EXHIBIT 4.8
EXECUTION COPY
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COLLATERAL TRUST AGREEMENT
dated as of December 23, 2003
among
NRG ENERGY, INC.,
NRG POWER MARKETING INC.,
the Guarantors from time to time party hereto,
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
as Administrative Agent,
LAW DEBENTURE TRUST COMPANY OF NEW YORK,
as Trustee
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION........................................... 2
SECTION 1.1 Defined Terms............................................................ 2
SECTION 1.2 Rules of Interpretation.................................................. 14
ARTICLE 2. THE TRUST ESTATES................................................................. 15
SECTION 2.1 Declaration of Senior Trust.............................................. 15
SECTION 2.2 Declaration of Junior Trust.............................................. 16
SECTION 2.3 Priority of Liens........................................................ 17
SECTION 2.4 Collateral Shared Equally and Ratably within Class....................... 19
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE...................................... 19
SECTION 3.1 Undertaking of the Collateral Trustee.................................... 19
SECTION 3.2 Release or Subordination of Liens........................................ 20
SECTION 3.3 Remedies Upon Actionable Default......................................... 20
SECTION 3.4 Application of Proceeds.................................................. 21
SECTION 3.5 Powers of the Collateral Trustee......................................... 22
SECTION 3.6 Documents and Communications............................................. 22
SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured Obligations......... 22
SECTION 3.8 Additional Secured Debt.................................................. 22
ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE GUARANTORS......................... 24
SECTION 4.1 Release of Liens......................................................... 24
SECTION 4.2 Delivery of Copies to Secured Debt Representatives....................... 25
SECTION 4.3 Collateral Trustee not Required to Serve, File or Record................. 26
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE.............................................. 26
SECTION 5.1 No Implied Duty.......................................................... 26
SECTION 5.2 Appointment of Agents and Advisors....................................... 26
SECTION 5.3 Other Agreements......................................................... 26
SECTION 5.4 Solicitation of Instructions............................................. 26
SECTION 5.5 Limitation of Liability.................................................. 26
SECTION 5.6 Documents in Satisfactory Form........................................... 26
SECTION 5.7 Entitled to Rely......................................................... 27
SECTION 5.8 Secured Debt Default..................................................... 27
SECTION 5.9 Actions by Collateral Trustee............................................ 27
SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee................. 27
SECTION 5.11 Rights of the Collateral Trustee......................................... 27
SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of Collateral....... 28
SECTION 5.13 Assumption of Rights, Not Assumption of Duties........................... 28
SECTION 5.14 No Liability for Clean Up of Hazardous Materials......................... 28
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE................................. 29
SECTION 6.1 Resignation or Removal of Collateral Trustee............................. 29
SECTION 6.2 Appointment of Successor Collateral Trustee.............................. 29
SECTION 6.3 Succession............................................................... 29
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ARTICLE 7. MISCELLANEOUS PROVISIONS.......................................................... 30
SECTION 7.1 Amendment................................................................ 30
SECTION 7.2 Further Assurances....................................................... 32
SECTION 7.3 Successors and Assigns................................................... 32
SECTION 7.4 Delay and Waiver......................................................... 33
SECTION 7.5 Notices.................................................................. 33
SECTION 7.6 Entire Agreement......................................................... 34
SECTION 7.7 Compensation; Expenses................................................... 34
SECTION 7.8 Indemnity................................................................ 35
SECTION 7.9 Severability............................................................. 35
SECTION 7.10 Headings................................................................. 35
SECTION 7.11 Obligations Secured...................................................... 36
SECTION 7.12 Governing Law............................................................ 36
SECTION 7.13 Consent to Jurisdiction.................................................. 36
SECTION 7.14 Waiver of Jury Trial..................................................... 36
SECTION 7.15 Counterparts............................................................. 36
SECTION 7.16 Effectiveness............................................................ 37
SECTION 7.17 Additional Obligors...................................................... 37
SECTION 7.18 Continuing Nature of this Agreement...................................... 37
SECTION 7.19 Insolvency............................................................... 37
SECTION 7.20 Rights and Immunities of Secured Debt Representatives.................... 37
ARTICLE 8. CREDIT AGREEMENT PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS............. 38
ARTICLE 9. INDENTURE PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS.................... 39
Exhibits:
Exhibit A Collateral Trust Joinder
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This Collateral Trust Agreement, dated as of December 23, 2003
(this "Agreement"), is entered into by and among NRG ENERGY, INC., a Delaware
corporation (the "Company"), NRG POWER MARKETING INC., a Delaware corporation
("Power Marketing" and, together with the Company, the "Credit Agreement
Borrowers"), the Guarantors from time to time party hereto, CREDIT SUISSE FIRST
BOSTON, acting through its Cayman Islands Branch, as Administrative Agent (as
defined below), LAW DEBENTURE TRUST COMPANY OF NEW YORK, as Trustee (as defined
below), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Trustee
(together with its successors in such capacity, the "Collateral Trustee").
RECITALS
1. The Credit Agreement Borrowers intend to enter into a
Credit Agreement dated as of the date hereof (as amended, supplemented, replaced
or modified from time to time, the "Credit Agreement") among the Credit
Agreement Borrowers, the several banks and other financial institutions or
entities from time to time parties thereto as lenders, Credit Suisse First
Boston, acting through its Cayman Islands Branch, and Xxxxxx Brothers Inc., as
joint lead book runners and joint lead arrangers (in such capacities,
collectively, the "Arrangers"), Credit Suisse First Boston, acting through its
Cayman Islands Branch, as administrative agent (in such capacity and together
with its successors, the "Administrative Agent") and as collateral agent (in
such capacity and together with its successors, the "Collateral Agent"), Xxxxxx
Commercial Paper Inc., as syndication agent (in such capacity, the "Syndication
Agent"), and General Electric Capital Corporation, as revolver agent, which will
provide for a $1,450,000,000 credit facility to be made available in the form of
revolving loans, term loans, swingline loans and letters of credit to be issued
thereunder or to be deposited in the form of credit-linked deposits thereunder.
2. The Company intends to issue 8% Second Priority
Senior Secured Notes (the "Notes") in an aggregate principal amount of
$1,250,500,000 pursuant to an Indenture dated as of the date hereof (as amended,
supplemented, replaced or modified from time to time, the "Indenture") among the
Company, the Guarantors and Law Debenture Trust Company of New York, as trustee
(in such capacity and together with its successors, the "Trustee").
3. The Credit Agreement Borrowers and the Guarantors
intend to secure their respective Secured Obligations (as defined below),
including their obligations under the Credit Agreement and any future Priority
Lien Debt, on a priority basis, and, subject to such priority, their obligations
under the Indenture and any future Parity Lien Debt, with security interests in
all present and future Collateral (as defined below) to the extent that such
security interests have been provided for in the applicable Security Documents
(as defined below).
4. This Agreement sets forth the terms on which each
Secured Party has appointed the Collateral Trustee as trustee for the present
and future holders of the Secured Obligations to receive, hold, maintain,
administer and distribute the Collateral at any time delivered to the Collateral
Trustee or the subject of the Security Documents, and to enforce the Security
Documents and all interests, rights, powers and remedies of the Collateral
Trustee with respect thereto or thereunder and the proceeds thereof.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 Defined Terms.
