EXHIBIT 4.40
STOCK PLEDGE AGREEMENT
(Pledge of Capital Stock of BNG)
by
VULCAN POWER COMPANY
(as Pledgor)
in favor of
CHEMICAL TRUST COMPANY OF CALIFORNIA
(as Collateral Agent)
Dated as of June 20, 1996
TABLE OF CONTENTS
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Page
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1. Definitions....................................................................... 2
2. Grant of Security Interest........................................................ 2
3. Representations and Warranties.................................................... 3
4. Covenants and Agreements.......................................................... 4
5. Pledgor's Obligations Upon Event of Default....................................... 6
6. Remedies; Rights Upon Event of Default............................................ 6
7. Application of Proceeds........................................................... 8
8. Security Interest Absolute........................................................ 8
9. Collateral Agent Appointed Attorney-in-Fact....................................... 9
10. Collateral Agent May Perform......................................................10
11. No Duty on Collateral Agent's Part, Limitation on Collateral Agent's Obligations..10
12. Reasonable Care...................................................................10
13. Role of Collateral Agent..........................................................11
14. Waiver of Trial by Jury...........................................................11
15. Notices...........................................................................11
16. Absence of Fiduciary Relation.....................................................11
17. Survival of Representations and Warranties........................................11
18. No Waiver; Cumulative Remedies....................................................12
19. Severability......................................................................12
20. Exculpatory Provisions; Reliance by Collateral Agent..............................12
21. Amendment.........................................................................13
22. Successors and Assigns............................................................13
23. Number and Gender.................................................................13
24. Subrogation, etc..................................................................13
25. Captions..........................................................................13
26. Applicable Law....................................................................13
27. Continuing Security Interest; Termination.........................................13
28. Payments Set Aside................................................................14
29. Counterparts......................................................................14
30. Non-Recourse......................................................................14
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STOCK PLEDGE AGREEMENT
----------------------
(Pledge of Capital Stock of BNG)
This STOCK PLEDGE AGREEMENT (this "Pledge Agreement"), dated
as of June 20, 1996, is entered into by VULCAN POWER COMPANY, a Nevada
corporation ("Pledgor"), in favor of CHEMICAL TRUST COMPANY OF CALIFORNIA, a
California corporation, as collateral agent (together with its successors and
assigns, the "Collateral Agent"), on behalf of and for the benefit of the
Secured Parties and Salton Sea Funding Corporation, a Delaware Corporation
("Funding Corporation").
W I T N E S S E T H:
WHEREAS, Pledgor owns all of the issued and outstanding
capital stock of BN Geothermal, Inc., a Delaware corporation ("BNG"); and
WHEREAS, Funding Corporation is a corporation established
for the sole purpose of making loans to the Guarantors (as hereinafter
defined) from the proceeds of the issuance of notes and bonds (collectively,
the "Securities") in its individual capacity as principal and as agent acting
on behalf of Salton Sea Brine Processing L.P., a California limited
partnership ("SSBP"), Salton Sea Power Generation L.P., a California limited
partnership ("SSPG"), Fish Lake Power Company, a Delaware corporation ("Fish
Lake," and together with SSBP and SSPG, the "Salton Sea Guarantors"), Pledgor,
BNG, Del Ranch, L.P., a California limited partnership ("Del Ranch"), Elmore,
L.P., a California limited partnership ("Elmore"), Leathers, L.P., a
California limited partnership ("Leathers"), Vulcan/BN Geothermal Power
Company, a Nevada general partnership ("Vulcan"), Conejo Energy Company, a
California corporation ("Conejo"), Niguel Energy Company, a California
corporation ("Niguel"), and San Felipe Energy Company, a California
corporation ("San Felipe"), and CalEnergy Operating Company, a Delaware
corporation ("CEOC," and together with Pledgor, BNG, Del Ranch, Elmore,
Leathers, Vulcan, Conejo, Niguel and San Felipe, the "Partnership
Guarantors"), and Salton Sea Royalty Company, a Delaware corporation ("Royalty
Guarantor", and together with the Salton Sea Guarantors and the Partnership
Guarantors, the "Guarantors"), pursuant to the Trust Indenture, dated as of
July 21, 1995, as the same may be amended, modified, or supplemented,
including pursuant to that certain Second Supplemental Trust Indenture, dated
as of even date herewith (as so amended, modified and supplemented, the
"Indenture"), between Funding Corporation and Collateral Agent, as trustee
("Trustee"); and
WHEREAS, the principal and interest payments on the
Securities will be serviced by repayment of loans made by Funding Corporation
to the Guarantors and guaranteed by the Guarantors, subject to the conditions
set forth in the Indenture; and
WHEREAS, Funding Corporation has (a) on July 21, 1995 issued
and sold Securities in the principal amount of $475 Million (the "Initial
Issuance") and (b) simultaneously with the execution and delivery of this
Agreement issued and sold Securities in the principal amount of $135 Million
(the "Additional Issuance"); and
WHEREAS, Funding Corporation has used a portion of the
proceeds from the Initial Issuance and intends to use the proceeds from the
Additional Issuance to make loans to the Partnership
Guarantors in the aggregate outstanding amount of $189,956,000, as of the
