Exhibit 10.8
EXECUTION COPY
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SECOND LIEN NON-SHARED SECURITY AGREEMENT
Dated August 11, 2003
From
The Grantors referred to herein
as Grantors
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to
Xxxxx Fargo Bank Minnesota, N.A.
as Collateral Trustee
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Dynegy Second Lien Non-Shared Security Agreement
T A B L E O F C O N T E N T S
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Section Page
Section 1. Definitions; Other Interpretive Provisions....................... 2
Section 2. Grant of Security................................................ 10
Section 3. Security for Obligations......................................... 14
Section 4. Grantors Remain Liable........................................... 14
Section 5. Delivery and Control of Security Collateral...................... 15
Section 6. Maintaining the Account Collateral............................... 17
Section 7. Maintaining Electronic Chattel Paper, Transferable Records
and Letter-of-Credit Rights and Giving Notice of Commercial
Tort Claims...................................................... 18
Section 8. Representations and Warranties................................... 19
Section 9. Further Assurances............................................... 21
Section 10. Post-Closing Changes; Bailees; Collections on
Receivables and Related Contracts............................... 22
Section 11. As to Intellectual Property Collateral.......................... 23
Section 12. Voting Rights; Dividends; Etc................................... 24
Section 13. As to Letter-of-Credit Rights................................... 25
Section 14. Transfers and Other Liens; Additional Shares.................... 26
Section 15. Collateral Trustee Appointed Attorney-in-Fact................... 26
Section 16. Collateral Trustee May Perform.................................. 27
Section 17. The Collateral Trustee's Duties................................. 27
Section 18. Remedies........................................................ 28
Section 19. Indemnity and Expenses.......................................... 29
Section 20. Amendments; Waivers; Additional Grantors; Etc................... 30
Section 21. Notices, Etc.................................................... 31
Section 22. Continuing Security Interest.................................... 32
Section 23. Release; Termination............................................ 32
Section 24. Security Interest Absolute...................................... 32
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Section 25. Execution in Counterparts....................................... 33
Section 26. The Mortgages................................................... 33
Section 27. Collateral in the State of Louisiana............................ 34
Section 28. Governing Law................................................... 34
Section 29. Submission to Jurisdiction and Waiver........................... 34
Section 30. Intercreditor Agreement......................................... 35
Schedules
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Schedule I - Location, Chief Executive Office, Place Where Agreements Are
Maintained, Type Of Organization, Jurisdiction Of
Organization And Organizational Identification Number
Schedule II - Pledged Equity, Pledged Debt, Securities Accounts and
Commodity Accounts
Schedule II-A - Equity not to Be Pledged
Schedule III - Changes in Name, Location, Etc.
Schedule IV - Account Collateral (Designated Accounts)
Schedule V - Account Collateral not Subject to Account Control Agreement
Schedule VI - Commercial Tort Claims
Exhibits
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Exhibit A - Form of Second Lien Non-Shared Security Agreement Supplement
Exhibit B - Form of Account Control Agreement
(Deposit Account/Securities Account)
Exhibit C - Form of Securities Account Control Agreement
Exhibit D - Form of Commodity Account Control Agreement
Exhibit E - Form of Intellectual Property Second Lien Non-Shared
Security Agreement
Exhibit F - Form of Intellectual Property Second Lien Non-Shared
Security Agreement Supplement
Exhibit G - Form of Consent to Assignment of Letter of Credit Rights
Dynegy Second Lien Non-Shared Security Agreement
SECOND LIEN NON-SHARED SECURITY AGREEMENT
SECOND LIEN NON-SHARED SECURITY AGREEMENT dated August 11, 2003 (this
"Second Lien Non-Shared Security Agreement") made by Dynegy Inc., an Illinois
corporation (the "Parent Guarantor"), the other Persons listed on the signature
pages hereof (the "Initial Grantors") and the Additional Grantors (as defined in
Section 20) (Parent Guarantor, Initial Grantors and the Additional Grantors
being, collectively, the "Grantors"), to Xxxxx Fargo Bank Minnesota, N.A., (with
its successors in such capacity, the "Collateral Trustee") for the benefit of
the Secured Parties (as defined below).
PRELIMINARY STATEMENTS.
(1) Dynegy Holdings Inc., a Delaware corporation ("DHI") and the
guarantors named therein have entered into an Indenture, dated as of the date
hereof (the "Indenture") with Wilmington Trust Company, as Trustee (in such
capacity, the "Trustee") and the Collateral Trustee pursuant to which it is
issuing, as of the date hereof, (i) $225,000,000 of Second Priority Senior
Secured Floating Rate Notes due 2008, (ii) $525,000,000 of 9.875% Second
Priority Senior Secured Notes due 2010, (iii) $700,000,000 of 10.125% Second
Priority Senior Secured Notes due 2013 and (iv) may, from time to time, issue
additional notes in accordance with the provisions of the Indenture
(collectively, the "Notes").
(2) DHI has entered into a Credit Agreement dated as of April 1, 2003
with the Parent Guarantor, the other guarantor parties thereto, Citibank, N.A.
and Bank of America, N.A., as administrative agents, the other lender parties
thereto, Citibank, N.A., as payment agent, Bank One, NA (main office Chicago),
as L/C Issuer, Bank One, NA (main office Chicago), as collateral agent (together
with successors in such capacity, the "First Priority Collateral Agent"),
Xxxxxxx Xxxxx Barney, Inc., Banc of America Securities LLC and Bank One, NA
(main office Chicago), as co-lead arrangers, and Xxxxxxx Xxxxx Xxxxxx, Inc. and
Banc of America Securities LLC, as book running managers (said Agreement, as it
may hereafter be amended, amended and restated, supplemented, replaced,
refinanced or otherwise modified from time to time, being the "Credit
Agreement").
(3) Pursuant to the Credit Agreement, the Grantors and the First
Priority Collateral Agent entered into a Non-Shared Security Agreement, dated
April 1, 2003 (together with any amendments, supplements, replacements and
restatements thereof, the "First Priority Non-Shared Security Agreement"), in
order to grant to the First Priority Collateral Agent for the ratable benefit of
the Non-Shared Secured Parties (as defined in the Credit Agreement) a security
interest in the Non-Shared Collateral.
(4) Pursuant to the Credit Agreement and the Indenture, the Grantors,
the Existing First Priority Collateral Trustees (as defined therein), the First
Priority Collateral Agent and the Collateral Trustee have agreed to enter into
an Intercreditor Agreement, dated as of the date hereof (as such agreement may
be amended, amended and restated, supplemented, replaced or otherwise modified
hereafter from time to time the "Intercreditor Agreement").
(5) The Collateral Trustee has agreed, pursuant to the terms of the
Indenture and the Intercreditor Agreement, to accept the pledge and assignment,
and the grant of a security
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interest, under this Second Lien Non-Shared Security Agreement as security for
the Parity Lien Obligations.
(6) Each Grantor is the owner of the Initial Pledged Equity set forth
opposite such Grantor's name on and as otherwise described in Part I of Schedule
II hereto and issued by the Persons named therein and of the Initial Pledged
Debt set forth (to the extent the same is evidenced by instruments) opposite
such Grantor's name on and as otherwise described in Part II of Schedule II
hereto and issued by the Obligors named therein.
(7) Each Grantor has Pledged Security Entitlements with respect to
all the Pledged Financial Assets credited from time to time to such Grantor, as
set forth opposite such Grantor's name on and as otherwise described in Part III
of Schedule II hereto.
(8) Each Grantor has rights in and to the Pledged Commodity Contracts
carried from time to time in such Grantor's Commodities Accounts, set forth
opposite such Grantor's name on and as otherwise described in Part IV of
Schedule II hereto.
(9) Each Grantor has opened Other Deposit Accounts with banks, in the
name of such Grantor and subject to the terms of this Second Lien Non-Shared
Security Agreement, as described in Schedule IV hereto.
(10) It is a condition precedent to the Trustee entering into the
Indenture that the Grantors shall have granted the assignment and security
interest and made the pledge and assignment contemplated by this Second Lien
Non-Shared Security Agreement.
(11) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by this Second Lien Non-Shared Security
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Trustee to enter into the Indenture and the holders of the Notes to
purchase the Notes, each Grantor hereby agrees with the Collateral Trustee for
the ratable benefit of the Secured Parties as follows:
Section 1. Definitions; Other Interpretive Provisions. The
interpretive provisions set forth in Section 1.04 of the Indenture are
incorporated by reference herein. Terms defined in the Indenture or the
Intercreditor Agreement and not otherwise defined in this Second Lien Non-Shared
Security Agreement are used in this Second Lien Non-Shared Security Agreement as
defined in the Indenture or the Intercreditor Agreement. The terms incorporated
by reference to the Credit Agreement are defined as used in the Credit Agreement
as in effect as of the date hereof. Further, unless otherwise defined in this
Second Lien Non-Shared Security Agreement, the Indenture or the Intercreditor
Agreement, terms defined in Article 8 or 9 of the UCC and/or in the Federal Book
Entry Regulations are used in this Second Lien Non-Shared Security Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. As used in this Second Lien Non-Shared Security Agreement the
following terms shall have the meanings set forth below:
"Account Collateral" means, collectively, the following:
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(a) the Other Deposit Accounts and all funds and financial
assets from time to time credited thereto (including, without
limitation, all Cash Equivalents), all interest, dividends,
distributions, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such funds and financial assets, and all
certificates and instruments, if any, from time to time representing
or evidencing the Cash Collateral Accounts and the Other Deposit
Accounts;
(b) all promissory notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time delivered to
or otherwise possessed by the Collateral Trustee for or on behalf of
any Grantor, including, without limitation, those delivered or
possessed in substitution for or in addition to any or all of the then
existing Account Collateral; and
(c) all interest, dividends, distributions, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral.
"Account Control Agreement" has the meaning specified in Section 6(a).
"Additional Grantor" has the meaning specified in Section 20(b).
"Additional Provisions" has the meaning specified in the definition of
"Federal Book Entry Regulations" set forth herein.
"After-Acquired Intellectual Property" has the meaning specified in
Section 11(b).
"Agreement Collateral" means the Assigned Agreements, including,
without limitation, (a) all rights of any Grantor to receive moneys due and
to become due under or pursuant to the Assigned Agreements, (b) any rights
of such Grantor to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the Assigned Agreements, (c) claims of any
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (d) the right of any Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder.
"Assigned Agreements" means, collectively, each of the contracts and
agreements to which any Grantor is now or may hereafter become a party, in
each case as such contracts and agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time, to the
extent permitted by the Indenture.
"Collateral Trustee" has the meaning specified in the recital of the
parties hereto.
"Commercial Tort Claims Collateral" means all commercial tort claims
described in Schedule VI hereto, provided, however, that any commercial
tort claim shall not be included in the "Commercial Tort Claims Collateral"
to the extent, but only to the
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extent, that the assignment thereof or grant of a security interest therein
would violate any effective or enforceable provision of applicable law.
"Commodity Account Control Agreement" has the meaning specified in
Section 5(d).
"Commodity Accounts" means those commodities accounts of each Grantor
as described in Part IV of Schedule II hereto.