(a) The following terms shall have the following
meanings:
"Act of Instructing Debtholders" shall mean, as to any matter
at any time, (a) prior to the Discharge of Priority Lien Obligations, a
direction in writing delivered to the Collateral Trustee by or with the written
consent of the Priority Debt Representatives representing the holders of
Priority Lien Debt constituting more than 50% of the sum of (x) the aggregate
outstanding amount of all Priority Lien Debt and (y) the face amount of any
outstanding letters of credit issued under Priority Lien Documents or, if such
direction is delivered in respect of any act other than the enforcement of
remedies or the protections of Liens on Collateral, 50% of the sum of (i) the
aggregate outstanding amount of all Priority Lien Debt, (ii) the aggregate
undrawn commitments with respect to all Priority Lien Debt and (iii) the face
amount of all outstanding letters of credit issued under any Priority Lien
Document, and (b) at any time after the Discharge of Priority Lien Obligations,
a direction in writing delivered to the Collateral Trustee by or with the
written consent of the Parity Debt Representatives representing the Required
Parity Debtholders. For this purpose, Secured Debt registered in the name of, or
beneficially owned by, the Company or any Affiliate of the Company will be
deemed not to be outstanding and neither the Company nor any such Affiliate
shall be entitled to vote to direct the relevant Secured Debt Representative.
"Actionable Default" shall mean (a) prior to the Discharge of
Priority Lien Obligations, the occurrence of any event of default under any
Priority Lien Document, the result of which is that (i) the holders of Priority
Lien Debt under such Priority Lien Document have the right to declare all of the
Secured Obligations thereunder to be due and payable prior to the stated
maturity thereof or (ii) such Secured Obligations automatically become due and
payable prior to the stated maturity thereof, and (b) at any time after the
Discharge of Priority Lien Obligations, the occurrence of any event of default
under any Parity Lien Document, the result of which is that (x) the holders of
Parity Lien Debt under such Parity Lien Document have the right to declare all
of the Secured Obligations thereunder to be due and payable prior to the stated
maturity thereof or (y) such Secured Obligations automatically become due and
payable prior to the stated maturity thereof.
"Administrative Agent" shall have the meaning assigned to such
term in the recitals.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified, and shall include any "person" or "group" (within the meaning
of Rule 13d-5 of the Securities Exchange Act of 1934) that owns
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directly or indirectly, beneficially or of record, 5% or more of any class of
Equity Interests in the person specified or that is an officer or director of
the person specified.
"Agreement" shall have the meaning assigned to such term in
the preamble.
"Arrangers" shall have the meaning assigned to such term in
the recitals.
"Bankruptcy Case" shall mean any case under Title 11 of the
United States Code or any comparable foreign law equivalent, or any successor
bankruptcy law commenced voluntarily or involuntarily against the Company or any
other Obligor.
"Board of Directors" shall mean (i) with respect to a
corporation, the board of directors of the corporation or any committee thereof
duly authorized to act on behalf of such board, (ii) with respect to a
partnership, the Board of Directors of the general partner of the partnership,
(iii) with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof and (iv) with
respect to any other person, the board or committee of such person serving a
similar function.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"CERCLA" shall have the meaning assigned to such term in
Section 5.14.
"Class" shall mean all Secured Parties having the same
priority. This Agreement includes two Classes of Secured Parties, the holders of
Priority Lien Obligations and the holders of Parity Lien Obligations.
"Closing Date" shall mean the date hereof.
"Collateral" shall mean, in the case of each Series of Secured
Debt, all properties and assets of the Company and each applicable Guarantor,
now owned or hereafter acquired, in which Liens have been granted to the
Collateral Trustee under any of the Security Documents to secure the Secured
Obligations in respect of such Series of Secured Debt.
"Collateral Agent" shall have the meaning assigned to such
term in the recitals.
"Collateral Trustee" shall have the meaning assigned to such
term in the preamble.
"Collateral Trust Joinder" shall mean an agreement
substantially in the form of Exhibit A hereto.
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"Company" shall have the meaning assigned to such term in the
preamble.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" shall have meanings
correlative thereto; provided that when used in connection with the Collateral
Trustee's rights with respect to, or security interest in, any Collateral,
"control" shall have the meaning specified in the UCC with respect to that type
of Collateral.
"Control Agreement" shall mean a Control Agreement to be
executed and delivered by the applicable Obligor and the other party or parties
thereto, as required by the Guarantee and Collateral Agreement.
"Credit Agreement" shall have the meaning assigned to such
term in the recitals.
"Credit Agreement Agent" shall mean, at any time and for so
long as the Credit Agreement shall be in effect, the person serving at such time
as the "Administrative Agent" under the Credit Agreement or any other
representative of the Lenders then most recently designated by the Lenders in
accordance with the terms of the Credit Agreement, in a written notice delivered
to each Secured Debt Representative and the Collateral Trustee, as the Credit
Agreement Agent for the purposes of each of the Priority Lien Documents, and, at
any time when the Credit Agreement shall no longer be in effect, the person
serving at such time as the "Agent" or "Administrative Agent" under the
applicable Credit Facility or any other representative of the lenders thereunder
then most recently designated by such lenders in accordance with the terms of
the agreement relating to such facility, in a written notice delivered to each
Secured Debt Representative and the Collateral Trustee, as the Credit Agreement
Agent for the purposes of each of the Priority Lien Documents.
"Credit Agreement Borrowers" shall have the meaning assigned
to such term in the preamble.
"Credit Agreement Documents" shall mean the Credit Agreement
and the Security Documents.
"Credit Agreement Parallel Debt" shall have the meaning
assigned to such term in Article 8.
"Credit Facilities" shall mean, one or more debt facilities
(including the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, credit-linked deposits (or similar deposits), receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced (including by means of sales of debt securities to
institutional investors) in whole or in part from time to time.
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"Credit-Linked Deposits" shall mean the cash deposit made by
the Lenders to reimburse drawings on certain letters of credit issued under the
Credit Agreement, which deposit is held by the Administrative Agent in
accordance with the Credit Agreement.
"Discharge of Priority Lien Obligations" shall mean the
occurrence of all of the following: (i) termination of all commitments to extend
credit that would constitute Priority Lien Debt; (ii) payment in full in cash of
the principal of and interest and premium (if any) on all Priority Lien Debt
(other than any undrawn letters of credit); (iii) discharge or cash
collateralization (at 100% of the aggregate undrawn amount) of all outstanding
letters of credit constituting Priority Lien Debt; (iv) return in full in cash
of any Credit-Linked Deposits to the applicable Lenders and (v) payment in full
in cash of all other Priority Lien Obligations that are outstanding and unpaid
at the time the Priority Lien Debt is paid in full in cash (other than any
obligations for taxes, costs, indemnifications, reimbursements, damages and
other liabilities in respect of which no claim or demand for payment has been
made at such time).
"Dutch Security Documents" shall mean (a) the first priority
Deed of Pledge dated December 23, 2003, among NRG International LLC, as Pledgor,
NRGenerating International B.V., as Company and the Collateral Trustee, as
Pledgee, (b) the second priority Deed of Pledge dated December 23, 2003, among
NRG International LLC, as Pledgor, NRGenerating International B.V., as Company
and the Collateral Trustee, as Pledgee, (c) the first priority Deed of Pledge
dated December 23, 2003, among NRGenerating Holdings (No. 21) B.V., as Pledgor,
Tosli Acquisition B.V., as Company and the Collateral Trustee, as Pledgee, and
(d) the second priority Deed of Pledge dated December 23, 2003, among
NRGenerating Holdings (No. 21) B.V., as Pledgor, Tosli Acquisition B.V., as
Company and the Collateral Trustee, as Pledgee.
