then made or of any subsequent Event of Default; nor,
except as otherwise expressly provided in an instrument executed by the
Mortgagee, shall this Mortgage be altered thereby. In the event of the sale or
transfer by operation of law or otherwise of all or part of the Mortgaged
Property, the Mortgagee is hereby authorized and empowered to deal with any
vendee or transferee with reference to the Mortgaged Property secured hereby, or
with reference to any of the terms, covenants, conditions or agreements hereof,
as fully and to the same extent as it might deal with the original parties
hereto and without in any way releasing or discharging any liabilities,
obligations or undertakings.
Section 3.16 Remedies Cumulative. No right, power or remedy conferred upon
or reserved to the Mortgagee by this Mortgage is intended to be exclusive of any
other right, power or remedy, and each and every such right, power and remedy
shall be cumulative and concurrent and in addition to any other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or by
statute; may, to the maximum extent permitted by applicable Requirements of Law,
be pursued separately, successively or together against Mortgagor or the
Mortgaged Property, or both, at the sole discretion of Mortgagee, and may be
exercised as often as occasion therefor shall arise. The delay or failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release thereof.
ARTICLE IV
MISCELLANEOUS
Section 4.01 Subordination. Notwithstanding any provision of this Mortgage
or any other Financing Document to the contrary, (i) this Mortgage and the
security interests created and granted hereby are subject to, subordination and
inferior to the security interests created by the Amended and Restated Open-End
Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents
dated as of the Restructuring Effective Date (the "Amended and Restated
Mortgage"), made by the Mortgagor in favor of Bank of America, N.A., as
Administrative Agent pursuant to the OPMW Restated Credit Agreement, and all
rights, powers and remedies granted to, the OPMW Administrative Agent under the
Amended and Restated Mortgage, are subject in all respects to, the terms and
conditions of the Intercreditor Agreement, including restrictions on the right
of the Mortgagee take possession, hold, use, operate or control the Mortgaged
Property, or to give notices, exercise power of attorney rights, direct or
receive payments, hold, control or receive delivery of possessory collateral or
to exercise remedies under this Mortgage and to apply proceeds of the Mortgaged
Property; provided, that if and to the extent the Intercreditor Agreement is
amended, supplemented or modified at any time from time to time and such
amendment, supplement or modification could reasonably be expected to have any
adverse effect on the Mortgagor's rights, duties or obligations hereunder or
under any other Financing Document, such amendment, supplement or modification
shall not be effective as to the Mortgagor without the Mortgagor's prior written
acknowledgment (which acknowledgment shall not be unreasonably conditioned,
withheld or delayed) that such amendment, modification
20
or supplement shall be effective for purposes of this Mortgage and the other
Financing Documents, (ii) the Mortgagee on behalf of each of the Lenders hereby
acknowledges and agrees that the Mortgagor shall not have any duty and
obligation with respect to the perfection or priority of this Mortgage and the
security interests granted under this Mortgage in and to any of the Mortgaged
Property (and no Default or Event of Default shall result or occur) to the
extent (a) such Mortgaged Property is in the possession or control of the OPMW
Administrative Agent, (b) such Mortgaged Property is not transferred by the OPMW
Administrative Agent to the Mortgagee as required pursuant to the Intercreditor
Agreement, (c) such perfection or priority requires any consent, approval or
other action of the OPMW Administrative Agent, or (d) the OPMW Administrative
Agent then maintains a perfected, first priority security interest in and to the
Mortgaged Property, and (iii) no obligations contained in this Mortgage shall
require the Mortgagor to take or omit to take any action inconsistent with the
terms and conditions of the OPMW Deposit Account Agreement and/or the Holdco
Deposit Account Agreement and no Default or Event of Default under this Mortgage
shall rise or result from the taking or omitting of such action.
Section 4.02 Partial Invalidity. If any provision hereof, of the Guarantee
or of any of the other Financing Documents is invalid or unenforceable in any
jurisdiction or under any circumstances, the other provisions hereof, of the
Guarantee or of those Financing Documents shall remain in full force and effect
in such jurisdiction and the remaining provisions hereof will be liberally
construed in favor of the Mortgagee in order to carry out the provisions hereof,
of the Guarantee and of such other Financing Documents. The invalidity of any
provision of this Mortgage in any jurisdiction or under any circumstances will
not affect the validity or enforceability of any such provision in any other
jurisdiction or under any other circumstances. If any lien, encumbrance or
security interest evidenced or created by this Mortgage is invalid or
unenforceable, in whole or in part, as to any part of the Obligations, or is
invalid or unenforceable, in whole or in part, as to any part of the Mortgaged
Property, such portion, if any, of the Obligations as is not secured by all of
the Mortgaged Property hereunder shall be paid prior to the payment of the
portion of the Obligations and shall, unless prohibited by applicable laws or
unless the Mortgagee, in its sole and absolute discretion, otherwise elects, be
deemed to have been first paid on and applied to payment in full of the
unsecured or partially secured portion of the Obligations, and the remainder to
the secured portion of the Obligations.
Section 4.03 Notices. All notices hereunder, unless otherwise specified,
shall be given in the manner provided for in Section 9.1 of the Credit Agreement
and shall be given to the Mortgagee at its address or telecopy number set forth
in the Credit Agreement and to the Mortgagor at its address or telecopy number
set forth on the signature page hereof or at any address or telecopy number
which such party shall have specified. Notwithstanding the foregoing, (a) all
notices given to the Mortgagee by any person or entity (other than Mortgagor)
pursuant to 42 Pa. C.S.A. ss. 8143(c) or (d) shall be in writing and shall be
sent exclusively by registered or certified mail, return receipt requested, to
the Mortgagee at the address set forth above and (b) all notices given by the
Mortgagor to the Mortgagee pursuant to 42 Pa. C.S.A. ss. 8143(c) shall be given
to the Mortgagee in writing, by registered or certified mail, return receipt
requested, and must be signed by all parties necessary to bind the Mortgagor in
accordance with all applicable documents of formation of the Mortgagor and all
applicable laws.
21
Section 4.04 Successors and Assigns. All of the grants, covenants, terms,
provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the
successors and permitted assigns of the Mortgagor and the successors and assigns
of the Mortgagee.
Section 4.05 Counterparts. This Mortgage may be executed in any number of
counterparts and all such counterparts shall together constitute but one and the
same instrument.
Section 4.06 Satisfaction and Cancellation.
(a) The mortgaging to the Mortgagee of the Mortgaged Property as security
and for the benefit of the Mortgagee created and consummated by this Mortgage
shall be null and void when all the Obligations (other than contingent
liabilities that, by their nature, may accrue after principal and interest the
Obligations have been repaid in full) have been indefeasibly paid in full in
cash in accordance with the terms of the Financing Documents and all Commitments
have been terminated.
(b) In connection with any termination or release pursuant to paragraph
(a) to the extent applicable, this Mortgage shall be marked "satisfied" by the
Mortgagee, and this Mortgage shall be satisfied of record at the request and at
the expense of the Mortgagor. The Mortgagee shall execute any documents
reasonably requested by the Mortgagor to accomplish the foregoing or to
accomplish any release contemplated by paragraph (a) or (b) of this Section 4.06
and the Mortgagor will pay all costs and expenses, including reasonable
attorneys' fees and disbursements actually incurred (not as imposed by statute),
incurred by the Mortgagee in connection with the preparation and execution of
such documents.
Section 4.07 Definitions. As used in this Mortgage, the singular shall
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including without
limitation" or "including but not limited to"; (b) "provisions" shall mean
"provisions, terms, covenants and/or conditions"; (c) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage or deed of trust"; (d)
"obligation" shall mean "obligation, duty, covenant and/or condition"; and (e)
"any of the Mortgaged Property" shall mean "the Mortgaged Property or any part
thereof or interest therein." Any act that the Mortgagee is permitted to perform
hereunder may be performed at any time and from time to time by the Mortgagee or
any person or entity designated by the Mortgagee. Any act which is prohibited to
the Mortgagor hereunder is also prohibited to all lessees of any of the
Mortgaged Property. Each appointment of the Mortgagee as attorney-in-fact for
the Mortgagor under the Mortgage is irrevocable, with power of substitution and
coupled with an interest.
Section 4.08 Other Financing Documents. The Mortgagor acknowledges that in
addition to this Mortgage, other Financing Documents secure the Obligations. The
Mortgagor agrees that the lien of this Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever of the Mortgagee and, without limiting the generality of
the foregoing, the lien hereof shall not be impaired by any acceptance by the
Mortgagee of any security for or guarantees of any of the Obligations hereby
secured, or by any failure, neglect or omission on the part of the Mortgagee to
realize upon or
22
protect any Obligation hereby secured or any collateral security therefor
including the other Financing Documents. The lien hereof shall not in any manner
be impaired or affected by any release (except as to the property released),
sale, pledge, surrender, compromise, settlement, renewal, extension, indulgence,
alteration, changing, modification or disposition of any of the Obligations
secured or of any of the collateral security therefor, including the other
Financing Documents or of any guarantee thereof, and the Mortgagee may at its
discretion foreclose, exercise any power of sale, or exercise any other remedy
available to it under any or all of the other Financing Documents without first
exercising or enforcing any of its rights and remedies hereunder. Such exercise
of the Mortgagee's rights and remedies under any or all of the other Financing
Documents shall not in any manner impair the Obligations hereby secured or the
lien of this Mortgage and any exercise of the rights or remedies of the
Mortgagee hereunder shall not impair the lien of any of the other Financing
Documents or any of the Mortgagee's rights and remedies thereunder. The
undersigned specifically consents and agrees that the Mortgagee may exercise its
rights and remedies hereunder and under the other Financing Documents separately
or concurrently and in any order that it may deem appropriate, and the
undersigned waives any rights of subrogation until the Obligations are paid in
full. In the event of a conflict between the terms and provisions of this
Mortgage and the Credit Agreement, both documents shall be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of a conflict that cannot be so resolved, the terms and provisions of
the Credit Agreement shall control and govern.
Section 4.09 Subrogation. This Mortgage is made with full substitution and
subrogation of the Mortgagee in and to all covenants and warranties by others
heretofore given or made in respect of the Mortgaged Property or any part
thereof.
Section 4.10 Mortgagee Powers. Without affecting the liability of any other
Person liable for the payment of any obligations herein mentioned and without
affecting the lien or charge of this Mortgage upon any portion of the Mortgaged
Property not then or theretofore released as security for the full amount of all
unpaid Obligations, from time to time, regardless of consideration and without
notice to or consent by the holder of any subordinate lien, encumbrance, right,
title or interest in or to the Mortgaged Property, the Mortgagee may (a) release
any Persons liable for or on any Obligation, (b) extend the maturity or alter
any of the terms of any Obligation, (c) modify the interest rate payable on the
principal balance of the Obligations, (d) grant other indulgences, (e) release
or reconvey, or cause to be released or reconveyed at any time at the
Mortgagee's option any parcel, portion or all of the Mortgaged Property, (f)
take or release any other or additional security for any obligations herein
mentioned or (g) make compositions or other arrangements with debtors in
relation thereto.
Section 4.11 Enforceability of Mortgage. This Mortgage is deemed to be and
may be enforced from time to time as an assignment, chattel mortgage, contract,
deed of trust, deed to secure debt, financing statement, real estate mortgage or
security agreement, and from time to time as any one or more thereof, as is
appropriate under applicable laws. A carbon, photographic or other reproduction
of this Mortgage or any financing statement in connection herewith shall be
sufficient as a financing statement for any and all purposes.
23
Section 4.12 Amendments. No amendment, modification or waiver of any
provision of this Mortgage and no consent to any departure by the Mortgagor or
the Mortgagee therefrom shall in any event be effective unless the same shall be
in writing and shall be executed and delivered in accordance with Section 9.02
of the Credit Agreement, and then such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 4.13 Applicable Law. THIS MORTGAGE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA.
Section 4.14 Limitation of Recourse. The obligations of the Mortgagor
hereunder and under the other Financing Documents are obligations solely of the
Mortgagor (other than as expressly assumed by any Credit Party or OPMW Credit
Party pursuant to any Financing Document) and shall not constitute a debt or
obligation of any direct or indirect member, partner or shareholder of the
Mortgagor or any of their respective directors, officers, agents or employees
(each such Person, a "Non-Recourse Party"). No Non-Recourse Party shall be
liable for any amount payable by the Mortgagor under this Mortgage and the
Secured Parties shall not seek a money judgment or deficiency or personal
judgment against any Non-Recourse Party for payment of the indebtedness payable
by the Mortgagor evidenced by this Mortgage. No property or assets of any
Non-Recourse Party other than as contemplated in the Financing Documents, shall
be sold, levied upon or otherwise used to satisfy any judgment rendered in
connection with any action brought against the Mortgagor with respect to this
Mortgage or the other Financing Documents. The foregoing acknowledgments,
agreements and waivers shall be enforceable by any Non-Recourse Party.
Notwithstanding the foregoing, nothing in this Section shall limit or affect or
be construed to limit or affect the obligations and liabilities of any Credit
Party, OPMW Credit Party or any other Non-Recourse Party (a) in accordance with
the terms of any Transaction Document or Financing Document creating such
liabilities and obligations to which such Credit Party, OPMW Credit Party or
Non-Recourse Party is a party, or (b) arising from liability pursuant to
applicable Requirements of Law for such Credit Party's, OPMW Credit Party's or
such Non-Recourse Party's fraudulent actions, knowing misrepresentations or
willful misconduct or (c) with respect to amounts distributed to it in violation
of Section 6.10 of the OPMW Restated Credit Agreement.
24
IN WITNESS WHEREOF, this Mortgage has been duly authorized and has been
executed and delivered, under seal, to the Mortgagee by the Mortgagor on the
date first above written.
ORION POWER MIDWEST, L.P.
By: Orion Power MidWest GP, Inc.,
[Embossed corporate seal] its general partner
ATTEST: By:
------------------------------ ------------------------------
[Assistant] Secretary Name:
Title:
1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
25
ACKNOWLEDGMENT
STATE OF _________________:
: ss.
COUNTY OF ________________:
On this _____ day of _____, 20__, before me the Subscriber, personally
appeared _____________________________, who acknowledged him/herself to be the
__________________ of ORION POWER MIDWEST GP, INC., a Delaware corporation,
which is the general partner of Orion Power MidWest, L.P., a Delaware limited
partnership, and that he/she, as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
the name of the corporation in such capacity by him/herself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and notarial seal.
----------------------------------------
[Notarial Seal]
Notary Public
My Commission Expires:
26
CERTIFICATE OF RESIDENCE
The undersigned certifies that the residence address of the Mortgagee is:
Bank of America, N.A.
Bank of America Corporate Center
101 North Tryon Street
NCI-001-08-19
Charlotte, NC 28255
Attention: Laura S. Ryan
----------------------------------------
On behalf of the Mortgagee
Attachments:
Exhibit A - The Land
Exhibit B - The Permitted Encumbrances
27
EXHIBIT A
Legal Description
[To be attached]
28
EXHIBIT B
Permitted Encumbrances
All matters listed as title exceptions on Schedule B Part I of Fidelity
National Title Insurance Company of New York Lender's Policy of Title Insurance
bearing Title No.; NYN99-4444PA(A), Order No. PA 1008A, as endorsed by
Endorsement Number ____________.
EXHIBIT N-3
TO THE
AMENDED AND RESTATED
CREDIT AGREEMENT
Twelvepole Creek, West Virginia (Second)
Wayne County, West Virginia
================================================================================
A CREDIT LINE DEED OF TRUST
CREDIT LINE DEED OF TRUST, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS
(COLLATERAL IS OR INCLUDES FIXTURES)
DATED AS OF OCTOBER 28, 2002
FROM
TWELVEPOLE CREEK, LLC,
GRANTOR
TO
MARY CLARE EROS AND WILLIAM J. POWELL,
TRUSTEE
IN FAVOR OF
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT
FOR THE BENEFIT OF THE SECURED PARTIES,
BENEFICIARY
WALKERS BRANCH OF TWELVEPOLE CREEK, CEREDO DISTRICT,
WAYNE COUNTY, WEST VIRGINIA
THIS DEED OF TRUST DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED OR
TO BE IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE
NOT MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH DWELLING UNIT HAVING
ITS OWN SEPARATE COOKING FACILITIES.
Record and return to:
McGuireWoods LLP
Bank of America Corporate Center
100 North Tryon Street, Suite 2900
Charlotte, North Carolina 28202
Attention: Marvin L. Rogers, Esq.
================================================================================
TABLE OF CONTENTS
Article Section Page
ARTICLE I OBLIGATIONS AND THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTOR............................6
SECTION 1.01 Obligations..............................................................................6
SECTION 1.02 Continuing Security......................................................................7
SECTION 1.03 Maximum Secured Amount...................................................................7
SECTION 1.04 Title....................................................................................7
SECTION 1.05 Credit Agreement.........................................................................8
SECTION 1.06 Payment of Taxes, Liens and Charges......................................................8
SECTION 1.07 Payment of Closing Costs.................................................................9
SECTION 1.08 Maintenance and Operations; Plans; Use...................................................9
SECTION 1.09 Insurance...............................................................................10
SECTION 1.10 [INTENTIONALLY OMITTED.]................................................................10
SECTION 1.11 [INTENTIONALLY OMITTED.]................................................................10
SECTION 1.12 Assignment of Leases and Rents..........................................................10
SECTION 1.13 Restrictions on Transfers and Encumbrances..............................................12
SECTION 1.14 Security Agreement......................................................................12
SECTION 1.15 Filing and Recording....................................................................13
SECTION 1.16 Contract Collateral.....................................................................14
SECTION 1.17 INTENTIONALLY OMITTED...................................................................14
SECTION 1.18 Further Assurances......................................................................14
SECTION 1.19 Additions to Trust Property.............................................................14
SECTION 1.20 No Claims Against the Trustee or the Beneficiary........................................15
SECTION 1.21 Change in Tax Law.......................................................................15
SECTION 1.22 Ground Lease............................................................................15
SECTION 1.23 Survey of Mortgaged Property............................................................17
ARTICLE II DEFAULTS AND REMEDIES.................................................................................17
SECTION 2.01 Events of Default.......................................................................17
SECTION 2.02 Demand for Payment......................................................................17
SECTION 2.03 Rights to Take Possession, Operate and Apply Revenues...................................18
SECTION 2.04 Right to Cure the Grantor's Failure to Perform..........................................19
SECTION 2.05 Right to a Receiver.....................................................................19
SECTION 2.06 Foreclosure and Sale....................................................................19
SECTION 2.07 Other Remedies..........................................................................21
SECTION 2.08 Application of Sale Proceeds and Rents..................................................21
SECTION 2.09 The Grantor as Tenant Holding Over......................................................22
SECTION 2.10 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws....................................................................................22
SECTION 2.11 Discontinuance of Proceedings...........................................................22
SECTION 2.12 Suits to Protect the Trust Property.....................................................22
SECTION 2.13 Filing Proofs of Claim..................................................................22
i
Article Section Page
SECTION 2.14 Possession by the Beneficiary...........................................................23
SECTION 2.15 Waiver..................................................................................23
SECTION 2.16 Remedies Cumulative.....................................................................24
ARTICLE III MISCELLANEOUS........................................................................................24
SECTION 3.01 Subordination...........................................................................24
SECTION 3.02 Partial Invalidity......................................................................25
SECTION 3.03 Notices.................................................................................25
SECTION 3.04 Successors and Assigns..................................................................25
SECTION 3.05 Counterparts............................................................................26
SECTION 3.06 Satisfaction and Cancellation...........................................................26
SECTION 3.07 Definitions.............................................................................26
SECTION 3.08 Other Financing Documents...............................................................26
SECTION 3.09 The Trustee's Powers and Liabilities....................................................27
SECTION 3.10 Subrogation.............................................................................28
SECTION 3.11 Beneficiary Powers......................................................................28
SECTION 3.12 Enforceability of Deed of Trust.........................................................29
SECTION 3.13 Amendments..............................................................................29
SECTION 3.14 Applicable Law..........................................................................29
SECTION 3.15 Limitation of Recourse..................................................................29
ii
CREDIT LINE DEED OF TRUST, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT
OF LEASES AND RENTS
THIS CREDIT LINE DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING AND
ASSIGNMENT OF LEASES AND RENTS dated as of October 28, 2002 (this "Deed of
Trust"), is made by TWELVEPOLE CREEK, LLC, a Delaware limited liability company,
having an office at 305 6th Street West, P.O. Box 429, Ceredo, West Virginia
25507-0429, (the "Grantor"), to Mary Clare Eros, a resident of Jefferson County,
West Virginia and William J. Powell, a resident of Berkley County, West Virginia
(hereinafter jointly referred to as "Trustee"), having an office at c/o Jackson
& Kelly PLLC, 310 West Burke Street, Martinsburg, West Virginia 25401, in favor
of BANK OF AMERICA, N.A., as Administrative Agent for the benefit of the Secured
Parties referred to in the Credit Agreement (as defined below), having an office
at 101 North Tryon Street, NC1-001-08-19, Charlotte, NC 28255 (in such capacity,
together with its successors, substitutes and assigns, the "Beneficiary").
RECITALS:
A. Reference is hereby made, for all purposes, to (i) that certain
Amended and Restated Credit Agreement dated as of October 28, 2002 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among Orion Power New York, L.P., a Delaware limited
partnership as borrower ("Orion Power"), Banc of America Securities LLC and BNP
Paribas, as Lead Arrangers and Joint Book Runners, each other financial
institution which is a signatory thereto or which may hereafter become an
assignee pursuant to Section 9.06 of the Credit Agreement (each, a "Lender" and
collectively the "Lenders"), and the Beneficiary, as Issuing Bank and
Administrative Agent, Union Bank of California, N.A., CoBank, ACB and Deutsche
AG New York and/or Cayman Island Branch, as Documentation Agents and BNP
Paribas, as Syndication Agent, (ii) all other documents and instruments that are
collectively defined as the "Financing Documents" in the Credit Agreement. A
copy of the Credit Agreement is available during normal business hours, upon two
days notice, at the offices of the Grantor. All capitalized terms not expressly
defined in this Deed of Trust shall have the meaning given to them in the Credit
Agreement; provided that the following terms shall have the meaning set forth in
the OPMW Restated Credit Agreement: "Acceptable Reserves", "Default Rate",
"Liens", "Permitted Liens", "Prudent Industry Practice" and "Requirements of
Law". Pursuant to the Credit Agreement, the Acquisition Lenders have extended,
upon the terms and subject to the conditions of the Credit Agreement, credit to
Orion Power in the aggregate principal amount of up to $352,549,541.00 in the
form of Acquisition Loans as evidenced by promissory notes having a final
maturity date of no later than October 28, 2005. In addition to the Acquisition
Loans and pursuant to the Credit Agreement, the Working Capital Lenders have
also extended, or have agreed to extend, credit to Orion Power in the form of
certain Working Capital Loans in an aggregate principal amount of up to
$30,000,000.00 as evidenced by promissory notes having a final maturity date of
no later than October 28, 2005.