"Computer Software" means all computer software, programs and
databases (including, without limitation, source code, object code and all
related applications and data files), firmware and documentation and
materials relating thereto, together with any and all maintenance rights,
service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any
substitutions, replacements, improvements, error corrections, updates and
new versions of any of the foregoing.
"Consent to Assignment of Letter of Credit Rights" means an agreement
in substantially the form of the Consent to Assignment of Letter of Credit
Rights attached hereto as Exhibit G or otherwise in form and substance
reasonably satisfactory to the Collateral Trustee.
"Copyrights" means all copyrights, including, without limitation,
copyrights in Computer Software (as hereinafter defined), internet web
sites and the content thereof, whether registered or unregistered.
"Credit Agreement" has the meaning specified in Preliminary Statement
(2).
"Designated Accounts" means any Account Collateral that constitutes:
(a) any deposit accounts listed in Schedule IV hereto and the funds
credited to any such deposit accounts, and (b) any securities accounts and
any financial assets that are credited to any such securities accounts.
"DHI" has the meaning set forth in Preliminary Statement (1).
"Equipment" means all equipment in all of its forms, including,
without limitation, all machinery, tools, motor vehicles, vessels,
aircraft, furniture and fixtures, and all parts thereof and all accessions
thereto and all software related thereto, including, without limitation,
software that is embedded in and is part of the equipment.
"Excluded Agreements" has the meaning specified in paragraph (ii) in
the "notwithstanding" clause at the end of Section 2.
"Excluded Authorizations" has the meaning specified in paragraph (iii)
of the "notwithstanding" clause at the end of Section 2.
"Excluded Equity" has the meaning specified in paragraph (v) of the
"notwithstanding" clause at the end of Section 2.
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"Excluded Non-Shared Collateral" means any Non-Shared Collateral that,
under the provisions of paragraph (i) of the "notwithstanding" clause at
the end of Section 2, is to be excluded from the lien and security interest
granted by any Grantor under clauses (a) through (j) of Section 2.
"Federal Book Entry Regulations" means (a) the federal regulations
contained in Subpart B ("Treasury/Reserve Automated Debt Entry System
(TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R.
Part 357, 31 C.F.R. Section 357.2, Section 357.10 through Section 357.14
and Section 357.41 through Section 357.44 and (b) to the extent
substantially identical to the federal regulations referred to in clause
(a) above (as in effect from time to time), the federal regulations
governing other book-entry securities.
"First Priority Collateral Agent" has the meaning specified in
Preliminary Statement (2).
"First Priority Controlling Collateral Parties" has the meaning
specified in the Intercreditor Agreement.
"First Priority Lien Satisfaction Date" means the first date on which
the Priority Lien Obligations are Paid in Full.
"First Priority Non-Shared Security Agreement" has the meaning
specified in Preliminary Statement (3).
"Grantors" has the meaning specified in the recital of the parties
hereto.
"Indemnified Party" has the meaning specified in Section 19.
"Indenture" has the meaning specified in Preliminary Statement (1).
"Indenture Documents" means the Indenture, the Notes, the Mortgages,
this Second Lien Non-Shared Security Agreement, the Second Lien Shared
Security Agreement and the Intercreditor Agreement.
"Initial Grantors" has the meaning specified in the recital of the
parties hereto.
"Initial Pledged Debt" means the indebtedness described in Part II of
Schedule II hereto.
"Initial Pledged Equity" means the shares of stock or other Equity
Interests as described in Part I of Schedule II hereto.
"Intellectual Property Collateral" means, collectively, the following:
(a) all Patents; (b) all Trademarks; (c) all Copyrights; (d) all Computer
Software; (e) all Trade Secrets and all other intellectual, industrial and
intangible property of any type, including, without limitation, industrial
designs and mask works; (f) all registrations and applications for
registration for any of the foregoing, together with all reissues,
divisions,
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continuations, continuations-in-part, extensions, renewals and
reexaminations thereof; (g) all tangible embodiments of the foregoing, all
rights in the foregoing provided by international treaties or conventions,
all rights corresponding thereto throughout the world and all other rights
of any kind whatsoever of any Grantor accruing thereunder or pertaining
thereto; (h) all agreements, permits, consents, orders and franchises
relating to the license, development, use or disclosure of any of the
foregoing to which any Grantor, now or hereafter, is a party or a
beneficiary ("IP Agreements"); and (i) any and all claims for damages and
injunctive relief for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to any of the
foregoing, with the right, but not the obligation, to xxx for and collect,
or otherwise recover, such damages.
"Intellectual Property Second Lien Non-Shared Security Agreement" has
the meaning specified in Section 11(a).
"Intercreditor Agreement" has the meaning specified in Preliminary
Statement (4).
"Inventory" means all inventory in all of its forms, including,
without limitation, (a) all raw materials, work in process, finished goods
and materials used or consumed in the manufacture, production, preparation
or shipping thereof, (b) goods in which any Grantor has an interest in mass
or a joint or other interest or right of any kind, and (c) goods that are
returned to or repossessed or stopped in transit by any Grantor), and all
accessions thereto and products thereof and documents therefor, and all
software related thereto, including, without limitation, software that is
embedded in and is part of the inventory, provided, however, that goods in
which any Grantor has an interest or right as consignee shall be excluded
from the definition of "Inventory".
"IP Agreements" has the meaning specified in the definition of the
term "Intellectual Property Collateral" herein.
"IP Second Lien Non-Shared Security Agreement Supplement" has the
meaning specified in Section 11(b).
"Knowledge" means, in the case of the knowledge of a Grantor, the best
knowledge of such Grantor's executive officers after due inquiry and
investigation.
"Mortgages" means each deed of trust, trust deed, mortgage, leasehold
mortgage and leasehold deed of trust delivered by a Grantor pursuant to the
Indenture or any instrument evidencing Parity Lien Obligations.
"Netting Agreements" has the meaning set forth in Section 1.01 of the
Credit Agreement.
"Non-Shared Collateral" has the meaning specified in the first
paragraph of Section 2.
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"Non-Shared Collateral Documents" has the meaning set forth in Section
1.01 of the Intercreditor Agreement.
"Notes" has the meaning specified in Preliminary Statement (1).
"Obligors" means any Person obligated on an account, chattel paper,
instrument, or general intangible.
"Other Deposit Accounts" means those deposit accounts with banks
opened by each Grantor, as described in Schedule IV and Schedule V hereto.
"Paid in Full" means (a) the payment in full in cash of (i) all
principal and interest in respect of the Priority Lien Obligations and (ii)
all other valid Priority Lien Obligations that are claimed within 30 days
of the last date on which all principal and interest in respect of the
Priority Lien Obligations shall have been paid in full and (b) the
termination in full of all commitments in respect of the Priority Lien
Obligations. "Payment in Full" shall have the correlative meaning.
"Parent Guarantor" has the meaning specified in the recital of the
parties hereto.
"Patents" means all patents, patent applications, utility models and
statutory invention registrations, all inventions claimed or disclosed
therein and all improvements thereto.
"Permitted Collateral" means any of the following property: (a)
Receivables (together with all general intangibles, and payment intangibles
related thereto or arising therefrom and all proceeds and products of any
of the foregoing), (b) cash and short-term investments, and (c) all
dividends, interest, distributions, and other proceeds from time to time
received, receivable or otherwise distributed in respect of, or in exchange
for, any or all of the foregoing.
"Permitted Contracts" has the meaning set forth in Section 1.01 of the
Credit Agreement.
"Pledged Account Banks" has the meaning specified in Section 6(a).
"Pledged Commodity Contracts" means the commodity contracts carried
from time to time in each Grantor's Commodity Account.
"Pledged Debt" has the meaning specified in the definition of the term
"Security Collateral" herein.
"Pledged Equity" has the meaning specified in the definition of the
term "Security Collateral" herein.
"Pledged Financial Assets" means the financial assets credited from
time to time to each Grantor's Securities Accounts.
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"Pledged Security Entitlements" means each Grantor's security
entitlements with respect to the Pledged Financial Assets credited from
time to time to such Grantor's Securities Accounts.
"Receivables" means, to the extent the same are not referred to in
Sections 2(d), 2(e) and 2(f) herein, all accounts (including, without
limitation, receivables under Permitted Contracts or Netting Agreements),
chattel paper (including, without limitation, tangible chattel paper and
electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services and whether or
not earned by performance, and all rights now or hereafter existing in and
to all supporting obligations and in and to all security agreements,
mortgages, Liens, leases, letters of credit and other contracts securing or
otherwise relating to the foregoing property (any and all such supporting
obligations, security agreements, mortgages, Liens, leases, letters of
credit and other contracts being referred to herein as the "Related
Contracts").
"Related Contracts" has the meaning specified in the definition of the
term "Receivables" herein.
"Second Lien Non-Shared Security Agreement" has the meaning specified
in the recital of the parties hereto.
"Second Lien Non-Shared Security Agreement Supplement" has the meaning
specified in Section 20(c).
"Second Lien Shared Security Agreement" has the meaning specified in
the Intercreditor Agreement.
"Second Preferred Fleet Mortgage" means the Second Preferred Fleet
Mortgage dated as of August 11, 2003 by Midstream Barge Company, L.L.C. in
favor of the Collateral Trustee, as the same may be amended, amended and
restated, supplemented, replaced or otherwise modified from time to time in
accordance with the Indenture and the Intercreditor Agreement.
"Secured Parties" means each of the Collateral Trustee, the Trustee,
the holders of any Note, the holders of any other Parity Lien Obligations
and any other Second Priority Collateral Party.
"Securities Account Control Agreement" has the meaning specified in
Section 5(c).
"Securities Accounts" means those securities accounts of each Grantor
as described in Part III of Schedule II hereto.
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"Security Collateral" means, collectively, the following:
(a) the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends,
distributions, return of capital, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial Pledged Equity
and all subscription warrants, rights or options issued thereon or
with respect thereto;
(b) the Initial Pledged Debt and the instruments, if any,
evidencing the Initial Pledged Debt, and all interest, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of the Initial Pledged Debt;
(c) all additional shares of stock and other Equity Interests of
or in any issuer of the Initial Pledged Equity or any successor entity
from time to time acquired by any Grantor in any manner and all
additional shares of stock or Equity Interests of or in any new direct
Subsidiary of any Grantor formed or acquired by any Grantor in any
manner after the date of this Second Lien Non-Shared Security
Agreement (such shares and other Equity Interests, together with the
Initial Pledged Equity, being the "Pledged Equity"), and the
certificates, if any, representing such additional shares or other
Equity Interests, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such shares or other Equity Interests and all
subscription warrants, rights or options issued thereon or with
respect thereto;
(d) all additional indebtedness from time to time owed to any
Grantor (such indebtedness, together with the Initial Pledged Debt,
being the "Pledged Debt") and the instruments, if any, evidencing such
indebtedness, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;
(e) the Securities Account, all Pledged Security Entitlements
with respect to all Pledged Financial Assets from time to time
credited to the Securities Account, and all Pledged Financial Assets,
and all dividends, distributions, return of capital, interest, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of such Pledged Security Entitlements or such Pledged Financial Assets
and all subscription warrants, rights or options issued thereon or
with respect thereto;
(f) the Commodities Account, all Pledged Commodity Contracts
from time to time carried in the Commodities Account, and all value,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such Pledged Commodity Contracts; and
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(g) all other investment property (including, without
limitation, all (i) securities, whether certificated or
uncertificated, (ii) security entitlements, (iii) securities accounts,
(iv) commodity contracts and (v) commodity accounts) in which any
Grantor has now, or acquires from time to time hereafter, any right,
title or interest in any manner, and the certificates or instruments,
if any, representing or evidencing such investment property, and all
dividends, distributions, return of capital, interest, distributions,
value, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such investment property and all
subscription warrants, rights or options issued thereon or with
respect thereto.