"Environmental Laws" shall mean all former, current and future
Federal, state, local and foreign laws (including common law), treaties,
regulations, rules, ordinances and codes, and legally binding decrees,
judgments, directives and orders (including consent orders), in each case,
relating to protection of the environment, natural resources, occupational
health and safety or the presence, Release of, or exposure to, Hazardous
Materials, or the generation, manufacture, processing, distribution, use,
treatment, storage, transport, recycling or handling of, or the arrangement for
such activities with respect to, Hazardous Materials.
"Environmental Liability" shall mean all liabilities,
obligations, damages, losses, claims, actions, suits, judgments, orders, fines,
penalties, fees, expenses and costs (including administrative oversight costs,
natural resource damages and remediation costs), whether contingent or
otherwise, arising out of or relating to (a) compliance or non-compliance with
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"equally and ratably" shall mean, in reference to sharing of
Liens or proceeds thereof as between the Secured Parties of the same Class, that
such Liens or proceeds:
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(i) shall be allocated and distributed first to
each Secured Debt Representative for each outstanding Series of Secured
Debt within that Class, for the account of the holders of such Series
of Secured Debt, ratably in proportion to the principal of (and, in the
case of the Credit Agreement, any Credit-Linked Deposits) and interest
and premium (if any) and reimbursement obligations (contingent or
otherwise) with respect to letters of credit, if any, outstanding
(whether or not drawings have been made under such letters of credit)
on each outstanding Series of Secured Debt within that Class when the
allocation or distribution is made, and thereafter
(ii) shall be allocated and distributed (if any
remain after payment in full of all of the principal of (and, in the
case of the Credit Agreement, any Credit-Linked Deposits) and interest
and premium (if any) on all outstanding Secured Obligations within that
Class) to each Secured Debt Representative for each outstanding series
of Secured Obligations within that Class, for the account of the
holders of any remaining Secured Obligations within that Class, ratably
in proportion to the aggregate unpaid amount of such remaining Secured
Obligations within that Class due and demanded (with written notice to
the applicable Secured Debt Representative and the Collateral Trustee)
prior to the date such distribution is made.
It is understood and agreed that Liens and proceeds will not
be shared between Classes.
"Equity Interests" shall mean shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a partnership or limited liability company, beneficial
interests in a trust or other equity interests in any person, or any obligations
convertible into or exchangeable for, or giving any person a right, option or
warrant to acquire, such equity interests or such convertible or exchangeable
obligations.
"GAAP" shall mean generally accepted accounting principles in
the United States.
"Governmental Authority" shall mean the government of the
United States of America or any other nation, any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any person (the "guarantor") shall mean
any obligation, contingent or otherwise, of (a) the guarantor or (b) another
person (including any bank under a letter of credit) to induce the creation of
which the guarantor has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation, contingent or otherwise, of the guarantor, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
Indebtedness or other obligation, (ii) to purchase or lease property, securities
or services for the purpose of
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assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, (iv) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation or (v) to
otherwise assure or hold harmless the owner of such Indebtedness or other
obligation against loss in respect thereof; provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantee and Collateral Agreement" shall mean the Guarantee
and Collateral Agreement dated as of the date hereof and executed and delivered
by the Company and each Guarantor.
"Guarantors" shall mean, initially, in the case of any Series
of Secured Debt, each Subsidiary party hereto that, pursuant to the terms of the
Guarantee and Collateral Agreement, has provided a Guarantee in respect of the
Secured Obligations evidenced by such Series of Secured Debt and shall include
any future Subsidiary required by the terms of any Secured Debt Document to
become a guarantor of the Secured Obligations evidenced thereby, and any
successor of the foregoing.
"Hazardous Materials" shall mean (a) any petroleum products or
byproducts and all other hydrocarbons, coal ash, coal combustion by-products or
waste, boiler slag, scrubber residue, flue desulfurization material, radon gas,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
chlorofluorocarbons and all other ozone-depleting substances and (b) any
hazardous or toxic chemical, material, substance or waste that is prohibited,
limited or regulated by or pursuant to any Environmental Law.
"Hedging Agreement" shall mean any agreement with respect to
any swap, forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
fuel or other commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided, however, that no phantom stock or similar plan providing
for payments and on account of services provided by current or former directors,
officers, employees or consultants of the Company or any Subsidiary shall be a
Hedging Agreement.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
under conditional sale or other title retention agreements relating to property
or assets acquired by such person, (d) all obligations of such person in respect
of the deferred purchase price of property or services (other than trade
accounts payable incurred in the ordinary course of business that are not more
than 90 days past due), (e) all obligations of such person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value, or make
any payment in cash (whether dividends, interest or otherwise) prior to any
applicable maturity date with respect to any Series of Secured Debt in respect
of, any Equity Interests in such person, (f) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an
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existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such person, whether or not the Indebtedness secured
thereby has been assumed (provided that, if such person has not assumed such
Indebtedness of another person, then the amount of Indebtedness of such person
for purposes of this clause (f) shall be equal to the lesser of the amount of
the Indebtedness of the other person and the fair market value of the assets of
such person which secures such Indebtedness), (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations or Synthetic Lease
Obligations of such person, (i) all obligations, contingent or otherwise, of
such person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such person in
respect of bankers' acceptances. The Indebtedness of any person shall include
the Indebtedness of any other person (including any partnership in which such
person is a general partner) to the extent such person is liable therefor as a
result of such person's ownership interest in, or other relationship with, such
other person, except to the extent the terms of such Indebtedness provide that
such person is not liable therefor.
"Indemnified Liabilities" shall mean any and all liabilities
(including all Environmental Liabilities), obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, performance,
administration or enforcement of this Agreement or any of the other Security
Documents, including any of the foregoing relating to the use of proceeds of any
Secured Debt or the violation of, noncompliance with or liability under, any law
(including Environmental Laws) applicable to or enforceable against the Company
or any of its subsidiaries or any of the Collateral and all reasonable costs and
expenses (including reasonable fees and expenses of legal counsel selected by
the Indemnitee) incurred by any Indemnitee in connection with any claim, action,
investigation or proceeding in any respect relating to any of the foregoing,
whether or not suit is brought.
"Indemnitee" shall have the meaning assigned to such term in
Section 7.8(a).
"Indenture" shall have the meaning assigned to such term in
the recitals.
"Indenture Parallel Debt" shall have the meaning assigned to
such term in Article 9.
"Insolvency Proceeding" shall mean:
(i) any proceeding for the reorganization,
recapitalization or adjustment or marshalling of the assets or
liabilities of the Company or any other Obligor, any receivership or
assignment for the benefit of creditors relating to the Company or any
other Obligor or any similar case or proceeding relative to the Company
or any other Obligor or its creditors, as such, in each case whether or
not voluntary;
(ii) any liquidation, dissolution, marshalling of
assets or liabilities or other winding up of or relating to the Company
or any other Obligor, in each case whether or not voluntary and whether
or not involving bankruptcy or insolvency; or
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(iii) any other proceeding of any type or nature
in which substantially all claims of creditors of the Company or any
other Obligor are determined and any payment or distribution is or may
be made on account of such claims.
"Junior Trust Estate" shall have the meaning assigned to such
term in Section 2.2.
"Lenders" shall mean, at any time, the parties to the Credit
Agreement then holding (or committed to provide) loans, letters of credit,
Credit-Linked Deposits or other extensions of credit that constitute (or when
provided will constitute) Priority Lien Debt outstanding under the Credit
Agreement.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, deed to secure debt, lien (statutory or otherwise),
pledge, hypothecation, encumbrance, restriction, collateral assignment, charge
or security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of Equity
Interests or debt securities, any purchase option, call or similar right of a
third party with respect to such Equity Interests or debt securities.