B. The Grantor, Orion Power Midwest, L.P., Orion Power Midwest GP, Inc.
and Orion Power LP, Inc. have entered into a Guarantee Agreement dated as of
October 28, 2002 (the "Guarantee") in favor of the --------- Administrative
Agent for the benefit of the Secured Parties.
C. The obligation of the Lenders to make the Loans is conditioned upon,
among other things, the execution and delivery by the Grantor of this Deed of
Trust to secure, subject to the limitations set forth in Section 1.03, the due
and punctual payment and performance of the Obligations (defined below).
GRANTING CLAUSES
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged and in order to secure the due and punctual payment
and performance of the Obligations and intending to be legally bound hereby, the
Grantor hereby gives, grants, bargains, sells, aliens, confirms, transfers, sets
over, pledges, enfeoffs, assigns, hypothecates and conveys as security, grants a
security interest in, hypothecates, mortgages, pledges and sets over unto the
Trustee IN TRUST FOREVER, with power of sale, and with deed of trust covenants,
subject to Permitted Encumbrances (as hereinafter defined) and other Permitted
Liens, a second priority lien in all the following described property whether
now owned or held or hereafter acquired (collectively, the "Trust Property");
(1) (a) the parcel or parcels of land located in Wayne County,
West Virginia, as more particularly described on Exhibit A-1 hereto
(the "Fee Interest Land") and (b) the leasehold estate created by and
all right, title and interest of the lessee or tenant in, to and under
that certain Lease by and between The County Commission of Wayne
County, West Virginia, as lessor (the "Ground Lessor") and the Grantor,
as lessee, dated as of July 1, 2000, as amended pursuant to that
certain First Amendment to Lease Agreement dated June 1, 2001 (the
Lease as amended by the First Amendment to Lease Agreement is hereafter
referred to as the "Ground Lease"), a memorandum of which Ground Lease
is recorded in the office of the Clerk of the County Commissioner of
Wayne County, West Virginia, in Book 31, page 582, covering the parcel
or parcels of land located in Wayne County, West Virginia, as more
particularly described on Exhibit A-2 hereto (the "Leasehold Land" and,
together with the Fee Interest Land, the "Land"), together with any
after-acquired estate of the Grantor in the Leasehold Land and any
option to purchase the Leasehold Land now or hereafter existing in
favor of the Grantor, and in the case of each of (a) and (b) above,
together with all rights appurtenant thereto, including without
limitation, all strips and gores within or adjoining the Land, all
estate, right, title, interest, claim or demand of Grantor in the
streets, roads, sidewalks, alleys and ways adjacent thereto (whether or
not vacated and whether public or private and whether open or
proposed), all easements over adjoining land granted by any easement
agreements, covenants or restrictive agreements, all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights
pursuant to any trackage agreement, rights to the use of common drive
entries, rights-of-way and other rights, privileges and appurtenances
thereunto belonging or in any way pertaining thereto, all reversions,
remainders, dower and right of dower, curtesy and right of curtesy, all
of the air space and right to use air space above such property, all
transferable development rights arising therefrom or transferred
thereto, all water and water rights and water rights applications
(whether
2
riparian, appropriative or otherwise, and whether or not appurtenant),
all pumps, pumping plants, pipes, flumes and ditches thereunto
appertaining, all rights and ditches for irrigation, all utility
rights, sewer rights, and any shares of stock evidencing the same, all
oil, gas and other minerals and mineral substances (which term shall
include all gypsum, anhydrite, coal, lignite, hydrocarbon or other
fossil materials or substances, fissionable materials or substances and
all other minerals of any kind or character, whether gaseous, liquid or
hard minerals, whether similar or dissimilar to those named, whether
now or hereafter found to exist and whether associated with the surface
or mineral estate) in, on or under the Land or produced, saved or
severed from the Land, all mineral, mining, gravel, oil, gas,
hydrocarbon rights and other rights to produce or share in the
production of anything related to such property, all drainage, crop,
timber, agricultural, and horticultural rights with respect to such
property, and all other appurtenances appurtenant to such property,
including without limitation, any now or hereafter belonging or in any
way appertaining thereto, and all claims or demands of the Grantor,
either at law or in equity, in possession or expectancy, now or
hereafter acquired, of, in or to the same (the Land and all of the
foregoing being sometimes referred to herein collectively as the
"Premises");
(2) all of the Grantor's right, title and interest in and to
all buildings, improvements, fixtures and other structures or
improvements of any kind now or hereafter erected or located upon the
Land, including, but not limited to, all building materials, water,
sanitary and storm sewers, drainage, electricity, steam, gas, telephone
and other utility facilities, parking areas, roads, driveways, walks
and other site improvements; and all additions and betterments thereto
and all renewals, substitutions and replacements thereof, owned or to
be owned by the Grantor or in which the Grantor has or shall acquire an
interest, to the extent of the Grantor's interest therein, now or
hereafter erected or located upon the Land (collectively, the
"Improvements");
(3) AND AS INDEPDENT AND SEPARATE SECURITY for the payment of
the Indebtedness and the performance of the obligations and the
covenants and agreements secured hereby, all of the Grantor's right,
title and interest in and to the following (collectively, the "Personal
Property"):
(a) All personal property and fixtures of every kind
and nature whatsoever which are now or hereafter located on,
attached to, incorporated in (regardless of where located) or
affixed to the Premises or the Improvements or used or useful
in connection with the ownership, construction, maintenance,
repair, reconstruction, alteration, addition, improvement,
operation, mining, use or occupancy of the Premises or the
Improvements, including, without limitation, all goods,
inventory, construction materials, equipment, mining
equipment, tools, furniture, furnishings, fittings, fixtures,
supplies, computers and computer programs, carpeting,
draperies, blinds, window treatments, racking and shelving
systems, heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, incinerating and/or compacting
plants, systems and equipment, elevators, escalators,
appliances, stoves, ranges, refrigerators, vacuum, window
washing and other cleaning and building service systems, call
systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, cables, antennae,
3
pipes, ducts, conduits, machinery, apparatus, motors, dynamos,
engines, compressors, generators, boilers, stokers, furnaces,
pumps, tanks, appliances, garbage systems and pest control
systems and all of the Grantor's present and future "goods",
"equipment" and "fixtures" (as such terms are defined in the
Uniform Commercial Code in effect in the State where the
Premises are located) and other personal property, including
without limitation any such personal property and fixtures
which are leased, and all repairs, attachments, betterments,
renewals, replacements, substitutions and accessions thereof
and thereto; and
(b) all general intangibles now owned or hereafter
acquired by the Grantor and relating to the design,
development, operation, management and use of the Premises or
the Improvements, including, but not limited to, all contract
rights, trademarks, trade names, logos and other rights
relating to the name and style under which the Premises and
the Improvements are operated;
(4) all of the Grantor's right, title and interest in and to
all approvals, authorizations, building permits, certificates of
occupancy, zoning variances, use permits, certifications, entitlements,
exemptions, franchises, licenses, orders, variances, plat plan
approvals, environmental approvals, air pollution authorities to
construct and permits to operate, sewer and waste discharge permits,
national pollutant discharge elimination system permits, water permits,
zoning and land use entitlements and all other permits, whether now
existing or hereafter issued to or obtained by or on behalf of the
Grantor, that relate to or concern in any way the Premises or the
Improvements and are given or issued by any governmental or
quasi-governmental authority, whether now existing or hereafter created
(as the same may be amended, modified, renewed or extended from time to
time, and including all substitutions and replacements therefor), all
rights under and pursuant to all construction, service, engineering,
consulting, management, access, supply, leasing, architectural and
other similar contracts relating in any way to the design,
construction, management, operation, occupancy and/or use of the
Premises and Improvements, all rights under all purchase agreements,
sales agreements, option contracts, land contracts and contracts for
the sale of oil, gas and other minerals, or any of them, that relate to
or concern in any way the Premises or the Improvements, all abstracts
of title, architectural, engineering or construction drawings, plans,
specifications, operating manuals, computer programs, computer data,
maps, surveys, soil tests, feasibility studies, appraisals,
environmental studies, engineering reports and similar materials
relating to any portion of or all of the Premises and Improvements, and
all payment and performance bonds or warranties or guarantees relating
to the Premises or the Improvements, all to the extent assignable
(collectively, the "Permits, Plans and Contracts");
(5) all of the Grantor's interest in and rights under all
leases or licenses (under which the Grantor is landlord or licensor)
and subleases (under which the Grantor is sublandlord), concession,
franchise, management, mineral or other agreements relating to the use
or occupancy of the Premises or the Improvements or any part thereof
for any purpose, or the extraction or taking of any gas, oil, water or
other minerals from the Premises, whether now or hereafter existing or
entered into (including any use or occupancy arrangements created
pursuant to Section 365(d) of the Bankruptcy Code (as
4
defined in Section 1.01) or otherwise in connection with the
commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar
proceedings, or any assignment for the benefit of creditors, in respect
of any tenant or occupant of any portion of the Premises or the
Improvements), and all guaranties thereof and all amendments,
modifications, supplements, extensions or renewals thereof
(collectively, the "Leases"), and all rents, issues, profits, revenues,
charges, fees, receipts, royalties, proceeds from the sale of oil, gas
and/or other minerals (whether gaseous, liquid or hard minerals,
whether similar or dissimilar to those named and whether associated
with the surface or mineral estate), accounts receivable, cash or
security deposits and other deposits (subject to the prior right of the
tenants making such deposits) and income, and other benefits now or
hereafter derived from any portion of the Premises or the Improvements
or the use or occupancy thereof (including any payments received
pursuant to Section 502(b) of the Bankruptcy Code or otherwise in
connection with the commencement or continuance of any bankruptcy,
reorganization, arrangement, insolvency, dissolution, receivership or
similar proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or other occupants of any portion of the Premises
or the Improvements and all claims as a creditor in connection with any
of the foregoing) and all payments of a similar nature, now or
hereafter, including during any period of redemption, derived from the
Premises or the Improvements or any other portion of the Trust Property
and all proceeds from the cancellation, surrender, sale or other
disposition of the Leases (collectively, the "Rents");
(6) all of the Grantor's right, title and interest in and to
all refunds or rebates of real and personal property taxes or charges
in lieu of taxes, heretofore or now or hereafter assessed or levied
against all or any of the Premises, the Improvements, the Personal
Property, the Leases, the Rents and the Permits, Plans and Contracts,
including interest thereon, and the right to receive the same, whether
such refunds or rebates relate to fiscal periods before or during the
term of this Deed of Trust;
(7) all of the Grantor's right, title and interest in and to
all insurance policies and the proceeds thereof, now or hereafter in
effect with respect to all or any of the Premises, the Improvements,
the Personal Property, the Leases, the Rents and the Permits, Plans and
Contracts, including, without limitation, any and all title insurance
proceeds, and all unearned premiums and premium refunds, accrued,
accruing or to accrue under such insurance policies, and all awards
made for any taking of or damage to all or any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, by eminent domain, or by any purchase in
lieu thereof, and all awards resulting from a change of grade of
streets or for severance damages, and all other proceeds of the
conversion, voluntary or involuntary, of all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, into cash or other liquidated claims, and
all judgments, damages, awards, settlements and compensation (including
interest thereon) heretofore or hereafter made to the present and all
subsequent owners of the Premises, Improvements, the Personal Property,
the Leases, the Rents and the Permits, Plans and Contracts, or any part
thereof for any injury to or decrease in the value thereof for any
reason;
5
(8) All of the Grantor's right, title and interest in and to
the following:
(a) all right, in the name and on behalf of the
Grantor, to appear in and defend any action or proceeding
brought with respect to all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and
the Permits, Plans and Contracts, and to commence any action
or proceeding to protect the interest of the Grantor in all or
any of the Premises, Improvements, the Personal Property, the
Leases, the Rents and the Permits, Plans and Contracts;
(b) all right and power to encumber further all or
any of the Premises, Improvements, the Personal Property, the
Leases, the Rents and the Permits, Plans and Contracts, or any
part thereof;
(c) all rights, titles, interests, estates or other
claims, both in law and in equity, which the Grantor now has
or may hereafter acquire in any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents or
the Permits, Plans and Contracts, or in and to any greater
estate in all or any of the Premises, the Improvements, the
Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts;
(d) all property hereafter acquired or constructed by
the Grantor of the type described above which shall forthwith,
upon acquisition or construction thereof by the Grantor and
without any act or deed by any party, become subject to the
lien and security interest of this Deed of Trust as if such
property were now owned by the Grantor and were specifically
described in this Deed of Trust and were specifically conveyed
or encumbered hereby;
(e) all options to purchase, rights of first refusal,
renewal rights and other rights and interests of the Grantor
under the Ground Lease; and
(9) All accessions, additions or attachments to, and proceeds
or products of, any of the foregoing.
TO HAVE AND TO HOLD the Trust Property and the rights and privileges
hereby granted and conveyed or intended to be, unto the Trustee, its successors
and assigns for the uses and purposes herein set forth, for the benefit and
security of the Beneficiary, subject only to the Permitted Encumbrances (as
hereinafter defined) and other Permitted Liens, and to satisfaction and
cancellation as provided in Section 3.06 hereof, IN TRUST, upon the terms and
conditions set forth herein.
ARTICLE I
OBLIGATIONS AND THE REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE GRANTOR
SECTION 1.01 Obligations. This Deed of Trust is executed, acknowledged
and delivered by the Grantor to secure and enforce, and the Trust Property is
security for, the due and punctual payment and performance of all obligations of
Orion Power under the Guarantee (the
6
"Obligations"). Copies of all documents evidencing the Obligations are available
during normal business hours, upon two days notice, at the offices of the
Grantor.
SECTION 1.02 Continuing Security. This Deed of Trust shall secure and
shall continue to secure the entire outstanding amount of the Obligations up to
the Maximum Secured Amount until all of the Obligations have been paid in full.
SECTION 1.03 Maximum Secured Amount. THIS IS A CREDIT LINE DEED OF
TRUST FOR THE PURPOSES OF W. VA., CODE ss.38-1-14, AND SECURES A MAXIMUM AMOUNT
NOT TO EXCEED THREE HUNDRED EIGHTY TWO MILLIONT FIVE HUNDRED FORTY-NINE THOUSAND
FIVE HUNDRED FORTY-ONE AND 11/100 Dollars ($382,549,541.00) and this Deed of
Trust is also security for the payment of all sums due and payable pursuant to
the Guarantee. This Deed of Trust secures future advances that are intended to
be obligatory that the Beneficiary has agreed to make in accordance with the
provisions of the Credit Agreement and this Deed of Trust.
The Grantor agrees, covenants, represents and warrants as follows:
SECTION 1.04 Title.
(a) The Grantor has (i) good, marketable, indefeasible, fee
simple title to the Fee Interest Land and Improvements related thereto,
(ii) good, marketable and indefeasible title to its interest in the
Ground Lease and the Improvements related to the Leasehold Land, and
(iii) good and marketable title to or valid leasehold, easement or
right-of-way interests in, all of the other Trust Property, except in
each case where the failure to have such title or interest could not
reasonably be expected to have a material adverse effect on the Trust
Property. This Deed of Trust is and will remain a valid and enforceable
lien on (x) the Trust Property in respect of the Fee Interest Land and
(y) the leasehold estate created by the Ground Lease and the other
Trust Property in respect of the Leasehold Land, subject to no Liens
other than the exceptions and encumbrances set forth in Exhibits B-1
and B-2, respectively, attached hereto (collectively, the "Permitted
Encumbrances") and other Permitted Liens, including the Amended and
Restated Deed of Trust (as defined below).
(b) [INTENTIONALLY OMITTED.]
(c) The Grantor has good and lawful right and full power and
authority to encumber or grant a security interest in the Trust
Property. The Grantor will forever warrant and defend its title to the
Trust Property, the rights of the Beneficiary therein under this Deed
of Trust and the validity and priority of the lien of this Deed of
Trust thereon against the claims of all persons and parties except
those having rights under the Permitted Encumbrances or other Permitted
Liens and including the Amended and Restated Deed of Trust (as defined
below) to the extent of those rights.
(d) This Deed of Trust, when duly recorded in the appropriate
public records and when financing statements are duly filed in the
appropriate public records, will create
7
a valid, perfected and enforceable lien upon and security interest in,
as applicable, all the material Trust Property in which a security
interest can be perfected.
SECTION 1.05 Credit Agreement.
(a) This Deed of Trust is given pursuant to the Credit
Agreement. Subject to and without limited Section 3.07 hereof, each and
every term and provision of the Credit Agreement, including the rights,
remedies, obligations, covenants, conditions, agreement, indemnities,
representations and warranties of the parties thereto shall be
considered as if a part of this Deed of Trust. Subject to the
limitations set forth in Section 1.03, this Deed of Trust secures all
present and future Indebtedness of the Grantor in respect of the
Guarantee and all other Obligations from time to time owing under the
Guarantee.
(b) If any remedy or right of the Trustee or the Beneficiary
pursuant hereto is acted upon by the Trustee or the Beneficiary or if
any actions or proceedings (including any bankruptcy, insolvency or
reorganization proceedings) are commenced in which the Trustee or the
Beneficiary is made a party and is obliged to defend or uphold or
enforce this Deed of Trust or the rights of the Trustee or the
Beneficiary hereunder or the terms of any Lease, or if a condemnation
proceeding is instituted affecting the Trust Property, the Grantor will
pay all sums, including reasonable attorneys' fees and disbursements,
actually incurred (not as imposed by statute) by the Trustee or the
Beneficiary related to the exercise of any remedy or right of the
Trustee or the Beneficiary pursuant hereto or for the expense of any
such action or proceeding together with all other costs (not as imposed
by statute), disbursements and allowances, interest thereon from the
date of demand for payment thereof at the Default Rate, and such sums
and the interest thereon shall, to the extent permissible by applicable
Requirements of Law, be a lien on the Trust Property prior to any
right, title to, interest in or claim upon the Trust Property attaching
or accruing subsequent to the recording of this Deed of Trust and,
subject to the limitations set forth in Section 1.03, shall be secured
by this Deed of Trust to the extent permitted by applicable
Requirements of Law.
(c) Any payment of amounts due under this Deed of Trust not
made on or before the due date for such payments shall accrue interest
daily without notice from the due date until paid at the Default Rate,
and such interest at the Default Rate shall be immediately due upon
demand by the Trustee or the Beneficiary.
SECTION 1.06 Payment of Taxes, Liens and Charges
(a) The Grantor will pay and discharge (whether by it or any
Affiliate, or otherwise) from time to time prior to the time when the
same shall become delinquent, and before any interest or penalty
accrues thereon or attaches thereto, all taxes, assessments and
governmental charges, levies or obligations lawfully imposed upon or
assessed against the Grantor, the Trust Property or any part thereof or
upon the Rents from the Trust Property or arising in respect of the
occupancy, use or possession thereof and all lawful claims or
obligations that, if unpaid, would become a Lien upon the Trust
Property or upon any part thereof; except as the validity or amount of
such taxes, assessments, charges, levies or obligations may be
contested by the Grantor in
8
accordance with Section 5.12 of the Credit Agreement. Upon the
reasonable written request of the Administrative Agent, the Grantor
shall promptly deliver to the Administrative Agent, at the same place
as designated in Section 3.03 below, reasonably satisfactory evidence
that all payments required under this Section 1.06 have been timely
made.
(b) In the event of the passage of any state, Federal,
municipal or other governmental law, order, rule or regulation
subsequent to the date hereof (i) deducting from the value of real
property for the purpose of taxation any lien or encumbrance thereon or
in any manner changing or modifying the laws now in force governing the
taxation of this Deed of Trust or debts secured by mortgages or deeds
of trust (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing
a tax to be paid by the Beneficiary, either directly or indirectly, on
this Deed of Trust or any of the Financing Documents or to require an
amount of taxes to be withheld or deducted therefrom, upon obtaining
actual knowledge thereof, the Grantor will promptly notify the
Beneficiary of such event. In such event the Grantor shall (i) agree to
enter into such further instruments as may be reasonably necessary or
desirable to obligate the Grantor to make any applicable additional
payments and (ii) the Grantor shall make all such additional payments,
except as such law, order, rule, regulation or payment may be contested
by the Grantor in good faith and by appropriate proceedings and
pursuant to which Acceptable Reserves have been established.
SECTION 1.07 Payment of Closing Costs. The Grantor shall pay all
reasonable costs in connection with, relating to or arising out of the
preparation, execution and recording of this Deed of Trust, including title
company premiums and charges, inspection costs, survey costs, recording fees and
taxes (including without limitation all West Virginia Deed of Trust Recording
Taxes and any other applicable deed of trust recording taxes), reasonable
attorneys', engineers', appraisers' and consultants' fees and disbursements and
all other similar reasonable expenses of every kind.
SECTION 1.08 Maintenance and Operations; Plans; Use.
(a) The Grantor will, subject to Section 6.11 of the OPMW
Restated Credit Agreement and Section 8.11 of the Twelvepole Guarantee,
(i) operate and maintain the Trust Property in accordance with Prudent
Industry Practice and all applicable material Requirements of Law,
except when being contested in good faith and by appropriate
proceedings and as to which Acceptable Reserves have been established,
or except where the failure to so operate and maintain the Trust
Property could not be reasonably expected to have a material adverse
effect on the Trust Property, and (ii) keep proper books of records and
accounts in which full, true and correct entries shall be made of all
entries shall be made of all of its transactions in accordance with
GAAP.
(b) The Grantor shall at all times comply with its material
obligations under all recorded restrictions, conditions, easements and
covenants ("Restrictive Covenants") encumbering the Land and shall duly
enforce its rights under all Restrictive Covenants encumbering other
property for the benefit of the Land and/or the Improvements, except
9
where the failure to so comply could not reasonably be expected to have
a material adverse effect on the Trust Property. If the Grantor
receives any notice (whether oral or written) that any Restrictive
Covenant has been violated, which violation would be reasonably likely
to have a material adverse effect on the Trust Property, the Grantor
shall promptly notify the Beneficiary and take such steps as the
Beneficiary may reasonably require to correct such violation.
SECTION 1.09 Insurance. The Grantor will keep the Trust Property
insured against such risks, and in the manner, required by the terms of Section
5.06 of the OPMW Restated Credit Agreement. All premiums due under all insurance
policies required to be maintained under Section 5.06 of the OPMW Restated
Credit Agreement shall be paid timely by, or on behalf of, the Grantor.
SECTION 1.10 [INTENTIONALLY OMITTED.]
SECTION 1.11 [INTENTIONALLY OMITTED.]
SECTION 1.12 Assignment of Leases and Rents.