date hereof, portions of which will be used for the following purposes:
(a) approximately $96 Million to refinance all existing project-level
indebtedness
of the Partnership Projects, (b) approximately $15 Million to fund certain
capital
improvements to the Partnership Projects and the Salton Sea Projects, and (c)
approximately $23 Million to fund a portion of the purchase price for the
acquisition
by certain of the Partnership Guarantors of the 50% interest in each of the
Partnership Projects previously owned by a third party; and
WHEREAS, Pledgor anticipates benefiting directly and
indirectly from the making of the loan pursuant to the Partnership Credit
Agreement and is, therefore, willing to enter into this Pledge Agreement in
accordance with the terms hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and in order to induce the
Funding Corporation to enter into the Partnership Credit Agreement, the
parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, all
capitalized terms shall have the meanings set forth in Exhibit A to the
Indenture, which Exhibit A is hereby incorporated by reference. All references
to sections, schedules and exhibits in or to this Pledge Agreement are to
sections, schedules and exhibits in or to this Pledge Agreement, unless
otherwise specified. The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Pledge Agreement shall refer to this Pledge
Agreement as a whole and not to any particular provision of this Pledge
Agreement. For purposes of this Pledge Agreement, all other terms used herein
and not otherwise defined herein which are defined in Article 9 of the Uniform
Commercial Code (as the same may be in effect in the State of California or
any other applicable jurisdiction, the "Code"), shall have their respective
meanings as therein defined.
2. Grant of Security Interest.
.1. Collateral. As security for the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of any and all of the Obligations (as defined below)
now existing or hereafter arising, and howsoever evidenced, Pledgor hereby
collaterally assigns, conveys, mortgages, pledges, hypothecates and transfers
to Collateral Agent, and grants and creates a lien on and first priority
security interest (the "Security Interest") in favor of Collateral Agent, for
the equal and ratable benefit of the Secured Parties and the Funding
Corporation, in all right, title and interest of Pledgor in and to all of the
issued and outstanding capital stock of BNG, whether now existing or hereafter
acquired (collectively, the "Stock"), including, without limitation, the Stock
described in Schedule 2.1 hereto, and all proceeds thereof, including, without
limitation, dividends and other property received and receivable by Pledgor in
connection with the Stock, other than dividends and other distributions made by
BNG in compliance with the other Financing Documents (the Stock and such
proceeds to be referred to herein collectively as the "Collateral").
.2. Obligations. This Pledge Agreement secures,
in accordance with the provisions hereof, the following obligations, now
existing or hereafter arising (collectively, the "Obligations"):
.1 payment and performance of the Partnership Guarantors'
obligations under the Partnership Credit Agreement and the
Partnership Guarantee, and each and every obligation, indebtedness,
covenant and agreement of Pledgor under any of the Financing
Documents to which it is a party, including, without limitation, this
Pledge Agreement, the Intercreditor Agreement and any amendments or
supplements thereto, extensions or renewals thereof or replacements
therefor; and
.2 performance of every obligation, covenant and agreement
of Pledgor contained in any agreement now or hereafter executed by
Pledgor which recites that the obligations thereunder are secured by
this Pledge Agreement;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, renewed or
restructured, reinstated, created or incurred, and, including, without
limitation, all indebtedness of Pledgor under any instrument now or hereafter
evidencing or securing any of the foregoing.
3. Representations and Warranties. Pledgor hereby
represents and warrants as follows:
.1. Organization and Existence. Pledgor owns
all of the issued and outstanding capital stock of BNG. Pledgor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada. Pledgor is duly qualified to do business and is in
good standing in the State of California and each other jurisdiction in which
the character of the properties owned or leased by it or in which the
transaction of its business as presently conducted or proposed to be conducted
makes such qualification necessary or desirable. Pledgor has full corporate
power and authority to own its property and to carry on its business as now
being conducted and as proposed to be conducted.
.2. Authority, Enforceability. Pledgor has
full corporate power and authority to enter into and perform this
Pledge Agreement and the entering into and performance of such agreement by
Pledgor has been duly authorized by all proper and necessary corporate action.
This Pledge Agreement, when executed and delivered by Pledgor and any other
party hereto, will constitute the legal, valid and binding obligation of
Pledgor, enforceable in accordance with its terms.
.3. Title: No Other Liens. Pledgor is the legal and
beneficial owner of the Collateral in existence on the date hereof and will be
the sole owner of the Collateral hereafter acquired, free and clear of any and
all Liens or claims of others except for Permitted Liens, and Pledgor has full
corporate power and authority to grant the liens and security interests in and
to the Collateral hereunder. Except with respect to the Secured Parties and the
Funding Corporation and as required under this Pledge Agreement, no security
agreement, financing statement or other public notice with respect to all or
any part of the Collateral is on file or of record in any public office, and
no lien or security interest on or in the Collateral has been registered in
the registration book maintained by BNG in which all capital stock of BNG is
recorded, except such as may have been filed in favor of Collateral Agent for
the benefit of the Secured Parties and the Funding Corporation pursuant to
this Pledge Agreement.