"Note Documents" shall mean the Indenture, the Notes, each
Sharing Confirmation and the Security Documents.
"Notes" shall have the meaning assigned to such term in the
recitals.
"Notice of Actionable Default" shall mean a written notice
given to the Collateral Trustee stating that an Actionable Default has occurred
and is continuing, delivered by (i) prior to the Discharge of Priority Lien
Obligations, the Secured Debt Representative for the holders of Priority Lien
Obligations that are governed by the Secured Debt Document pursuant to which
such Actionable Default has occurred, and (ii) following the Discharge of
Priority Lien Obligations, the Secured Debt Representative for the holders of
Parity Lien Obligations that are governed by the Secured Debt Document pursuant
to which such Actionable Default has occurred.
"Obligations" shall mean any principal (including
reimbursement obligations with respect to letters of credit whether or not any
drawing has been made thereon and including, in the case of the Credit
Agreement, any obligations to return Credit-Linked Deposits), interest
(including any interest accruing at the then applicable rate provided in any
applicable Secured Debt Document after the maturity of the loans or notes and
reimbursement obligations therein and interest accruing at the then applicable
rate provided in any applicable Secured Debt Document after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness or Hedging Agreement.
"Obligor" shall mean the Company and the applicable
Guarantors.
9
"Parity Debt Representative" shall mean:
(i) in the case of the Notes, the Trustee; or
(ii) in the case of any other Series of Parity
Lien Debt, the trustee, agent or representative of the holders of such
Series of Parity Lien Debt who maintains the transfer register for such
Series of Parity Lien Debt and is appointed as a Parity Debt
Representative (for purposes related to the administration of the
security documents) pursuant to the credit agreement, indenture or
other agreement governing such Series of Parity Lien Debt, and who has
executed a Collateral Trust Joinder.
"Parity Lien" shall mean a Lien granted by a Security Document
to the Collateral Trustee upon any property of the Company or any other Obligor
to secure Parity Lien Obligations.
"Parity Lien Debt" shall mean (i) the Notes and (ii) any other
Indebtedness (including additional notes) that is secured equally and ratably
with the Notes by a Parity Lien that was permitted to be incurred and so secured
under the applicable provisions of the Indenture and the Credit Agreement (each
if then in effect) and any other applicable Secured Debt Document; provided, in
the case of each issue or series of Indebtedness referred to in this clause
(ii), that:
(a) on or before the date on which such Indebtedness was
incurred by the Company such Indebtedness is designated by the Company,
in an officers' certificate delivered to each Parity Debt
Representative and the Collateral Trustee on or before such date, as
Parity Lien Debt for the purposes of the Indenture (if then in effect)
and this Agreement;
(b) such Indebtedness is governed by an indenture or
other agreement that includes a Sharing Confirmation; and
(c) all requirements set forth in this Agreement as to
the confirmation, grant or perfection of the Liens granted to the
Collateral Trustee, for the benefit of the Secured Parties, to secure
such Indebtedness or Obligations in respect thereof are satisfied
(and the satisfaction of such requirements and the other provisions of this
clause (ii) shall be conclusively established, for purposes of entitling the
holders of such Indebtedness to share equally and ratably with the other holders
of Parity Lien Debt in the benefits and proceeds of the Collateral Trustee's
Liens on the Collateral, if the Company delivers to the Collateral Trustee an
officers' certificate stating that such requirements and other provisions have
been satisfied and that such Indebtedness is Parity Lien Debt, together with an
opinion of counsel stating that such officers' certificate has been duly
authorized by the Board of Directors of the Company and has been duly executed
and delivered, and the holders of such Indebtedness and Obligations in respect
thereof will be entitled to rely conclusively thereon).
"Parity Lien Documents" shall mean, collectively, the Note
Documents and any indenture or agreement governing each other Series of Parity
Lien Debt and all agreements binding on any Obligor related thereto.
10
"Parity Lien Obligations" shall mean Parity Lien Debt and all
other Obligations in respect thereof.
"Parity Lien Secured Parties" shall mean the holders of Parity
Lien Obligations and any Parity Debt Representatives.
"person" shall mean any natural person, corporation, trust,
business trust, joint venture, joint stock company, association, company,
limited liability company, partnership, Governmental Authority or other entity.
"Power Marketing" shall have the meaning assigned to such term
in the preamble.
"Priority Debt Representative" shall mean (i) in the case of
the Credit Agreement (and any Hedging Agreements that are permitted to be
incurred by the terms of each Secured Debt Document and are permitted by the
terms of the Priority Lien Documents relating to the Credit Agreement to be
secured equally and ratably with the Priority Lien Obligations thereunder), the
Administrative Agent; or (ii) in the case of any other Series of Priority Lien
Debt, the trustee, agent or representative of the holders of such Series of
Priority Lien Debt who maintains the transfer register for such Series of
Priority Lien Debt and is appointed as a Priority Debt Representative (for
purposes related to the administration of the security documents) pursuant to
the credit agreement, indenture or other agreement governing such Series of
Priority Lien Debt, and who has executed a Collateral Trust Joinder.
"Priority Lien" shall mean a Lien granted by a Security
Document to the Collateral Trustee, for the benefit of the Priority Lien Secured
Parties, upon any property of the Company or any other Obligor to secure
Priority Lien Obligations.
"Priority Lien Debt" shall mean (i) the Indebtedness under,
together with the aggregate amount of all Credit-Linked Deposits made pursuant
to, the Credit Agreement and (ii) Indebtedness, including any deposit that is
similar to the Credit-Linked Deposits, under any other Credit Facility that is
secured equally and ratably with the Indebtedness under the Credit Agreement by
a Priority Lien that was permitted to be incurred and so secured under the
applicable provisions of the Credit Agreement and the Indenture (each if then in
effect) and any other applicable Secured Debt Document, but only if on or before
the day on which such Indebtedness under a Credit Facility described in clause
(ii) above is incurred by any applicable Obligor such Indebtedness is designated
by such Obligor, in an officers' certificate delivered to each Parity Debt
Representative and the Collateral Trustee on or before such date, as Priority
Lien Debt for the purposes of each of the Parity Lien Debt Documents and this
Agreement.
"Priority Lien Documents" shall mean, collectively, the Credit
Agreement Documents and the credit agreement, indenture or other agreement
governing any other Credit Facility pursuant to which the Priority Lien Debt is
incurred and all other agreements governing, securing or related to any Priority
Lien Obligations.
"Priority Lien Obligations" shall mean the Priority Lien Debt
and all other Obligations in respect of Priority Lien Debt and includes, in the
case of the Credit Agreement and any other Credit Facility the Indebtedness
under which constitutes Priority Lien Debt, any obligations in respect of
Hedging Agreements that are permitted to be incurred by the terms of
11
the Priority Lien Documents relating to the Credit Agreement or, if the Credit
Agreement is not in effect at the time such Hedging Agreement is entered into,
such other Credit Facilities, and are permitted by the terms of the Priority
Lien Documents relating to the Credit Agreement or, if the Credit Agreement is
not in effect at the time such Hedging Agreement is entered into, such other
Credit Facilities to be secured equally and ratably with the Priority Lien
Obligations thereunder.
"Priority Lien Secured Parties" shall mean the holders of
Priority Lien Obligations and any Priority Debt Representatives.
"Release" shall mean any release, spill, emission, leaking,
pumping, injection, pouring, emptying, deposit, disposal, discharge, dispersal,
dumping, escaping, leaching or migration into or through the environment or
within or upon any building, structure, facility or fixture.