(a) The Grantor hereby irrevocably and absolutely grants,
transfers and assigns to the Beneficiary all of its right, title and
interest in and to all Leases, together with any and all extensions and
renewals thereof for purposes of securing and discharging the
performance by Orion Power and the Grantor of the Obligations. The
Grantor has not assigned or executed any assignment of, and will not
assign or execute any assignment of, any Lease or its respective Rents
to anyone other than the Beneficiary, except as otherwise permitted
under the OPMW Restated Credit Agreement and the other Financing
Documents (as defined in the OPMW Credit Agreement).
(b) Without the Beneficiary's prior written consent, the
Grantor will not (i) modify, amend, terminate or consent to the
cancellation or surrender of any Lease or (ii) consent to an assignment
of any tenant's interest in any Lease or to a subletting thereof
covering a material portion of the Trust Property, except, in each
case, (x) as may be permitted by this Deed of Trust or the OPMW Credit
Agreement or (y) to the extent such modification, amendment,
termination or consent would reasonably be expected to have a material
adverse effect on the Trust Property.
(c) Subject to Section 1.12(d) below, the Grantor has assigned
and transferred to the Beneficiary all of the Grantor's right, title
and interest in and to the Rents now or hereafter arising, it being
intended that this assignment establish, subject to Section 1.12(d)
below, an absolute transfer and assignment of all Rents and all Leases
to the Beneficiary and not merely to grant a security interest therein.
The Grantor shall have the license and right, subject to automatic
revocation as provided in Section 1.12(d) below, to operate and rent,
lease or let all or any portion of the Trust Property and to collect,
but not more than one month prior to accrual, all of the Rents. As
provided in Section 1.12(d) below, the license granted by this Section
1.12(c) is subject to automatic revocation and thereafter the
Beneficiary may, in the Grantor's name and stead (with or without first
taking possession of any of the Trust Property personally or by
receiver as provided
10
herein) operate the Trust Property and rent, lease or let all or any
portion of any of the Trust Property to any party or parties at such
rental and upon such terms as the Beneficiary shall, in its sole
discretion, determine, and may collect and have the benefit of all of
such Rents arising from or accruing at any time thereafter or that may
thereafter become due.
(d) As long as no Event of Default has occurred and is
continuing, the license granted under Section 1.12(c) above shall be
effective and the Beneficiary shall not exercise any of its rights
under Section 1.12(c) above, and the Grantor shall receive and collect
the Rents accruing under any Lease pursuant to the revocable license
granted therein; but upon the occurrence and during the continuance of
any Event of Default, the license granted under Section 1.12(c) above
shall be deemed to be automatically revoked and shall terminate
automatically without notice and the Beneficiary shall be entitled to
all of the Rents without the necessity of the Beneficiary's taking any
action whatsoever, and the Rents shall thereupon be deemed to be cash
collateral for all purposes, including for purposes of Section 363 of
the Bankruptcy Code. Upon the occurrence and during the continuance of
any Event of Default, the Beneficiary may receive and collect all Rents
and enter upon the Premises and Improvements through its officers,
agents, employees or attorneys for such purpose and for the operation
and maintenance thereof. Upon the occurrence and during the continuance
of an Event of Default, the Grantor hereby irrevocably authorizes and
directs each tenant, if any, and each successor, if any, to the
interest of any tenant under any Lease, respectively, to rely upon any
notice of a claimed Event of Default sent by the Beneficiary to any
such tenant or any of such tenant's successors in interest, and
thereafter to pay Rents to the Beneficiary without any obligation or
right to inquire as to whether an Event of Default actually exists and
even if notice to the contrary is received from the Grantor, who shall
have no right or claim against any such tenant or successor in interest
for any such Rents so paid to the Beneficiary. Each tenant or any of
such tenant's successors in interest from whom the Beneficiary or any
officer, agent, attorney or employee of the Beneficiary shall have
collected any Rents, shall be authorized to pay Rents to the Grantor
only after such tenant or any of such tenant's successors in interest
shall have received written notice from the Beneficiary that the Event
of Default is no longer continuing, which notice the Beneficiary shall
be obligated to give if the Beneficiary determines in its reasonable
discretion that such Event of Default is no longer continuing (or if
ordered by a court or arbitrator with jurisdiction), unless and until a
further notice of an Event of Default is given by the Beneficiary to
such tenant or any of such tenant's successors in interest.
(e) The Beneficiary will not become a mortgagee in possession
so long as it does not enter and take actual possession of the Trust
Property. In addition, the Beneficiary shall not be responsible or
liable for performing any of the obligations of the landlord under any
Lease, for any waste by any tenants, or others, for any dangerous or
defective conditions of any of the Trust Property, for negligence in
the management, upkeep, repair or control of any of the Trust Property
or any other act or omission by any other person.
(f) Upon the occurrence and during the continuance of an Event
of Default, the Grantor shall furnish to the Beneficiary, within thirty
(30) days after a request by the
11
Beneficiary to do so, a written statement containing the names of all
tenants, subtenants and concessionaires of the Premises or
Improvements, the terms of any Lease, the space occupied and the
rentals or license fees payable thereunder.
(g) If an Event of Default occurs and is continuing, and if
there is any applicable law requiring the Beneficiary or the Trustee to
take actual or constructive possession of the Premises (or some action
equivalent thereto, such as securing the appointment of a receiver) in
order for the Beneficiary or the Trustee to "perfect" or "activate" its
rights and remedies as set forth herein, the Grantor hereby waives the
benefits of any such laws to the maximum extent allowable.
SECTION 1.13 Restrictions on Transfers and Encumbrances. The Grantor
shall not create or permit to exist any Lien on the Trust Property, other than
any Permitted Lien or Permitted Encumbrance; provided, however, that the Grantor
may grant easements and licenses, enter into easements, leases, subleases, and
enter into other similar agreements relating to the Trust Property in the
ordinary course of business to the extent the same would not reasonably be
expected to have a material adverse effect on the Trust Property and the same
shall be deemed Permitted Encumbrances hereunder. Notwithstanding anything to
the contrary contained in this Deed of Trust or the other Financing Documents,
Grantor shall have the right, at any time, upon ten days advance written notice
to Beneficiary, but without the requirement for consent of the Beneficiary or
any Lender, to convey that certain portion of the Trust Property as more
particularly described on Exhibit C attached hereto (the "Approved Conveyance
Property") to any third party, and in the event of such conveyance, Beneficiary
shall reasonably cooperate with Grantor, at Grantor's sole expense, in
effectuating the release of the Approved Conveyance Property from the lien of
this Deed of Trust. Grantor represents that Grantor has been actively marketing
the Approved Conveyance Property for more than one (1) year since October of
2001 and that Grantor has not received an offer for the Approved Conveyance
Property in excess of Fifty Thousand Dollars ($50,000.00).
SECTION 1.14 Security Agreement.
(a) This Deed of Trust is both a mortgage and grant of real
property and a grant of a security interest in personal property, and
shall constitute and serve as a "Security Agreement" (i) with regard to
fixtures, within the meaning of the West Virginia Uniform Commercial
Code (the "WV UCC") and (ii) with regard to personal property, within
the meaning of the Delaware Uniform Commercial Code (the "DE UCC"). The
Grantor hereby grants unto the Beneficiary a security interest in and
to all the Trust Property described in this Deed of Trust that is not
real property, and simultaneously with the recording of this Deed of
Trust, the Grantor has filed or will file, or has caused to be or will
cause to be filed, UCC financing statements, and will file continuation
statements prior to the lapse thereof, at the appropriate offices in
the State of Delaware to perfect the security interest granted by this
Deed of Trust in all of the Trust Property that is not real property.
The Grantor hereby appoints the Beneficiary as its true and lawful
attorney-in-fact and agent, for the Grantor and in its name, place and
stead, in any and all capacities, to execute any document and to file
the same in the appropriate offices (to the extent it may lawfully do
so), and to perform each and every act and thing requisite and
necessary to be done to perfect the security interest hereby granted.
The Grantor hereby authorizes
12
the Beneficiary to file one or more financing or continuation
statements and amendments thereto, relative to all or any part of the
Trust Property without the signature of the Grantor where permitted by
applicable Requirements of Law. The Beneficiary shall have all rights
with respect to the part of the Trust Property that is the subject of a
security interest afforded by the WV UCC and the DE UCC in addition to,
but not in limitation of, the other rights afforded the Trustee and the
Beneficiary hereunder. The Grantor agrees, to the extent permitted by
applicable Requirements of Law, that: (i) all of the goods described
within the definition of the word "Personal Property" are or are to
become fixtures on the Land; (ii) this Deed of Trust upon filing or
recording in the office designated for the filing or recording of a
record of a deed of trust on related real property shall constitute a
financing statement filed as a "fixture filing" within the meaning of
Sections 9-102(40) and 9-502, and in accordance with Section 9-501, of
the WV UCC and (iii) the Grantor is the record owner of the Premises.
Additionally, this Deed of Trust shall constitute a financing statement
covering fixtures and/or minerals or the like (including oil and gas)
and/or accounts resulting from the sale thereof at the wellhead or
minehead and, as such, shall be filed or recorded in the office
designated for the filing or recording of a record of a deed of trust
on related real property and in the office of the Delaware Secretary of
State. The registration number assigned to the Grantor by the Secretary
of the State of Delaware is 3165827.
(b) Notwithstanding any provision of this Deed of Trust, the
Grantor shall not be in breach or default of any obligation under this
Deed of Trust for any failure by the Grantor to (i) notify any Person
of the Lien and security interest purported to be granted under this
Deed of Trust or to cause or direct any cash, receipts or other monies
to be paid to the Beneficiary, (ii) obtain any consent to assignment of
any Collateral, or (iii) deliver to the Beneficiary any Collateral the
possession of which is required for the perfection of the Lien and
security interest granted by this Deed of Trust during any period when
the Amended and Restated Deed of Trust is in effect.
SECTION 1.15 Filing and Recording.
(a) The Grantor will cause this Deed of Trust, any other
security instrument creating a security interest in or evidencing the
lien hereof upon the Trust Property and each instrument of further
assurance to be filed, registered or recorded in such manner and in
such places as may be required by any present or future law in order to
publish notice of and to protect fully the liens and security interests
of the Trustee and the Beneficiary hereby granted in and upon the Trust
Property. The Grantor will pay all filing, registration, stamps and/or
recording fees, and all reasonable expenses incidental to the execution
and acknowledgment of this Deed of Trust, any deed of trust
supplemental hereto, any security instrument with respect to the Trust
Property, and any instrument of further assurance and all Federal,
state, county and municipal recording, documentary or intangible taxes
and other taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution, delivery and recording of this
Deed of Trust, any deed or trust supplemental hereto, any security
instrument with respect to the Trust Property or any instrument of
further assurance.
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(b) It is acknowledged and agreed that, unless and until
permitted in accordance with the terms and conditions of Section 4.01
and the Intercreditor Agreement, any certificates, instruments or other
documents or things evidencing Collateral shall be delivered and
endorsed to, or be registered as a first Lien in favor of, and shall
remain in the possession of, the Grantor (as defined in the Amended and
Restated Deed of Trust) and that notwithstanding any provision of any
Financing Document, no breach, Default or Event of Default shall occur
or exist as a result thereof.
SECTION 1.16 Contract Collateral. Notwithstanding any provision of this
Agreement, but subject to and without limiting Section 1.14, each of the parties
hereto acknowledges and agrees that (i) any reference to assignment of any
right, title or interest in and to any agreement, contract, contract right,
chattel paper, instrument, letter of credit, document, lease, Governmental
Approval or other similar right (collectively "Contract Collateral"), such
assignment shall constitute only a grant of a collateral security interest and
not an absolute assignment of rights under any Contract Collateral, and (ii)
except as otherwise provided in the DE UCC, to the extent any grant of a
collateral security interest in and to any Contract Collateral would result in
the breach of the instrument, contract, agreement or other document evidencing
or creating such Contract Collateral, such security interest shall be deemed to
be made subject to obtaining any required consent and approval under such
instrument, contract, agreement or other document for such grant of a security
interest.
SECTION 1.17 INTENTIONALLY OMITTED.
SECTION 1.18 Further Assurances. Upon demand by the Beneficiary, the
Grantor will, at the sole cost of the Grantor and without expense to the
Beneficiary, do, execute, acknowledge and/or deliver all such further acts,
deeds, conveyances, deeds of trust, assignments, notices of assignment,
transfers and assurances as the Beneficiary shall from time to time reasonably
require for the better assuring, conveying, assigning, transferring and
confirming unto the Beneficiary the property and rights hereby conveyed or
assigned or intended now or hereafter so to be, or which the Grantor may be or
may hereafter become bound to convey or assign to the Beneficiary, or for
carrying out the intention or facilitating the performance of the terms of this
Deed of Trust, or for filing, registering or recording this Deed of Trust, and
on demand, the Grantor will also execute and deliver and hereby appoints the
Beneficiary, as its true and lawful attorney-in-fact and agent for the Grantor
and in its name, place and stead, in any and all capacities, to execute and file
to the extent it may do so under applicable Requirements of Law and under the
terms of the Credit Agreement or this Deed of Trust, one or more financing
statements, chattel mortgages or comparable security instruments reasonably
required by the Beneficiary to evidence or perfect the liens and security
interests hereby granted and to perform each and every act and thing requisite
and necessary to be done to accomplish the same.
SECTION 1.19 Additions to Trust Property. All right, title and interest
of the Grantor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Trust Property hereafter acquired by or released to the Grantor or constructed,
assembled or placed by the Grantor upon the Premises or the Improvements, and
all conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be,
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and in each such case without any further deed of trust, conveyance, assignment
or other act by the Grantor, shall become subject to the liens and security
interests of this Deed of Trust as fully and completely and with the same effect
as though now owned by the Grantor and specifically described in the grant of
the Trust Property above, but at any and all times the Grantor will execute and
deliver to the Beneficiary any and all such further assurances, deeds of trust,
conveyances or assignments thereof as the Beneficiary may reasonably require for
the purpose of expressly and specifically subjecting the same to the liens and
security interests of this Deed of Trust.
SECTION 1.20 No Claims Against the Trustee or the Beneficiary. Nothing
contained in this Deed of Trust shall constitute any consent or request by the
Trustee or the Beneficiary, express or implied, for the performance of any labor
or services or the furnishing of any materials or other property in respect of
the Trust Property or any part thereof, nor as giving the Grantor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against the Trustee or the Beneficiary in
respect thereof.
SECTION 1.21 Change in Tax Law. Upon the enactment of or change in
(including, without limitation, a change in interpretation of) any applicable
law (a) deducting or allowing the Grantor to deduct from the value of the Trust
Property for the purpose of taxation any lien or security interest thereon or
(b) subjecting the Beneficiary to any tax (excluding income, franchise, estate,
inheritance, transfer or similar entity taxes) or changing the basis of taxation
of mortgages, deeds of trust, or other liens or debts secured thereby, or the
manner of collection of such taxes, in each such case, so as to affect this Deed
of Trust, the Obligations or the Beneficiary (but excluding income, franchise,
estate, inheritance, transfer or similar entity taxes), and the result is to
increase the taxes imposed upon or the cost to the Beneficiary of maintaining
the Obligations, or to reduce the amount of any payments receivable hereunder,
then, and in any such event, if the Beneficiary has received notice of such
change from, or demand for payment of amounts arising from such change from, the
relevant Governmental Authority, then the Grantor shall, upon the earlier to
occur of (i) ten (10) Business Days after the Beneficiary delivers to the
Grantor notice of Beneficiary's receipt of such notice or demand and (ii) the
date such payment is due, or, if the Beneficiary has not received any notice or
demand from a Governmental Authority, then the Grantor shall, on demand, pay to
the Beneficiary additional amounts to compensate for such increased costs or
reduced amounts, provided that if any such payment or reimbursement shall be
unlawful, or taxable to the Beneficiary and not reimbursed as set forth herein,
or would constitute usury or render the Obligations wholly or partially usurious
under applicable law, then the Beneficiary may, within ten (10) Business days
after notice thereof, require the Grantor to pay or reimburse the Beneficiary
for payment of the lawful and non-usurious portion thereof. If the Grantor fails
to pay such amounts within such time, then the Beneficiary may declare the
Obligations immediately due and payable.
SECTION 1.22 Ground Lease.
(a) The Grantor shall (i) pay all rent, additional rent and
other sums as and when due under the Ground Lease, and, at the
Beneficiary's request, deliver to the Beneficiary receipts from the
Ground Lessor evidencing the payment thereof, (ii) promptly and
faithfully perform and comply with all of the other terms, covenants
and
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conditions of the Ground Lease to be performed or complied with by the
Grantor, (iii) enforce all of its rights and all of the Ground Lessor's
obligations under the Ground Lease and (iv) maintain the Ground Lease
in full force and effect in accordance with the terms thereof.
(b) The Grantor shall not modify in any respect, supplement,
terminate or surrender, or cause or permit the modification, amendment,
termination or surrender of the Ground Lease, without the Beneficiary's
prior consent, and the Grantor hereby relinquishes and assigns to the
Beneficiary all of its right, power and authority to so modify,
supplement, terminate or surrender the Ground Lease. Any such
modification, supplement, amendment, termination or surrender of the
Ground Lease without the Beneficiary's prior consent shall be void and
of no force and effect. In addition, the Grantor shall not waive or
release the Ground Lessor from any of its obligations under the Ground
Lease.
(c) Within ten (10) Business Days of a Responsible Officer
obtaining actual knowledge thereto, the Grantor shall (i) notify the
Beneficiary of any material default by the Ground Lessor in the
performance of any of its obligations under the Ground Lease or of the
occurrence of any event which, with the lapse of time, the giving of
notice or both, would constitute such a default, and (ii) send to the
Beneficiary a copy of any notice which the Grantor receives from the
Ground Lessor with respect to termination of the Ground Lease or
default in the Grantor's obligations under the Ground Lease. The
Grantor shall give to the Ground Lessor such notices as the Beneficiary
may reasonably require to protect its security as a leasehold
mortgagee. Within ten (10) Business Days of a Responsible Officer
obtaining actual knowledge thereof, the Grantor shall promptly notify
the Beneficiary of all increases in rent payable under the Ground
Lease.
(d) If any default with respect to the Grantor's obligations
under the Ground Lease occurs and is continuing (a "Ground Lease
Default"), the Beneficiary, without waiving or releasing any Event of
Default under this Deed of Trust and without any obligation to do so,
may make any payment or take such action as may be necessary in the
Beneficiary's opinion to prevent or cure the Ground Lease Default
regardless of whether any grace period in the Ground Lease shall have
expired. Although not a condition precedent to the Beneficiary's
exercise of its rights under this Section 1.22(d), the Beneficiary may
conclusively rely upon any notice of a Ground Lease Default which it
receives from the Ground Lessor even if the Grantor may question or
deny the existence of the Ground Lease Default. In order to prevent or
cure a Ground Lease Default, the Beneficiary shall have the absolute
and immediate right to enter upon the Premises to such extent and as
often as the Beneficiary in its reasonable discretion deems necessary.
The Grantor shall pay to the Beneficiary upon demand all reasonable
sums expended and costs incurred by the Beneficiary in exercising its
rights under this Section 1.22(d), together with interest thereon at
the Default Rate, and all such sums, costs and interest shall be
secured by this Deed of Trust. The foregoing rights of the Beneficiary
shall be in addition to and not exclusive of any other right or remedy
available to the Beneficiary under this Deed of Trust.
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(e) No release or forbearance by the Ground Lessor of any of
the Grantor's obligations under the Ground Lease shall release the
Grantor from any of its obligations under this Deed of Trust.
(f) If the fee simple title to the Leasehold Land and the
Grantor's leasehold interest therein shall be held by the same party,
the interest in the Leasehold Land and the Improvements thereon granted
to the Trustee pursuant to this Deed of Trust shall not terminate or be
merged, and this Deed of Trust shall remain in full force and effect.
If the Grantor now owns or shall acquire fee simple title to the
Leasehold Land, or any other right, title, interest or estate therein,
the lien of this Deed of Trust shall immediately attach thereto, and in
confirmation thereof the Grantor does hereby grant and convey unto the
Trustee, with the power of sale, any after-acquired interest in the
Leasehold Land upon the terms and conditions of this Deed of Trust. The
Grantor also shall execute any instruments which the Beneficiary may
require to effect or confirm the foregoing.
SECTION 1.23 Survey of Mortgaged Property To the best of Grantor's
knowledge, except as otherwise disclosed in Exhibit D attached hereto, there are
no unrecorded improvements, additions, easements or rights of way located on the
Trust Property that are not shown on that certain survey made by Diamond
Engineering, Inc. dated January 9, 2001, revised January 19, 2001, and last
revised February 9, 2001, and as re-inspected by Diamond Engineering, Inc. on
September 27, 2002.
ARTICLE II
DEFAULTS AND REMEDIES
SECTION 2.01 Events of Default. It shall be an Event of Default under
this Deed of Trust if (i) any Event of Default (as defined in the Credit
Agreement) shall exist under the Credit Agreement or (ii) the Grantor fails to
comply with, or otherwise defaults in, any of the terms and provisions of the
Ground Lease and failure or default continues for the applicable grace period
under the Ground Lease, if any.
SECTION 2.02 Demand for Payment. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights and
remedies the Beneficiary may have pursuant to the Financing Documents, or as
provided at law or in equity, and without limitation, the Obligations and all
other amounts payable with respect to this Deed of Trust shall become due and
payable to the extent provided in the Credit Agreement. The Grantor hereby
waives notice of presentment, demand, protest, acceleration and notice of
acceleration. In case the Grantor shall fail forthwith to pay such amounts or
any amounts due under any provision of this Deed of Trust upon the Beneficiary's
demand, but in accordance with the Credit Agreement, the Trustee or the
Beneficiary, in addition to any other rights or remedies provided herein or at
law or equity, shall be entitled and empowered to institute an action or
proceeding at law or in equity as advised by counsel for the collection of the
sums so due and unpaid, to prosecute any such action or proceedings to judgment
or final decree, to enforce any such judgment or final decree against the
Grantor and to collect, in any manner provided by law, all moneys adjudged or
decreed to be payable.
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SECTION 2.03 Rights to Take Possession, Operate and Apply Revenues.If
an Event of Default shall occur and be continuing, the Grantor shall, upon
demand of the Beneficiary forthwith surrender to the Beneficiary actual
possession of the Trust Property and, if and to the extent permitted by
applicable law, the Beneficiary itself, or by such officers or agents as it may
appoint, may then enter and take possession of all the Trust Property with or
without the appointment of a receiver or an application therefor, exclude the
Grantor and its agents and employees wholly therefrom, and have access to the
books, papers and accounts of the Grantor.
(a) If the Grantor shall for any reason fail to surrender or
deliver the Trust Property or any part thereof after such demand by the
Beneficiary as provided in the preceding clause (a), the Beneficiary
may obtain a judgment or decree conferring upon the Beneficiary the
right to immediate possession or requiring the Grantor to deliver
immediate possession of the Trust Property to the Beneficiary, to the
entry of which judgment or decree the Grantor hereby specifically
consents. The Grantor will promptly pay to the Beneficiary all
out-of-pocket costs and other reasonable expenses in connection with
enforcing this Deed of Trust, including all reasonable fees and
expenses of attorneys and paralegals (including reasonable charges for
inside counsel);and subject to the limitations set forth in Section
1.03, all such expenses and compensation shall, until paid, be secured
by this Deed of Trust.