.4. Collateral. All of the Collateral constituting
shares of capital stock are and such future collateral will be validly issued,
fully paid and nonassessable securities of BNG. The Collateral includes all of
the
issued and outstanding shares of capital stock of BNG. Except for the
Collateral,
there are no outstanding options, warrants or other rights to subscribe for or
purchase voting or non-voting capital stock of BNG, nor any notes, bonds,
debentures or other evidences of indebtedness that (1) are at any time
convertible into capital stock of BNG, or (2) have or at any time would have
voting rights with respect to BNG.
.5. Perfection; Registration of Lien. Financing
statements or other appropriate instruments have been filed or deposited for
filing
pursuant to the Code in such public offices as may be necessary to perfect any
Security Interest granted or purported to be granted hereby to the extent any
such
Security Interest may be perfected by the filing of a financing statement. All
other action by Pledgor and, to Pledgor's knowledge, by any other Person
necessary or desirable to perfect the Security Interest in each item of the
Collateral has been duly taken. Subject to the requirements contained in the
Code with respect to the filing of continuation statements, this Pledge
Agreement constitutes a valid and continuing Lien on and perfected Security
Interest (subject only to Permitted Liens) in the Collateral in favor of
Collateral Agent for the equal and ratable benefit of the Secured Parties and
the Funding Corporation, superior and prior to the rights of all Persons
(subject only to Permitted Liens), whether the Collateral subject to the
Security Interest is now owned by Pledgor or is hereafter acquired.
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.6. No Default. Pledgor is not in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions applicable to Pledgor contained in any Financing
Document
to which it is a party.
.7. Chief Executive Office and Principal Place of
Business. Pledgor's chief executive office and principal place of business and
the
place where Pledgor's records concerning the Collateral are kept is:
Blackstone Center
302 South 36th Street, Suite 400-E
Omaha, Nebraska 68131
4. Covenants and Agreements. Pledgor hereby covenants and
agrees that Pledgor shall faithfully observe and fulfill, and shall cause to
be observed and fulfilled, each and all of the following covenants until all
Obligations to be paid or performed by Pledgor and the other Partnership
Guarantors under the Financing Documents to which it is a party have been paid
and performed in full:
.1. Further Assurances. Pledgor shall, from time to
time at Pledgor's expense, and upon request by Collateral Agent on behalf of the
Secured Parties and the Funding Corporation, promptly execute and deliver all
further instruments and documents, and take all further action that may be
reasonably necessary or advisable, or that Collateral Agent reasonably
determines may be necessary, in order to perfect and protect the Security
Interest granted or purported to be granted hereby or to enable Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect
to the Collateral.
.2. Stock Certificates. Pledgor shall promptly
deliver
to Collateral Agent all originals of certificates and other documents,
instruments and agreements evidencing the Collateral which are now held or
hereafter received by Pledgor, together with such blank stock powers executed
by Pledgor as Collateral Agent may request.
.3. Stock Issuance. Pledgor shall not, except as
expressly permitted by the Financing Documents, vote to enable, or take any
other
action to permit, BNG to issue any stock.
.4. Certificated Interest. If Pledgor shall become
entitled to receive or shall receive any certificate, instrument, option or
rights, whether as an addition to, in substitution of, or in exchange for the
Collateral or any part thereof, or otherwise, Pledgor shall accept any such
certificate, instrument, option or rights as Collateral Agent's agent, shall
hold them in trust for Collateral Agent, and shall deliver them forthwith to
Collateral Agent in the exact form received, with Pledgor's endorsement when
necessary, or accompanied by duly executed instruments of transfer or
assignment in blank or, if requested by Collateral Agent, an additional pledge
agreement or security agreement executed and delivered by Pledgor, all in form
and substance reasonably satisfactory to Collateral Agent, to be held by
Collateral Agent, subject to the terms hereof, as further Collateral for the
Obligations.
.5. Change in Location, Name, Etc. Pledgor may change
the location of its chief executive office, principal place of business or the
office where such records are kept to another location in the United States
after
giving Collateral Agent thirty (30) days' advance written notice of such change.
Without the prior written consent of Collateral Agent, Pledgor shall not adopt
any trade name or fictitious business name.
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.6. Limitation on Liens on the Collateral. Pledgor
shall
not create, incur or permit to exist, shall defend the Collateral now owned or
hereafter acquired by it against, and shall take such other action as is
necessary
to remove, any Lien or claim on or to Collateral, other than Permitted Liens,
and
shall defend the right, title and interest of Collateral Agent in and to any
of the Collateral against the claims and demands of all Persons whomsoever.
.7. Bankruptcy Filing, etc. Pledgor shall not
authorize
or permit BNG (i) to commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to BNG, or its debts
under
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of BNG, or any substantial part of its properties or (ii) to
consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against
BNG or (iii) to make a general assignment for the benefit of BNG's creditors.