"Required Parity Debtholders" shall mean, at any time in
respect of any action or matter, holders of a majority in aggregate outstanding
principal amount of all Parity Lien Debt then outstanding, voting together as a
single class. For this purpose, Parity Lien Debt registered in the name of, or
beneficially owned by, the Company or any Affiliate of the Company will be
deemed not to be outstanding and neither the Company nor any such Affiliate
shall be entitled to vote to direct the relevant Parity Debt Representative.
"Responsible Officer" shall mean, with respect to the
Collateral Trustee or any Secured Debt Representative, any officer within the
corporate trust department of the Collateral Trustee or such Secured Debt
Representative, as the case may be, including any managing director, director,
vice president, assistant vice president, associate, trust officer or any other
officer of the Collateral Trustee or such Secured Debt Representative, as the
case may be, who customarily performs functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Agreement.
"Secured Debt" shall mean Parity Lien Debt and Priority Lien
Debt.
"Secured Debt Default" shall mean any event or condition
which, under the terms of any credit agreement, indenture or other agreement
governing any Series of Secured Debt causes, or permits holders of Secured Debt
outstanding thereunder (with or without the giving of notice or lapse of time,
or both, and whether or not notice has been given or time has lapsed) to cause,
the Secured Debt outstanding thereunder to become immediately due and payable.
"Secured Debt Documents" shall mean the Parity Lien Documents
and the Priority Lien Documents.
"Secured Debtholder" shall mean, at any time, a person which
then is the holder of any Secured Debt (including any Credit-Linked Deposits or
similar deposits) or has any commitment with respect to any Secured Debt or the
issuance of any letters of credit under any Secured Debt Document or the making
of any loans under any Secured Debt Document.
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"Secured Debt Representative" shall mean each Parity Debt
Representative and each Priority Debt Representative.
"Secured Obligations" shall mean the Parity Lien Obligations
and the Priority Lien Obligations.
"Secured Parties" shall mean the Parity Lien Secured Parties
and the Priority Lien Secured Parties.
"Security Documents" shall mean this Agreement and one or more
security agreements, pledge agreements, collateral assignments, mortgages,
collateral agency agreements, control agreements, deeds of trust or other grants
or transfers for security executed and delivered by the Company or any other
Obligor creating (or purporting to create) a Lien upon Collateral in favor of
the Collateral Trustee, for the benefit of the Secured Parties, in each case, as
amended, modified, renewed, restated or replaced, in whole or in part, from time
to time, in accordance with its terms.
"Senior Trust Estate" shall have the meaning assigned to such
term in Section 2.1.
"Series of Parity Lien Debt" shall mean, severally, the Notes
and each other issue or series of Parity Lien Debt for which a single transfer
register is maintained.
"Series of Priority Lien Debt" shall mean, severally, the
extensions of credit under the Credit Agreement and each other issue or series
of Priority Lien Debt for which a single transfer register is maintained and
shall include, in the case of the Credit Agreement and any other Credit Facility
the Indebtedness under which constitutes Priority Lien Debt, any obligations in
respect of Hedging Agreements that are permitted to be incurred by the terms of
the Priority Lien Documents relating to the Credit Agreement or, if the Credit
Agreement is not in effect at the time such Hedging Agreement is entered into,
such other Credit Facilities, and are permitted by the terms of the Priority
Lien Documents relating to the Credit Agreement or, if the Credit Agreement is
not in effect at the time such Hedging Agreement is entered into, such other
Credit Facilities to be secured equally and ratably with the Priority Lien
Obligations thereunder
"Series of Secured Debt" shall mean, severally, the Notes,
each other issue or Series of Parity Lien Debt, the extensions of credit under
the Credit Agreement, and each other issue or Series of Priority Lien Debt.
"Sharing Confirmation" shall mean, as to any Series of Parity
Lien Debt, the written agreement of the holders of such Series of Parity Lien
Debt, as set forth in the indenture or other agreement governing such Series of
Parity Lien Debt, for the enforceable benefit of all holders of each other
existing and future Series of Parity Lien Debt and each existing and future
Parity Debt Representative, that all Parity Lien Obligations shall be and are
secured equally and ratably by all Liens at any time granted by the Company or
any other Obligor to secure any Obligations in respect of such Series of Parity
Lien Debt, whether or not upon property otherwise constituting Collateral, that
all such Liens shall be enforceable by the Collateral Trustee for the benefit of
all holders of Parity Lien Obligations equally and ratably, and that the holders
of Obligations in respect of such Series of Parity Lien Debt are bound by the
provisions in this
13
Agreement relating to the order of application of proceeds from enforcement of
such Liens, and consent to and direct the Collateral Trustee to perform its
obligations under this Agreement.
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, limited liability
company, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or more than 50% of the general partnership interests are,
at the time any determination is being made, owned, controlled or held, or (b)
that is, at the time any determination is made, otherwise controlled, by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Company.
"Swiss Security Documents" shall mean (a) the Public
Certification regarding the pledge of the shares in NRG International Holdings
GmbH (1st ranking right of pledge) dated December 22, 2003 between NRG
International III Inc., as pledgor and the Collateral Trustee, as pledgee (b)
the Public Certification regarding the pledge of the shares in NRG International
Holdings GmbH (2nd ranking right of pledge) dated December 22, 2003 between NRG
International III Inc., as pledgor and the Collateral Trustee, as pledgee, (c)
the Public Certification regarding the pledge of the shares in NRG International
Holdings (No.2) GmbH (1st ranking right of pledge) dated December 22, 2003
between NRG International III Inc., as pledgor and the Collateral Trustee, as
pledgee, and (d) the Public Certification regarding the pledge of the shares in
NRG International Holdings (No.2) GmbH (2nd ranking right of pledge) dated
December 22, 2002 between NRG International III Inc., as pledgor and the
Collateral Trustee, as pledgee.
"Syndication Agent" shall have the meaning assigned to such
term in the recitals.
"Synthetic Lease Obligations" shall mean all monetary
obligations of a person under (a) a so-called synthetic, off-balance sheet or
tax retention lease or (b) an agreement for the use or possession of any
property (whether real, personal or mixed) creating obligations which do not
appear on the balance sheet of such person, but which, upon the insolvency or
bankruptcy of such person, would be characterized as Indebtedness of such person
(without regard to accounting treatment).
"Trustee" shall have the meaning assigned to such term in the
recitals.
"Trust Estates" shall have the meaning assigned to such term
in Section 2.2.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York or any other applicable jurisdiction.
(b) All terms used in this Agreement that are defined in
Article 9 of the UCC, and not otherwise defined herein shall have the meanings
therein set forth.
SECTION 1.2 Rules of Interpretation.
14
(a) Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference.
(b) Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.
(c) Unless otherwise indicated, any reference to any
agreement or instrument shall be deemed to include a reference to such agreement
or instrument as assigned, amended, amended and restated, supplemented,
otherwise modified from time to time or replaced in accordance with the terms of
this Agreement.
(d) The use in this Agreement or any of the other
Security Documents of the word "include" or "including," when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. The word "will" shall be construed to
have the same meaning and effect as the word "shall."
(e) References to "Sections" and "clauses" shall be to
Sections and clauses, respectively, of this Agreement unless otherwise
specifically provided.
(f) References to "Articles" shall be to Articles of this
Agreement unless otherwise specifically provided.
(g) References to "Exhibits" and "Schedules" shall be to
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided.
(h) The use in this Agreement of the words "herein,"
"hereof," and "hereunder," and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof.