(b) If an Event of Default shall occur and be continuing, the
Beneficiary may hold, store, use, operate, manage and control the Trust
Property, conduct the business thereof and, from time to time, (i) make
all necessary, proper and reasonable maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and
thereon, (ii) purchase or otherwise acquire additional fixtures,
personalty and other property, (iii) insure or keep the Trust Property
insured, (iv) manage and operate the Trust Property and exercise all
the rights and powers of the Grantor to the same extent as the Grantor
could in its own name or otherwise with respect to the same or (v)
enter into any and all agreements with respect to the exercise by
others of any of the powers herein granted to the Beneficiary, all as
may from time to time be directed or determined by the Beneficiary to
be in its best interest and the Grantor hereby appoints the Beneficiary
as its true and lawful attorney-in-fact and agent, for the Grantor and
in its name, place and stead, in any and all capacities, to perform any
of the foregoing acts. Regardless of whether or not Beneficiary has
entered or taken possession, the Beneficiary may receive and, so long
as any Event of Default exists, collect and receive all the Rents,
issues, profits and revenues from the Trust Property, including those
past due as well as those accruing thereafter, and, after deducting (i)
all expenses of taking, holding, managing and operating the Trust
Property (including reasonable compensation for the services of all
persons employed for such purposes), (ii) the costs of all such
maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases and acquisitions, (iii) the costs of insurance,
(iv) such taxes, assessments and other similar charges as the
Beneficiary may at its option pay, (v) other proper charges upon the
Trust Property or any part thereof and (vi) the reasonable
compensation, expenses and disbursements of the attorneys and agents of
the Beneficiary, the Beneficiary shall apply the remainder of the
moneys and proceeds so received in accordance with the terms and
conditions of the Deposit Account Agreement and the Intercreditor
Agreement.
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(c) Whenever, before any sale of the Trust Property under
Section 2.06 hereof, all Obligations that are then due shall have been
paid and all Events of Default fully cured, the Beneficiary will
surrender possession of the Trust Property back to the Grantor, its
successors or assigns. The same right of taking possession shall,
however, arise again if any subsequent Event of Default shall occur and
be continuing.
SECTION 2.04 Right to Cure the Grantor's Failure to Perform. Upon the
occurrence and during the continuance of an Event of Default, at any time
thereafter and without notice, should the Grantor fail in the payment,
performance or observance of any term, covenant or condition required by this
Deed of Trust or the Credit Agreement or any other Financing Document (with
respect to the Trust Property), the Beneficiary may pay, perform or observe the
same, and, subject to the limitations set forth in Section 1.03, all payments
made or costs or expenses incurred by the Beneficiary in connection therewith
shall be secured hereby and shall be, without demand, immediately repaid by the
Grantor to the Beneficiary with interest thereon at the Default Rate. The
Beneficiary shall make the determination as to the necessity for any such
actions and of the amounts to be paid. Subject to the notice provisions of the
first sentence of this Section 2.04, to the maximum extent permitted by
Requirements of Law, the Beneficiary is hereby empowered to enter and to
authorize others to enter upon the Premises or the Improvements or any part
thereof for the purpose of performing or observing any such defaulted term,
covenant or condition without having any obligation to so perform or observe and
without thereby becoming liable to the Grantor, to any person in possession
holding under the Grantor or to any other person.
SECTION 2.05 Right to a Receiver. If an Event of Default shall occur
and be continuing the Beneficiary, upon application to a court of competent
jurisdiction, shall be entitled as a matter of right to the appointment of a
receiver to take possession of and to operate the Trust Property and to collect
and apply the Rents. The Grantor hereby consents to such appointment and
acknowledges and agrees that the Beneficiary shall be entitled to such
appointment without notice and without regard for the adequacy of security for
the Obligations or the solvency of the Grantor or any party liable for the
Obligations and without regard to the then value of the Trust Property and
without regard to whether the Grantor has committed waste or allowed
deterioration of the Trust Property; and the Beneficiary or an agent of the
Beneficiary may be appointed as such receiver. The receiver shall have all of
the rights and powers permitted under the laws of the state wherein the Trust
Property is located. The Grantor will pay to the Beneficiary upon demand all
expenses, including receiver's fees, reasonable attorneys' fees and
disbursements that are actually incurred (not as imposed by statute), costs and
agent's compensation incurred pursuant to the provisions of this Section 2.05;
and, subject to the limitations set forth in Section 1.03, all such expenses
shall be secured by this Deed of Trust and shall be, without demand, immediately
repaid by the Grantor to the Beneficiary with interest thereon at the Default
Rate.
SECTION 2.06 Foreclosure and Sale.
(a) If an Event of Default shall occur and be continuing, the
Beneficiary may elect to sell or to cause and direct the Trustee to
sell the Trust Property or any part of the Trust Property by exercise
of the power of foreclosure or of sale granted to the Beneficiary by
applicable Requirements of Law, this Deed of Trust or the Security
19
Agreement. At the request of the Beneficiary, Trustee shall proceed to
sell the Trust Property at a foreclosure sale to satisfy the
Obligations secured hereby in accordance with the provisions of West
Virginia law. A copy of a notice of foreclosure sale shall be served on
the Grantor by certified mail, return receipt requested, directed to
the address set forth on page one hereof or such other address given to
the Beneficiary in writing. A notice shall be deemed complete when such
notice is mailed to the aforesaid address, notwithstanding the fact
that such mail may be returned as refused or undeliverable. A copy of
such notice shall be served by certified mail, at least twenty (20)
days prior to the sale, upon any subordinate lien holder who has
previously notified the Beneficiary by certified mail of the existence
of a subordinate lien. The address to which such notice to Beneficiary
shall be mailed is set forth in Section 3.03 hereof. Grantor hereby
waives personal service of notice of any sale made hereunder, upon
Grantor, its devisees, agents, successors or assigns, and also waives
the posting of notice of sale at the courthouse. Unless otherwise
specified by the Beneficiary, all such foreclosure sales shall be for
cash in hand on day of sale. Upon the terms of such sale being complied
with, the Trustee shall, by quitclaim deed, convey to, and at the cost
of, the purchaser or purchasers the interest of the Grantor in the
property so sold. The Trustee or the Beneficiary may postpone any
foreclosure or other sale of all or any portion of the Trust Property
by public announcement at such time and place of sale, and from time to
time as permitted by applicable Requirements of Law thereafter may
postpone such sale by public announcement or subsequently noticed sale.
Except as otherwise required by applicable Requirements of Law, without
further notice, the Trustee or the Beneficiary may make such sale at
the time fixed by the last postponement, or may, in its discretion,
give a new notice of sale. Any person, including the Grantor or the
Beneficiary or any designee or affiliate thereof, may purchase any
portion of the Trust Property at such sale.
(b) The Trust Property may be sold subject to unpaid taxes and
the Permitted Encumbrances, and after deducting all the costs, fees and
expenses of the Trustee or the Beneficiary, including costs of evidence
of title in connection with the sale, the Trustee or the Beneficiary or
an officer that makes any sale shall apply the proceeds of sale in the
manner set forth in Section 2.08 hereof.
(c) Any foreclosure or other sale of less than the whole of
the Trust Property or any defective or irregular sale made hereunder
shall not exhaust the power of foreclosure or of sale provided for
herein; and subsequent sales may be made hereunder until the
Obligations have been satisfied, or the entirety of the Trust Property
has been sold. All sums collected by the Beneficiary under this Deed of
Trust or other Financing Documents or under the Notes on account of
principal or interest or other amounts owing hereunder including costs
of collection and reasonable attorneys' fees, shall be applied in
accordance with the terms and conditions of the Deposit Account
Agreement and the Intercreditor Agreement.
(d) If an Event of Default shall occur and be continuing, the
Beneficiary may instead of, or in addition to, exercising the rights
described in Section 2.06(a) above and either with or without entry or
taking possession as herein permitted and as permitted by applicable
Requirements of Law, proceed by a suit or suits in law or in equity or
by any other appropriate proceeding or remedy (i) to specifically
enforce payment of some or all
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of the terms of the Financing Documents or the performance of any term,
covenant, condition or agreement of this Deed of Trust or any other
right or (ii) to pursue any other remedy available to it, at law or in
equity, all as the Beneficiary shall determine most effectual for such
purposes.
SECTION 2.07 Other Remedies.
(a) In case an Event of Default shall occur and be continuing,
the Beneficiary may also exercise, to the extent not prohibited by
applicable Requirements of Law, any or all of the remedies available to
a secured party under the UCC, including, to the extent not prohibited
by applicable Requirements of Law, the following:
(i) In the case of personal property, exercise those
rights and remedies under other applicable Security Documents.
(ii) To make such payments and do such acts as the
Beneficiary may deem necessary to protect its security
interest in the Personal Property including paying,
purchasing, contesting or compromising any encumbrance, charge
or lien that is prior or superior to the security interest
granted hereunder, and, in exercising any such powers or
authority, paying all expenses incurred in connection
therewith.
(iii) To enter upon any or all of the Premises or
Improvements to exercise the Beneficiary's rights hereunder.
(b) In connection with a sale of the Trust Property and the
application of the proceeds of sale as provided in Section 2.08 of this
Deed of Trust, the Beneficiary shall be entitled to enforce payment of
and to receive up to the principal amount of the Obligations, plus all
other charges, payments and costs due under this Deed of Trust, and to
recover a deficiency judgment for any portion of the aggregate
principal amount of the Obligations remaining unpaid, with interest.
SECTION 2.08 Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any of the Trust Property, (i) the Trustee or the
Beneficiary shall receive the proceeds of sale in accordance with the applicable
statutory requirements, (ii) no purchaser shall be required to see to the
application of the proceeds and (iii) the Trustee or the Beneficiary shall apply
the proceeds of the sale together with any Rents that may have been collected
and any other sums that then may be held by the Trustee or the Beneficiary under
this Deed of Trust in accordance with the Deposit Account Agreement and the
Intercreditor Agreement.
Upon any sale of the Trust Property by the Trustee or the Beneficiary
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Trustee or officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Trust Property so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Trustee or the
Beneficiary or such officer or be answerable in any way for the misapplication
thereof.
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SECTION 2.09 The Grantor as Tenant Holding Over. If the Grantor remains
in possession of any of the Trust Property after any foreclosure sale by the
Trustee or the Beneficiary, at the Beneficiary's election the Grantor shall be
deemed a tenant holding over and shall forthwith surrender possession to the
purchaser or purchasers at such sale or be summarily dispossessed or evicted
according to provisions of Requirements of Law applicable to tenants holding
over.
SECTION 2.10 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws.
(a) The Grantor will not object to any sale of the Trust
Property pursuant hereto, and for itself and all who may claim under
it, the Grantor waives, to the extent that it lawfully may under
applicable Requirements of Law, all right to have the Trust Property
marshalled or to have the Trust Property sold as separate estates,
parcels, tracts or units in the event of any foreclosure of this Deed
of Trust.
(b) To the full extent permitted by applicable Requirements of
Law, neither the Grantor nor anyone claiming through or under it shall
or will set up, claim or seek to take advantage of any appraisement,
valuation, stay, extension, homestead-exemption or redemption laws now
or hereafter in force in order to prevent or hinder the enforcement or
foreclosure of this Deed of Trust, the absolute sale of the Trust
Property or the final and absolute putting of the purchasers into
possession thereof immediately after any sale; and the Grantor, for
itself and all who may at any time claim through or under it, hereby
waives to the full extent that it may lawfully do so, the benefit of
all such laws and any and all right to have the assets covered by the
security interest created hereby marshalled upon any foreclosure of
this Deed of Trust.
SECTION 2.11 Discontinuance of Proceedings. In case the Trustee or the
Beneficiary shall proceed to enforce any right, power or remedy under this Deed
of Trust by foreclosure, entry or otherwise, and such proceedings shall be
discontinued or abandoned for any reason, or shall be determined adversely to
the Trustee or the Beneficiary, then and in every such case the Grantor, the
Trustee and the Beneficiary shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of the Trustee or the
Beneficiary shall continue as if no such proceeding had been taken.
SECTION 2.12 Suits to Protect the Trust Property. During the
continuance of an Event of Default, the Trustee or the Beneficiary shall have
power (a) to institute and maintain suits and proceedings to prevent any
impairment of the Trust Property by any acts which may be unlawful or in
violation of this Deed of Trust, (b) to preserve or protect its interest in the
Trust Property and in the Rents arising therefrom and (c) to restrain the
enforcement of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of or compliance with such enactment, rule or order would impair
the security or be prejudicial to the interest of the Trustee or the Beneficiary
hereunder.
SECTION 2.13 Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting
22
the Grantor, the Beneficiary shall, to the extent permitted by applicable
Requirements of Law, be entitled to file such proofs of claim and other
documents as may be necessary or advisable in order to have the claims of the
Beneficiary allowed in such proceedings for the Obligations secured by this Deed
of Trust at the date of the institution of such proceedings and for any interest
accrued, late charges and additional interest or other amounts due or that may
become due and payable hereunder after such date.
SECTION 2.14 Possession by the Beneficiary. Notwithstanding the
appointment of any receiver, liquidator or trustee of the Grantor, any of its
property or the Trust Property, the Beneficiary shall be entitled, to the extent
not prohibited by applicable Requirements of Law, to remain in possession and
control of all parts of the Trust Property now or hereafter granted under this
Deed of Trust in accordance with the terms hereof and applicable Requirements of
Law and the Intercreditor Agreement.
SECTION 2.15 Waiver.
(a) No delay or failure by the Trustee or the Beneficiary to
exercise any right, power or remedy accruing upon or during the
continuance of any Event of Default shall exhaust or impair any such
right, power or remedy or be construed to be a waiver of any such Event
of Default or acquiescence therein; and every right, power and remedy
given by this Deed of Trust to the Trustee or the Beneficiary may be
exercised from time to time and as often as may be deemed expedient by
the Trustee or the Beneficiary. No consent or waiver by the Trustee or
the Beneficiary to or of any breach, default or Event of Default by the
Grantor in the performance of the Obligations shall be deemed or
construed to be a consent or waiver to or of any other breach, default
or Event of Default in the performance of the same or any other
Obligations by the Grantor hereunder. No failure on the part of the
Trustee or the Beneficiary to complain of any act or failure to act or
to declare an Event of Default, irrespective of how long such failure
continues, shall constitute a waiver by the Trustee or the Beneficiary
of its rights hereunder or impair any rights, powers or remedies
consequent on any future Event of Default by the Grantor.
(b) Even if the Trustee or the Beneficiary (i) grants some
forbearance or an extension of time for the payment of any sums secured
hereby, (ii) takes other or additional security for the payment of any
sums secured hereby, (iii) waives or does not exercise some right
granted herein or under the Financing Documents, (iv) releases a part
of the Trust Property from this Deed of Trust, (v) agrees to change
some of the terms, covenants, conditions or agreements of any of the
Financing Documents, (vi) consents to the filing of a map, plat or
replat affecting the Premises, (vii) consents to the granting of an
easement or other right affecting the Premises or (viii) makes or
consents to an agreement subordinating the Beneficiary's lien on the
Trust Property hereunder; no such act or omission shall preclude the
Trustee or the Beneficiary from exercising any other right, power or
privilege herein granted or intended to be granted in the event and
during the continuance of any Event of Default then made or of any
subsequent Event of Default; nor, except as otherwise expressly
provided in an instrument executed by the Trustee and the Beneficiary,
shall this Deed of Trust be altered thereby. In the event of the sale
or transfer by operation of law or otherwise of all or part of the
Trust Property, the Beneficiary is hereby authorized and empowered to
deal with any vendee or
23
transferee with reference to the Trust Property secured hereby, or with
reference to any of the terms, covenants, conditions or agreements
hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging
any liabilities, obligations or undertakings.
SECTION 2.16 Remedies Cumulative. No right, power or remedy conferred
upon or reserved to the Trustee or the Beneficiary by this Deed of Trust is
intended to be exclusive of any other right, power or remedy, and each and every
such right, power and remedy shall be cumulative and concurrent and in addition
to any other right, power and remedy given hereunder or now or hereafter
existing at law or in equity or by statute; may, to the maximum extent permitted
by applicable Requirements of Law, be pursued separately, successively or
together against the Grantor or the Trust Property, or both, at the sole
discretion of Beneficiary, and may be exercised as often as occasion therefore
shall arise. The delay or failure to exercise any such right or remedy shall in
no event be construed as a waiver or release thereof.
ARTICLE III
MISCELLANEOUS
SECTION 3.01 Subordination. Notwithstanding any provision of this Deed
of Trust or any other Financing Document to the contrary, (i) this Deed of Trust
and the security interests created and granted hereby are subject to,
subordinate and inferior to the security interests created by the Amended and
Restated Credit Line Deed of Trust, Security Agreement, Fixture Filing and
Assignment of Leases and Rents dated as of the Restructuring Effective Date (the
"Amended and Restated Deed of Trust"), made by the Grantor in favor of Bank of
America, N.A., as Administrative Agent pursuant to the OPMW Restated Credit
Agreement, and all rights, powers and remedies granted to, the OPMW
Administrative Agent under the Amended and Restated Deed of Trust, are subject
in all respects to, the terms and conditions of the Intercreditor Agreement,
including restrictions on the right of the Beneficiary to take possession, hold,
use, operate or control the Trust Property, or to give notices, exercise power
of attorney rights, direct or receive payments, hold, control or receive
delivery of possessory collateral or to exercise remedies under this Deed of
Trust and to apply proceeds of the Trust Property; provided, that if and to the
extent the Intercreditor Agreement is amended, supplemented or modified at any
time from time to time and such amendment, supplement or modification could
reasonably be expected to have any adverse effect on the Grantor's rights,
duties or obligations hereunder or under any other Financing Document, such
amendment, supplement or modification shall not be effective as to the Grantor
without the Grantor's prior written acknowledgment (which acknowledgment shall
not be unreasonably conditioned, withheld or delayed) that such amendment,
modification or supplement shall be effective for purposes of this Deed of Trust
and the other Financing Documents, (ii) the Beneficiary on behalf of each of the
Lenders hereby acknowledges and agrees that the Grantor shall not have any duty
and obligation with respect to the perfection or priority of this Deed of Trust
and the security interests granted under this Deed of Trust in and to any of the
Trust Property (and no Default or Event of Default shall result or occur) to the
extent (a) such Trust Property is in the possession or control of the OPMW
Administrative Agent, (b) such Trust Property is not transferred by the OPMW
Administrative Agent to the Beneficiary as required pursuant to the
Intercreditor Agreement, (c) such perfection or priority requires any consent,
approval or other action of the OPMW Administrative Agent, or (d) the OPMW
Administrative Agent then maintains a perfected, first
24
priority security interest in and to the Trust Property, and (iii) no
obligations contained in this Deed of Trust shall require the Grantor to take or
omit to take any action inconsistent with the terms and conditions of the OPMW
Deposit Account Agreement and/or the Holdco Deposit Account Agreement and no
Default or Event of Default under this Deed of Trust shall rise or result from
the taking or omitting of such action.
SECTION 3.02 Partial Invalidity. If any provision hereof, of the
Guarantee or of any of the other Financing Documents is invalid or unenforceable
in any jurisdiction or under any circumstances, the other provisions hereof, of
the Guarantee or of those Financing Documents shall remain in full force and
effect in such jurisdiction and the remaining provisions hereof will be
liberally construed in favor of the Beneficiary in order to carry out the
provisions hereof, of the Guarantee and of such other Financing Documents. The
invalidity of any provision of this Deed of Trust in any jurisdiction or under
any circumstances will not affect the validity or enforceability of any such
provision in any other jurisdiction or under any other circumstances. If any
lien, encumbrance or security interest evidenced or created by this Deed of
Trust is invalid or unenforceable, in whole or in part, as to any part of the
Obligations, or is invalid or unenforceable, in whole or in part, as to any part
of the Trust Property, such portion, if any, of the Obligations as is not
secured by all of the Trust Property hereunder shall be paid prior to the
payment of the portion of the Obligations and shall, unless prohibited by
applicable laws or unless Beneficiary, in its sole and absolute discretion,
otherwise elects, be deemed to have been first paid on and applied to payment in
full of the unsecured or partially secured portion of the Obligations, and the
remainder to the secured portion of the Obligations.
SECTION 3.03 Notices. All notices hereunder, unless otherwise
specified, shall be given in the manner provided in Section 9.1 of the Credit
Agreement and shall be given to the Beneficiary at its address or telecopy
number set forth in the Credit Agreement and to the Grantor at its address or
telecopy number set forth in the signature page hereof or at any address or
telecopy number which such party shall have specified.
A copy of any notice of trustee's sale hereunder shall be served on
Grantor by certified mail, return receipt requested, directed to Grantor at the
address stated on page one hereinabove or such other address given to
Beneficiary in writing by Grantor, subsequent to the execution and delivery of
this instrument.
Any notice of other liens which may be given to Beneficiary pursuant to
W.Va. Code ss. 38-1-4 and ss. 38-1-14, shall be effective upon the receipt of
such notice, in writing, through the regular United States Mail, postage
prepaid, addressed to the Beneficiary, the beneficial holder of the Notes and
other indebtedness secured hereunder, at its address set forth on page one of
this instrument.
SECTION 3.04 Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the
successors and permitted assigns of the Grantor and the successors and assigns
of the Beneficiary.
25
SECTION 3.05 Counterparts. This Deed of Trust may be executed in any
number of counterparts and all such counterparts shall together constitute but
one and the same instrument.
SECTION 3.06 Satisfaction and Cancellation.
(a) The conveyance to the Trustee of the Trust Property as
security and for the benefit of the Beneficiary created and consummated
by this Deed of Trust shall be null and void when all the Obligations
(other than contingent liabilities that, by their nature, may accrue
after principal and interest the Obligations have been repaid in full)
have been indefeasibly paid in full in cash in accordance with the
terms of the Financing Documents and all Commitments have been
terminated.
(b) In connection with any termination or release pursuant to
paragraph (a) to the extent applicable, this Deed of Trust shall be
marked "satisfied" by the Trustee and/or the Beneficiary, and this Deed
of Trust shall be cancelled of record at the request of the Grantor.
The Trustee and the Beneficiary shall execute any documents reasonably
requested by the Grantor to accomplish the foregoing or to accomplish
any release contemplated by paragraph (a) or (b) of this Section 3.06.