"Security Control Agreements" has the meaning specified in Section
5(d).
"Subagent" has the meaning specified in Section 17(b).
"Trademarks" means all trademarks, service marks, domain names, trade
dress, logos, designs, slogans, trade names, business names, corporate
names and other source identifiers, whether registered or unregistered
(provided that no security interest shall be granted in United States
intent-to-use trademark applications to the extent that, and solely during
the period in which, the grant of a security interest therein would impair
the validity or enforceability of such intent-to-use trademark applications
under applicable federal law), together, in each case, with the goodwill
symbolized thereby.
"Trade Secrets" means all confidential and proprietary information,
including, without limitation, know-how, trade secrets, manufacturing and
production processes and techniques, inventions, research and development
information, databases and data, including, without limitation, technical
data, financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and
information.
"Trustee" has the meaning specified in Preliminary Statement (1).
"UCC" means the Uniform Commercial Code as in effect, from time to
time, in the State of New York; provided that, if perfection or the effect
of perfection or non-perfection or the priority of any security interest in
any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, "UCC" means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction
for purposes of the provisions hereof relating to such perfection, effect
of perfection or non-perfection or priority.
"UETA" means the Uniform Electronic Transactions Act, as in effect in
any relevant jurisdiction.
Section 2. Grant of Security. Each Grantor hereby grants to the
Collateral Trustee, in each case, in trust pursuant to the Indenture for the
ratable benefit of the Secured Parties, a security interest in, such Grantor's
right, title and interest in and to the following, in each case, as to each type
of property described below, whether now owned or hereafter acquired
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by such Grantor, wherever located, and whether now or hereafter existing or
arising (collectively, the "Non-Shared Collateral"):
(a) all Equipment;
(b) all Inventory;
(c) all Receivables and all Related Contracts;
(d) the Security Collateral;
(e) the Agreement Collateral;
(f) the Account Collateral;
(g) the Intellectual Property Collateral;
(h) all Commercial Tort Claims Collateral;
(i) all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and
records) of such Grantor pertaining to any of the Non-Shared Collateral;
and
(j) all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Non-Shared Collateral
(including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in clauses (a)
through (i) of this Section 2 and this clause (j)) and, to the extent not
otherwise included, all (A) payments under insurance (whether or not the
Collateral Trustee is the loss payee thereof), or any indemnity, warranty
or guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Non-Shared Collateral, (B) tort claims,
including, without limitation, all commercial tort claims and (C) cash.
Notwithstanding anything to the contrary contained in this Section 2,
the following property shall be excluded from the lien and security interest
granted hereunder (and shall, as applicable, not be included as "Non-Shared
Collateral", "Equipment", "Inventory", "Receivables", "Related Contracts",
"Security Collateral", "Agreement Collateral", "Account Collateral",
"Intellectual Property Collateral", "Commercial Tort Claims Collateral",
"Assigned Agreements", "Pledged Equity" or "Pledged Debt" for the purposes
hereof):
(i) any Non-Shared Collateral constituting property that is the
subject of or relating to any contract, agreement or other document to
which any Grantor is a party on the date hereof or any similar contract,
agreement or other document entered into by such Grantor after the date
hereof shall, in each case, be excluded from the lien and security interest
created by such Grantor under this Section 2 to the extent (but only to the
extent) that the assignment thereof, or the creation of a lien and security
interest therein, would constitute a breach of the terms of such contract,
agreement or other
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document, or would cause a default or event of default under the terms of
such contract, agreement or other document, or would permit any party to
such contract, agreement or other document to terminate any material
contract right arising under any such contract agreement or other document
or to exercise any put, call, right of refusal, purchase option or other
similar right, or would permit any party to such contract, agreement or
other document to terminate such contract, agreement or other document;
provided, however, that any of the Excluded Non-Shared Collateral shall
automatically cease to be excluded from this Section 2 at such time as (x)
the prohibition of assignment or of the creation of a lien and security
interest in such Excluded Non-Shared Collateral is no longer in effect or
is rendered ineffective as a matter of law or (y) the applicable Grantor
has obtained the consent of the other parties to such agreement to the
assignment of, or creation of a lien and security interest in, such
Excluded Non-Shared Collateral (which consent such Grantor shall not be
required to obtain hereunder, except upon a request of the Collateral
Trustee after the occurrence and during the continuance of an Event of
Default following the First Priority Lien Satisfaction Date) or (z) the
breach, default, event of default or any other conditions otherwise giving
rise to the exclusion of such property under this clause (i) shall cease to
exist;
(ii) any contract, agreement or other document (and any contract
rights arising thereunder) to which any of the Grantors is a party on the
date hereof and any similar contract or agreement entered into by any
Grantor after the date hereof, in each case, shall be excluded from the
lien and security interest granted by such Grantor under this Section 2 to
the extent (but only to the extent) that the assignment thereof, or the
creation of a lien and security interest therein, would constitute a breach
of the terms of such contract, agreement or other document to which any of
the Grantors may now or hereafter be a party or to which any Grantor may
now or hereafter be subject, or would cause a default or event of default
under the terms of such contract, agreement or other document, or would
permit any party to such contract, agreement or other document to terminate
any material contract right arising under any such contract agreement or
other document or to exercise any put, call, right of refusal, purchase
option or other similar right, or would permit any party to such contract,
agreement or other document to terminate such contract, agreement or other
document (all such contracts, agreements and other documents being the
"Excluded Agreements"); provided, however, that (x) except as set forth in
clause (iv) below, the exclusion from the lien and security interest
granted by such Grantor hereunder of any contract rights of any of the
Grantors under one or more of the Excluded Agreements shall not limit,
restrict or impair the grant by such Grantor of the lien and security
interest in any accounts or receivables arising under any such Excluded
Agreement or any payments due or to become due thereunder, and (y) any of
the Excluded Agreements shall automatically cease to be excluded from this
Section 2 at such time as, (A) the prohibition of assignment or of the
creation of a lien and security interest in such agreement is no longer in
effect or is rendered ineffective as a matter of law or (B) the applicable
Grantor has obtained the consent of the other parties to such agreement to
the assignment of, or creation of a lien and security interest in, the
contract rights of such Grantor thereunder (which consent such Grantor
shall not be required to obtain hereunder, except upon a request of the
Collateral Trustee after the occurrence and during the continuance of an
Event of Default following the First Priority Lien Satisfaction Date);
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13
(iii) any license, permit or authorization from any Governmental
Authority (as defined in the Credit Agreement) in favor of any Grantor
shall be excluded from the lien and security interest granted by such
Grantor under this Section 2 to the extent (but only to the extent) that
the assignment thereof or the creation of a lien and security interest
therein would constitute a breach of or a default or event of default under
the terms of such license, permit or authorization or would require any
separate license, permit or authorization or would otherwise terminate such
license, permit or authorization (all of the licenses, permits and
authorizations referred to herein being the "Excluded Authorizations");
provided, however, that any of the Excluded Authorizations shall cease to
be excluded from this Section 2 at such time as (x) the prohibition of
assignment or of the creation of a lien and security interest in such
license, permit or authorization is no longer in effect or is rendered
ineffective as a matter of law or (y) the applicable Grantor has obtained
the consent of the applicable Governmental Authority (as defined in the
Credit Agreement) to the assignment of, or creation of a lien and security
interest in, such license, permit or authorization of such Grantor (which
consent such Grantor shall not be required to obtain hereunder, except upon
a request of the Collateral Trustee after the occurrence and during the
continuance of an Event of Default following the First Priority Lien
Satisfaction Date);
(iv) any Permitted Collateral of any Grantor from time to time
pledged, assigned, conveyed or transferred, or against which any right of
set-off is granted or in which a Lien or security interest is granted, by
such Grantor under any Permitted Contract or Netting Agreement shall be
excluded from the lien and security interest granted by such Grantor under
this Section 2. To the extent any such lien and security interest is deemed
to be granted pursuant to this Agreement in such Permitted Collateral
hereunder notwithstanding the exclusion contemplated hereby, such lien and
security interest shall ipso facto immediately and automatically terminate,
without any further action by any Person, upon any such pledge, assignment,
conveyance, transfer, grant of such right of set-off or grant of such Lien
and security interest, provided, however, that any such Permitted
Collateral shall cease to be excluded from this Section 2 at such time as
(x) the Permitted Contract or Netting Agreement, as the case may be,
related thereto is terminated and the setoff rights, Lien and security
interest granted in such Permitted Collateral are terminated or (y) the
applicable Grantor has obtained the consent of the applicable Counterparty
(as defined in the Credit Agreement) to such Permitted Contracts or Netting
Agreements to the assignment of, or creation of a lien and security
interest in such Permitted Collateral hereunder (which consent such Grantor
shall not be required to obtain hereunder, except upon a request of the
Collateral Trustee after the occurrence and during the continuance of an
Event of Default following the First Priority Lien Satisfaction Date);
(v) as to each Grantor, any outstanding voting stock of any entity
that is a controlled foreign corporation under Section 957 of the Internal
Revenue Code (or any successor provision thereto), except for voting stock
consisting of no more than 66% of the outstanding voting stock of such
entity (any such stock being the "Excluded Equity");
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(vi) any property or accounts (including without limitation, coal,
power, energy, other energy related products, natural gas, natural gas
liquids, condensate, and sulfur, and including any other products resulting
from generating, gas gathering, processing, fractionating and refining,
marketed by any Grantor on behalf of third parties and the proceeds derived
therefrom pursuant to processing agreements and/or marketing arrangements),
to the extent (but only to the extent) that any Grantor manages, maintains
or markets such property on behalf of a third party, including, without
limitation, any Non-Shared Collateral maintained, managed or marketed by
any Grantor for a joint venture in which third parties participate or on
behalf of third parties;
(vii) any policy of insurance, provided, however, that proceeds of
insurance shall be included as Non-Shared Collateral to the extent the
security interest granted hereby in the goods covered by such insurance
would continue in accordance with Section 9-315 of the UCC; and
(viii) the shares of stock or such other Equity Interests owned by and
set forth opposite any relevant Grantor's name on Schedule II-A hereto;
provided, however, that any proceeds received by any Grantor from the
disposition of Excluded Non-Shared Collateral, Excluded Authorizations, Excluded
Equity and any other property excluded under clauses (i) through (viii) above
shall constitute Non-Shared Collateral unless any assets or property
constituting such proceeds are themselves subject to the exclusions set forth in
clauses (i) through (viii) above.