(i) This Agreement, the other Security Documents and any
documents or instruments delivered pursuant hereto shall be construed without
regard to the identity of the party who drafted the various provisions of the
same. Each and every provision of this Agreement, the other Security Documents
and any instruments and documents entered into and delivered in connection
therewith shall be construed as though the parties participated equally in the
drafting of the same. Consequently, each of the parties acknowledges and agrees
that any rule of construction that a document is to be construed against the
drafting party shall not be applicable either to this Agreement or the other
Security Documents and any instruments and documents entered into and delivered
in connection therewith.
ARTICLE 2. THE TRUST ESTATES
SECTION 2.1 Declaration of Senior Trust.
15
TO SECURE the payment of the Priority Lien Obligations and in
consideration of the premises and the mutual agreements set forth herein, each
of the Obligors hereby grants to the Collateral Trustee, and the Collateral
Trustee hereby accepts and agrees to hold, in trust under this Agreement for the
benefit of all present and future holders of Priority Lien Obligations, all of
such Obligor's right, title and interest in, to and under all Collateral granted
to the Collateral Trustee under any Security Document for the benefit of the
Priority Lien Secured Parties, together with all of the Collateral Trustee's
right, title and interest in, to and under the Security Documents, and all
interests, rights, powers and remedies of the Collateral Trustee thereunder or
in respect thereof and all cash and non-cash proceeds thereof (collectively, the
"Senior Trust Estate"),
TO HAVE AND TO HOLD the Senior Trust Estate unto the
Collateral Trustee and its successors and assigns in trust under this Agreement,
IN TRUST, NEVERTHELESS, for the benefit solely and exclusively
of all present and future holders of Priority Lien Obligations as security for
the payment of all present and future Priority Lien Obligations,
PROVIDED, that if at any time (i) all Liens granted by any and
all of the Priority Lien Documents have been released as provided in Section
4.1, (ii) the Collateral Trustee holds no other property in trust as part of the
Senior Trust Estate, (iii) no monetary obligation (other than indemnification
and other contingent obligations not then due and payable) is outstanding and
payable under this Agreement to the Collateral Trustee or any of its
co-trustees, agents or sub-agents (whether in an individual or representative
capacity) and (iv) the Company delivers to the Collateral Trustee an officer's
certificate stating that all Liens of the Collateral Trustee have been released
in compliance with all applicable provisions of the Priority Lien Documents and
that Obligors are not required by any Priority Lien Document to grant any Lien
upon any property to secure the Priority Lien Obligations, then the senior trust
arising hereunder shall terminate, except that, notwithstanding such
termination, all provisions set forth in Sections 7.7 and 7.8 hereof enforceable
by the Collateral Trustee or any of its co-trustees, agents or sub-agents
(whether in an individual or representative capacity) shall remain enforceable
in accordance with their terms,
AND THE PARTIES FURTHER DECLARE AND COVENANT that the Senior
Trust Estate shall be held and distributed by the Collateral Trustee subject to
the further agreements herein.
SECTION 2.2 Declaration of Junior Trust.
TO SECURE the payment of the Parity Lien Obligations and in
consideration of the premises and the mutual agreements set forth herein, each
of the Obligors hereby grants to the Collateral Trustee, and the Collateral
Trustee hereby accepts and agrees to hold, in trust under this Agreement for the
benefit of all present and future holders of Parity Lien Obligations, all of
such Obligor's right, title and interest in, to and under all Collateral granted
to the Collateral Trustee under any Security Document for the benefit of the
Parity Lien Secured Parties, together with all of the Collateral Trustee's
right, title and interest in, to and under the Security Documents, and all
interests, rights, powers and remedies of the Collateral Trustee
16
thereunder or in respect thereof and all cash and non-cash proceeds thereof
(collectively, the "Junior Trust Estate", and together with the Senior Trust
Estate, the "Trust Estates"),
TO HAVE AND TO HOLD the Junior Trust Estate unto the
Collateral Trustee and its successors and assigns in trust under this Agreement,
IN TRUST, NEVERTHELESS, for the benefit solely and exclusively
of all present and future holders of Parity Lien Obligations as security for the
payment of all present and future Parity Lien Obligations,
PROVIDED, that if at any time (i) all Liens granted by any and
all of the Parity Lien Documents have been released as provided in Section 4.1,
(ii) the Collateral Trustee holds no other property in trust as part of the
Junior Trust Estate, (iii) no monetary obligation (other than indemnification
and other contingent obligations not then due and payable) is outstanding and
payable under this Agreement to the Collateral Trustee or any of its
co-trustees, agents or sub-agents (whether in an individual or representative
capacity) and (iv) the Company delivers to the Collateral Trustee an officer's
certificate stating that all Liens of the Collateral Trustee have been released
in compliance with all applicable provisions of the Parity Lien Documents and
that the Obligors are not required by any Parity Lien Document to grant any Lien
upon any property to secure the Parity Lien Obligations, then the junior trust
arising hereunder shall terminate, except that, notwithstanding such
termination, all provisions set forth in Sections 7.7 and 7.8 hereof enforceable
by the Collateral Trustee or any of its co-trustees, agents or sub-agents
(whether in an individual or representative capacity) shall remain enforceable
in accordance with their terms,
AND THE PARTIES FURTHER DECLARE AND COVENANT that the Junior
Trust Estate shall be held and distributed by the Collateral Trustee subject to
the further agreements herein.
SECTION 2.3 Priority of Liens.
(a) Notwithstanding anything else contained herein or in
any Security Document, it is the intent of the parties that: (i) this Agreement
and the Security Documents create two separate and distinct Trust Estates and
Liens: the Senior Trust Estate and Lien securing the payment and performance of
the Priority Lien Obligations and the Junior Trust Estate and Lien securing the
payment and performance of the Parity Lien Obligations and (ii) the Liens
securing the Parity Lien Obligations are subject and subordinate to the Liens
securing the Priority Lien Obligations.
(b) The parties hereto agree that, after the date hereof
and prior to the Discharge of Priority Lien Obligations, in no event shall the
Parity Debt Representatives or any Parity Lien Secured Parties have a Lien on or
security interest in any Collateral that is not subject and subordinate to the
first priority lien of the Priority Lien Secured Parties. Notwithstanding (i)
anything to the contrary contained in any Parity Lien Document and irrespective
of the time, order or method of attachment or perfection of the security
interests created by the Priority Lien Documents or the Parity Lien Documents,
(ii) anything contained in any filing or agreement to which the Priority Lien
Secured Parties or Parity Lien Secured Parties or any other party hereto
17
may be a party and (iii) the rules for determining priority under the UCC or any
other law governing the relative priorities of secured creditors, any security
interest in any Collateral that is part of the Senior Trust Estate has and shall
have priority over any security interest in such Collateral that is part of the
Junior Trust Estate.