Neither Pledgor nor any of its Affiliates shall commence or join with any
other Person (other than the Secured Parties and Funding Corporation) in
commencing any proceeding against BNG under any bankruptcy, reorganization,
liquidation or insolvency law or statute now or hereafter in effect in any
jurisdiction.
.8. Obligations. Pledgor acknowledges and agrees that
its
rights to receive any payments from BNG, or arising out of or in connection with
Pledgor's interests in BNG, shall be payable by BNG only from funds available
to BNG upon distributions pursuant to the Depositary Agreement or any other
provision of the Indenture expressly providing for distribution, payment or
release of funds to BNG, and only so long as such distribution, payment or
release is made in accordance with the Depositary Agreement and the Indenture.
Pledgor also agrees that any distributions made by BNG to Pledgor that do not
comply with the Depositary Agreement and the Indenture shall be restored to
BNG by Pledgor by deposit into an account designated by Collateral Agent,
promptly upon demand by Collateral Agent or BNG or upon Pledgor becoming aware
of receipt of such non-complying distribution.
.9. Governmental Authority Requirement. Pledgor shall
not
take or omit to take (or suffer such taking or omission of) any action (unless
ordered
to do so by a competent Governmental Authority having jurisdiction) in respect
of Pledgor or BNG and its businesses if, as a consequence directly or indirectly
of such action or omission, BNG or Pledgor becomes subject to regulation by any
Governmental Authority as a "public utility," an "electric utility," an
"electric
utility holding company," a "public utility holding company" or a subsidiary or
affiliate of any of the foregoing under PUHCA, FPA or PURPA, or as a "holding
company"
within the meaning of PUHCA.
.10. Indemnification. Pledgor shall defend, indemnify
and
hold harmless Collateral Agent and each of the other Secured Parties and the
Funding
Corporation and their officers, directors and employees, from and against any
and
all costs, expenses, disbursements, liabilities, obligations, losses, damages,
injunctions, judgments, suits, actions, causes of action, fines, penalties,
claims
and demands, of every kind or nature (including, without limitation, reasonable
attorney's fees and expenses) which are occasioned by or result from any (i)
failure
by Pledgor to perform any of the terms, agreements, or covenants to be performed
by
Pledgor under this Pledge Agreement and (ii) proceeding or action to enforce
brought
by Collateral Agent pursuant to this Pledge Agreement or which arise out of any
such
agreement unless due solely to the gross negligence or willful misconduct of
Collateral Agent. This indemnity and any other obligations of Pledgor under any
of
the Financing
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Documents shall be made only against, and shall be limited to the
extent of, the Collateral pledged hereunder.
5. Pledgor's Obligations Upon Event of Default. If an Event of
Default under the Partnership Credit Agreement or the Partnership Guarantee
shall occur and be continuing (a) all payments received by Pledgor under or in
connection with any of the Collateral shall be held by Pledgor in trust for
Collateral Agent, shall be segregated from other funds of Pledgor and shall,
forthwith upon receipt by Pledgor, be turned over to Collateral Agent or its
designee in the same form as received by Pledgor (duly endorsed by Pledgor to
Collateral Agent, if requested), and (b) any and all such payments so received
by Collateral Agent or its designee (whether from Pledgor or otherwise) may,
in the sole discretion of Collateral Agent or its designee, be held by
Collateral Agent or such designee as collateral security for, and/or then or
at any time thereafter be applied, subject only to the relevant provisions of
the Intercreditor Agreement and Depositary Agreement or as otherwise may be
required by applicable law, in whole or in part by Collateral Agent or its
designee in the manner specified in Section 7.
6. Remedies; Rights Upon Event of Default. Until an Event of
Default shall have occurred and be continuing under the Partnership Credit
Agreement or the Partnership Guarantee and Collateral Agent shall have given
notice to Pledgor of Collateral Agent's intent to exercise its rights pursuant
to Subparagraph 6.5 below, Pledgor shall be permitted (a) to receive all
dividends paid on Stock (other than dividends paid in additional capital stock
unless such additional capital stock is pledged to Collateral Agent for the
benefit of Collateral Agent and the Secured Parties and the Funding
Corporation pursuant to a Pledge Agreement in the form of this Pledge
Agreement) which are permitted by the Financing Documents and (b) to exercise
all voting and corporate rights with respect to the such capital stock. Upon
the occurrence and during the continuance of an Event of Default under the
Partnership Credit Agreement or the Partnership Guarantee, Collateral Agent,
for the equal and ratable benefit of and on behalf of the Secured Parties and
the Funding Corporation, may, subject to the provisions of the Intercreditor
Agreement and the other Financing Documents, do one or more of the following:
.1. declare, without presentment, demand, protest or
notice of any kind, all of which Pledgor hereby expressly waives, the entire
amount of Obligations to be immediately due and payable, whereupon all of such
Obligations declared due and payable shall be and become immediately due and
payable; provided, however, if, with respect to the Partnership Guarantors, an
Event of Default occurs pursuant to Section 5.1 of the Partnership Credit
Agreement, then the acceleration provided for in this Section 6.1 shall be
deemed to have been made upon the occurrence of such Event of Default without
declaration or any other action by Collateral Agent;
.2. upon notice to Pledgor, which notice need not be
in writing, make such payments and do such acts as Collateral Agent may deem
necessary to protect, perfect or continue the perfection of the Secured Parties'
and the Funding Corporation's Security Interest in the Collateral, including,
without limitation, paying, purchasing, contesting or compromising any Lien
which
is, or purports to be, prior to or superior to the Security Interest granted
hereunder, and commencing, appearing or otherwise participating in or