Section 3. Security for Obligations. This Second Lien Non-Shared
Security Agreement secures, in the case of each Grantor, the payment of all
Parity Lien Obligations, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or
otherwise. Without limiting the generality of the foregoing, this Second Lien
Non-Shared Security Agreement secures, as to each Grantor, the payment of all
amounts that constitute part of the Parity Lien Obligations and would be owed by
such Grantor to any Secured Party but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving a Grantor.
Section 4. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Non-Shared Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Second Lien Non-Shared Security Agreement had not been
executed, (b) the exercise by the Collateral Trustee of any of the rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Non-Shared Collateral and (c)
none of the Collateral Trustee or any Secured Party shall have any obligation or
liability under the contracts and agreements included in the Non-Shared
Collateral by reason of this Second Lien Non-Shared Security Agreement or any
other Indenture Document, nor shall any of the Collateral Trustee or any Secured
Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder or thereunder.
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15
Section 5. Delivery and Control of Security Collateral. (a) Subject
to Section 5(h), with respect to any certificates or instruments representing or
evidencing Security Collateral (other than Permitted Investments), to the extent
that any relevant Grantor has Knowledge of the existence of such certificates
and instruments, such certificates and instruments shall be delivered to and
held by or on behalf of the Collateral Trustee pursuant to this Second Lien
Non-Shared Security Agreement and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to the
Collateral Trustee. After the occurrence and during the continuance of an Event
of Default following the First Priority Lien Satisfaction Date, the Collateral
Trustee shall have the right, at any time in its discretion and with notice to
DHI, to transfer to or to register in the name of the Collateral Trustee or any
of its nominees any or all of the Security Collateral, subject only to the
revocable rights specified in Section 13(a), provided, however, that the failure
to deliver any such notice to DHI shall not affect the validity of such actions
of the Collateral Trustee. In addition, after the occurrence and during the
continuance of an Event of Default and subject to the Intercreditor Agreement,
the Collateral Trustee shall have the right at any time to exchange certificates
or instruments representing or evidencing Security Collateral for certificates
or instruments of smaller or larger denominations.
(b) Subject to Section 5(h), with respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes an
uncertificated security, to the extent that such Grantor has Knowledge of the
existence of such uncertificated securities, such Grantor will cause the issuer
thereof either (at such Grantor's election) (i) to register the Collateral
Trustee as the registered owner of such security or (ii) to agree in an
authenticated record with such Grantor and the Collateral Trustee that such
issuer will comply with instructions with respect to such security originated by
the Collateral Trustee without further consent of such Grantor, such
authenticated record to be in form and substance reasonably satisfactory to the
Collateral Trustee provided, however, that the Collateral Trustee agrees that it
will not deliver any such instructions to such issuer except upon the occurrence
and during the continuance of an Event of Default. With respect to any Security
Collateral in which any Grantor has any right, title or interest and that is not
an uncertificated security, upon the request of the Collateral Trustee after the
occurrence and during the continuance of an Event of Default following the First
Priority Lien Satisfaction Date, such Grantor will notify each such issuer of
Pledged Equity that such Pledged Equity is subject to the security interest
granted hereunder.
(c) Subject to Section 5(h), with respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes a
security entitlement in which the Collateral Trustee is not the entitlement
holder, to the extent that such Grantor has Knowledge of the existence of such
security entitlements, such Grantor will cause the securities intermediary with
respect to such security entitlement either (at such Grantor's election) (i) to
identify in its records the Collateral Trustee as the entitlement holders of
such security entitlement against such securities intermediary or (ii) to agree
in an authenticated record with such Grantor and the Collateral Trustee that
such securities intermediary will comply with entitlement orders (that is,
notifications communicated to such securities intermediary directing transfer or
redemption of the financial asset to which such Grantor has a security
entitlement) originated by the Collateral Trustee without further consent of
such Grantor, such authenticated record to be in substantially
Dynegy Second Lien Non-Shared Security Agreement
16
the form of Exhibit C hereto or otherwise in form and substance reasonably
satisfactory to the Collateral Trustee (such agreement being a "Securities
Account Control Agreement").
(d) Subject to Section 5(h), with respect to any Security Collateral
in which any Grantor has any right, title or interest and that constitutes a
commodity contract, to the extent that such Grantor has Knowledge of the
existence of such commodity contracts, such Grantor shall cause the commodity
intermediary with respect to such commodity contract to agree in an
authenticated record with such Grantor and the Collateral Trustee that such
commodity intermediary will apply any value distributed on account of such
commodity contract as directed by the Collateral Trustee without further consent
of such Grantor, such authenticated record to be in substantially the form of
Exhibit D hereto or otherwise in form and substance reasonably satisfactory to
the Collateral Trustee (such agreement being a "Commodity Account Control
Agreement", and all such authenticated records, together with all Securities
Account Control Agreements being, collectively, "Security Control Agreements").
(e) No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Non-Shared Collateral is credited or carried, or
change or add any such securities account or commodity account, in each case
without first complying with the above provisions of this Section 5 in order to
perfect the security interest granted hereunder in such Non-Shared Collateral.
For the avoidance of doubt, the provisions of this Section 5(e) shall not apply
to any securities account or commodity account that any Grantor manages or
maintains on behalf of third parties, such as securities accounts and commodity
accounts maintained or managed by any Grantor for a joint venture in which third
parties participate.
(f) Upon the request of the Collateral Trustee upon the occurrence
and during the continuance of an Event of Default following the First Priority
Lien Satisfaction Date, such Grantor will notify each such issuer of Pledged
Debt that such Pledged Debt is subject to the security interest granted
hereunder.
(g) To the extent that any of the Non-Shared Collateral constituting
money or any of the Account Collateral or any Security Collateral is subject to
a Permitted Lien and such Permitted Lien has been perfected through control (as
such term is used in Sections 9-104 and 9-106 of the UCC) or possession,
perfection through possession or control of the security interest created
hereunder shall not be required.
(h) Notwithstanding anything to the contrary set forth in this
Section 5 or any other provision of this Second Lien Non-Shared Security
Agreement, until the First Priority Lien Satisfaction Date, Grantors shall not
be required to (i) take any of the actions required under Sections 5(a) through
5(d) herein or (ii) take any other actions with respect to any Collateral that
would violate or be inconsistent with the terms of the Intercreditor Agreement
or the First Priority Non-Shared Security Agreement. Subject to the terms of the
Intercreditor Agreement, the Grantors shall comply with the provisions set forth
in Sections 5 and 9 of the First Priority Non-Shared Security Agreement until
the First Priority Lien Satisfaction Date. Under the terms of Section 2.09 of
the Intercreditor Agreement, the First Priority Collateral Parties have agreed
to act as bailees on behalf of the Collateral Trustee in respect of certain
Collateral on the terms and conditions set forth therein.
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17
Section 6. Maintaining the Account Collateral. Following the First
Priority Lien Satisfaction Date and so long as any Parity Lien Obligations
(other than indemnification obligations that are not yet due and payable) which
are accrued and payable shall remain unpaid and unsatisfied and subject to the
Intercreditor Agreement:
(a) Each Grantor will maintain all Designated Accounts only with the
Collateral Trustee or with banks (the "Pledged Account Banks") that have
agreed, in a record authenticated by the Grantor, the Collateral Trustee
and the Pledged Account Banks, to (i) comply with instructions originated
by the Collateral Trustee (as set forth in the Account Control Agreement)
directing the disposition of funds in the Designated Accounts without the
further consent of the Grantor and (ii) waive or subordinate (other than as
agreed between any Pledged Account Bank and the Collateral Trustee) in
favor of the Collateral Trustee all claims of the Pledged Account Banks
(including, without limitation, claims by way of a security interest, lien
or right of setoff or right of recoupment) to the Account Collateral, which
authenticated record shall be substantially in the form of Exhibit B
hereto, or shall otherwise be in form and substance reasonably satisfactory
to the Collateral Trustee (the "Account Control Agreement"); provided,
however, this Section 6(a) shall not apply to Other Deposit Accounts listed
in Schedule V hereto, as such Schedule may be updated from time to time.
(b) Subject in all respects to the provisions of Section 5(g) hereof,
each Grantor agrees that it will not add any bank that maintains a deposit
account for such Grantor or open any new deposit account with any then
existing Pledged Account Bank unless (i) the Collateral Trustee shall have
received at least 10 days' prior written notice of such additional bank or
such new deposit account and (ii) the Collateral Trustee shall have
received, in the case of a bank or Pledged Account Bank that is not the
Collateral Trustee, an Account Control Agreement authenticated by such new
bank and such Grantor, or a supplement to an existing Account Control
Agreement with such then existing Pledged Account Bank, covering such new
deposit account (and, upon the receipt by the Collateral Trustee of such
Account Control Agreement or supplement, Schedule IV hereto shall be
automatically amended to include such Other Deposit Account). Each Grantor
may terminate any bank as a Pledged Account Bank or terminate any
Designated Account, if it gives the Collateral Trustee at least 10 days'
prior written notice of such termination (and, upon such termination,
Schedule IV hereto shall be automatically amended to delete such Pledged
Account Bank and Other Deposit Account without any additional formal
actions or agreements). For the avoidance of doubt, the provisions of this
Section 6(b) shall not apply to any deposit account that any Grantor
manages or maintains on behalf of third parties, such as deposit accounts
maintained or managed by any Grantor for a joint venture in which third
parties participate.
(c) Subject in all respects to the provisions of Section 5(g) hereof,
upon any termination by a Grantor of any Other Deposit Account by such
Grantor, or any Pledged Account Bank with respect thereto, such Grantor
will promptly (i) either (at such Grantor's election), (A) comply with the
provisions regarding the opening of new deposit accounts as set forth in
the first sentence of Section 6(b) or (B) subject to the restrictions set
forth in Section 6(f), transfer all funds and property held in such
terminated Other Deposit Account to another Other Deposit Account listed in
Schedule IV and (ii) notify
Dynegy Second Lien Non-Shared Security Agreement
18
all Obligors that were making payments to such Other Deposit Account to
make all future payments to another Other Deposit Account listed in
Schedule IV hereto, in each case so that the Collateral Trustee shall have
a continuously perfected security interest in such Designated Accounts.
Subject in all respects to the provisions of Section 5(g) hereof, after the
occurrence and during the continuance of an Event of Default following the
First Priority Lien Satisfaction Date, each Grantor agrees to terminate any
or all Account Collateral and Account Control Agreements upon request by
the Collateral Trustee.
(d) Upon the occurrence and during the continuance of an Event of
Default following the First Priority Lien Satisfaction Date, the Collateral
Trustee shall have sole right to direct the disposition of funds with
respect to each of the Designated Accounts.
(e) Following the First Priority Lien Satisfaction Date, the
Collateral Trustee may, at any time after notice to DHI (provided, however,
that the failure to give any such notice to DHI shall not affect the
validity of any action taken by the Collateral Trustee pursuant to the
provisions of this Section 6(e)), but without consent from the Grantor,
transfer, or direct the transfer of, funds from the Designated Accounts to
satisfy the Grantor's obligations under this Second Lien Non-Shared
Security Agreement if (A) a payment default in respect of principal under
this Second Lien Non-Shared Security Agreement shall have occurred and be
continuing for a period greater than or equal to three Business Days, or
(B) a payment default in respect of any amount other than principal due
under this Second Lien Non-Shared Security Agreement shall have occurred
and be continuing for a period greater than or equal to five Business Days,
or (C) an acceleration of the Parity Lien Debt shall have occurred and be
continuing.