(c) Whether or not any Bankruptcy Case or Insolvency
Proceeding has been commenced by or against any Obligor, until the Discharge of
Priority Lien Obligations, (i) the Parity Lien Secured Parties will not (A)
exercise or seek to exercise any rights or exercise any remedies with respect to
any Collateral that is subject to the Senior Trust Estate, (B) institute any
action or proceeding with respect to such rights or remedies with respect to any
Collateral, including any action of foreclosure, (C) contest, protest or object
to any foreclosure proceeding or action brought by the Priority Lien Secured
Parties or any other exercise by the Priority Lien Secured Parties of any rights
and remedies under any Priority Lien Documents relating to the Collateral that
is subject to the Senior Trust Estate, (D) object to the forbearance by the
Priority Lien Secured Parties to the bringing or pursuing of any foreclosure
proceeding or action or any other exercise of any rights or remedies relating to
the Collateral that is subject to the Senior Trust Estate, (E) take or receive
from the Obligors, directly or indirectly, in cash or other property or by set
off or in any other manner, the Collateral or any part thereof or proceeds
therefrom in satisfaction of the Parity Lien Obligations, (F) contest or seek to
invalidate any Liens or security interests securing the Priority Debt
Obligations, or the perfection thereof, or the validity or enforceability of
this Agreement, (G) take or permit any action prejudicial to or inconsistent
with the priority position of the Senior Trust Estate over the Junior Trust
Estate, (H) object to any adequate protection or similar relief requested and
obtained by the Priority Lien Secured Parties in any Insolvency Proceeding or
Bankruptcy Case with respect to any Obligor or (I) object to any consent or
approval by the Priority Lien Secured Parties to the use of cash or other
Collateral, or any similar relief, in any Insolvency Proceeding or Bankruptcy
Case with respect to any Obligor, and (ii) the Priority Lien Secured Parties
shall have the exclusive right to enforce rights and exercise remedies with
respect to any Collateral that is part of the Senior Trust Estate, regardless of
whether such Collateral may also be part of the Junior Trust Estate.
Notwithstanding the foregoing, the Parity Lien Secured Parties may enforce
rights, exercise remedies and take actions (A) without any condition or
restriction whatsoever, at any time after the Discharge of Priority Lien
Obligations, (B) as necessary to perfect a Lien upon any Collateral by any
method of perfection except through possession or control or (C) as necessary to
prove, preserve or protect (but not enforce) the Liens securing the Parity Lien
Obligations.
(d) In exercising rights and remedies with respect to the
Collateral, the Priority Debt Representatives may enforce (or refrain from
enforcing) the provisions of the Priority Lien Documents and exercise (or
refrain from exercising) remedies thereunder or any such rights and remedies,
all in such order and in such manner as they may determine in the exercise of
their sole and exclusive discretion, including (i) the exercise or forebearance
from exercise of all rights and remedies in respect of the Collateral and/or the
Priority Lien Obligations, (ii) the enforcement or forbearance from enforcement
of any Lien in respect of the Collateral, (iii) the release, with or without
consideration, of the Collateral from the Senior Trust Estate, and, in
connection with any such release, the concurrent release, with or without
consideration (as determined by the Priority Lien Secured Parties), of such
collateral from the Junior Trust Estate, (iv) the exercise or forebearance from
exercise of rights and powers of a holder of shares of stock included in the
Senior Trust Estate to the extent provided in the
18
Security Documents, (v) the acceptance of the Collateral in full or partial
satisfaction of the Priority Lien Obligations and (vi) the exercise or
forebearance from exercise of all rights and remedies of a secured lender under
the UCC or any similar law of any applicable jurisdiction or in equity.
(e) Without in any way limiting the generality of the
foregoing paragraphs, the Priority Lien Secured Parties may, at any time and
from time to time, without the consent of or notice to the Parity Lien Secured
Parties, without incurring responsibility to the Parity Lien Secured Parties and
without impairing or releasing the subordination provided in this Agreement or
the obligations hereunder of the Parity Lien Secured Parties, do any one or more
of the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, the Priority Lien Obligations, or
otherwise amend or supplement in any manner the Priority Lien Obligations, or
any instrument evidencing the Priority Lien Obligations or any agreement under
which the Priority Lien Obligations are outstanding, (ii) release any person or
entity liable in any manner for the collection of the Priority Lien Obligations,
(iii) release the Lien on any Collateral securing the Priority Lien Obligations
and (iv) exercise or refrain from exercising any rights against any Obligor.
(f) The doctrine of marshalling of assets or collateral
or any other legal or equitable principle or doctrine which could otherwise, in
any way, constrain, limit or affect the order or manner of the enforcement
against any person obligated for the Priority Lien Obligations or the
liquidation of the Senior Trust Estate shall not be applicable to the Senior
Trust Estate or to the rights of the Priority Lien Secured Parties under this
Agreement.
SECTION 2.4 Collateral Shared Equally and Ratably within Class. The
parties hereto agree that the payment and satisfaction of all of the Secured
Obligations within each Class shall be secured equally and ratably by the
security interests established in favor of the Collateral Trustee for the
benefit of the Secured Parties belonging to such Class. It is understood and
agreed that nothing in this Section 2.4 is intended to alter the priorities
among Secured Parties belonging to different Classes as provided in Section 2.3
hereof.
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE
SECTION 3.1 Undertaking of the Collateral Trustee.
(a) Subject to, and in accordance with, this Agreement,
the Collateral Trustee will, as trustee for the benefit solely and exclusively
of the present and future Secured Parties:
(i) accept, enter into, hold, maintain,
administer and enforce all Security Documents, including all Collateral
subject thereto, and all security interests created thereunder, perform
its obligations under the Security Documents and protect, exercise and
enforce the interests, rights, powers and remedies granted or available
to it under, pursuant to or in connection with the Security Documents;
(ii) take all lawful and commercially reasonable
actions permitted under the Security Documents that it may deem
necessary or advisable to protect or preserve its interest in the
Collateral subject thereto and such interests, rights, powers and
remedies;
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(iii) deliver and receive notices pursuant to the
Security Documents;
(iv) sell, assign, collect, assemble, foreclose
on, institute legal proceedings with respect to, or otherwise exercise
or enforce the rights and remedies of a secured party (including a
mortgagee, trust deed beneficiary and insurance beneficiary or loss
payee) with respect to the Collateral under the Security Documents and
its other interests, rights, powers and remedies;
(v) remit as provided in Section 3.4 all cash
proceeds received by the Collateral Trustee from the collection,
foreclosure or enforcement of its interest in the Collateral under the
Security Documents or any of its other interests, rights, powers or
remedies;
(vi) execute and deliver amendments to the
Security Documents as from time to time authorized by an Act of
Instructing Debtholders; and
(vii) release any Lien granted to it by any
Security Document upon any Collateral if and as required by Section
4.1(b).
(b) Each party to this Agreement acknowledges and
consents to the undertaking of the Collateral Trustee set forth in Section
3.1(a) and agrees to each of the other provisions of this Agreement applicable
to it.
(c) Notwithstanding anything to the contrary contained in
this Agreement, the Collateral Trustee shall not commence any exercise of
remedies or any foreclosure actions or otherwise take any action or proceeding
against any of the Collateral (other than actions as necessary to prove, protect
or preserve the Liens securing the Secured Obligations) unless and until it
shall have received a Notice of Actionable Default, or a Responsible Officer of
the Collateral Trustee has actual knowledge that an Actionable Default has
occurred and is continuing, and then only in accordance with the provisions of
this Agreement.
SECTION 3.2 Release or Subordination of Liens. The Collateral Trustee
will not release or subordinate any Lien of the Collateral Trustee or consent to
the release or subordination of any Lien of the Collateral Trustee, except (a)
as directed by an Act of Instructing Debtholders, (b) as required by Article 4,
(c) as ordered pursuant to applicable law under a final and nonappealable order
or judgment of a court of competent jurisdiction or (d) for the subordination of
the Junior Trust Estate and the Parity Liens to the Senior Trust Estate and the
Priority Liens.