controlling
any action or proceeding purporting to affect the Secured Parties' and the
Funding Corporation's Security Interest in or ownership of the Collateral;
.3. foreclose on the Collateral as herein provided or
in any manner permitted by law and exercise any and all of the rights and
remedies
conferred upon the Secured Parties and the Funding Corporation by the Security
Documents either concurrently or in such order as
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Collateral Agent may determine without affecting the rights or
remedies to which the Secured Parties and the Funding Corporation may be
entitled under any Security Documents. Pledgor hereby waives, to the extent
permitted by applicable law, notice and judicial hearing in connection with
Collateral Agent's taking possession or collection, recovery, receipt,
appropriation, repossession, retention, set-off, sale, leasing, conveyance,
assignment, transfer or other disposition of or realization upon any or all of
the Collateral, including, without limitation, 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 or other
law of the United States of America or of any state;
.4. without notice, except as specified below, sell
the
Collateral, or any part thereof, in one or more parcels at public or private
sale,
at any of Collateral Agent's offices or elsewhere, at such time or times, for
cash, on credit or for future delivery, and at a commercially reasonable price
or
prices and on other commercially reasonable terms. Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days' notice
to Pledgor of the time and the place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
At any sale of the Collateral, if permitted by law, Collateral Agent may bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for the purchase of the Collateral or any portion thereof for
the account of Collateral Agent on behalf of the Secured Parties and the
Funding Corporation. Collateral Agent shall not be obligated to make any sale
of the Collateral regardless of notice of sale having been given. Collateral
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Collateral
Agent shall incur no liability as a result of the manner of sale of the
Collateral, or any part thereof, at any private sale conducted in a
commercially reasonable manner. Pledgor hereby waives, to the extent permitted
by applicable law, any claims against Collateral Agent arising by reason of
the fact that the price at which the Collateral, or any part thereof, may have
been sold at a private sale was less than the price which might have been
obtained at public sale or was less than the aggregate amount of the
Obligations, even if Collateral Agent accepts the first offer received which
Collateral Agent in good faith deems to be commercially reasonable under the
circumstances and does not offer the Collateral to more than one offeree. To
the full extent permitted by law, Pledgor shall have the burden of proving
that any such sale of the Collateral was conducted in a commercially
unreasonable manner. To the extent permitted by law, Pledgor hereby
specifically waives all rights of redemption, stay or appraisal which it has
or may have under any law now existing or hereafter enacted. Pledgor
authorizes Collateral Agent, at any time and from time to time, to execute, in
connection with a sale of the Collateral pursuant to the provisions of this
Pledge Agreement, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral;
.5. upon notice to Pledgor, register the Collateral
in
the name of Collateral Agent or its nominee as pledgee or otherwise take such
action as Collateral Agent shall in its sole discretion deem necessary or
desirable
with respect to the Collateral, and Collateral Agent or its nominee may
thereafter,
in its sole discretion, without notice, exercise all voting, consent, managerial
and other rights relating to the Collateral and exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining to the Collateral as if it were the absolute owner thereof,
including,
without limitation, all rights of Pledgor, including, without limitation, the
right
to (i) receive all permitted distributions, if any, made for the account of
Pledgor
and (ii) exchange any and all of the Collateral upon the merger, consolidation,
reorganization, recapitalization or other readjustment of BNG, all without
liability
except to account for property actually received by Collateral Agent, but
Collateral
Agent shall have no duty to exercise any of the
8
aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing; and
.6. exercise in respect of the Collateral, in
addition to
other rights and remedies provided for herein or otherwise available to it, all
the
rights and remedies of a secured party after default under the Code.
7. Application of Proceeds. The net proceeds of any foreclosure,
collection, recovery, receipt, appropriation, realization or sale of the
Collateral shall be applied in the order of priority specified in the
Intercreditor Agreement. If all Obligations and any other amounts due under
this Pledge Agreement and the Intercreditor Agreement have been indefeasibly
paid, satisfied and discharged in full, any surplus then remaining shall be
paid to Pledgor, if it is lawfully entitled to receive the same or shall be
paid to whomsoever a court of competent jurisdiction may direct.
8. Security Interest Absolute. All the rights of Collateral Agent
and any of the other Secured Parties and the Funding Corporation hereunder and
the Security Interest and all obligations of Pledgor hereunder shall be
absolute and unconditional irrespective of:
.1. any lack of validity or enforceability of the
Project Documents or the Financing Documents or any other agreement or
instrument
relating thereto;
.2. any change in the time, manner or place of
payment
of, or in any other term of, all or any of the Obligations, or any other
amendment
or waiver of or any consent to any departure from the Project Documents or the
Financing Documents;
.3. any exchange or release of any Collateral or any
other collateral, or the non-perfection of any of the Security Interest, or any
release or amendment or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations;
.4. to the full extent permitted by law, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Pledgor or any third party pledgor; or
.5. the failure by Pledgor to fulfill its obligations
under this Pledge Agreement.