(f) Each of the Grantors agrees that at no time shall the aggregate
amount on deposit in the Other Deposit Accounts listed in Schedule V hereto
(other than any Other Deposit Account that is subject to a Permitted Lien)
exceed $20,000,000.
Section 7. Maintaining Electronic Chattel Paper, Transferable Records
and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims. So long
as any Parity Lien Obligations (other than indemnification obligations that are
not yet due and payable) which are accrued and payable shall remain unsatisfied:
(a) Following the First Priority Lien Satisfaction Date, each Grantor
will maintain all (i) electronic chattel paper (to the extent that such
Grantor has Knowledge of the existence of such electronic chattel paper) so
that the Collateral Trustee have control of the electronic chattel paper in
the manner specified in Section 9-105 of the UCC and (ii) all transferable
records (to the extent that such Grantor has Knowledge of the existence of
such transferable records) so that the Collateral Trustee have control of
the transferable records in the manner specified in Section 16 of the UETA;
and
(b) Each Grantor will immediately give notice to the Collateral
Trustee of any material commercial tort claim that may arise in the future
and will immediately execute or otherwise authenticate a supplement to this
Second Lien Non-Shared Security Agreement, and otherwise take all necessary
action, to subject such material commercial tort claim to security interest
created under this Second Lien Non-Shared Security
Dynegy Second Lien Non-Shared Security Agreement
19
Agreement provided, however, that any commercial tort claim shall not be
covered by the provisions of this Section 7(b) to the extent, but only to
the extent, that the assignment thereof or grant of a security interest
therein would violate any effective or enforceable provision of applicable
law.
Section 8. Representations and Warranties. Each Grantor represents
and warrants as follows:
(a) As of the date hereof, such Grantor's exact legal name, which is
sufficient in accordance with Section 9-503(a) of the UCC, is correctly set
forth in Schedule I hereto. With respect to each Grantor that is not a
"registered organization" as such term is defined in Section 9-102 of the
UCC, such Grantor has its chief executive office in the state or
jurisdiction set forth in Schedule I hereto. Within the five years
preceding the execution of this Second Lien Non-Shared Security Agreement,
the information set forth in Schedule I hereto with respect to such Grantor
is true and accurate in all respects, except to the extent that failure of
such information to be true and accurate could not reasonably be expected
to result in a Material Adverse Effect (as defined in the Credit
Agreement). To the Knowledge of such Grantor, such Grantor has not
previously changed its name, the location of its chief executive office,
type of organization, jurisdiction of organization or organizational
identification number (if such Grantor, now or has been organized in a
jurisdiction that requires the organizational number of a debtor to be
identified on the relevant financing statement in order to create a
perfected second priority security interest) from those set forth in
Schedule I hereto except as disclosed in Schedule III hereto.
(b) Subject to Section 5(h), all Security Collateral consisting of
certificated securities and instruments (other than Permitted Investments),
have to the Knowledge of the relevant Grantor been delivered to the
Collateral Trustee. Subject to Section 5(h), to the Knowledge of the
relevant Grantor, none of the Receivables or Agreement Collateral is
evidenced by a promissory note or other instrument that has not been
delivered to the Collateral Trustee.
(c) Such Grantor is the legal and beneficial owner of the Non-Shared
Collateral of such Grantor free and clear of any Lien, claim, option or
right of others, except for Permitted Liens or the security interest
created under this Second Lien Non-Shared Security Agreement. No effective
financing statement or other instrument similar in effect covering all or
any part of such Non-Shared Collateral or listing such Grantor or any trade
name of such Grantor as debtor is on file in any recording office, except
(i) such as may have been filed in favor of the First Priority Controlling
Collateral Parties relating to the First Priority Shared Secured Agreement,
(ii) such as may have been filed in favor of the Collateral Trustee
relating to this Second Lien Non-Shared Security Agreement or (iii) as
otherwise permitted under the Indenture.
(d) Subject to Section 5(h), with respect to the Pledged Equity that
is an uncertificated security, to the extent that such Grantor has
Knowledge of the existence of any such uncertificated securities, such
Grantor has caused the issuer thereof either (at such Grantor's election)
(i) to register the Collateral Trustee as the registered owner of
Dynegy Second Lien Non-Shared Security Agreement
20
such security or (ii) to agree in an authenticated record with such Grantor
and the Collateral Trustee that such issuer will comply with instructions
with respect to such security originated by the Collateral Trustee without
further consent of such Grantor provided, however, that the Collateral
Trustee agrees that they will not deliver any such instructions to such
issuer except upon the occurrence and during the continuance of an Event of
Default. If such Grantor is an issuer of Pledged Equity, such Grantor
confirms that it has received notice of such security interest. Subject to
Section 5(h), with respect to all Security Collateral consisting of
certificated securities and instruments, to the extent that the relevant
Grantor has Knowledge of the existence of such certificated securities and
instruments, all such certificated securities and instruments have been
delivered to the Collateral Trustee.
(e) The Initial Pledged Equity pledged by such Grantor constitutes
the percentage of the issued and outstanding Equity Interests of the
issuers thereof indicated on Schedule II hereto.
(f) Subject in all respects to the provisions of Section 5(g) hereof,
to the Knowledge of the relevant Grantor, such Grantor has no deposit
accounts, other than the Account Collateral listed on Schedule IV hereto,
as such Schedule IV may be amended from time to time pursuant to Section
6(b), and to the Knowledge of the relevant Grantor, legal, binding and
enforceable Account Control Agreements with the First Priority Controlling
Collateral Parties are in effect for each deposit account that constitutes
Account Collateral (other than Account Collateral consisting of deposit
accounts maintained with the First Priority Controlling Collateral
Parties), except to the extent such Account Control Agreements are not
required by Sections 5(g) or 6(a). For the avoidance of doubt, the
representations and warranties in this Section 8(f) do not apply with
respect to any deposit account that any Grantor manages or maintains on
behalf of third parties, such as deposit accounts maintained or managed by
any Grantor for a joint venture in which third parties participate.
(g) Except for the consent of the First Priority Collateral Agent
which has been obtained and subject in all respects to the provisions of
Sections 5(g) and 5(h) hereof, to the Knowledge of the relevant Grantor,
all filings and other actions (including without limitation, (A) actions
necessary to obtain control of Non-Shared Collateral as provided in
Sections 9-104, 9-105 and 9-106 of the UCC and Section 16 of UETA and (B)
actions necessary to perfect the Collateral Trustee's security interest
with respect to Non-Shared Collateral constituting certificated securities
or instruments) necessary to perfect the security interest in the
Non-Shared Collateral of such Grantor created under this Second Lien
Non-Shared Security Agreement have been duly made or taken and are in full
force and effect, and this Second Lien Non-Shared Security Agreement
creates in favor of the Collateral Trustee for the benefit of the Secured
Parties a valid and, together with such filings and other actions,
perfected security interest in the Non-Shared Collateral of such Grantor,
securing the payment of the Parity Lien Obligations except, in each case,
(i) as is otherwise permitted pursuant to the express provisions of this
Second Lien Non-Shared Security Agreement and (ii) for Permitted Liens.
Dynegy Second Lien Non-Shared Security Agreement
21
(h) To the Knowledge of the relevant Grantor, the Grantor has no
commercial tort claims other than those listed in Schedule VI hereto.
Section 9. Further Assurances. (a) Subject to Section 5(h) and the
Intercreditor Agreement, each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute and deliver, or
otherwise authenticate, all further instruments and documents, and take all
further action that (to the Knowledge of such Grantor) may be necessary, or that
the Collateral Trustee reasonably may request, in order to perfect and protect
any pledge, assignment or security interest granted or purported to be granted
by such Grantor hereunder or to enable the Collateral Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Non-Shared
Collateral of such Grantor. Without limiting the generality of the foregoing,
each Grantor will promptly with respect to Non-Shared Collateral of such Grantor
and subject to the Indenture, Section 5(h) hereof and the Intercreditor
Agreement (and the right of the First Priority Controlling Collateral Parties to
have such actions taken for their benefit): (i) if any such Non-Shared
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper and if such Grantor has Knowledge of the existence of any such
promissory notes, instruments, or chattel paper, deliver and pledge to the
Collateral Trustee hereunder such note or instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance reasonably satisfactory to the Collateral Trustee;
(ii) execute or authenticate and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary, or as the Collateral Trustee reasonably may request, in order to
perfect and preserve the security interest granted or purported to be granted by
such Grantor hereunder; (iii) with respect to any certificates representing
Security Collateral that constitutes certificated securities, to the extent that
the relevant Grantor has Knowledge of the existence of such certificates,
deliver and pledge to the Collateral Trustee for ratable benefit of the Secured
Parties certificates representing Security Collateral that constitutes
certificated securities, accompanied by undated stock or bond powers executed in
blank; (iv) subject in all respects to the provisions of Section 5(g) hereof,
with respect to any Non-Shared Collateral consisting of deposit accounts,
electronic chattel paper, investment property or transferable records, to the
extent that the relevant Grantor has Knowledge of the existence of such deposit
accounts, electronic chattel paper, investment property or transferable records,
take all action necessary to ensure that the Collateral Trustee has control of
Non-Shared Collateral consisting of deposit accounts, electronic chattel paper,
investment property and transferable records as provided in Sections 9-104,
9-105 and 9-106 of the UCC and in Section 16 of UETA; (v) upon the occurrence
and during the continuance of an Event of Default, at the request of the
Collateral Trustee, take all action to ensure that the Collateral Trustee's
security interest is noted on any certificate of title related to any Non-Shared
Collateral evidenced by a certificate of title; and (vi) deliver to the
Collateral Trustee evidence that all other action that the Collateral Trustee
may deem reasonably necessary in order to perfect and protect the security
interest created by such Grantor under this Second Lien Non-Shared Security
Agreement has been taken.
(b) Each Grantor hereby authorizes the Collateral Trustee to file one
or more financing and continuation statements, and amendments thereto, relating
to all or any part of the Non-Shared Collateral of such Grantor without the
signature of such Grantor where permitted by law. A photocopy or other
reproduction of this Second Lien Non-Shared Security Agreement or any financing
statement covering the Non-Shared Collateral or any part thereof shall be
Dynegy Second Lien Non-Shared Security Agreement
22
sufficient as a financing statement where permitted by law. Each Grantor
ratifies its authorization for the Collateral Trustee to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.
(c) Each Grantor will furnish to the Collateral Trustee from time to
time statements and schedules further identifying and describing the Non-Shared
Collateral of such Grantor and such other reports in connection with such
Non-Shared Collateral as the Collateral Trustee may reasonably request, all in
reasonable detail.