SECTION 3.07 Definitions. As used in this Deed of Trust, the singular
shall include the plural as the context requires and the following words and
phrases shall have the following meanings: (a) "including" shall mean "including
without limitation" or "including but not limited to"; (b) "provisions" shall
mean "provisions, terms, covenants and/or conditions"; (c) "lien" shall mean
"lien, charge, encumbrance, security interest, mortgage or deed of trust"; (d)
"obligation" shall mean "obligation, duty, covenant and/or condition"; and (e)
"any of the Trust Property" shall mean "the Trust Property or any part thereof
or interest therein." Any act that the Trustee or the Beneficiary is permitted
to perform hereunder may be performed at any time and from time to time by the
Trustee or the Beneficiary or any person or entity designated by the Trustee or
the Beneficiary. Any act which is prohibited to the Grantor hereunder is also
prohibited to all lessees of any of the Trust Property. Each appointment of the
Trustee or the Beneficiary as attorney-in-fact for the Grantor under the Deed of
Trust is irrevocable, with power of substitution and coupled with an interest.
SECTION 3.08 Other Financing Documents. The Grantor acknowledges that
in addition to this Deed of Trust, other Financing Documents secure the
Obligations. The Grantor agrees that the lien of this Deed of Trust shall be
absolute and unconditional and shall not in any manner be affected or impaired
by any acts or omissions whatsoever of the Trustee or the Beneficiary and,
without limiting the generality of the foregoing, the lien hereof shall not be
impaired by any acceptance by the Trustee or the Beneficiary of any security for
or guarantees of any of the Obligations hereby secured, or by any failure,
neglect or omission on the part of the Trustee or the Beneficiary to realize
upon or protect any Obligation hereby secured or any collateral security
therefor including the other Financing Documents. Except as provided in Section
3.06(a) hereof, the lien hereof shall not in any manner be impaired or affected
by any release (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any of the Obligations secured or of any of the
collateral security therefor, including the other Financing
26
Documents or of any guarantee thereof, and the Trustee or the Beneficiary may at
its discretion foreclose, exercise any power of sale, or exercise any other
remedy available to it under any or all of the other Financing Documents without
first exercising or enforcing any of its rights and remedies hereunder. Such
exercise of the Trustee's or the Beneficiary's rights and remedies under any or
all of the other Financing Documents shall not in any manner impair the
Obligations hereby secured or the lien of this Deed of Trust and any exercise of
the rights or remedies of the Trustee or the Beneficiary hereunder shall not
impair the lien of any of the other Financing Documents or any of the Trustee's
or the Beneficiary's rights and remedies thereunder. The undersigned
specifically consents and agrees that the Trustee or the Beneficiary may
exercise its rights and remedies hereunder and under the other Financing
Documents separately or concurrently and in any order that it may deem
appropriate, and the undersigned waives any rights of subrogation until the
Obligations are paid in full. In the event of a conflict between the terms and
provisions of this Deed of Trust and the Credit Agreement, both documents shall
be read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of a conflict that cannot be so resolved, the
terms and provisions of the Credit Agreement shall control and govern.
SECTION 3.09 The Trustee's Powers and Liabilities.
(a) The Trustee, by acceptance hereof, covenants faithfully to
perform and fulfill the trusts herein created, being liable, however,
only for gross negligence, bad faith or willful misconduct. All
authorities, powers and discretions given in this Deed of Trust to the
Trustee and/or the Beneficiary may be exercised by either, without the
other, with the same effect as if exercised jointly.
(b) The Trustee may resign at any time upon giving 30 days'
notice in writing to the Grantor and to the Beneficiary.
(c) Beneficiary may from time to time, for any reason or for
no reason, substitute another Trustee or Trustees, corporations or
persons, in place of any Trustee herein named. Upon each such
appointment, the substituted Trustee or Trustees shall be vested with
all the rights, titles, interests, powers, duties and trusts conferred
upon the Trustee herein named. Each appointment and substitution shall
be evidenced by an instrument in writing, executed and acknowledged by
Beneficiary, which when recorded in the office of the Clerk of the
County Commission of the County where the Land is located, shall be
conclusive proof of the proper substitution and appointment and notice
to all parties in interest. In the event of the death, removal,
resignation, refusal to act, inability to act or absence of the Trustee
from the state in which the premises are located, or in its sole
discretion for any reason whatsoever, the Beneficiary may, upon notice
to the Grantor and without specifying the reason therefor and without
applying to any court, select and appoint a successor trustee, and all
powers, rights, duties and authority of the former Trustee, as
aforesaid, shall thereupon become vested in such successor. Such
substitute trustee shall not be required to give bond for the faithful
performance of his duties unless required by the Beneficiary. The
Grantor hereby ratifies and confirms any and all acts that the herein
named Trustee, or his successor or successors in this trust, shall do
lawfully by virtue hereof. The Grantor hereby agrees, on behalf of
itself and its heirs, executors, administrators and assigns, that the
recitals contained in any deed or
27
deeds executed in due form by any Trustee or substitute trustee, acting
under the provisions of this instrument, shall be prima facie evidence
of the facts recited, and that it shall not be necessary to prove in
any court, otherwise than by such recitals, the existence of the facts
essential to authorize the execution and delivery of such deed or deeds
and the passing of title thereby.
(d) The Trustee shall not be required to see that this Deed of
Trust is recorded, nor be liable for its validity or its priority as a
first deed of trust, or otherwise, nor shall the Trustee be answerable
or responsible for performance or observance of the covenants and
agreements imposed upon the Grantor or the Beneficiary by this Deed of
Trust or any other agreement. The Trustee, as well as the Beneficiary,
shall have authority in their respective discretion to employ agents
and attorneys in the execution of this trust and to protect the
interest of the Beneficiary hereunder, and to the extent permitted by
applicable law they shall be compensated and all expenses relating to
the employment of such agents and/or attorneys, including expenses of
litigation, shall be paid out of the proceeds of the sale of the Trust
Property conveyed hereby should a sale be had, but if no such sale be
had, all sums so paid out shall be recoverable to the extent permitted
by applicable law by all remedies at law or in equity.
(e) The Trustee is hereby authorized to act by agent or
attorney in the execution of this trust, and it shall not be necessary
for any Trustee to be present in person at any foreclosure sale.
(f) If more than one trustee is named hereunder, either
Trustee may act in the execution of this trust; the authority and power
of any Trustee so acting shall be as full and complete as if the powers
and authority granted to Trustees herein jointly had been granted to
such Trustee alone; and either Trustee may act by agent or attorney. It
is not necessary for either Trustee to be personally present at any
foreclosure sale.
SECTION 3.10 Subrogation. This Deed of Trust is made with full
substitution and subrogation of the Beneficiary in and to all covenants and
warranties by others heretofore given or made in respect of the Trust Property
or any part thereof.
SECTION 3.11 Beneficiary Powers. Without affecting the liability of any
other Person liable for the payment of any obligations herein mentioned and
without affecting the lien or charge of this Deed of Trust upon any portion of
the Trust Property not then or theretofore released as security for the full
amount of all unpaid Obligations, from time to time, regardless of consideration
and without notice to or consent by the holder of any subordinate lien,
encumbrance, right, title or interest in or to the Trust Property, the
Beneficiary may (a) release any Persons liable for or on any Obligation, (b)
extend the maturity or alter any of the terms of any Obligation, (c) modify the
interest rate payable on the principal balance of the Obligations, (d) grant
other indulgences, (e) release or reconvey, or cause to be released or
reconveyed at any time at the Beneficiary's option any parcel, portion or all of
the Trust Property, (f) take or release any other or additional security for any
obligations herein mentioned or (g) make compositions or other arrangements with
debtors in relation thereto.
28
SECTION 3.12 Enforceability of Deed of Trust. This Deed of Trust is
deemed to be and may be enforced from time to time as an assignment, chattel
mortgage, contract, deed of trust, deed to secure debt, financing statement,
real estate mortgage or security agreement, and from time to time as any one or
more thereof, as is appropriate under applicable laws. A carbon, photographic or
other reproduction of this Deed of Trust or any financing statement in
connection herewith shall be sufficient as a financing statement for any and all
purposes.
SECTION 3.13 Amendments. No amendment, modification or waiver of any
provision of this Deed of Trust and no consent to any departure by the Grantor
or the Beneficiary therefrom shall in any event be effective unless the same
shall be in writing and shall be executed and delivered in accordance with
Section 9.02 of the Credit Agreement, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 3.14 Applicable Law. THIS DEED OF TRUST SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF WEST
VIRGINIA.
SECTION 3.15 Limitation of Recourse. The obligations of the Grantor
hereunder and under the other Financing Documents are obligations solely of the
Grantor (other than as expressly assumed by any Credit Party or OPMW Credit
Party pursuant to any Financing Document) and shall not constitute a debt or
obligation of any direct or indirect member, partner or shareholder of Orion
Power or any of their respective directors, officers, agents or employees (each
such Person, a "Non-Recourse Party"). No Non-Recourse Party shall be liable for
any amount payable by the Grantor under this Agreement and the Secured Parties
shall not seek a money judgment or deficiency or personal judgment against any
Non-Recourse Party for payment of the indebtedness payable by the Grantor
evidenced by this Agreement. No property or assets of any Non-Recourse Party
other than as contemplated in the Financing Documents, shall be sold, levied
upon or otherwise used to satisfy any judgment rendered in connection with any
action brought against the Grantor with respect to this Agreement or the other
Financing Documents. The foregoing acknowledgments, agreements and waivers shall
be enforceable by any Non-Recourse Party. Notwithstanding the foregoing, nothing
in this Section shall limit or affect or be construed to limit or affect the
obligations and liabilities of any Credit Party, OPMW Credit Party or any other
Non-Recourse Party (a) in accordance with the terms of any Transaction Document
or Financing Document creating such liabilities and obligations to which such
Credit Party, OPMW Credit Party or Non-Recourse Party is a party, (b) arising
from liability pursuant to applicable Requirements of Law for such Credit
Party's, OPMW Credit Party's or such Non-Recourse Party's fraudulent actions,
knowing misrepresentations or willful misconduct or (c) with respect to amounts
distributed to it in violation of Section 6.10 of the OPMW Restated Credit
Agreement.
29
IN WITNESS WHEREOF, this Deed of Trust has been duly authorized and has
been executed and delivered, under seal, to the Trustee and the Beneficiary by
the Grantor on the date first above written.
TWELVEPOLE CREEK, LLC
By:
-----------------------------------
Name:
Title
1111 Louisiana Street
Houston, TX 77002
Attn: Senior Vice President - Finance
Ph.: (713) 207-3160
Fax: (713) 207-0988
With a copy to:
1111 Louisiana Street
Houston, TX 77002
Attn.: General Counsel
Ph.: (713) 207-7265
Fax: (713) 393-0140
Attachments:
Exhibit A-1 - The Fee Interest Land
Exhibit A-2 - The Leasehold Land
Exhibit B-1 - The Fee Interest Land Permitted Encumbrances
Exhibit B-2 - The Leasehold Land Permitted Encumbrances
STATE OF
------------------------------------
COUNTY OF , to wit:
--------------------------------------------
The foregoing instrument was acknowledged before me this ____ day of
______________, 2002, by ______________________, the ________________ of
Twelvepole Creek, LLC, a Delaware limited liability company, on behalf of said
limited liability company.
My Commission expires:
-------------------------------
---------------------------------
Notary Public
[SEAL]*
*rubber stamp seal, rather than embossed seal, is preferred.
When recorded, return to:
McGuireWoods LLP
Bank of America Corporate Center
100 North Tryon Street, Suite 2900
Charlotte, North Carolina 28202
Attention: Marvin L. Rogers, Esq.
EXHIBIT O
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT, dated as of __________________,
20____ (this "Agreement"), among [ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the
"Assignee"), and Bank of America, N.A., as administrative agent under the Credit
Agreement referred to below (in such capacity, together with any successor and
assigns, the "Administrative Agent").
PRELIMINARY STATEMENTS
1. This Assignment and Acceptance Agreement relates to the Amended and
Restated Credit Agreement, dated as of October 28, 2002 (as such agreement may
be modified, amended or supplemented from time to time, the "Credit Agreement"),
among ORION POWER NEW YORK, L.P. (the "Borrower"), BANC OF AMERICA SECURITIES
LLC, as a Lead Arranger and a Joint Book Runner, BNP PARIBAS, as a Lead Arranger
and a Joint Book Runner, BNP PARIBAS, as Syndication Agent, Union Bank of
California, N.A., as a Documentation Agent, CoBank, ACB, as a Documentation
Agent, Deutsche Bank AG, New York and/or Cayman Island Branch, as a
Documentation Agent, BANK OF AMERICA, N.A., as Issuing Bank, the Administrative
Agent, and each financial institution which is a signatory thereto or which may
hereafter become an assignee pursuant to Section 9.06 of the Credit Agreement
(each, a "Lender" and collectively, the "Lenders"). All capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
2. The Assignor's Acquisition Loan Commitment and Working Capital Loan
Commitment are as set forth on Annex I to the Credit Agreement.
3. Acquisition Loan Advances made to the Borrower by the Assignor under
the Credit Agreement in the principal amount of $____________ are outstanding on
the date hereof. Working Capital Loan Advances made to the Borrower by the
Assignor under the Credit Agreement in the principal amount of $____________ are
outstanding on the date hereof.
4. The Assignor proposes to assign to the Assignee all of the rights of
the Assignor under the Credit Agreement in respect of ____% of its Acquisition
Loan Commitment thereunder (the "Assigned Acquisition Loan Commitment") and/or
____ % of its Working Capital Loan Commitment thereunder (the "Assigned Working
Capital Loan Commitment" and, together with the Assigned Acquisition Loan
Commitment, the "Assigned Commitments"), together with a portion of its
outstanding Acquisition Loan Advances in the principal amount equal to
$________________ (the "Assigned Acquisition Loan Advances") and/or a portion of
its outstanding Working Capital Loan Advances in the principal amount equal to
$________________ (the "Assigned Working Capital Loan Advances" and, together
with the Assigned Acquisition Loan Advances, the "Assigned Advances"), and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms. For purposes hereof,
the Assigned Commitments together with the Assigned Advances shall hereafter be
referred to as the "Assigned Interests" and are further described on Schedule 1
hereto.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Assignment. Effective as of the effective date set forth on
Schedule 1 (the "Effective Date"), the Assignor hereby sells, assigns, transfers
and conveys to the Assignee all of the rights and obligations of the Assignor
under the Credit Agreement in and to the Assigned Interests, and the Assignee
hereby accepts such assignment, transfer and conveyance from the Assignor and
assumes all of the obligations of the Assignor under the Credit Agreement in and
to the Assigned Interests. Upon (a) the execution and delivery hereof by the
Assignor, the Assignee and the Administrative Agent and (b) the payment of the
amounts specified in Section 2 hereof required to be paid on the date hereof,
(i) the Assignee shall, as of the date hereof, be deemed to be an [Acquisition]
[Working Capital] Lender listed on the signature pages to the Credit Agreement
and succeed to the rights and be obligated to perform the obligations of an
[Acquisition] [Working Capital] Lender under the Credit Agreement with an
aggregate Commitment in an amount equal to the Assigned Commitments and Advances
outstanding in a principal amount equal to the Assigned Advances and (ii) the
aggregate Commitment and Advances of the Assignor shall, as of the date hereof,
be reduced correspondingly and the Assignor shall be released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor. The assignment executed hereby is made pursuant to and
in accordance with Section 9.06 of the Credit Agreement.
SECTION 2. Payments. As consideration for the sale and assignment
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
date hereof in federal funds an aggregate amount equal to the aggregate amount
specified on, or calculated as provided on, Schedule 1 hereto (the "Aggregate
Assignment Payment"). It is understood that all unpaid interest accrued and Fees
with respect to the Assigned Interests accrued prior to the date hereof are for
the account of the Assignor. The interest and Fees with respect to the Assigned
Interests accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
SECTION 3. Participations. Assignee may sell or grant participations in all
or any part of the rights granted to it hereunder in accordance with the
provisions of Section 9.06(g) of the Credit Agreement.
SECTION 4. Non-Reliance on Assignor, the Lenders, the Lead Arrangers, the
Issuing Bank or the Administrative Agent. (a) Neither the Assignor, the Lenders,
the Lead Arrangers, the Issuing Bank nor the Administrative Agent shall be
responsible to the Assignee for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of any of the
Transaction Documents or for any representations, warranties, recitals or
statements made therein or in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
made or furnished or made available by the Assignor, the Lenders, the Issuing
Bank or the Administrative Agent to the Assignee or by or on behalf of the
Borrower to the Assignor, the Lenders, the Issuing Bank, the Administrative
Agent or the Assignee in connection with the Transaction Documents and the
transactions contemplated thereby. Neither the Assignor, the Lenders, the
Issuing Bank nor the Administrative Agent shall be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Transaction
Documents or as to the use of the proceeds of the Advances or as to the
existence or possible existence of any Default or Event of Default.
(b) Neither the Assignor, the Lenders, the Lead Arrangers, the Issuing
Bank nor the Administrative Agent makes any representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or any other party to any
Financing Document, or the validity and enforceability of the Obligations. The
Assignee acknowledges that it has, independently and without reliance on the
Assignor, the Lenders, the Issuing Bank or the Administrative Agent, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and will continue to
be responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower and of each other party to the Financing
Documents.
SECTION 5. Representations and Warranties of Assignee. The Assignee (i)
represents and warrants that it is legally authorized to enter into this
Agreement, (ii) confirms that it has received a copy of the Security Documents,
the Credit Agreement, the other Financing Documents and the Project Contracts
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Agreement, (iii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, the Security
Agreements and other Financing Documents, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Security Agreements, the Credit Agreement and the other Financing Documents are
required to be performed by it as a Lender and (v) specifies as its lending
offices (and address for notices) the offices set forth beneath its name on the
signature pages thereof.
SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY
SUCH REQUIREMENT OF LAWS THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT THE LAWS
OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
SECTION 7. Amendment. No term or provision of this Agreement may be
amended, changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Assignor and the Assignee, with the consent
of the Administrative Agent.
SECTION 8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:
------------------------------------
Name:
Title:
[ASSIGNEE]
By:
------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
------------------------------------
Name:
Title:
PAYMENT INSTRUCTIONS
Assignee:
[Bank ]
[Address ]
[ABA No.: ]
[Attention: ]
[Account Name: ]
Assignor:
[Bank ]
[Address ]
[ABA No.: ]
[Attention: ]
[Account Name: ]
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
1. Effective Date:
2. Legal Name of Assignor:
3. Legal Name of Assignee:
4. Assignee's Address and Telecopy Number for Notices:
5. Assigned Interests:
a. Assigned Acquisition Loan Commitment: %
b. Aggregate principal amount of Assigned Acquisition Loan Advances: $
c. Assigned Working Capital Loan Commitment: %
d. Aggregate principal amount of Assigned Working Capital Loan Advances:
$
e. Accrued and unpaid interest assigned (if any):
i. Interest on Acquisition Loan Advances: $
ii. Interest on Working Capital Loan Advances: $
a. Accrued and unpaid Fees assigned (if any): $
6. Aggregate Assignment Payment:
$ ___________________ (may specify method of calculation in lieu of an
amount)
EXHIBIT P
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
RESTRUCTURING EFFECTIVE DATE
LETTER AGREEMENT
THIS RESTRUCTURING EFFECTIVE DATE LETTER AGREEMENT (this "Agreement") is
made and entered into as of October 28, 2002 (the "Restructuring Effective
Date") by and among ORION POWER HOLDINGS, INC., a Delaware corporation ("OPH"),
ORION POWER CAPITAL LLC, a Delaware limited liability company ("Holdco"), ORION
POWER NEW YORK, L.P., a Delaware limited partnership ("OPNY"), ORION POWER
MIDWEST, L.P., a Delaware limited partnership ("OPMW") (OPH, Holdco, OPNY and
OPMW are referred to collectively as the "Orion Parties"), the Original OPNY
Lenders (defined below), the Original OPMW Lenders (defined below), the OPH
Lenders (defined below), the OPH Administrative Agent (defined below) and the
Exiting OPNY Lenders (defined below).
R E C I T A L S:
WHEREAS, OPH is party to that certain Credit Agreement, dated as of July
27, 2000 as amended prior to the date hereof, (the "OPH Revolver"), with each of
Union Bank of California, N.A. ("UBOC"), Canadian Imperial Bank of Commerce
("CIBC"), The Bank of Nova Scotia ("Scotia") and Bayerische Hypo- und
Vereinsbank, AG, New York Branch ("HVB") as lenders (in such capacity,
collectively, the "OPH Lenders," and each an "OPH Lender"), the letter of credit
issuing banks party thereto from time to time, UBOC, as administrative agent
(the "OPH Administrative Agent"), CIBC World Markets Corp., as syndication
agent, and Scotia, as documentation agent;
WHEREAS, (i) Holdco is a direct, wholly-owned subsidiary of OPH and (ii)
each of OPNY and OPMW are indirect, wholly-owned subsidiaries of both OPH and
Holdco;
WHEREAS, OPNY is party to that certain Credit Agreement, dated as of July
28, 1999 (as amended prior to the date hereof, the "Original OPNY Credit
Agreement"), with each of Banc of America Securities, LLC and BNP Paribas as
lead arrangers, the financial institutions party thereto as lenders (the
"Original OPNY Lenders" and each, an "Original OPNY Lender"), Bank of America,
N.A. as issuing bank, and Bank of America, N.A., as administrative agent;
WHEREAS, OPMW is party to that certain Amended and Restated Credit
Agreement, dated as of December 15, 2000 (as amended prior to the date hereof,
the "Original OPMW Credit Agreement"), with Banc of America Securities LLC, as
Co-Lead Arranger and as a Joint Book-Runner, Bank of America, N.A., as Issuing
Bank and Administrative Agent, Goldman Sachs Credit Partners, L.P., as Co-Lead
Arranger, Syndication Agent and a Joint Book Runner, Paribas, as an Arranger, a
Documentation Agent and a Syndication Agent, Deutsche Bank Securities Inc., as
an Arranger, Deutsche
Bank AG New York Branch, as a Documentation Agent and a Syndication Agent, and
the financial institutions from time to time party thereto as lenders (the
"Original OPMW Lenders" and each, an "Original OPMW Lender");
WHEREAS, OPNY desires to enter into an Amended and Restated Credit
Agreement (the "Restated OPNY Credit Agreement") with each of Banc of America
Securities, LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the
financial institutions party thereto, as lenders (the "OPNY Lenders"), Bank of
America, N.A., as Issuing Bank, Bank of America, N.A., as Administrative Agent
(the "OPNY Administrative Agent"), BNP Paribas as Syndication Agent, and each of
Union Bank of California, N.A., CoBank, ACB and Deutsche Bank AG New York and/or
Cayman Island Branch, as Documentation Agents, amending and restating the
Original OPNY Credit Agreement in its entirety;
WHEREAS, OPMW desires to enter into a Second Amended and Restated Credit
Agreement (the "Restated OPMW Credit Agreement," and, together with the OPNY
Credit Agreement, the "Restated Credit Agreements") with Banc of America
Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the
financial institutions party thereto, as lenders (the "OPMW Lenders"), Bank of
America, N.A. as Issuing Bank, Bank of America, N.A., as Administrative Agent
(the "OPMW Administrative Agent"), BNP Paribas, as Syndication Agent, and each
of The Bank of Nova Scotia, Mizuho Corporate Bank, Ltd, and Bayerische Hypo-Und
Vereinsbank AG, New York Branch, as Documentation Agents, amending and restating
the Original OPMW Credit Agreement in its entirety;
WHEREAS, it is a condition precedent to each of the Restated Credit
Agreements that Holdco enter into a deposit account agreement (the "Holdco
Deposit Account Agreement") by and among Holdco and Bank of America, N.A., as
Collateral Agent (in such capacity, the "Collateral Agent") an Intercreditor and
Agency Agreement executed and delivered contemporaneously with the Restated
Credit Agreements by and among the OPNY Administrative Agent, the OPMW
Administrative Agent, the OPNY Lenders, the OPMW Lenders, and the Collateral
Agent;
WHEREAS, it is a condition precedent of each of the Restated Credit
Agreements that the OPH Revolver and all commitments thereunder have been
terminated;
WHEREAS, it is a condition precedent of the Restated OPNY Credit Agreement
that, in connection with the termination of the OPH Revolver, the OPH Lenders
(other than CIBC) shall become OPNY Lenders pursuant to the terms and conditions
of the Restated OPNY Credit Agreement; and
WHEREAS, the parties hereto do now desire to enter into this Agreement to
evidence their agreement regarding the occurrence of certain events required to
effectuate the transactions contemplated by the Restated Credit Agreements;
2
A G R E E M E N T:
NOW, THEREFORE, each of the Orion Parties agree with each of the OPH
Lenders, Original OPMW Lenders, Original OPNY Lenders and Exiting OPNY Lenders
(collectively, the "Lenders" and each, a "Lender"), and each of the Lenders
agree with each other, as follows:
1. Cash Distributions and Applications. As of the Restructuring Effective
Date and contemporaneously with the satisfaction or waiver of all conditions
precedent to the effectiveness of the Restated Credit Agreements other than
those conditions that are expressly set forth in this Agreement, the following
steps (the "Cash Applications") shall be deemed to occur in the following order:
A. Cash of OPNY, currently held in the OPNY Debt Service Account,
shall be applied to pay the OPNY Lenders all interest, fees and other costs
accrued but not paid under the Original OPNY Credit Agreement as of the
Restructuring Effective Date. Cash of OPMW, currently held in the OPMW Debt
Service Account, and/or $690,000 of cash of OPMW, currently held in the
OPMW Debt Service Reserve Account, shall be applied to pay the OPMW Lenders
all interest, fees and other costs accrued but not paid under the Original
OPMW Credit Agreement as of the Restructuring Effective Date.