9. Collateral Agent Appointed Attorney-in-Fact.
.1. Powers. Pledgor hereby irrevocably constitutes
and
appoints Collateral Agent and any officer or agent thereof, with full power of
substitution, as Pledgor's true and lawful attorney-in-fact (which appointment
as attorney-in-fact shall be coupled with an interest), with full authority in
the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time upon the occurrence and during the continuance of any Event of
Default under the Partnership Credit Agreement or the Partnership Guarantee in
Collateral Agent's discretion, to take any action and to execute any and all
documents and instruments which Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Pledge Agreement, without notice
to Pledgor, including, without limitation:
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.1. to exercise all rights, powers and privileges to
the same extent Pledgor shall have been entitled under applicable law,
including,
without limitation, all voting rights of Pledgor as holder of capital stock of
BNG;
.2. to receive, endorse and collect all instruments
made
payable to Pledgor representing any interest payment or other distribution in
respect
of the Collateral or any part thereof and to give full discharge for the same
and to
file any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by Collateral Agent for the purpose of
collecting any and all of such dividends, payments or other distributions;
.3. to pay or discharge taxes and liens levied or
placed
on the Collateral; and
.4. (a) to direct any party liable for any payment in
respect of or arising out of any of the Collateral to make payment of any and
all
moneys due or to become due in connection therewith directly to Collateral Agent
or as Collateral Agent shall otherwise direct, (b) to ask or make demand for,
collect, receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral, (c) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right in
respect of any Collateral, (d) to defend any suit, action or proceeding
brought against Pledgor with respect to any Collateral, (e) to settle,
compromise or adjust any suit, action or proceeding described in clause (d)
above and, in connection therewith, to give such discharges or releases as
Collateral Agent acting in good faith may deem appropriate and (f) generally,
to sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though Collateral
Agent were the absolute owner thereof for all purposes, and (g) to do, at
Collateral Agent's option and at Pledgor's expense, at any time, or from time
to time, all acts and things which Collateral Agent acting in good faith deems
necessary to protect, preserve or realize upon the Collateral and the Security
Interest granted herein and to effect the intent of this Pledge Agreement, all
as fully and effectively as Pledgor might do.
.2. Other Powers. Pledgor further authorizes
Collateral
Agent, at any time and from time to time (i) to execute, in connection with any
sale provided for hereunder, any endorsements, assignments or other instruments
of
conveyance or transfer with respect to the Collateral and (ii) to the full
extent
permitted by applicable law, 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.
10. Collateral Agent May Perform. Upon the occurrence and during
the continuance of an Event of Default under the Partnership Credit Agreement
or the Partnership Guarantee, Collateral Agent, without releasing Pledgor from
any obligation, covenant or condition hereof, itself may make any payment or
perform, or cause the performance of, any such obligation, covenant, condition
or agreement or any other action in such manner and to such extent as
Collateral Agent may deem necessary to protect, perfect or continue the
perfection of the Secured Parties' and the Funding Corporation's Security
Interest in the Collateral. Any costs or expenses incurred by Collateral Agent
in connection with the foregoing shall be governed by the Indenture and the
Financing Documents, and constitute Obligations secured hereby.
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11. No Duty on Collateral Agent's Part, Limitation on Collateral
Agent's Obligations.
.1. No Duty on Collateral Agent's Part. The powers
conferred on Collateral Agent hereunder are solely to protect Collateral Agent's
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. Collateral Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers.
.2. Limitations on Obligations. Without limiting the
effectiveness of Section 30 hereof, anything herein to the contrary
notwithstanding, Pledgor shall remain liable under any Project Document or
Financing Document to which it is a party to the extent set forth therein to
perform all of its duties and obligations thereunder, to the same extent as if
this Pledge Agreement had not been executed. The exercise by Collateral Agent of
any of the rights or remedies hereunder shall not release Pledgor from any of
its
duties or obligations under any Project Document or Financing Document to which
it is a party. All of the Collateral is hereby assigned to Collateral Agent
solely
as security, and Collateral Agent shall have no duty, liability or obligation
whatsoever with respect to any of the Collateral, unless Collateral Agent so
elects in writing consistent with its rights under this Pledge Agreement.
12. Reasonable Care. Collateral Agent shall exercise the
same degree of care hereunder as it exercises in connection with similar
transactions for its own account. Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which Collateral Agent accords or would accord collateral held by
Collateral Agent in similar transactions for its own account. Without limiting
the generality of the foregoing and except as otherwise provided by applicable
law, Collateral Agent shall not be required to marshall any collateral,
including, without limitation, the Collateral subject to the Security Interest
created hereby and any guaranties of the Obligations, or to resort to any item
of Collateral or guaranties in any particular order; and all of Collateral
Agent's rights hereunder and in respect of such Collateral and guaranties
shall be cumulative and in addition to all other rights, however existing or
arising. To the extent that Pledgor lawfully may, Pledgor hereby (a) agrees
that it will not invoke any law relating to the marshalling of collateral
which might cause delay in or impede the enforcement of Collateral Agent's
rights under this Pledge Agreement or under any other instrument evidencing
any of the Obligations or under which any of the Obligations is outstanding or
by which any of the Obligations is secured or guaranteed and (b) irrevocably
waives the benefits of all Laws and any and all rights to equity of redemption
or other rights of redemption that it may have in equity or at law with
respect to the Collateral.