Section 10. Post-Closing Changes; Bailees; Collections on Receivables
and Related Contracts. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
(if such Grantor is organized in a jurisdiction that requires the organizational
number of a debtor to be identified on a financing statement in order to create
a perfected second priority security interest) or location of its chief
executive office (in the case only of a Grantor that is not a "registered
organization", as such term is defined in Section 9-102 of the UCC) from those
set forth in Section 8(a) of this Second Lien Non-Shared Security Agreement
without first giving at least 30 days' prior written notice to the Collateral
Trustee and taking all action required by the Collateral Trustee for the purpose
of perfecting or protecting the security interest granted by this Second Lien
Non-Shared Security Agreement. Except with respect to security agreements
related to Permitted Liens, no Grantor will become bound by a security agreement
authenticated by another Person (determined as provided in Section 9-203(d) of
the UCC) without giving the Collateral Trustee 30 days' prior written notice
thereof and taking all action required by the Collateral Trustee to ensure that
the perfection and second priority nature of the Collateral Trustee's security
interest in the Non-Shared Collateral will be maintained. If any Grantor that is
organized in a jurisdiction that requires the organizational number of a debtor
to be identified on a relevant financing statement in order to create a
perfected second priority security interest does not have an organizational
identification number and later obtains one, it will forthwith notify the
Collateral Trustee of such organizational identification number.
(b) If any Non-Shared Collateral constituting goods of any Grantor
is, to the Knowledge of such Grantor, at any time in the possession or control
of a warehouseman, bailee or agent, or if the Collateral Trustee so requests,
such Grantor will (i) notify such warehouseman, bailee or agent of the security
interest created hereunder and under the First Priority Shared Security
Agreement, (ii) instruct such warehouseman, bailee or agent to hold all such
Non-Shared Collateral solely for the Collateral Trustee's account subject (A) to
the Intercreditor Agreement (and the prior rights of the First Priority
Controlling Collateral Parties on behalf of the holders of the First Priority
Obligations) and (B) after the First Priority Lien Satisfaction Date, to the
Collateral Trustee's instructions (which shall permit such Non-Shared Collateral
to be removed by such Grantor in the ordinary course of business until the
Collateral Trustee notifies such warehouseman, bailee or agent that an Event of
Default has occurred and is continuing), (iii) use commercially reasonable
efforts, to cause such warehouseman, bailee or agent to authenticate a record
acknowledging that it holds possession of such Non-Shared Collateral for the
applicable First Priority Controlling Collateral Parties' and Collateral
Trustee's benefit and shall, after the First Priority Lien Satisfaction Date,
act solely on the instructions of the Collateral Trustee without the further
consent of the Grantor or any other Person; provided, however, that the
Collateral Trustee agrees that it will not deliver any such instructions to such
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23
issuer except upon the occurrence and during the continuance of an Event of
Default following the First Priority Lien Satisfaction Date, and (iv) make such
authenticated record available to the Collateral Trustee.
(c) Except as otherwise provided in this subsection (c), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, such Grantor may take (and, at the
Collateral Trustee's direction given after the occurrence and during the
continuance of an Event of Default following the First Priority Lien
Satisfaction Date, will take) such action as such Grantor or the Collateral
Trustee may deem necessary to enforce collection of the Assigned Agreements,
Receivables and Related Contracts; provided, however, that the Collateral
Trustee shall have the right at any time, upon the occurrence and during the
continuance of an Event of Default following the First Priority Lien
Satisfaction Date, and upon written notice to such Grantor of its intention to
do so, to notify the Obligors under any Receivables and Related Contracts of the
assignment of such Receivables and Related Contracts to the Collateral Trustee
and to direct such Obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Collateral Trustee and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Receivables and Related Contracts, to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done, and to otherwise exercise all rights with respect to
such Receivables and Related Contracts, including, without limitation, those set
forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of the
notice from the Collateral Trustee referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including, without limitation,
instruments) received by such Grantor in respect of the Receivables and Related
Contracts of such Grantor shall be received in trust for the benefit of the
Collateral Trustee hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Trustee in the same
form as so received (with any necessary indorsement) to be applied as provided
in the Intercreditor Agreement and (ii) such Grantor will not adjust, settle or
compromise the amount or payment of any Receivable or amount due on any Related
Contract, release wholly or partly any Obligor thereof, or allow any credit or
discount thereon except in the ordinary course of such Grantor's business. For
the avoidance of doubt, none of the provisions of this Section 10(c) shall apply
with respect to any Property that is excluded from the lien and security
interest granted hereunder pursuant to the provisions of paragraphs (i), (ii),
(iii), (iv), (v), (vi), (vii) or (viii) of the "notwithstanding" clause at the
end of Section 2, including, but not limited to, Excluded Non-Shared Collateral,
Excluded Authorizations, Permitted Collateral or Excluded Equity.
Section 11. As to Intellectual Property Collateral. (a) With respect
to its material Intellectual Property Collateral, each Grantor agrees, upon the
request of the Collateral Trustee, to execute or otherwise authenticate an
agreement in substantially the form set forth in Exhibit E hereto or otherwise
in form and substance reasonably satisfactory to the Collateral Trustee (an
"Intellectual Property Second Lien Non-Shared Security Agreement"), for
recording the security interest granted hereunder to the Collateral Trustee in
such Intellectual Property Collateral with the U.S. Patent and Trademark Office,
the U.S. Copyright Office and any other governmental authorities necessary to
perfect the security interest hereunder in such material Intellectual Property
Collateral; provided that such Intellectual Property Collateral is granted to
the First Priority Controlling Collateral Parties.
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24
(b) Each Grantor agrees that should it obtain an ownership interest
in any item of the type set forth in Section 2(g) that is not on the date hereof
a part of the Intellectual Property Collateral ("After-Acquired Intellectual
Property") (i) the provisions of this Second Lien Non-Shared Security Agreement
shall automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Second Lien Non-Shared Security Agreement with
respect thereto; provided that such Intellectual Property Collateral is granted
to the First Priority Controlling Collateral Parties. At the end of each fiscal
quarter of DHI, each Grantor shall give written notice to the Collateral Trustee
identifying any material After-Acquired Intellectual Property acquired during
such fiscal quarter, and upon the request of the Collateral Trustee, such
Grantor shall execute and deliver to the Collateral Trustee with such written
notice, or otherwise authenticate, an agreement substantially in the form of
Exhibit F hereto or otherwise in form and substance reasonably satisfactory to
the Collateral Trustee (an "IP Second Lien Non-Shared Security Agreement
Supplement") covering such material After-Acquired Intellectual Property which
IP Second Lien Non-Shared Security Agreement Supplement shall be recorded with
the U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder in
such material After-Acquired Intellectual Property; provided that such
Intellectual Property Collateral is granted to the First Priority Controlling
Collateral Parties.
Section 12. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Security Collateral of such
Grantor or any part thereof for any purpose; provided however, that such
Grantor will not exercise or refrain from exercising any such right if such
action could reasonably be expected to result in a Material Adverse Effect
(as defined in the Credit Agreement).
(ii) Each Grantor shall be entitled to receive and retain any and
all dividends, interest and other distributions paid in respect of the
Security Collateral of such Grantor if and to the extent that the payment
thereof is not otherwise prohibited by the terms of this Second Lien
Non-Shared Security Agreement; provided, however, that any and all
dividends, interest and other distributions paid or payable other than in
cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Security
Collateral shall be, and shall be forthwith delivered to the First Priority
Controlling Collateral Parties, or following the First Priority Lien
Satisfaction Date, the Collateral Trustee to hold as, Security Collateral
and shall, if received by such Grantor, be received in trust for the
benefit of the Collateral Trustee, be segregated from the other property or
funds of such Grantor and be forthwith delivered to the Collateral Trustee
as Security Collateral in the same form as so received (with any necessary
indorsement).
(iii) Following the First Priority Lien Satisfaction Date, the
Collateral Trustee will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of
Dynegy Second Lien Non-Shared Security Agreement
25
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default, subject to the Intercreditor Agreement and notice to DHI (provided that
the failure to give any such notice shall not affect the validity of any of the
following actions taken by the Collateral Trustee):
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to Section 12(a)(i) shall, upon notice to
such Grantor by the First Priority Controlling Collateral Parties, or
following the First Priority Lien Satisfaction Date, the Collateral
Trustee, cease and (y) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain
pursuant to Section 12(a)(ii) shall automatically cease, and all such
rights shall thereupon become vested in the First Priority Controlling
Collateral Parties, or following the First Priority Lien Satisfaction Date,
the Collateral Trustee, who shall thereupon have the sole right to exercise
or refrain from exercising such voting and other consensual rights and to
receive and hold as collateral such dividends, interest and other
distributions.
(ii) All dividends, interest and other distributions that are
received by any Grantor contrary to the provisions of paragraph (i) of this
Section 12(b) shall be received in trust for the benefit of the Collateral
Trustee, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the First Priority Controlling Collateral Parties,
or following the First Priority Lien Satisfaction Date, the Collateral
Trustee as collateral in the same form as so received (with any necessary
indorsement).
(iii) Following the First Priority Lien Satisfaction Date, the
Collateral Trustee shall be authorized to send to each Securities
Intermediary or Commodity Intermediary as defined in and under any Security
Control Agreement a Notice of Exclusive Control as defined in and under
such Security Control Agreement.
Section 13. As to Letter-of-Credit Rights. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights to the Collateral Trustee, intends to (and hereby does) assign to the
Collateral Trustee its rights (including its contingent rights) to the proceeds
of all Related Contracts consisting of letters of credit of which it is or
hereafter becomes a beneficiary or assignee, subject to the prior rights of the
First Priority Controlling Collateral Parties therein for the benefit of the
holders of the First Priority Obligations. Following the First Priority Lien
Satisfaction Date and upon the request of the Collateral Trustee after the
occurrence and during the continuance of an Event of Default and subject to the
Intercreditor Agreement, each Grantor will promptly use its commercially
reasonable efforts to cause the issuer of each letter of credit and each
nominated person (if any) with respect thereto to consent to such assignment of
the proceeds thereof in a Consent to Assignment of Letter of Credit Rights.
Dynegy Second Lien Non-Shared Security Agreement
26
(b) Upon the occurrence and during the continuance of an Event of
Default following the First Priority Lien Satisfaction Date, each Grantor will,
promptly upon request by the Collateral Trustee, (i) notify (and such Grantor
hereby authorizes the Collateral Trustees to notify) the issuer and each
nominated person with respect to each of the Related Contracts consisting of
letters of credit that the proceeds thereof have been assigned to the Collateral
Trustee hereunder and any payments due or to become due in respect thereof are
to be made directly to the Collateral Trustee or its designee.
(c) With respect to any Securities Account Control Agreement,
Commodity Accounts Control Agreement, Account Control Agreement or Consent to
Assignment of Letter of Credit Rights, the Collateral Trustee agrees that it
will not issue any entitlement orders or other directions, instructions or
notifications thereunder with respect to the disposition or transfer of any
Non-Shared Collateral therein addressed or blocking any Grantor's ability to
deal with any such Non-Shared Collateral, except upon the occurrence and during
the continuance of an Event of Default following the First Priority Lien
Satisfaction Date. The Collateral Trustee further agrees that, upon its issuance
of any such entitlement orders, directions, instructions or notifications, it
will promptly provide a copy thereof to the relevant Grantor.