B. Cash of OPNY (x) currently held in the OPNY Revenue Account, in
the amount of $179,686,631.18, (y) currently held in the OPNY Distribution
Account, in the amount of $1,575,882.54, and (z) currently held in the OPNY
Debt Service Reserve Account, in the amount of $15,037,486.28, shall be
applied as follows: (i) $76,500,000 shall be distributed from OPNY to
Holdco, (x) $25,000,000 of which will be held in the Holdco Initial
Indenture Debt Service Account and $23,500,000 of which will be held in the
Holdco Allowance Purchase Reserve Account, in each case pursuant to the
terms of the Holdco Deposit Account Agreement, and (y) $28,000,000 of which
shall be held in the Holdco Restructuring Cost Reserve Account to be used
by Holdco to pay transaction fees and costs related to the transactions
contemplated by the Restated Credit Agreements; (ii) $59,800,000 shall be
applied to prepay outstanding principal of Acquisition Loans under the
Original OPNY Credit Agreement to the Original OPNY Lenders on a pro rata
basis based upon total Loans and Commitments outstanding under the Original
OPNY Credit Agreement immediately prior to the Restructuring Effective
Date; and (iii) $60,000,000 (such amount, plus any accrued but unpaid
interest and fees under the OPH Revolver, the "OPH Revolver Payoff Amount")
shall be applied in the manner contemplated by Section 1(D) below.
C. Cash of OPMW, currently held in the OPMW Revenue Account, in the
amount of $15,500,000 shall be applied as follows: (i) $14,000,000 shall be
applied to prepay outstanding principal of Acquisition Loans under the
Original OPMW Credit Agreement to the Original OPMW Lenders on a pro rata
basis
3
based upon total Loans and Commitments outstanding under the OPMW Credit
Agreement immediately prior to the Restructuring Effective Date; and (ii)
$1,500,000 of which will be held in the Holdco Allowance Purchase Reserve
Account pursuant to the terms of the Holdco Deposit Account Agreement.
D. UBOC, Scotia and HVB shall unconditionally commit to acquire
Loans and Commitments (as defined in the Original OPNY Credit Agreement and
to the extent acquired as contemplated herein, the "Acquired OPNY Loans and
Commitments") in the aggregate amount of $44,000,000 (allocated in the
aggregate amounts of $16,000,000 to each of UBOC and Scotia and $12,000,000
to HVB) as follows:
(i) First, cash equal to 100% of the outstanding principal
amount of loans ($37,109,845.34 in the aggregate, the "Exiting OPNY
Lender Payoff Amount") owed to each of CIBC, Bank of Montreal and Bank
Hapoalim, B.M. (the "Exiting OPNY Lenders") under the Original OPNY
Credit Agreement shall be used to acquire all of the Acquisition Loans
of the Exiting OPNY Lenders under the Original OPNY Credit Agreement.
The transfer of that portion of the Acquired OPNY Loans and
Commitments from the Exiting OPNY Lenders to UBOC, Scotia and HVB as
contemplated by this Section 1(D)(i) shall be effectuated by a Master
Assignment and Acceptance Agreement in the form of Exhibit A attached
hereto.
(ii) Second, cash in the amount of $6,890,154.66 shall be used to
acquire, on a pro-rata basis based on total Loans and Commitments,
notes and obligations from all of the Original OPNY Lenders (other
than the Exiting OPNY Lenders) under the Original OPNY Credit
Agreement. The transfer of such portion of the Acquired OPNY Loans
from the Original OPNY Lenders (other than the Exiting OPNY Lenders)
as contemplated by this Section 1(D)(ii) shall be effectuated by a
Master Assignment and Acceptance Agreement in the form of Exhibit A
attached hereto.
(iii) The OPH Lenders hereby agree and acknowledge that they
shall cancel the OPH Revolver, and the notes and credits that they
hold and are owed pursuant thereto, in exchange for and upon receipt
of (a) (x) in the case of CIBC, cash in the amount of $16,000,000 and
(y) in the case of UBOC, Scotia and HVB, the notes and obligations
held by the Exiting OPNY Lenders as described in Section 1(D)(i) and
(b) the notes and obligations held by the other Original OPNY Lenders
as and to the extent described in Section 1(D)(ii), and that such
actions (rather than the actual transfer of funds to UBOC, Scotia and
HVB) shall be deemed to constitute the Cash Applications contemplated
by Sections 1(D)(i) and 1(D)(ii) above. As a result of their
acquisition of the Acquired OPNY Loans pursuant to the terms of this
Section 1(D), UBOC, Scotia and HVB shall
4
become parties to the Original OPNY Credit Agreement, and immediately
thereafter, the Restated OPNY Credit Agreement as contemplated by this
Agreement and by the Restated OPNY Credit Agreement.
E. The OPNY Lenders shall unconditionally commit to acquire Working
Capital Loan Commitments of the Exiting OPNY Lenders under the Original
OPNY Credit Agreement in the aggregate amount of $4,232,000 (allocated in
the aggregate amounts of $2,157,000 to Bank of Montreal and $2,075,000 to
CIBC), on a pro rata basis based upon such OPNY Lenders' total Loans and
Commitments under the Original Credit Agreement (after giving effect to the
actions described in the foregoing clauses 1.A through 1.D hereof);
however, those OPNY Lenders who are not Working Capital Lenders under the
Original OPNY Credit Agreement will then swap their resulting pro rata
share of such $4,232,000 for a like amount of the Acquisition Loans with
Bank of America, N.A. and BNP Paribas. The assignments and acceptances as
contemplated by this Section 1(E) shall be effectuated by a Master
Assignment and Acceptance Agreement in the form of Exhibit A attached
hereto.
F. Cash of OPNY currently held in the OPNY Revenue Account, in the
amount of $1,650,000 shall be applied to prepay outstanding principal of
Acquisition Loans under the Restated OPNY Credit Agreement to the Original
OPNY Lenders in accordance with the terms of the Original OPNY Credit
Agreement and shall be deemed to be in payment of the principal amount due
and payable to the OPNY Lenders on December 31, 2002 under the Restated
OPNY Credit Agreement. Cash of OPMW, currently held in the OPMW Revenue
Account, in the amount of $4,950,000 shall be applied to prepay outstanding
principal of Acquisition Loans under the Original OPMW Credit Agreement to
the Original OPMW Lenders in accordance with the terms of the Original OPMW
Credit Agreement and shall be deemed to be in payment of the amount due and
payable to the OPMW Lenders on December 31, 2002 under the Restated OPMW
Credit Agreement.
2. Restated Credit Agreements. The parties hereby agree that this
Agreement sets forth the parties' understanding of the Cash Applications
necessary to effect the transactions contemplated by the terms and conditions of
the Restated Credit Agreements. The Restated Credit Agreements shall govern the
credits and commitments related thereto.
3. Agreement of OPH and the OPH Lenders. OPH, the OPH Administrative
Agent and the OPH Lenders hereby acknowledge and agree that effective upon
receipt by each of the OPH Lenders of its pro rata share of the OPH Revolver
Payoff Amount in the manner described in Section 1 above, (a) the OPH Revolver,
and all obligations of OPH thereunder, shall be terminated and no longer of any
force and effect, (b) all obligations and commitments of the OPH Lenders under
the OPH Revolver shall be permanently terminated and no longer of any force and
effect, and (c) all liens and other encumbrances created under the OPH Revolver,
if any, shall be released and be of no further force and
5
effect; provided, however, that any indemnification or similar obligations that
by the express terms of the OPH Revolver are stated to survive termination shall
continue to survive.
4. Agreement of the Exiting OPNY Lenders. Each Exiting OPNY Lender hereby
acknowledges and agrees that effective upon its receipt of its pro rata share of
the Exiting OPNY Lender Payoff Amount in the manner described in Section 1(D)(i)
above, (a) all obligations of OPNY to the Exiting OPNY Lenders shall be
terminated and no longer of any force and effect, (b) all obligations and
commitments of the Exiting OPNY Lenders under the Original OPNY Credit Agreement
shall be transferred as provided in the Master Assignment and Acceptance
Agreement, and (c) all liens and other encumbrances created under the Financing
Documents (as defined in the Original OPNY Credit Agreement, the "OPNY Financing
Documents") in favor of the Exiting OPNY Lenders shall have been assigned by the
Exiting OPNY Lenders as contemplated above and the Exiting OPNY Lenders shall
have no interest in or claim upon the collateral security provided in the OPNY
Financing Documents or in or upon any other assets or property of OPNY or its
affiliates pursuant to the Original OPNY Credit Agreement or the other OPNY
Financing Documents; provided, however, that any indemnification or similar
obligations that by the express terms of the OPNY Financing Documents are stated
to survive termination shall continue to survive in favor for the Original OPNY
Lenders.
5. Consent and Waiver. The parties hereto hereby consent to and agree to
permit the Cash Applications as described herein despite any provisions to the
contrary in any of the documents and agreements related to the OPH Revolver, the
Original OPNY Credit Agreement and the Original OPMW Credit Agreement. The
parties hereby agree to waive any contrary provisions of the terms, covenants
and conditions of any of the documents and agreements related to the OPH
Revolver, the Original OPNY Credit Agreement and the Original OPMW Credit
Agreement to the extent necessary to effect the Cash Applications and the other
actions and transactions described in and contemplated by this Agreement.
6. Counterpart Signatures. This Agreement may be executed in counterpart.
7. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and assigns.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY SUCH
REQUIREMENT OF LAWS THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO
THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY APPLICABLE. ANY
DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THE PARTIES HERETO IN CONNECTION WITH THIS
AGREEMENT, WHETHER
6
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
In witness whereof, the parties to the foregoing Closing Memorandum have
caused this Agreement to be executed by their duly authorized representatives as
of the date and year first above written.
[SIGNATURES ON THE FOLLOWING PAGES]
7
ORION PARTIES:
ORION POWER HOLDINGS, INC.,
a Delaware corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ORION POWER CAPITAL LLC,
a Delaware limited liability company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ORION POWER NEW YORK, L.P.,
a Delaware limited partnership
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ORION POWER MIDWEST, L.P.,
a Delaware limited partnership
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
OPH ADMINISTRATIVE AGENT:
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
OPH LENDERS:
UNION BANK OF CALIFORNIA, N.A.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
THE BANK OF NOVA SCOTIA
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
BAYERISCHE HYPO- UND VEREINSBANK, AG,
NEW YORK BRANCH
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ORIGINAL OPNY LENDERS:
BANK OF AMERICA, N.A.
By:
------------------------------------
Name:
Title:
BNP PARIBAS
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
COBANK, ACB
By:
------------------------------------
Name:
Title:
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------
Name:
Title:
ING CAPITAL LLC
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
DZ BANK AG DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN,
NEW YORK BRANCH
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
-------------------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
CIBC INC.
By:
-------------------------------------
Name:
Title:
MIZUHO CORPORATE BANK, LTD
By:
-------------------------------------
Name:
Title:
THE ROYAL BANK OF SCOTLAND PLC
By:
-------------------------------------
Name:
Title:
BANK OF SCOTLAND
By:
-------------------------------------
Name:
Title:
LLOYDS TSB BANK PLC
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
ABBEY NATIONAL TREASURY SERVICES PLC
By:
-------------------------------------
Name:
Title:
THE GOVERNOR AND COMPANY OF THE BANK
OF IRELAND
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK/GRAND CAYMAN ISLANDS
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
SUMITOMO MITSUI BANKING CORPORATION
By:
-------------------------------------
Name:
Title:
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BANK HAPOALIM, B.M.
By:
-------------------------------------
Name:
Title:
BANK OF MONTREAL
By:
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
-------------------------------------
Name:
Title:
ORIGINAL OPMW LENDERS:
BANK OF AMERICA, N.A., as Revolving
Lender and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BNP PARIBAS, as a Revolving Lender and
an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLAND BRANCH, as a Revolving
Lender and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH, as a Revolving
Lender and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
DEXIA- CREDIT LOCAL DE FRANCE, as a
Revolving Lender and an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
DZ BANK AG DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN,
NEW YORK BRANCH, as a Revolving Lender
and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, as a Revolving
Lender and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
ING CAPITAL LLC, as a Revolving Lender
and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
SOCIETE GENERALE, as a Revolving Lender
and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A., as a
Revolving Lender and an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
ABN AMRO BANK N.V., as a Revolving
Lender and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
COBANK, ACB, as a Revolving Lender and
an Acquisition Lender
By:
-------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH, as a
Revolving Lender and an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
MIZUHO CORPORATE BANK, LTD, as a
Revolving Lender and an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
FLEET NATIONAL BANK, as a Revolving
Lender and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK/GRAND CAYMAN ISLANDS BRANCH,
as a Revolving Lender and an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
THE ROYAL BANK OF SCOTLAND PLC, as a
Revolving Lender and an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
ABBEY NATIONAL TREASURY SERVICES PLC,
as an Acquisition Lender
By:
-------------------------------------
Name:
Title:
BANK ONE, NA, as an Acquisition Lender
By:
-------------------------------------
Name:
Title:
BARCLAYS BANK PLC, as an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
LLOYDS TSB BANK PLC, as an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
THE GOVERNOR AND COMPANY OF
THE BANK OF SCOTLAND, as an
Acquisition Lender
By:
-------------------------------------
Name:
Title:
SUMITOMO MITSUI BANKING CORPORATION,
as an Acquisition Lender
By:
-------------------------------------
Name:
Title:
AIB CAPITAL MARKETS PLC, as an
Acquisition Lender
By:
-------------------------------------
Name:
Title:
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH, as an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
CREDIT INDUSTRIEL ET COMMERCIAL,
as an Acquisition Lender
By:
-------------------------------------
Name:
Title:
NATIONAL CITY BANK OF PENNSYLVANIA,
as an Acquisition Lender
By:
-------------------------------------
Name:
Title:
THE GOVERNOR AND COMPANY OF
THE BANK OF IRELAND, as an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG, as an Acquisition Lender
By:
-------------------------------------
Name:
Title:
UFJ BANK LIMITED (f/k/a THE SANWA BANK
LIMITED), NEW YORK BRANCH, as an
Acquisition Lender
By:
-------------------------------------
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., as an Acquisition
Lender
By:
-------------------------------------
Name:
Title:
CSAM FUNDING I, as a Revolving Lender
and an Acquisition Lender
By:
-------------------------------------
Name:
Title:
FIRST DOMINION FUNDING I, as an
Acquisition Lender
By:
-------------------------------------
Name:
Title:
BANK HAPOALIM, B.M.
By:
-------------------------------------
Name:
Title:
BANK OF MONTREAL
By:
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
-------------------------------------
Name:
Title:
EXITING OPNY LENDERS:
CIBC, INC.
By:
-------------------------------------
Name:
Title:
BANK OF MONTREAL
By:
-------------------------------------
Name:
Title:
BANK HAPOALIM, B.M.
By:
-------------------------------------
Name:
Title:
EXHIBIT A
MASTER ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS MASTER ASSIGNMENT AND ACCEPTANCE AGREEMENT, dated as of October 28,
2002 (this "Agreement"), among the financial institutions listed on Schedule 1
to this Agreement (collectively, the "Assignors"), the financial institutions
listed on Schedule 2 to this Agreement (collectively, the "Assignees"), and Bank
of America, N.A., as administrative agent under the Credit Agreement referred to
below (in such capacity, together with any successor and assigns, the
"Administrative Agent").
PRELIMINARY STATEMENTS
1. This Agreement relates to the Credit Agreement, dated as of July 28,
1999 (as such agreement may be modified, amended or supplemented from time to
time, the "Credit Agreement"), among ORION POWER NEW YORK, L.P. (the
"Borrower"), BANC OF AMERICA SECURITIES LLC and PARIBAS, as lead arrangers
(collectively, the "Lead Arrangers"), the financial institutions signatories
thereto and each other financial institution which may thereafter become an
assignee pursuant to Section 9.06 thereto (each a "Lender", and collectively the
"Lenders"), BANK OF AMERICA, N.A., as Issuing Bank and BANK OF AMERICA, N.A., as
Administrative Agent. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Credit Agreement.
2. Immediately before giving effect to this Agreement, each of the
Assignors has the Acquisition Loan Commitments and Working Capital Loan
Commitments (collectively, the "Commitments"), as well as the outstanding
Acquisition Loan Advances and outstanding Working Capital Loan Advances
(collectively, the "Outstanding Advances") set forth on Schedule 3 hereto. Each
of the Assignors propose to assign to each of the Assignees, and each of the
Assignees proposes to assume, all of the rights of each such Assignor under the
Credit Agreement in respect of each Assignee's pro rata share of all or a
portion of such Assignor's Commitments (the "Assigned Commitments") and
Outstanding Advances (the "Assigned Advances," and, together with the Assigned
Commitments, the "Assigned Interests"), as the case may be, such that,
immediately upon giving effect to this Agreement, each of the Assignors and each
of the Assignees shall have the Acquisition Loan Commitments, Working Capital
Loan Commitments, outstanding Acquisition Loan Advances and outstanding Working
Capital Loan Advances set forth on Schedule 4 hereto.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Assignment. Effective as of the effective date set forth on
Schedule 1 (the "Effective Date"), each of the Assignors hereby sells, assigns,
transfers and conveys to each Assignee such Assignee's pro rata share of all of
the rights and
obligations of such Assignor under the Credit Agreement in and to its respective
portion of the Assigned Interests, and each Assignee hereby accepts such
assignment, transfer and conveyance from the Assignors and assumes all of the
obligations of the Assignors under the Credit Agreement in and to such Assigned
Interests. Upon (a) the execution and delivery hereof by the Assignors, the
Assignees and the Administrative Agent and (b) the payment of the amounts
specified in Section 2 hereof required to be paid on the date hereof, (i) each
Assignee shall, as of the date hereof, be deemed to be an Acquisition Lender and
Working Capital Lender listed on the signature pages to the Credit Agreement and
succeed to the rights and be obligated to perform the obligations of an
Acquisition Lender and Working Capital Lender under the Credit Agreement with
the Commitments and Outstanding Advances set forth on Schedule 4 hereto, and
(ii) the aggregate Commitments and Outstanding Advances of each Assignor shall,
as of the date hereof, be reduced to the amounts set forth on Schedule 4 hereto,
and the Assignors shall be released from their respective obligations under the
Credit Agreement to the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be without recourse to the
Assignors. The assignment executed hereby is made pursuant to and in accordance
with Section 9.06 of the Credit Agreement.
SECTION 2. Payments. It is understood that all unpaid interest accrued and
Fees with respect to the Assigned Interests accrued prior to the date hereof are
for the account of the Assignors. The interest and Fees with respect to the
Assigned Interests accruing from and including the date hereof are for the
account of the Assignee. Each of the Assignors and the Assignees hereby agrees
that if it receives any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 3. Participations. The Assignees may sell or grant participations
in all or any part of the rights granted to it hereunder in accordance with the
provisions of Section 9.06(g) of the Credit Agreement.
SECTION 4. Non-Reliance on Assignors, the Lenders, the Lead Arrangers, the
Issuing Bank or the Administrative Agent. (a) Neither the Assignors, the
Lenders, the Lead Arrangers, the Issuing Bank nor the Administrative Agent shall
be responsible to the Assignees for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of any of the
Transaction Documents or for any representations, warranties, recitals or
statements made therein or in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
made or furnished or made available by the Assignors, the Lenders, the Issuing
Bank or the Administrative Agent to the Assignees or by or on behalf of the
Borrower to the Assignors, the Lenders, the Issuing Bank, the Administrative
Agent or the Assignees in connection with the Transaction Documents and the
transactions contemplated thereby. Neither the Assignors, the Lenders, the
Issuing Bank nor the Administrative Agent shall be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements
contained in any of the Transaction Documents or as to the use of the proceeds
of the Advances or as to the existence or possible existence of any Default or
Event of Default.
(b) Neither the Assignors, the Lenders, the Lead Arrangers, the Issuing
Bank nor the Administrative Agent makes any representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or any other party to any
Financing Document, or the validity and enforceability of the Obligations. Each
Assignee hereby acknowledges that it has, independently and without reliance on
the Assignors, the Lenders, the Issuing Bank or the Administrative Agent, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and will continue
to be responsible for making its own independent appraisal of the business,
affairs and financial condition of the Borrower and of each other party to the
Financing Documents.