13. Role of Collateral Agent. The rights, duties, liabilities and
immunities of Collateral Agent and its appointment and replacement hereunder
shall be governed by the Intercreditor Agreement.
14. Waiver of Trial by Jury. WITH REGARD TO THIS PLEDGE AGREEMENT,
EACH OF PLEDGOR AND COLLATERAL AGENT HEREBY WAIVES THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING AND FOR ANY COUNTERCLAIM THEREIN.
15. Notices. All notices, demands, requests and other
communications required or permitted hereunder shall be in writing, and shall
be given and deemed to have been given in
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accordance with Section 6.1 of the Partnership Credit Agreement and
the information set forth immediately below shall apply to Pledgor:
Blackstone Center
302 South 36th Street, Suite 400-E
Omaha, Nebraska 68131
16. Absence of Fiduciary Relation. Collateral Agent undertakes to
perform or to observe only such of its agreements and obligations as are
specifically set forth in this Pledge Agreement, the Intercreditor Agreement
or any other Security Document, and no implied agreements, covenants or
obligations with respect to Pledgor, any Affiliate of Pledgor or any other
party to the Partnership Agreement or any other Project Document or Security
Document to which Pledgor is a party shall be read into this Pledge Agreement
against Collateral Agent or any of the Secured Parties and the Funding
Corporation; neither Collateral Agent nor any of the Secured Parties and the
Funding Corporation in its and their capacity as such is a fiduciary of and
shall not owe or be deemed to owe any fiduciary duty to Pledgor, any Affiliate
of Pledgor or any other party to any Project Document or Financing Document to
which Pledgor is a party, except as otherwise specifically required by law.
17. Survival of Representations and Warranties. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Pledge Agreement and the other Financing Documents and
repayment of the Obligations, and shall be deemed to be material and to have
been relied upon by Collateral Agent and any of the other Secured Parties and
the Funding Corporation, regardless of any investigation made by or on behalf
of any of Collateral Agent and any of the other Secured Parties and the
Funding Corporation. Notwithstanding anything in this Pledge Agreement or
implied by law to the contrary, the agreements and obligations of Pledgor set
forth in Section 4.8 shall survive until the payment or prepayment in full of
the Obligations and the termination of this Pledge Agreement in accordance
with Section 27 hereof.
18. No Waiver; Cumulative Remedies. By exercising or failing to
exercise any of its rights, options or elections hereunder (without also
expressly waiving the same in writing), Collateral Agent, on behalf of the
Secured Parties and the Funding Corporation, shall not be deemed to have
waived any breach or default on the part of Pledgor or to have released
Pledgor from any of its obligations secured hereby. No failure on the part of
Collateral Agent to exercise, and no delay in exercising (without also
expressly waiving the same in writing) any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law. Collateral Agent, acting on behalf of the Secured Parties and the Funding
Corporation, shall have all of the rights and remedies granted under the
Intercreditor Agreement or any Financing Document, and available at law or in
equity, and these same rights and remedies may be pursued separately,
successively or concurrently against Pledgor or any Collateral, at the
discretion of Collateral Agent.
19. Severability. Any provision of this Pledge Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction. Where provisions of any law or
regulation resulting in such prohibition or unenforceability may be waived
they are hereby waived by Pledgor and Collateral Agent to the full
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extent permitted by law so that this Pledge Agreement shall be
deemed a valid, binding agreement, and the Security Interest created hereby
shall constitute a continuing first lien on and first perfected security
interest in the Collateral, in each case enforceable in accordance with its
terms.
20. Exculpatory Provisions; Reliance by Collateral Agent.
.1. Exculpatory Provisions. Neither Collateral Agent,
Funding Corporation nor any other Secured Party, nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates (the
"Exculpated Parties") shall be liable to Pledgor for any action taken or omitted
to be taken by it or them under or in connection with this Pledge Agreement or
any other Project Document or Financing Document to which Pledgor is a party,
except for the Exculpated Parties' own gross negligence or willful misconduct,
or responsible in any manner to any Person for any recitals, statements,
representations or warranties made by Pledgor or any officer thereof contained
in this Pledge Agreement or any other Project Document or Financing Document
to which Pledgor is a party or in any certificate, report, statement or other
document referred to or provided for in, or received by Collateral Agent,
Funding Corporation or any other Secured Party under or in connection with,
this Pledge Agreement or any other Project Document or Financing Document to
which Pledgor is a party or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Pledge Agreement or any
other Project Document or Financing Document to which Pledgor is a party or
for any failure of Pledgor to perform any of the Obligations. Neither
Collateral Agent, Funding Corporation nor any other Secured Party shall be
under any obligation to any Person to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Pledge Agreement or any other Project Document or Financing Document
to which Pledgor is a party, or to inspect the properties or records of
Pledgor.