Section 14. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Non-Shared Collateral, other than
sales, assignments and other dispositions of Non-Shared Collateral, and options
relating to Non-Shared Collateral, permitted under the terms of the Indenture
and Intercreditor Agreement or (ii) create or suffer to exist any Lien upon or
with respect to any of the Non-Shared Collateral of such Grantor except for the
pledge, assignment and security interest created under this Second Lien
Non-Shared Security Agreement and Liens permitted under the Indenture.
(b) Each Grantor agrees that it will pledge hereunder, promptly upon
its acquisition (directly or indirectly) thereof, any and all additional Equity
Interests or other securities that are issued by any Grantor and are Pledged
Equity.
Section 15. Collateral Trustee Appointed Attorney-in-Fact. Subject to
the Indenture and the Intercreditor Agreement, each Grantor hereby irrevocably
appoints the Collateral Trustee such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time, upon the occurrence and during the continuance
of an Event of Default following the First Priority Lien Satisfaction Date, in
the Collateral Trustee's discretion, to take any action and to execute any
instrument that the Collateral Trustee may deem necessary or advisable to
accomplish the purposes of this Second Lien Non-Shared Security Agreement,
including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Trustee pursuant to the provisions of the Indenture,
(b) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Non-Shared Collateral,
Dynegy Second Lien Non-Shared Security Agreement
27
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above,
and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Trustee may deem necessary or desirable for
the collection of any of the Non-Shared Collateral or otherwise to enforce
compliance with the terms and conditions of any Assigned Agreement or the
rights of the Collateral Trustee with respect to any of the Non-Shared
Collateral.
Section 16. Collateral Trustee May Perform. Subject to the
Intercreditor Agreement, if any Grantor fails to perform any agreement contained
herein, the Collateral Trustee may, but without any obligation to do so and
without notice, themselves perform, or cause performance of, such agreement, and
the expenses of the Collateral Trustee incurred in connection therewith shall be
payable by such Grantor under Section 19.
Section 17. The Collateral Trustee's Duties. (a) The powers conferred
on the Collateral Trustee hereunder are solely to protect the Secured Parties'
interest in the Non-Shared Collateral and shall not impose any duty upon them to
exercise any such powers. Except for the safe custody of any Non-Shared
Collateral in its possession and the accounting for moneys actually received by
them hereunder, the Collateral Trustee shall have no duty as to any Non-Shared
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Non-Shared Collateral, whether or not any Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Non-Shared Collateral. The Collateral Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of any Non-Shared Collateral in
its possession if such Non-Shared Collateral is accorded treatment substantially
equal to that which it accords its own property.
(b) Anything contained herein to the contrary notwithstanding, the
Collateral Trustee may from time to time, when the Collateral Trustee deems it
to be necessary, appoint one or more subagents (each a "Subagent") for the
Collateral Trustee hereunder with respect to all or any part of the Non-Shared
Collateral, subject to Section 11.02 of the Indenture. In the event that the
Collateral Trustee so appoints any Subagent with respect to any Non-Shared
Collateral, (i) the assignment and pledge of such Non-Shared Collateral and the
security interest granted in such Non-Shared Collateral by each Grantor
hereunder shall be deemed for purposes of this Second Lien Non-Shared Security
Agreement to have been made to such Subagent, in addition to the Collateral
Trustee, for the ratable benefit of the Secured Parties, as security for the
Parity Lien Obligations of such Grantor, (ii) such Subagent shall automatically
be vested, in addition to the Collateral Trustee, with all rights, powers,
privileges, interests and remedies of the Collateral Trustee hereunder with
respect to such Non-Shared Collateral, and (iii) the term "Collateral Trustee,"
when used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Trustee with respect to such Non-Shared Collateral,
shall include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Non-Shared Collateral
unless and except to the extent expressly authorized in writing by the
Collateral Trustee and permitted by the Intercreditor Agreement.
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28
Section 18. Remedies. If any Event of Default shall have occurred and
be continuing and subject to the Intercreditor Agreement:
(a) The Collateral Trustee may exercise in respect of the Non-Shared
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
upon default under the UCC (whether or not the UCC applies to the affected
Non-Shared Collateral) and also may: (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon request of the
Collateral Trustee forthwith, assemble all or part of the Non-Shared
Collateral as directed by the Collateral Trustee and make it available to
the Collateral Trustee at a place and time to be designated by the
Collateral Trustee that is reasonably convenient to all parties; (ii)
without notice except as specified below, sell the Non-Shared Collateral or
any part thereof in one or more parcels at public or private sale, at any
of the Collateral Trustee's offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as the Collateral Trustee
may deem commercially reasonable; (iii) to the fullest extent permitted by
applicable law and by contracts with third parties, and subject to any
applicable safety requirements at any such premises, occupy any premises
owned or leased by any of the Grantors where the Non-Shared Collateral or
any part thereof is assembled or located for a reasonable period in order
to effectuate their rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise
any and all rights and remedies of any of the Grantors under or in
connection with the Non-Shared Collateral, or otherwise in respect of the
Non-Shared Collateral, including, without limitation, (A) any and all
rights of such Grantor to demand or otherwise require payment of any amount
under, or performance of any provision of, the Assigned Agreements, the
Receivables, the Related Contracts and the other Non-Shared Collateral, (B)
withdraw, or cause or direct the withdrawal, of all funds with respect to
the Account Collateral and (C) exercise all other rights and remedies with
respect to the Assigned Agreements, the Receivables, the Related Contracts
and the other Non-Shared Collateral, including, without limitation, those
set forth in Section 9-607 of the UCC. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice
to such Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Trustee shall not be obligated to make any
sale of Non-Shared Collateral regardless of notice of sale having been
given. The Collateral Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned.
(b) Any cash held by or on behalf of the Collateral Trustee and all
cash proceeds received by or on behalf of the Collateral Trustee in respect
of any sale of, collection from, or other realization upon all or any part
of the Non-Shared Collateral may, in the discretion of the Collateral
Trustee, be held by the Collateral Trustee as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts payable to
the Collateral Trustee pursuant to Section 19) in whole or in part by the
Collateral Trustee for the ratable benefit of the Secured Parties against,
all or any part of the Parity Lien Obligations, in accordance with the
terms of the Intercreditor Agreement.
Dynegy Second Lien Non-Shared Security Agreement
29
(c) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Non-Shared Collateral
shall be received in trust for the benefit of the Collateral Trustee, shall
be segregated from other funds of such Grantor and shall be forthwith paid
over to the First Priority Controlling Collateral Parties, or following the
First Priority Lien Satisfaction Date, the Collateral Trustee in the same
form as so received (with any necessary endorsement).
(d) The Collateral Trustee may, without notice to any Grantor except
as required by law and at any time or from time to time, charge, set-off
and otherwise apply all or any part of the Parity Lien Obligations against
any funds held with respect to the Account Collateral or in any other
deposit account.
(e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill symbolized by
any Trademarks subject to such sale or other disposition shall be included
therein, and such Grantor shall supply to the Collateral Trustee or their
designee such Grantor's know-how and expertise, and documents and things
relating to any Intellectual Property Collateral subject to such sale or
other disposition, and such Grantor's customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services of
such Grantor.
Section 19. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless the Collateral Trustee and each
Secured Party and each of their affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or
resulting from this Second Lien Non-Shared Security Agreement (including,
without limitation, enforcement of this Second Lien Non-Shared Security
Agreement), except to the extent such claim, damage, loss, liability or expense
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. The provisions of this Section 19(a) shall survive the
termination of this Agreement.
(b) Each Grantor will upon demand pay to the Collateral Trustee the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of their counsel and of any experts and agents,
that the Collateral Trustee may incur in connection with (i) the administration
of this Second Lien Non-Shared Security Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Non-Shared Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Collateral Trustee, the
Secured Parties hereunder or (iv) the failure by such Grantor to perform or
observe any of the provisions hereof.
(c) EACH GRANTOR ACKNOWLEDGES THAT THIS SECOND LIEN NON-SHARED
SECURITY AGREEMENT AND OTHER TRANSACTION DOCUMENTS CONTAIN PROVISIONS RELEASING
EACH INDEMNIFIED PARTY FROM LIABILITY AND/OR INDEMNIFYING AND HOLDING HARMLESS
EACH
Dynegy Second Lien Non-Shared Security Agreement
30
INDEMNIFIED PARTY FOR, AMONG OTHER THINGS, INDEMNIFIED PARTY'S OWN NEGLIGENCE.
EACH GRANTOR AGREES THAT THE RELEASE AND/OR INDEMNITY PROVISIONS CONTAINED IN
THESE DOCUMENTS ARE CAPTIONED TO CLEARLY IDENTIFY THE RELEASE AND/OR INDEMNITY
PROVISIONS AND, THEREFORE, ARE SO CONSPICUOUS THAT EACH GRANTOR HAS FAIR NOTICE
OF THE EXISTENCE AND CONTENTS OF SUCH PROVISIONS. EACH GRANTOR HEREBY WAIVES ANY
DEFENSES IT MIGHT ASSERT AGAINST EACH INDEMNIFIED PARTY BASED ON THE HOLDING OF
THE TEXAS SUPREME COURT IN ETHYL CORP. x. XXXXXX CONST. CO., 725 S.W.2d 705
(Tex. 1987), PAGE PETROLEUM, INC., et al. V. DRESSER INDUSTRIES, INC., et al.,
853 S.W.2d 505 (Tex. 1993), AND QUORUM HEALTH RESOURCES, L.L.C. v. MAVERICK
COUNTY HOSPITAL DISTRICT et al., 308 F.3rd 451 (5th Cir. 2002) AND ANY RELATED
CASE LAW HOLDINGS.
Section 20. Amendments; Waivers; Additional Grantors; Etc. (a) Subject
to the terms of the Indenture and the Intercreditor Agreement and clause (b)
below, no amendment or waiver of any provision of this Second Lien Non-Shared
Security Agreement, and no consent to any departure by any Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Collateral Trustee and DHI and otherwise shall comply with the provisions
of Section 3.01 of the Intercreditor Agreement, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Collateral Trustee or any other
Secured Party to exercise, and no delay in exercising any right hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.
(b) This Second Lien Non-Shared Security Agreement shall be
automatically amended or waived without further action under the conditions set
forth in the Intercreditor Agreement. In the event of any such amendment, the
Collateral Trustee upon the request of any Grantor or any First Priority Secured
Party will enter into an instrument confirming such amendment or waiver.
(c) Upon the execution and delivery, or authentication, by any Person
of a security agreement supplement in substantially the form of Exhibit A hereto
(each a "Second Lien Non-Shared Security Agreement Supplement"), (i) such Person
shall be referred to as an "Additional Grantor" and shall be and become a
Grantor hereunder, and each reference in this Second Lien Non-Shared Security
Agreement to "Grantor" shall also mean and be a reference to such Additional
Grantor, and each reference in this Second Lien Non-Shared Security Agreement to
"Non-Shared Collateral" shall also mean and be a reference to the Non-Shared
Collateral of such Additional Grantor, and (ii) the supplemental schedules I-VI
attached to each Second Lien Non-Shared Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules I-VI,
respectively, hereto, and the Collateral Trustee may attach such supplemental
schedules to such Schedules; and each reference to such Schedules shall mean and
be a reference to such Schedules as supplemented pursuant to each Second Lien
Non-Shared Security Agreement Supplement.