SECTION 5. Representations and Warranties of Assignee. Each Assignee (i)
represents and warrants that it is legally authorized to enter into this
Agreement, (ii) confirms that it has received a copy of the Security Documents,
the Credit Agreement, the other Financing Documents and the Project Contracts
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Agreement, (iii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignors or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, the Security
Agreements and other Financing Documents, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Security Agreements, the Credit Agreement and the other Financing Documents are
required to be performed by it as a Lender and (v) specifies as its lending
offices (and address for notices) the offices set forth on Schedule 2 hereto.
SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY
SUCH REQUIREMENT OF LAWS THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY
APPLICABLE. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PARTIES HERETO IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
SECTION 7. Amendment. No term or provision of this Agreement may be
amended, changed, waived, discharged or terminated orally, but only by an
instrument in
writing signed by the Assignors and the Assignees, with the consent of the
Administrative Agent.
SECTION 8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ASSIGNEES:
UNION BANK OF CALIFORNIA, N.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE BANK OF NOVA SCOTIA
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BAYERISCHE HYPO- UND VEREINSBANK, AG,
NEW YORK BRANCH
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ASSIGNORS:
BANK OF AMERICA, N.A.
By:
-------------------------------------
Name:
Title:
BNP PARIBAS
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
COBANK, ACB
By:
-------------------------------------
Name:
Title:
DEUTSCHE BANK AG NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
-------------------------------------
Name:
Title:
ING CAPITAL LLC
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
DZ BANK AG DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN,
NEW YORK BRANCH
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
-------------------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
CIBC INC.
By:
-------------------------------------
Name:
Title:
MIZUHO CORPORATE BANK, LTD
By:
-------------------------------------
Name:
Title:
THE ROYAL BANK OF SCOTLAND PLC
By:
-------------------------------------
Name:
Title:
BANK OF SCOTLAND
By:
-------------------------------------
Name:
Title:
LLOYDS TSB BANK PLC
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
ABBEY NATIONAL TREASURY SERVICES PLC
By:
-------------------------------------
Name:
Title:
THE GOVERNOR AND COMPANY OF
THE BANK OF IRELAND
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK/GRAND CAYMAN ISLANDS
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
SUMITOMO MITSUI BANKING CORPORATION
By:
-------------------------------------
Name:
Title:
ERSTE BANK DER OESTERREICHISCHEN SPARKAS
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
EXITING OPNY LENDERS:
CIBC, INC.
By:
-------------------------------------
Name:
Title:
BANK OF MONTREAL
By:
-------------------------------------
Name:
Title:
BANK HAPOALIM, B.M.
By:
-------------------------------------
Name:
Title:
EXHIBIT S
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
AMENDED AND RESTATED
INTERCOMPANY WORKING CAPITAL AGREEMENT
THIS AMENDED AND RESTATED INTERCOMPANY WORKING CAPITAL AGREEMENT, dated as
of October 28, 2002 (this "Agreement") among ORION POWER NEW YORK, L.P., a
Delaware limited partnership ("Orion Power"), ASTORIA GENERATING COMPANY, L.P.,
a Delaware limited partnership ("Astoria Generating"), CARR STREET GENERATING
STATION, L.P., a Delaware limited partnership ("Carr Street"), and ERIE
BOULEVARD HYDROPOWER, L.P., a Delaware limited partnership ("Erie Boulevard").
W I T N E S S E T H:
WHEREAS, Orion Power has entered into an Amended and Restated Credit
Agreement, dated as of October 28, 2002 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
with Banc of America Securities LLC, as a Lead Arranger and a Joint Book Runner,
BNP Paribas, as a Lead Arranger and a Joint Book Runner, BNP Paribas, as
Syndication Agent, Union Bank of California, N.A., as a Documentation Agent,
CoBank, ACB, as a Documentation Agent, Deutsche Bank AG, New York and/or Cayman
Island Branch, as a Documentation Agent, Bank of America, N.A., as Issuing Bank,
Bank of America, N.A., as Administrative Agent (the "Administrative Agent"), and
each financial institution which is a signatory thereto or which may hereafter
become an assignee pursuant to Section 9.06 of the Credit Agreement (each a
"Lender", and collectively the "Lenders"), pursuant to which the Lenders have
agreed, inter alia, to make available credit facilities to Orion Power to
finance a portion of the purchase price of the Portfolio Assets (as defined in
the Credit Agreement) and to provide working capital availability to Orion
Power;
WHEREAS, the Credit Agreement contemplates the execution, delivery and
the implementation of this Agreement;
WHEREAS, Orion Power, the Administrative Agent, the Lenders and
certain other parties signatory thereto have entered into a Second Amended and
Restated Deposit Account Agreement, dated as of October 28, 2002 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Deposit Account Agreement"), providing for, among other things, the
establishment of the Accounts and the application of the proceeds of the
Collateral; and
WHEREAS, the Credit Agreement contemplates the execution and delivery
of the Intercompany Working Capital Note by Carr Street Generating, Erie
Boulevard and Astoria Generating on the Restructuring Effective Date;
NOW, THEREFORE, subject to and upon the terms, conditions, covenants
and agreements contained herein, Orion Power, Carr Street Generating, Erie
Boulevard and Astoria Generating hereby agree to amend and restate the existing
Intercompany Working Agreement in its entirety as follows, intending to be
legally bound:
1. Definitions.
(a) As used in this Agreement, the following terms will have the
following meanings unless the context requires otherwise:
(i) "AGREEMENT" means this Intercompany Working Capital
Agreement as originally executed or hereafter amended.
(iii) "OPERATING COMPANIES" means, collectively, Astoria
Generating, Carr Street Generating and Erie Boulevard, or any of them.
(b) Capitalized terms used herein but not defined herein have the
meanings set forth in the Credit Agreement.
2. Working Capital Line of Credit. (a) Subject to, and upon the terms,
conditions, covenants and agreements contained herein, Orion Power agrees to
lend to the Operating Companies at any time and from time to time from and after
the Restructuring Effective Date, such amounts as the Operating Companies may
request for working capital and general operating purposes. Within such limits
and during such periods, the Operating Companies may borrow, repay and reborrow
hereunder. All loans made pursuant to the terms hereof, and any repayment
thereof, shall be made and repaid consistent with and as contemplated by, the
Deposit Account Agreement and the Credit Agreement.
(b) All loans pursuant to Section 2(a) hereof shall be evidenced by a
promissory note executed and delivered by the Operating Companies in
substantially the form of Exhibit K-2 to the Credit Agreement, payable to
the order of Orion Power, bearing interest prior to maturity or default at
a variable rate at all times at the rate set forth in the Intercompany
Working Capital Note.
(c) All past due principal and interest of any Intercompany Working
Capital Note, whether due as the result of acceleration or maturity or
otherwise, shall bear interest at the Default Rate from the date the
payment thereof shall have become due until the same have been fully
discharged by payment. Each advance and each payment of principal under the
Intercompany Working Capital Note shall be evidenced by notations made by
Orion Power in its business records or as an attached schedule to the
Intercompany Working Capital Note.
2
3. Use of Proceeds. The proceeds of any Intercompany Working Capital Note
shall be used by the Operating Companies for working capital and for general
operating purposes.
4. Covenants and Agreements. Until payment and performance in full of the
Intercompany Working Capital Notes and the obligations hereunder, the Operating
Companies covenant and agree to do the following:
(a) Comply with their respective obligations under and pursuant to
all Financing Documents to which they are a party.
(b) Pay reasonable expenses of Orion Power, including reasonable
legal expenses and attorneys' fees, which have been or may be incurred by
Orion Power in connection with the lending and incurring of obligations or
liabilities hereunder or for the enforcement of the Operating Companies'
obligations hereunder.
(c) Furnish Orion Power with such financial and other information
concerning any of the Operating Companies as Orion Power shall reasonably
request from time to time.
(d) execute and deliver an Intercompany Working Capital Note on the
Restructuring Effective Date.
5. Counterparts. This Agreement may be executed by the parties hereto in
several separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts together constitute one and the
same instrument.
6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
7. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
8. Entire Agreement. This Agreement embodies the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to the subject matter hereof. Each
party hereto hereby agrees for the benefit of the Administrative Agent that all
references in the Financing Documents and all other documents and instruments
executed and delivered in connection therewith to the "Intercompany Working
Capital Agreement" shall be deemed to mean and include this Agreement.
3
9. Amendment and Restatement. This Agreement is an amendment and
restatement of the Intercompany Working Capital Agreement dated as of July 28,
1999 (as supplemented by that certain Supplemental Agreement dated as of August
19, 1999 by and between Astoria Generating and Bank of America, N.A., as
administrative agent) (the "Original Agreement") between Orion Power and the
Operating Companies. It is the intention of Orion Power and the Operating
Companies that this Agreement amend, restate, extend and renew the terms and
conditions of the Original Agreement, and is not intended to be a novation or
discharge of the obligations of Orion Power or the Operating Companies
thereunder.
[Remainder of page intentionally left blank.]
4
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
ORION POWER NEW YORK, L.P.,
a Delaware limited partnership
By: Orion Power New York GP, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
ASTORIA GENERATING COMPANY, L.P.,
a Delaware limited partnership
By: Orion Power New York GP, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
CARR STREET GENERATING STATION, L.P.,
a Delaware limited partnership
By: Orion Power New York GP, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
ERIE BOULEVARD HYDROPOWER, L.P.,
a Delaware limited partnership
By: Orion Power New York GP, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
EXHIBIT T
TO THE
AMENDED AND RESTATED
CREDIT AGREEMENT
[LETTERHEAD OF BANK OF AMERICA, N.A.]
IRREVOCABLE STANDBY LETTER OF CREDIT
Date:
Number:
Amount: U.S. $10,000,000
Account Party: Orion Power New York, L.P.
7 East Redwood Street, 10th Floor
Baltimore, MD 21202
Beneficiary: Consolidated Edison Company of New York, Inc.
4 Irving Place
New York, NY 10003
Consolidated Edison Company of New York, Inc.
4 Irving Place
New York, NY 10003
We hereby establish our Irrevocable Standby Letter of Credit No. ____ in
favor of the addressee hereof (the "Beneficiary") for the account of Orion Power
New York, L.P. (the "Borrower") for an amount not exceeding a total of U.S.
$10,000,000 (Ten Million U.S. Dollars) (such amount, as reduced or reinstated
from time to time in accordance with the provisions hereof, the "Stated
Amount"). This Letter of Credit is issued in connection with the Guarantee
Agreement, dated as of March 2, 1999, between Orion Power Holdings, Inc. and
Consolidated Edison Company of New York (the "ConEd Guarantee") and the Credit
Agreement, dated as of July 28, 1999 (the "Credit Agreement"), among the
Borrower, Banc of America Securities LLC and Paribas, as lead arrangers (the
"Lead Arrangers"), Bank of America, N.A., as the issuer of the letter of credit
referred to therein (the "Issuing Bank"), each of the lenders party thereto (the
"Lenders") and the Administrative Agent (all capitalized terms used herein and
not otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement).
Funds under this Letter of Credit are available to you upon our receipt of a
certificate in the form of Exhibit A attached hereto (the "Demand Certificate"),
purportedly signed by your duly authorized officer or employee and appropriately
completed, if such Demand Certificate is presented as hereinafter specified on
or before the Letter of Credit Expiration Date (as hereinafter defined).
Drawing Procedures: One Demand Certificate shall be presented for each drawing
hereunder. Each Demand Certificate shall be dated the date of presentation and
shall be presented to Bank of America, N.A., located at 901 Main Street, 14th
Floor, Dallas, Texas 75202 or such other address as we may designate in writing.
If your Demand Certificate is presented by 12:00 noon (New York City time) on
any day on which we open for business (a "Business Day"), in strict conformity
with the terms and conditions of this Letter of Credit, we will honor the same
by making payment, in accordance with your payment instructions, by 3:00 p.m.
(New York City time) the same Business Day, otherwise we will honor your Demand
Certificate by making payment, in accordance with your payment instructions, by
1:00 p.m. (New York City time) the following Business Day.
Partial drawings are allowed.
The amount available to be drawn under this Letter of Credit shall be
automatically reduced by the amount of any drawing hereunder.
Letter of Credit Expiration Date. This Letter of Credit is effective on August
19, 1999 and is valid until 5:00 p.m., New York City time, on August 19, 2000
(the "Letter of Credit Expiration Date"). This Letter of Credit shall
automatically be extended for a period of one year from the Letter of Credit
Expiration Date and shall thereafter automatically be extended for an additional
one-year period on each expiration date thereafter; provided, that, this Letter
of Credit shall terminate on the earliest to occur of (a) the date that is five
(5) Business Days after the delivery by Bank of America, N.A., as Administrative
Agent, to us, with a copy to you, of a notice of termination of this Letter of
Credit to you no later than ten (10) Business Days prior to the Final Maturity
Date, (b) a drawing under this Letter of Credit by the Beneficiary equal to the
then applicable Stated Amount, (c) the date that is five (5) Business Days after
the delivery by us of a notice of termination of this Letter of Credit to you no
later than thirty (30) days prior to the then current expiration date (the
"Current Letter of Credit Expiration Date"), (d) the date that is four (4)
Business Days after the delivery by Bank of America, N.A., as Administrative
Agent, to us, with a copy to you, of a notice of termination of the Working
Capital Loan Commitments in accordance with the terms of the Credit Agreement
and (e) thirty (30) days after the delivery by Bank of America, N.A., as
Administrative Agent, to us, with a copy to you, of a notice that the long term
debt of the Borrower shall have received an Investment Grade Rating.
Notwithstanding the foregoing, in no event shall this Letter of Credit be
extended beyond the date that is ten (10) Business Days prior to December 31,
2002. Upon expiration or termination of this Letter of Credit, our obligations
hereunder shall be fully discharged and we shall thereafter have no obligation
to make further payments under this Letter of Credit. By paying to you the full
amount demanded in accordance therewith, we make no representation as to the
correctness of the amount demanded.
Transfer. The Beneficiary may not transfer, in whole or in part, any of its
rights under this Letter of Credit without the prior written consent of each of
Bank of America, N.A. and the Borrower. Upon approval by each of Bank of
America, N.A. and the Borrower, the Beneficiary shall effect such transfer of
its rights under this Letter of Credit by the delivery to us of this Letter of
Credit accompanied by a Notice of Transfer in the form attached as Exhibit B.
Upon receipt thereof and surrender of this Letter of Credit to us, we shall
issue a replacement Letter of Credit on the same
terms as this Letter of Credit but with a revised Exhibit A to the Letter of
Credit showing the name of the transferee instead of the name of the
Beneficiary.
Full Agreement. This Letter of Credit sets forth in full our undertaking and
such undertaking shall not in any way be modified, amended, amplified, or
limited by reference to any document, instrument, or agreement referred to
herein, except only the Demand Certificates and drafts referred to herein; and
any such reference shall not be deemed to incorporate herein by reference any
document, instrument, or agreement except for such Demand Certificates and
drafts.
Governing Law. This Letter of Credit shall be governed by the Uniform Customs
and Practice for Documentary Credits, 1993 Revision, International Chamber of
Commerce Publication No. 500, and, as to matters not covered therein, be
governed by the laws of the State of New York, including without limitation the
Uniform Commercial Code as in effect in such State.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect of
this Letter of Credit shall be in writing and addressed and presented to us at
our office at 901 Main Street, 14th Floor, Dallas, Texas 75202, Attention:
Letter of Credit Department, and shall make specific reference to this Letter of
Credit by number. Such documents, notices and other communications shall be
personally delivered to us, or may be sent to us by telecopier (telecopier
number 214-290-9441), promptly confirmed by a written document, notice or other
communication, as the case may be, delivered to us, to the telecopier number set
forth above, or to such other numbers as we may specify from time to time in
writing to you.
Very truly yours,
BANK OF AMERICA, N.A.
By:
--------------------------------------------
Name:
Title:
Exhibit A to
Letter of Credit No._____
DEMAND CERTIFICATE
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Letter of Credit Department
I am a duly authorized officer of Consolidated Edison Company of New York,
Inc. (the "Beneficiary"). Demand is hereby made for payment in the amount of
U.S. $_____, under the Bank of America, N.A. Irrevocable Standby Letter of
Credit Number ______ dated ____________ (the "Letter of Credit"), issued for the
account of Orion Power New York, L.P., a Delaware limited partnership (the
"Borrower"). In connection with such demand, I hereby certify as follows on
behalf of the Beneficiary:
The Beneficiary is making a drawing under the Letter of Credit (all
capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the ConEd Guarantee (as defined in the Letter of
Credit)) because the Guarantor has fully or partially failed to satisfy the
Obligations under Section 2 of the ConEd Guarantee.
The Beneficiary certifies that such amount is now due and payable to the
Beneficiary pursuant to Section 2 of the ConEd Guarantee.
If this Demand Certificate is presented to you by 12:00 noon on a Business
Day (as defined in the Letter of Credit) then by 3:00 p.m. on the same Business
Day, or if this Demand Certificate is presented later than 12:00 noon, then by
1:00 p.m. the following Business Day, please transfer the amount specified above
to [insert wire instructions for account of the Beneficiary, Account No.
_______, Attention: _________].
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
Certificate as of the ______ day of __________.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
By:
---------------------------------------------
Name:
Title:
Exhibit B to
Letter of Credit No. ______
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Letter of Credit Department
NOTICE OF TRANSFER
Re: Irrevocable Standby Letter of Credit No. _______
The undersigned, a duly authorized officer of Consolidated Edison Company of New
York, Inc. (the "Beneficiary") hereby advises you that all rights of the
undersigned Beneficiary to draw under the Irrevocable Standby Letter of Credit
referred to above (the "Letter of Credit") have been and are hereby irrevocably
transferred to:
------------------------------------
(Name of transferee)
------------------------------------
------------------------------------
------------------------------------
(Address of transferee)
By this transfer, all rights of the Beneficiary in the Letter of Credit are
transferred to the Transferee and said Transferee shall hereafter have all and
exclusively the sole rights as beneficiary of the Letter of Credit, including
(without limitation) the right to draw funds under the Letter of Credit in
accordance with its terms.
As provided under the terms of the Letter of Credit, please issue a replacement
Irrevocable Standby Letter of Credit in the name of the Transferee, addressed to
the Transferee at the address set forth above, in an amount equal to the
outstanding amount of the Letter of Credit on the date of this notice, and
otherwise on the same terms as the original Letter of Credit but with a revised
Exhibit A to the Letter of Credit showing the name of the Transferee instead of
the name of Beneficiary.
Accompanying this Notice of Transfer is the original Letter of Credit, which is
being surrendered to you in trust for the benefit of said Transferee, until such
time as you shall have issued a replacement Irrevocable Standby Letter of Credit
in accordance with the terms of the Letter of Credit and this Notice.
Sincerely,
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
By:
----------------------------------------------
Name:
Title:
EXHIBIT U
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
================================================================================
[FORM OF]
SUBORDINATION AGREEMENT
DATED AS OF [ ], [ ]
AMONG
[NAME OF SUBORDINATED CREDITOR],
BANK OF AMERICA, N.A.,
AS OPNY ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A.,
AS OPMW ADMINISTRATIVE AGENT,
AND
ORION POWER NEW YORK, L.P.
================================================================================
TABLE OF CONTENTS
<Table>
<Caption>
Page
ARTICLE I DEFINITIONS.........................................................2
SECTION 1.1. Definitions..................................................2
ARTICLE II SUBORDINATION......................................................3
SECTION 2.1. Subordination................................................3
SECTION 2.2. Priority and Payment Over Upon Insolvency and Dissolution....3
SECTION 2.3. Priority and Payment Over Upon Acceleration of the
Subordinated Debt............................................4
SECTION 2.6. Payments on Subordinated Debt................................5
SECTION 2.4. Payment on Subordinated Debt Suspended When Senior Debt
is in Default................................................6
SECTION 2.5. Obligation to Pay Subordinated Debt Not Impaired;
Provisions Solely to Define Relative Rights..................6
ARTICLE III IN FURTHERANCE OF SUBORDINATION...................................6
SECTION 3.1. Restriction on Assignment of Subordinated Debt...............6
SECTION 3.2. Reliance on Subordination....................................6
SECTION 3.3. Actions Against the Company..................................6
SECTION 3.4. Subrogation..................................................7
SECTION 3.5. Proofs of Claim..............................................7
SECTION 3.6. Certain Proceedings..........................................8
ARTICLE IV MISCELLANEOUS......................................................8
SECTION 4.1. Changes......................................................8
SECTION 4.2. Continued Effectiveness......................................9
SECTION 4.3. Notices......................................................9
SECTION 4.4. No Waivers...................................................9
SECTION 4.5. Amendments and Waivers.......................................9
SECTION 4.6. Successors and Assigns.......................................9
SECTION 4.7. Governing Law...............................................10
SECTION 4.8. Counterparts; Effectiveness.................................10
</Table>
i
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT dated as of [ ], [ ], among [NAME OF
SUBORDINATED CREDITOR] (the "Junior Creditor"), BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the "OPNY Administrative Agent") for the
OPNY Lenders (as defined herein), BANK OF AMERICA, N.A., as Administrative Agent
(in such capacity, the "OPMW Administrative Agent", and together with the OPNY
Administrative Agent, the "Administrative Agents") for the OPMW Lenders (as
defined below), and ORION POWER NEW YORK, L.P., a Delaware limited partnership
(the "Company").
The Company is party to an Amended and Restated Credit Agreement (as
amended, renewed, extended, restated, supplemented or otherwise modified and in
effect from time to time, and includes any agreement extending the maturity of,
refinancing or otherwise restructuring all or any portion of the obligations
under such agreement or any successor agreement, the "OPNY Credit Agreement"),
dated as of October 28, 2002, among the Company, as Borrower, Banc of America
Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the
financial institutions from time to time party thereto (the "OPNY Lenders"),
Bank of America, N.A., as Issuing Bank, the OPNY Administrative Agent, BNP
Paribas, as Syndication Agent, and Union Bank of California, N.A., CoBank, ACB
and Deutsche Bank AG New York and/or Cayman Island Branch, as Documentation
Agents. The OPNY Lenders have severally agreed to extend credit to the Company
pursuant to, and subject to the terms and conditions specified in, the OPNY
Credit Agreement. The Junior Creditor desires to make certain loans to the
Company. Under the terms of the OPNY Credit Agreement, the Junior Creditor is
permitted to make loans to the Company only if the parties execute and deliver a
Subordination Agreement in the form hereof.