.2. Reliance by Collateral Agent. Collateral Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to
Pledgor), independent accountants and other experts selected by Collateral
Agent. Collateral Agent shall have no obligation to any Person to act or
refrain from acting or exercising any of its rights under this Pledge
Agreement.
21. Amendment. No modification or waiver of any of the provisions
of this Pledge Agreement shall be binding on Collateral Agent, except as
expressly set forth in a writing duly signed and delivered by Collateral Agent
and which is otherwise in accordance with Section 6.2 of the Partnership
Credit Agreement.
22. Successors and Assigns. This Pledge Agreement shall be binding
upon and inure to the benefit of Pledgor and Collateral Agent for the benefit
of the Secured Parties and the Funding Corporation and their respective
successors and assigns. In the event of any assignment or transfer by the
Funding Corporation or any other Secured Party of any instrument evidencing
all or any part of the Obligations, the holder of such instrument shall,
subject to the Partnership Credit Agreement and the Partnership Guarantee, be
entitled to the benefits of this Pledge Agreement.
23. Number and Gender. Whenever used in this Pledge Agreement, the
singular number shall include the plural and the plural the singular, and the
use of any gender shall be applicable to all genders.
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24. Subrogation, etc. Notwithstanding any payment or payments made
by Pledgor or the exercise by Collateral Agent of any of the remedies provided
under this Pledge Agreement or any of the Financing Documents, Pledgor shall
have no claim (as defined in 11 U.S. C. ss. 101 (5)) of subrogation to any of
the rights of the Secured Parties and the Funding Corporation against BNG,
Pledgor or any Collateral or guaranty held by the Secured Parties and the
Funding Corporation for the satisfaction of any of the Obligations, nor shall
Pledgor have any claims (as defined in 11 U.S.C. ss. 101 (5)) for
reimbursement, indemnity, exoneration or contribution from BNG in respect of
payments made by Pledgor hereunder. Notwithstanding the foregoing, if any
amount shall be paid to Pledgor on account of such subrogation, reimbursement,
indemnity, exoneration or contribution rights at any time, such amount shall
be held by Pledgor in trust for the Secured Parties and the Funding
Corporation, segregated from other funds of Pledgor, and shall be turned over
to Collateral Agent for the benefit of the Secured Parties and the Funding
Corporation, in the exact form received by Pledgor (duly endorsed by Pledgor
to Collateral Agent for the benefit of the Secured Parties and the Funding
Corporation, if required), to be applied against such amounts in such order as
Collateral Agent may elect.
25. Captions. The captions, headings and table of contents used in
this Pledge Agreement are for convenience only and do not and shall not be
deemed to affect, limit, amplify or modify the terms and provisions hereof.
26. Applicable Law. This Pledge Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of
California.
27. Continuing Security Interest; Termination. This Pledge
Agreement shall create a continuing assignment, pledge and first priority
Security Interest in the Collateral, subject only to Permitted Liens, and
shall remain in full force and effect for the benefit of Collateral Agent and
the other Secured Parties and the Funding Corporation until all Obligations to
be paid or performed by Partnership Guarantors under the Partnership Credit
Agreement and the Partnership Guarantee have been paid and performed in full.
Upon the happening of such event, the Security Interest granted hereby shall
terminate. Upon such termination, Collateral Agent shall, upon the request and
at the expense of Pledgor, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination or expiration.
28. Payments Set Aside. To the extent that Pledgor or the
Partnership Guarantors or any other Person on behalf of Pledgor or the
Partnership Guarantors makes a payment or payments to Collateral Agent and/or
any other Secured Party, or Collateral Agent and/or any other Secured Party
enforce the Security Interests or Collateral Agent exercises its right of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such
recovery, the Obligations or any part thereof originally intended to be
satisfied, and this Pledge Agreement and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.
29. Counterparts. This Pledge Agreement may be executed 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.
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30 . Non-Recourse. Notwithstanding any other provision hereof,
Collateral Agent agrees that its only remedy hereunder shall be to proceed
against the Collateral and that there shall be no recourse to the Pledgor, its
shareholders, officers, directors or employees.
15
IN WITNESS WHEREOF, the parties hereto have caused this
Pledge Agreement to be duly executed as of the day and year first written
above.
VULCAN POWER COMPANY,
a Nevada corporation
By: /s/ John G. Sylvia
-----------------------------------
Name: John G. Sylvia
-----------------------------
Title: Senior Vice President
-----------------------------
CHEMICAL TRUST COMPANY OF CALIFORNIA,
a California corporation,
as Collateral Agent
By: /s/ Rose Maravilla
Name: R.I. Maravilla
Title: Assistant Vice President
Schedule 2.1
STOCK
Percentage of
Stock Outstanding
Certificate No. No. of Shares Shares
--------------- ------------- ------
5 1,000 100%