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Section 21. Notices, Etc. (a) Unless otherwise expressly provided
herein, all notices and other communications provided for hereunder or any other
Non-Shared Collateral Document shall be in writing (including by facsimile
transmission). All such written notices shall be mailed, faxed or delivered to
the applicable address, facsimile number or (subject to Section 21(c))
electronic mail address, as follows:
(i) as to the Collateral Trustee, addressed to its address specified
in the Indenture;
(ii) as to any Grantor, addressed to it at its address shown on
Schedule I hereto; and
(iii) as to any party, at such other address as shall be designated by
such party in a written notice to the other parties.
All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of Section
21(c)), when delivered. In no event shall a voicemail message be effective as a
notice, communication or confirmation hereunder.
(b) Any amendment or waiver of any provision of this Second Lien
Non-Shared Security Agreement or of any Second Lien Non-Shared Security
Agreement Supplement or Schedule hereto may be transmitted and/or signed by
facsimile. The effectiveness of any such documents and signatures shall, subject
to applicable law, have the same force and effect as manually signed originals
and shall be binding on all parties thereto. The Collateral Trustee may also
require that any such documents and signatures be confirmed by a manually signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.
(c) Electronic mail and Internet and intranet websites may be used
only to distribute routine communications and to distribute Non-Shared
Collateral Documents for execution by the parties thereto, and may not be used
for any other purpose.
(d) The Collateral Trustee shall be entitled to rely and act upon any
notices purportedly given by or on behalf of any Grantor even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. Each Grantor shall indemnify the Collateral Trustee from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Grantor. All telephonic
notices to and other communications with the Collateral Trustee may be recorded
by the Collateral Trustee, and each of the parties hereto hereby consents to
such recording.
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32
Section 22. Continuing Security Interest. This Second Lien Non-Shared
Security Agreement shall create a continuing security interest in the Non-Shared
Collateral and shall (a) remain in full force and effect until all of the
Non-Shared Collateral is released, and this Second Lien Non-Shared Security
Agreement is terminated in accordance with the terms of this Second Lien
Non-Shared Security Agreement and the Indenture, (b) be binding upon each
Grantor, its successors and assigns and (c) inure, together with the rights and
remedies of the Collateral Trustee hereunder, to the benefit of the Collateral
Trustee and on behalf of the Secured Parties and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), any holder of the Notes may assign or otherwise transfer all or any portion
of its Notes to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such holder of the
Notes herein or otherwise, in each case as provided in Section 2.06 of the
Indenture.
Section 23. Release; Termination. The Collateral Trustee shall release
all or any portion of the Non-Shared Collateral solely on terms and subject to
the conditions set forth in, or as required by, Article 2 of the Intercreditor
Agreement or Section 12.04 of the Indenture. Upon request (and at the expense)
of any Grantor, the Collateral Trustee will execute and deliver such instruments
of release as such Grantor may reasonably request to evidence any such release.
Section 24. Security Interest Absolute. The obligations of each
Grantor under this Second Lien Non-Shared Security Agreement are independent of
the Parity Lien Obligations or any other Obligations of any other Grantor under
or in respect of this Second Lien Non-Shared Security Agreement, and a separate
action or actions may be brought and prosecuted against each Grantor to enforce
this Second Lien Non-Shared Security Agreement, irrespective of whether any
action is brought against such Grantor or any other Grantor or whether such
Grantor or any other Grantor is joined in any such action or actions. All rights
of the Collateral Trustee and the other Secured Parties and the pledge,
assignment and security interest hereunder, and all obligations of each Grantor
hereunder, shall to the fullest extent permitted under applicable law, be
irrevocable, absolute and unconditional irrespective of, and to the fullest
extent permitted under applicable law, each Grantor hereby irrevocably waives
(to the maximum extent permitted by applicable law) any defenses it may now have
or may hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of this Second Lien
Non-Shared Security Agreement or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Parity Lien Obligations or any other
Obligations of any other Grantor under or in respect of this Second Lien
Non-Shared Security Agreement or any other amendment or waiver of or any
consent to any departure from this Second Lien Non-Shared Security
Agreement, including, without limitation, any increase in the Parity Lien
Obligations resulting from the extension of additional credit to any
Grantor or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Non-Shared
Collateral or any other collateral, or any taking, release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Parity Lien Obligations;
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(d) any manner of application of any Non-Shared Collateral or any
other collateral, or proceeds thereof, to all or any of the Parity Lien
Obligations, or any manner of sale or other disposition of any Non-Shared
Collateral or any other collateral for all or any of the Parity Lien
Obligations or any other Obligations of any other Grantor under or in
respect of this Second Lien Non-Shared Security Agreement or any other
assets of any Grantor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Grantor or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Grantor any
information relating to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities or prospects
of any other Grantor now or hereafter known to such Secured Party (each
Grantor waiving any duty on the part of the Secured Parties to disclose
such information);
(g) the failure of any other Person to execute this Second Lien
Non-Shared Security Agreement or any other Non-Shared Collateral Document,
guaranty or agreement or the release or reduction of liability of any
Grantor or other grantor or surety with respect to the Parity Lien
Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, such Grantor or any other Grantor
or a third party grantor of a security interest.
To the fullest extent permitted under applicable law, this Second Lien
Non-Shared Security Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Parity Lien
Obligations is rescinded or must otherwise be returned by the Collateral Trustee
or any Secured Party or by any other Person upon the insolvency, bankruptcy or
reorganization of any Grantor or otherwise, all as though such payment had not
been made.
Section 25. Execution in Counterparts. This Second Lien Non-Shared
Security Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Second Lien Non-Shared Security
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Second Lien Non-Shared Security Agreement.
Section 26. The Mortgages. In the event that any of the Non-Shared
Collateral hereunder is also subject to a valid and enforceable Lien under the
terms of any Mortgage or the Second Preferred Fleet Mortgage and the terms of
such Mortgage or Second Preferred Fleet Mortgage are inconsistent with the terms
of this Second Lien Non-Shared Security Agreement, then with respect to such
Non-Shared Collateral, the terms of such Mortgage or such Second Preferred Fleet
Mortgage shall be controlling in the case of fixtures and real estate leases,
letting and licenses of, and contracts and agreements relating to the lease of,
real property, and the terms
Dynegy Second Lien Non-Shared Security Agreement
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of this Second Lien Non-Shared Security Agreement shall be controlling in the
case of all other Non-Shared Collateral.
Section 27. Collateral in the State of Louisiana. (a) As to all
Non-Shared Collateral now or hereafter located in the State of Louisiana, or as
to which the laws of the State of Louisiana may now be or hereafter become
applicable, each Grantor hereby acknowledges the Parity Lien Obligations,
whether now existing or to arise hereafter, and confesses judgment thereon if
the Parity Lien Obligations are not paid at maturity, and does by these presents
consent, agree and stipulate that if any portion of the Parity Lien Obligations
is not promptly and fully paid when due, the Parity Lien Obligations shall, at
the option of the Collateral Trustee and subject to the Intercreditor Agreement,
become immediately due and payable and it shall be lawful for the Collateral
Trustee, without making a demand and without notice or putting in default, the
same being hereby expressly waived, to cause all and singular the Non-Shared
Collateral to be seized and sold by executory process, without appraisement
(appraisement being hereby expressly waived), either in its entirety or in lots
or parcels, as the Collateral Trustee may determine, to the highest bidder for
cash, or on such terms as plaintiff in such proceedings may direct.
(b) To the fullest extent permitted under applicable law, each
Grantor hereby expressly waives: (a) the benefit of appraisement, as provided in
Articles 2332, 2336, 2723 and 2724, Louisiana Code of Civil Procedure, and all
other laws conferring the same; (b) the demand and three (3) days delay accorded
by Articles 2639 and 2721, Louisiana Code of Civil Procedure; (c) the notice of
seizure required by Articles 2293 and 2721, Louisiana Code of Civil Procedure;
(d) the three (3) days delay provided by Articles 2331 and 2722, Louisiana Code
of Civil Procedure; and (e) the benefit of the other provisions of Articles
2331, 2722 and 2723, Louisiana Code of Civil Procedure, and the benefit of any
other Articles or laws relating to rights of appraisement, notice, or delay not
specifically mentioned above; and, to the fullest extent permitted under
applicable law, each Grantor expressly agrees to the immediate seizure of the
Non-Shared Collateral in the event of suit hereon.
(c) Each Grantor acknowledges that the Collateral Trustee shall have
all rights to appointment of a keeper in connection with any action to foreclose
the lien hereof, all in accordance with La. R.S. 9:5136 et seq. The Court before
which the proceedings are pending shall determine the keeper's fees, and the
payment of such fees shall constitute a portion of the Parity Lien Obligations
secured by the lien hereof.
(d) This Section 27 shall in no way affect or be deemed a waiver of
the provisions of Section 28 or Section 29.
Section 28. Governing Law. This Second Lien Non-Shared Security
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.
Section 29. Submission to Jurisdiction and Waiver. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Second
Lien Non-Shared Security Agreement and the other Indenture Documents
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to which it is or is to be a party, or for recognition or enforcement of any
judgment, and each Grantor hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each Grantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Second Lien Non-Shared Security Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding relating to
this Second Lien Non-Shared Security Agreement in the courts of any
jurisdiction.
(b) Each Grantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Second Lien Non-Shared Security Agreement to
which it is or is to be a party in any New York State or federal court. Each
Grantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.
(c) EACH GRANTOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS SECOND LIEN NON-SHARED SECURITY AGREEMENT, THE LOANS OR THE
ACTIONS OF ANY BANKS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Section 30. Intercreditor Agreement. Notwithstanding anything in
this Second Lien Non-Shared Security Agreement to the contrary, the Lien and
security interest granted to the Collateral Trustee pursuant to this Second Lien
Non-Shared Security Agreement and the exercise of any right or remedy by the
Collateral Trustee hereunder are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and this Second Lien Non-Shared Security Agreement, the terms of the
Intercreditor Agreement shall govern.
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IN WITNESS WHEREOF, the parties hereto have executed this Second Lien
Non-Shared Security Agreement to be effective as provided herein.
ILLINOVA CORPORATION
By: /s/ Xxxxxx X. Xxx
----------------------------------
Name: Xxxxxx X. Xxx
-------------------------------
Title: Sr. Vice-President-Treasurer
-------------------------------
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DYNEGY INC.
ILLINOVA GENERATING COMPANY
IGC XXXXXX COUNTY, INC.
IGC XXXXXX FRONTIER, INC.
IPG FERNDALE, INC.
IPG PARIS, INC.
CHARTER OAK (PARIS) INC.
ILLINOVA ENERGY PARTNERS, INC.
By: /s/ Xxxxxx X. Xxx
----------------------------------
Xxxxxx X. Xxx
Xx. Vice President-Treasurer
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Acknowledged on the date hereof by:
XXXXX FARGO BANK MINNESOTA, N.A.,
as Collateral Trustee
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Corporate Trust Officer
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