Orion Power MidWest, L.P., a Delaware limited partnership ("OPMW") is
party to a Second Amended and Restated Credit Agreement (as amended, renewed,
extended, restated, supplemented or otherwise modified and in effect from time
to time, and includes any agreement extending the maturity of, refinancing or
otherwise restructuring all or any portion of the obligations under such
agreement or any successor agreement, the "OPMW Credit Agreement", and together
with the OPNY Credit Agreement, the "Credit Agreements"), dated as of October
28, 2002, among OPMW, as borrower, Banc of America Securities LLC and BNP
Paribas, as lead arrangers and joint book runners, the financial institutions
from time to time party thereto (the "OPMW Lenders", and together with the OPNY
Lenders, the "Lenders"), Bank of America, N.A., as issuing bank, the OPMW
Administrative Agent, BNP Paribas, as syndication agent, and The Bank of Nova
Scotia, Mizuho Corporate Bank, Ltd and Bayerische Hypo-Und Vereinsbank AG, as
documentation agents. The OPMW Lenders have severally agreed to extend credit to
OPMW pursuant to, and subject to the terms and conditions specified in, the OPMW
Credit Agreement.
Accordingly, the Junior Creditor and the Company, intending to be
legally bound, hereby agree with the Administrative Agents, for the benefit of
the Secured Parties (for purposes hereof, the "OPNY Secured Parties") and the
Secured Parties (as defined in the OPMW Credit
Agreement, the "OPMW Secured Parties," and together with the OPNY Secured
Parties, the "Secured Parties"), as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in the OPNY Credit
Agreement and the principles of construction set forth in Section 1.01 of the
OPNY Credit Agreement shall apply hereto; provided, however, that all
capitalized terms used in clause (ii) of the definition of "Senior Debt" and not
otherwise defined herein shall have the meanings assigned to them in the OPMW
Credit Agreement. The following additional terms, as used herein, have the
following meanings:
"Senior Debt" shall mean:
(i)(a) all principal of and interest now or hereafter payable
by the Company to the Lenders on or in respect of the Notes (including
any interest accruing on the Notes after the filing of a petition
initiating any proceeding referred to in Section 7.07 of the Credit
Agreement whether or not such is an allowed claim enforceable against
the Company in a bankruptcy case under Title 11 of the United States
Code) when and as due, whether at maturity, by acceleration, upon one
or more dates set for prepayment or otherwise, (b) all Fees and all
other fees, expenses, indemnities and expense reimbursement obligations
of the Company under the Credit Agreement, the Notes or any other
Financing Document, (c) all other Obligations, monetary or otherwise
(including obligations in respect of the Letters of Credit), or
liabilities now or hereafter payable by the Company pursuant to the
Credit Agreement, the Notes or any other Financing Document (including
all of the Company's obligations under Interest Hedge Contracts) and
(d) all other indebtedness, obligations and liabilities of the Company
to the Administrative Agent or the Secured Parties under the Financing
Documents, now existing or hereafter arising, whether or not evidenced
by notes or other instruments, and whether such indebtedness,
obligations and liabilities are direct or indirect, fixed or
contingent, liquidated or unliquidated, due or to become due, secured
or unsecured, joint, several or joint and several, similar or
dissimilar to the indebtedness arising out of or in connection with the
Credit Agreement or of the same or a different class of indebtedness as
the indebtedness arising out of the Credit Agreement, including loans
or advances to the Company after the commencement by or against the
Company of a bankruptcy case under Title 11 of the United States Code,
any overdrafts in any deposit accounts maintained by the Company
including any deposit account maintained pursuant to the Deposit
Account Agreement, any indebtedness of the Company that is purchased by
or assigned to the Administrative Agent or the Lenders and any
indebtedness of the Company to any assignee of all or a portion of the
Notes or any other obligation referred to above, together with all
renewals, amendments, restatements, modifications, extensions,
increases or rearrangements thereof; and
(ii)(a) all principal of and interest now or hereafter payable
by OPMW to the OPMW Lenders on or in respect of the Notes (including
any interest accruing on the
2
Notes after the filing of a petition initiating any proceeding
referred to in Section 7.07 of the OPMW Credit Agreement whether or not
such is an allowed claim enforceable against OPMW in a bankruptcy case
under Title 11 of the United States Code) when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (b) all Fees and all other fees, expenses, indemnities and
expense reimbursement obligations of OPMW under the OPMW Credit
Agreement, the Notes or any other Financing Document, (c) all other
Obligations, monetary or otherwise (including obligations in respect of
the Letters of Credit), or liabilities now or hereafter payable by OPMW
pursuant to the OPMW Credit Agreement, the Notes or any other Financing
Document (including all of OPMW's obligations under Interest Hedge
Contracts) and (d) all other indebtedness, obligations and liabilities
of OPMW to the Administrative Agent or the Secured Parties under the
Financing Documents, now existing or hereafter arising, whether or not
evidenced by notes or other instruments, and whether such indebtedness,
obligations and liabilities are direct or indirect, fixed or
contingent, liquidated or unliquidated, due or to become due, secured
or unsecured, joint, several or joint and several, similar or
dissimilar to the indebtedness arising out of or in connection with the
OPMW Credit Agreement or of the same or a different class of
indebtedness as the indebtedness arising out of the OPMW Credit
Agreement, including loans or advances to OPMW after the commencement
by or against OPMW of a bankruptcy case under Title 11 of the United
States Code, any overdrafts in any deposit accounts maintained by OPMW
including, without limitation, any deposit account maintained pursuant
to the Deposit Account Agreement, any indebtedness of OPMW that is
purchased by or assigned to the Administrative Agent or the OPMW
Lenders and any indebtedness of OPMW to any assignee of all or a
portion of the Notes or any other obligation referred to above,
together with all renewals, amendments, restatements, modifications,
extensions, increases or rearrangements thereof.
"Subordinated Debt" means all indebtedness of the Company to the Junior
Creditor pursuant to [insert description of Subordinated Loans].
ARTICLE II
SUBORDINATION
SECTION 2.1. Subordination. Notwithstanding any provision to the
contrary in any instrument governing the Subordinated Debt, the Company, the
Junior Creditor and each holder from time to time of the Subordinated Debt by
its acceptance thereof each agrees that all payments of the Subordinated Debt
shall be subordinate and subject in right of payment to the prior indefeasible
payment in full in cash of all Senior Debt and to any security held or to be
held by the Administrative Agents or the Collateral Agent for the benefit of the
Secured Parties under each of the Credit Agreements for the payment of the
Senior Debt.
SECTION 2.2. Priority and Payment Over Upon Insolvency and Dissolution.
In the event of (a) any insolvency or bankruptcy case or proceeding or any
receivership, liquidation, reorganization or similar case or proceeding in
connection therewith relative to the Company or its creditors as such or to its
assets, or (b) any liquidation, dissolution or other winding up of the
3
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
other marshalling of assets and liabilities of the Company, then and in any such
event the holders of the Senior Debt shall be entitled to receive payment in
full in cash of all amounts due or to become due on or in respect of all Senior
Debt before the holders of the Subordinated Debt shall be entitled to receive
and retain any payment on account of the principal, interest or other amounts
due or to become due on the Subordinated Debt, and to that end the holders of
the Senior Debt shall be entitled to receive, for application to the payment of
the Senior Debt, any payment or distribution of any kind or character, whether
in cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of the Company which is subordinated to the payment of the
Subordinated Debt, which may be payable or deliverable in respect of the
Subordinated Debt in any such case, proceeding, dissolution, liquidation or
other winding up or event. Accordingly, any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
which would otherwise have been made to the holders of the Subordinated Debt but
for the provisions of this Section 2.2 shall instead be made by the Company or
by the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets of the
Company directly to the holders of the Senior Debt for application to the
payment of all Senior Debt remaining unpaid to the extent necessary to pay all
Senior Debt in full in cash after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of the Senior Debt.
If, notwithstanding the foregoing provisions of this Section 2.2, any
holder of the Subordinated Debt shall have received any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company
which is subordinated to the payment of the Subordinated Debt, before all
amounts due or to become due on or in respect of all Senior Debt have been
indefeasibly paid in full in cash, then and in such event such payment or
distribution shall be received in trust for the holders of the Senior Debt and
shall be forthwith paid over or delivered by the holder of the Subordinated Debt
receiving the same directly to the holders of the Senior Debt or, to the extent
legally required, to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making such payment or distribution
of assets of the Company, for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all Senior Debt in full in cash
after giving effect to any concurrent payment or distribution to or for the
holders of the Senior Debt.
For purposes of this Agreement only, the words "cash, property or
securities" shall not be deemed to include shares of stock of, membership
interests, or partnership interests in, the Company as reorganized or readjusted
or unsecured debt securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment which are subordinated in right
of payment to all Senior Debt which may at the time be outstanding to the same
or a greater extent than the Subordinated Debt is subordinated as provided for
in this Agreement.
SECTION 2.3. Priority and Payment Over Upon Acceleration of the
Subordinated Debt. If any Subordinated Debt is declared due and payable before
the date specified therein as the
4
fixed date on which the principal thereof is due and payable, then and in such
event the holders of the Senior Debt shall be entitled to receive indefeasible
payment in full in cash of all amounts due or to become due on or in respect of
the Senior Debt before the holders of the Subordinated Debt shall be entitled to
receive and retain any payment (including any such payment which may be payable
by reason of the payment of any other indebtedness of the Company which is
subordinated to the payment of the Subordinated Debt) by the Company on account
of the principal of, interest on or any other amount due or to become due on the
Subordinated Debt or on account of the purchase or other acquisition of the
Subordinated Debt. Accordingly, any payment by the Company of any amount which
the holders of the Subordinated Debt would have been entitled to receive and
retain but for the provisions of this Section 2.3 shall instead be made by the
Company directly to the holders of the Senior Debt for application to the
payment of all Senior Debt remaining unpaid to the extent necessary to pay all
Senior Debt in full in cash after giving effect to any concurrent payment or
distribution to or for the holders of the Senior Debt.
If, notwithstanding the foregoing provisions of this Section 2.3, any
holder of the Subordinated Debt shall have received any payment, including any
payment which may be payable by reason of the payment of any other indebtedness
of the Company which is subordinated to the payment of the Subordinated Debt,
before all amounts due or to become due on or in respect of the Senior Debt have
been paid in full in cash, then and in such event such payment shall be received
in trust for the holders of the Senior Debt and shall be forthwith paid over by
the holder of the Subordinated Debt receiving such payment to the holders of the
Senior Debt for application to the payment of all Senior Debt remaining unpaid
to the extent necessary to pay all Senior Debt in full in cash after giving
effect to any concurrent payment or distribution to or for the holders of the
Senior Debt.
The provisions of this Section 2.3 above shall not apply to any payment
or distribution with respect to which Section 2.2 would be applicable.
SECTION 2.4. Payments on Subordinated Debt. The Junior Creditor and the
Company hereby agree and acknowledge that until the indefeasible payment in full
in cash of the Senior Debt, no payment (including any payment which may be
payable by reason of the payment of any other indebtedness of the Company which
is subordinated to the payment of the Subordinated Debt) shall be made by the
Company on account of the principal of or interest on the Subordinated Debt or
on account of the purchase or other acquisition by it of the Subordinated Debt.
If, notwithstanding the foregoing provisions of this Section 2.4, the
Company shall make any payment or distribution on or with respect to any
Subordinated Debt prohibited by the foregoing provisions of this Section 2.4,
then and in every such event such payment or distribution shall be forthwith
paid over or delivered by the holders of the Subordinated Debt to the
Administrative Agents for the benefit of the Lenders.
The provisions of this Section 2.4 shall not apply to any payment with
respect of which Section 2.2 or 2.3 would be applicable.
5
SECTION 2.5. Obligation to Pay Subordinated Debt Not Impaired;
Provisions to Define Relative Rights. Except as provided in this Article II, the
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the holders of the Subordinated Debt on the one
hand and the holders of the Senior Debt on the other hand. It is and shall be
the intent of the parties that this Subordination Agreement shall constitute a
present assignment by the holders of the Subordinated Debt of their rights to
receive payments or distributions of cash, property and securities of the
Company otherwise payable to the holders of the Subordinated Debt in the
circumstances described in Sections 2.2 and 2.3 hereof. Nothing contained in
this Subordination Agreement, except as set forth in this Article II, shall (a)
impair or affect, as among the Company, its creditors (other than the holders of
the Senior Debt) and the holders of the Subordinated Debt, the obligation of the
Company to pay the holders of the Subordinated Debt the principal of and
interest on the Subordinated Debt as of when the same shall become due and
payable in accordance with their terms, or (b) affect the relative rights
against the Company of the holders of the Subordinated Debt and the creditors of
the Company (other than the holders of the Senior Debt).
ARTICLE III
IN FURTHERANCE OF SUBORDINATION
SECTION 3.1. Restriction on Assignment of Subordinated Debt. The Junior
Creditor and each holder of the Subordinated Debt by its acceptance thereof
agrees not to sell, assign or transfer all or any part of the Subordinated Debt
while any Senior Debt remains unpaid unless such sale, assignment or transfer is
made expressly subject to this Subordination Agreement. The Junior Creditor
represents that no other subordination of the Subordinated Debt is in existence
on the date hereof, and the Junior Creditor agrees that the Subordinated Debt
will not be subordinated to any indebtedness owed to any Person other than the
Lenders.
SECTION 3.2. Reliance on Subordination. The Junior Creditor and each
holder of the Subordinated Debt by its acceptance thereof consents and agrees
that all Senior Debt shall be deemed to have been made or incurred in reliance
upon the subordination of the Subordinated Debt pursuant to this Subordination
Agreement.
SECTION 3.3. Actions Against the Company. No holder of the Subordinated
Debt will (a) commence any action or proceeding against the Company to recover
all or any part of such Subordinated Debt or (b) join with any creditor in
bringing any proceeding against the Company under Title 11 of the United States
Code or any other state or federal insolvency statute and until, in each case,
the Senior Debt shall have been indefeasibly paid in full in cash (provided that
holders of the Subordinated Debt may so file concurrently with or after the
holders of the Senior Debt). The Junior Creditor and each other holder of the
Subordinated Debt will not ask, demand, sue for, take or receive from the
Company, directly or indirectly, in cash, property or securities or other
property or by set-off or in any other manner (including, from or by way of
collateral), payment of all or any part of the Subordinated Debt unless and
until all Senior Debt shall have been indefeasibly paid in full in cash or the
benefits of this sentence waived by or on behalf of the holder or holders of the
Senior Debt.
6
SECTION 3.4. Subrogation. Subject to the indefeasible payment in full
in cash of all Senior Debt, the holders of the Subordinated Debt shall be
subrogated to the extent of the payments or distributions made to the holders of
the Senior Debt pursuant to the provisions of this Agreement (equally and
ratably with the holders of all indebtedness of the Company which by its express
terms is subordinated to indebtedness of the Company substantially to the extent
that the Subordinated Debt is subordinated hereunder and is entitled to like
rights of subrogation) to the rights of the holders of such Senior Debt to
receive payments and distributions of cash, property and securities applicable
to the Senior Debt until the principal of and interest on the Subordinated Debt
and all other obligations, monetary or otherwise, or liabilities now or
hereafter arising related to the Subordinated Debt shall be paid in full in
cash. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Debt of any cash, property or securities to which the
holders of the Subordinated Debt would be entitled but for the provisions of
this Agreement, and no payments over, pursuant to the provisions of Section 2.2
or 2.3, to the holders of the Senior Debt by the holders of the Subordinated
Debt shall, as among the Company, its creditors (other than the holders of
Senior Debt) and the holders of the Subordinated Debt, be deemed to be a payment
or distribution by the Company to or on account of the Senior Debt.
SECTION 3.5. Proofs of Claim. The Junior Creditor may file such proofs
of claim and other papers or documents or may be necessary or advisable in order
to have the claims of the Junior Creditor allowed in any judicial proceedings
relative to the Company (or any other obligor on the Subordinated Debt,
including any guarantor), its creditors or its property. If the Junior Creditor
files any claim, proof of claim or similar instrument in any judicial proceeding
referred to above and all Senior Debt has not been indefeasibly paid in full in
cash, the Junior Creditor shall (a) file such claim, proof of claim or similar
instrument on behalf of the Lenders and the other holder or holders of the
Senior Debt as it or such other holder's or holders' interests may appear and
(b) take all such other actions as may be appropriate to insure that all
payments and distributions made in respect of any such proceedings are made to
the Lenders and any other holder or holders of the Senior Debt as it or their
interests may appear.
Any term or provision of this Section 3.5 to the contrary notwithstanding, if
any judicial proceeding referred to above is commenced by or against the
Company, and so long as all Senior Debt has not been paid in full in cash: (a)
the Administrative Agents are hereby irrevocably authorized and empowered (in
their own names or in the name of the Junior Creditor or otherwise), but shall
have no obligation, to demand, sue for, collect and receive every payment or
distribution received in respect of any such proceeding and give acquittance
therefor and to file claims and proofs of claims and (b) the Junior Creditor
shall duly and promptly take, for the account of the Lenders and any other
holders of the Senior Debt, such reasonable action as the Lenders may request
(i) to collect all amounts payable by the Company in respect of the Subordinated
Debt and to file the appropriate claims or proofs of claim in respect of the
Subordinated Debt, (ii) to execute and deliver to the Administrative Agents on
behalf of the Lenders such assignments or other instruments as the Lenders may
request in order to enable the Lenders to enforce any and all claims with
respect to all amounts payable in respect of the Subordinated Debt and (iii) to
collect and receive any and all payments with respect to all amounts payable in
respect of the Subordinated Debt. Until the Senior Debt has been paid in full in
cash, no holder of the Subordinated Debt will (in any proceeding of the type
described in
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Section 2.2) discharge all or any portion of the obligations of the Company in
respect of the Subordinated Debt, whether by forgiveness, receipt of capital
stock, exercise of conversion privileges or otherwise, without the prior consent
of the holders of the Senior Debt.
SECTION 3.6. Certain Proceedings. Each holder of the Subordinated Debt
agrees that, as between themselves and the holders of the Senior Debt, the
latter shall be deemed to be the "holders" of all claims in respect of the
Subordinated Debt in any proceeding of the type contemplated by clause (a), (b)
or (c) of Section 2.2 (each, a "bankruptcy proceeding"). To the extent not
deemed to be "not in good faith" within the meaning of 11 U.S.C. Section
1126(e), each holder of the Subordinated Debt agrees to vote to accept a plan of
reorganization or dissolution in respect of the Company which the holders of the
Senior Debt have accepted or have notified the holders of the Subordinated Debt
of their intent to accept. If such acceptance by the holders of the Subordinated
Debt is or might (in the sole judgment of the holders of the Senior Debt) cause
the claims of the holders of the Subordinated Debt to be designated under 11
U.S.C. Section 1126(e), then, each holder of the Subordinated Debt agrees not to
vote against a plan of reorganization or dissolution which the holders of the
Senior Debt have accepted or have notified the holders of the Subordinated Debt
of their intent to accept. Any such vote for any plan or abstention from voting
against any plan pursuant to the immediately two preceding sentences shall be
enforceable by the holders of the Senior Debt against the holders of the
Subordinated Debt regardless of whether such plan allows a class subordinated to
the claims of the Subordinated Debt to retain an interest in the Company or
whether the holders of the Subordinated Debt will receive or retain under such
plan on account of their claims in respect of the Subordinated Debt property
having value less than the amount that such holders would receive or retain if
the Bankruptcy Proceeding were under Chapter 7 of the federal Bankruptcy Code.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Changes. The Administrative Agents, on behalf of the
Lenders, may at any time, and from time to time, without the consent of or
notice to the Junior Creditor or to any other holder of the Subordinated Debt,
without incurring responsibility to the Junior Creditor or such holder, and
without impairing or releasing any of the Lenders' rights, or any of the
obligations of the Junior Creditor or other holders of the Subordinated Debt
hereunder:
(a) change the time, amount, manner, place or terms of
payment, or change or extend the time of payment of, or renew or
otherwise alter, the Credit Agreements or any other Financing Document
(as defined in each of the Credit Agreements) or any instrument or
agreement evidencing any Senior Debt or securing payment thereof or
relating to the Senior Debt in any manner;
(b) sell, exchange, release or otherwise deal with any
collateral for all or any of the Senior Debt (whether or not in a
commercially reasonable manner);
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(c) release anyone liable in any manner for the payment or
collection of any Senior Debt;
(d) exercise or refrain from exercising any rights against the
Company or others (including the Junior Creditor);
(e) apply any sums received by the Administrative Agents or
any Lenders, by whomsoever paid and however realized, to the payment of
the Senior Debt in such manner as the Administrative Agents, in their
sole discretion, shall deem appropriate; and
(f) take any other action which might otherwise constitute a
defense available to, or a discharge of, the Junior Creditor in respect
of the Subordinated Debt in respect of these provisions.
SECTION 4.2. Continued Effectiveness. The terms of this Subordination
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Senior Debt is rescinded or must
otherwise be returned by the Lenders or other holder of the Senior Debt upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had been due but not made at such time.
SECTION 4.3. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing and delivered by
U.S. mail, hand delivery, telecopier or overnight delivery service and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when (i) received, if delivered by hand, telecopier, or overnight delivery
service, (ii) three Business Days after deposit in the mail, first class postage
prepaid, if by U.S. Mail or (iii) in all cases, immediately, whenever delivery
is refused irrespective of the manner, method or means of refusal, addressed as
set forth on the signature pages hereto or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes or the Notes (as defined in the OPMW Credit Agreement).
SECTION 4.4. No Waivers. No failure or delay by the Administrative
Agents or the Lenders in exercising any right, power or privilege hereunder or
under the Credit Agreements or any other instrument evidencing or securing any
Obligation or OPMW Obligation shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 4.5. Amendments and Waivers. Any provision of this
Subordination Agreement may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Administrative Agents, the Junior
Creditor and the Company.
SECTION 4.6. Successors and Assigns. Subject to Section 3.1, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
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SECTION 4.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK OTHER THAN ANY
SUCH REQUIREMENT OF LAWS THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION ARE MANDATORILY
APPLICABLE. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PARTIES HERETO IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
SECTION 4.8. Counterparts; Effectiveness. This Subordination Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Subordination Agreement shall become effective when the
Administrative Agents shall have received counterparts hereof signed by all of
the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Subordination
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
ORION POWER NEW YORK, L.P.
By: Orion Power New York GP, Inc.,
its general partner
By __________________________________________
Name:
Title:
Address:
1111 Louisiana Street
Houston, TX 77002
Attention:
Telecopy No.
ORION POWER MIDWEST, L.P.
By: Orion Power MidWest, GP, Inc.,
its general partner
By __________________________________________
Name:
Title:
Address:
1111 Louisiana Street
Houston, TX 77002
Attention:
Telecopy No.
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ADMINISTRATIVE AGENT
BANK OF AMERICA, N.A.,
as Administrative Agent
By __________________________________________
Name:
Title:
Bank of America Corporate Center
101 North Tryon Street
NC1-001-08-19
Charlotte, North Carolina 28255
Attention: Laura S. Ryan
Telecopy No.(704) 386-3324
[NAME OF SUBORDINATED CREDITOR]
By __________________________________________
Name:
Title:
[Address]
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