SECTION 3.3 Remedies Upon Actionable Default. If the Collateral Trustee
at any time receives a Notice of Actionable Default or other notice that an
Actionable Default has occurred and is continuing, it will promptly deliver
written notice thereof to each Secured Debt Representative. Thereafter, the
Collateral Trustee may await direction by an Act of Instructing Debtholders and
will act, or decline to act, as directed by an Act of Instructing Debtholders,
in the exercise and enforcement of the Collateral Trustee's interests, rights,
powers and remedies in respect of the Collateral or under the Security Documents
or applicable law and, following the initiation of such exercise of remedies,
the Collateral Trustee will act, or decline to act, with respect to the manner
of such exercise of remedies as directed by an Act of Instructing
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Debtholders. Unless it has been directed to the contrary by an Act of
Instructing Debtholders, the Collateral Trustee in any event may (but shall not
be obligated to) take or refrain from taking such action with respect to any
Actionable Default as it may deem advisable and in the best interest of the
holders of Secured Obligations.
SECTION 3.4 Application of Proceeds.
(a) The Collateral Trustee shall apply the proceeds of
any collection, sale, foreclosure or other realization upon any Collateral and
the proceeds of any title insurance policy required under any real property
mortgage in the following order of application:
FIRST, to the payment of all amounts payable under this
Agreement on account of the Collateral Trustee's fees or any reasonable legal
fees, costs and expenses or other liabilities of any kind incurred by the
Collateral Trustee or any co-trustee or agent in connection with any Security
Document, including any amounts payable by the Collateral Trustee, as collateral
trustee, to or for the benefit of persons other than the Secured Debtholders
pursuant to the terms thereof;
SECOND, to the respective Priority Debt Representatives for
application to the payment of Priority Lien Obligations equally and ratably, or
to be held by the Priority Debt Representatives pending such application, until
all Priority Debt Obligations have been paid in full in cash or the cash amount
held by the Priority Debt Representatives in respect of all Priority Lien
Obligations is sufficient to pay all Priority Lien Obligations in full in cash;
THIRD, to the respective Parity Debt Representatives for
application to the Parity Lien Obligations entitled to the benefit of such
Collateral equally and ratably, or to be held by the Parity Debt Representatives
pending such application, until all Parity Lien Obligations have been paid in
full in cash or the cash amount held by the Parity Debt Representatives in
respect of all Parity Lien Obligations is sufficient to pay all Parity Lien
Obligations in full in cash; and
FOURTH, any surplus remaining after the payment in full in
cash of all of the Secured Obligations entitled to the benefit of such
Collateral shall be paid to the Company or the other applicable Obligor, as the
case may be, or its successors or assigns, or as a court of competent
jurisdiction may direct.
For this purpose, "proceeds" of Collateral includes any and
all cash, securities and other property realized from collection, foreclosure or
enforcement of the Collateral Trustee's Liens upon the Collateral (including
distributions of Collateral in satisfaction of any Secured Obligations).
(b) If any Parity Debt Representative or any holder of a
Parity Lien Obligation collects or receives any proceeds in respect of the
Parity Lien Obligations that should have been applied to the payment of the
Priority Lien Obligations in accordance with clause (a) above and, with respect
to a Parity Debt Representative, a Responsible Officer of such Parity Debt
Representative shall have received written notice, or shall have actual
knowledge, of the same prior to such Parity Debt Representative's distribution
of such proceeds, whether after the commencement of a Bankruptcy Case or
otherwise, such Parity Debt Representative or such holder of a Parity Lien
Obligation, as the case may be, shall forthwith deliver the same to the
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Collateral Trustee, for the account of the holders of the Priority Lien
Obligations, in the form received, duly indorsed to the Collateral Trustee, for
the account of the holders of the Priority Lien Obligations to be applied in
accordance with clause (a) above. Until so delivered, such proceeds shall be
held by such Parity Debt Representative or such holder of a Parity Lien
Obligation, as the case may be, for the benefit of the holders of the Priority
Lien Obligations and shall be deemed to be held segregated from other funds and
property held by such Parity Debt Representative or such holder of a Parity Lien
Obligation.
SECTION 3.5 Powers of the Collateral Trustee.
(a) The Collateral Trustee is irrevocably authorized and
empowered to enter into and perform its obligations and protect, perfect,
exercise and enforce its interest, rights, powers and remedies under the
Security Documents and applicable law and in equity and to act as set forth in
this Article 3 or as requested in any lawful directions given to it from time to
time in respect of any matter by an Act of Instructing Debtholders.
(b) No Secured Debt Representative, Secured Debtholder or
other holder of Secured Obligations shall have any liability whatsoever for any
act or omission of the Collateral Trustee.
SECTION 3.6 Documents and Communications. The Collateral Trustee will
permit each Secured Debt Representative and each Secured Debtholder upon
reasonable written notice from time to time to inspect and copy, at the cost and
expense of the party requesting such copies, any and all Security Documents and
other documents, notices, certificates, instructions or communications received
by the Collateral Trustee in its capacity as such.
SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured
Obligations. The Collateral Trustee shall accept, hold, administer and enforce
all Liens at any time transferred or delivered to it and all other interests,
rights, powers and remedies at any time granted to or enforceable by the
Collateral Trustee and all other property of the Trust Estates solely and
exclusively for the benefit of the present and future holders of present and
future Secured Obligations, and shall distribute all proceeds received by it in
realization thereon or from enforcement thereof solely and exclusively pursuant
to the provisions of Section 3.4.
SECTION 3.8 Additional Secured Debt.
(a) The Collateral Trustee will, as trustee hereunder,
perform its undertakings set forth in Section 3.1(a) with respect to each holder
of Secured Obligations of a Series of Secured Debt that is issued or incurred
after the date hereof that (i) holds Secured Obligations that are identified as
a holder of Parity Lien Debt or Priority Lien Debt in accordance with the
procedures set forth in Section 3.8(b) and (ii) signs, through its designated
Secured Debt Representative identified pursuant to Section 3.8(b), a Collateral
Trust Joinder.
(b) The Company or other applicable Obligor shall be
permitted to designate as additional Secured Debtholders hereunder each person
who is, or who becomes, the registered holder of Parity Lien Debt or the holder
of Priority Lien Debt incurred by the Company or such other Obligor after the
date of this Agreement in accordance with the terms of the Secured Debt
Documents; provided that for purposes of this Section 3.8, all extensions of
credit under the
22
Credit Agreement (including issuances of letters of credit) shall be deemed to
be incurred on the date hereof so that no such further designation shall be
required to be made so that all such extensions of credit under the Credit
Agreement (regardless when made or incurred) shall be deemed Priority Lien Debt.
The Company or other applicable Obligor may effect such designation by
delivering to the Collateral Trustee, with copies to each previously identified
Secured Debt Representative, each of the following:
(i) An officer's certificate of the Company
stating that:
(A) the Company or such other Obligor
intends to incur additional Secured Debt ("New Secured Debt")
which shall either be (x) Priority Lien Debt permitted by each
agreement governing Secured Debt to be secured with a Priority
Lien on a pari passu basis with all previously existing
Priority Lien Debt and which, when incurred and after giving
pro forma effect to the incurrence of such Priority Lien Debt
and the application of the proceeds therefrom, shall be in an
aggregate principal amount that is permitted by the terms of
the Secured Debt Documents or (y) Parity Lien Debt permitted
by each agreement governing Secured Debt to be secured with a
Parity Lien on a pari passu basis with all previously existing
Parity Lien Debt and which, when incurred and after giving pro
forma effect to the incurrence of such Parity Lien Debt and
the application of the proceeds therefrom, shall be in an
aggregate principal amount that is permitted by the terms of
each Secured Debt Document; and
(B) after giving pro forma effect to
the incurrence of such New Secured Debt and the application of
the proceeds therefrom, no Secured Debt Default shall have
occurred and be continuing and, to the best of the signatory's
knowledge after due inquiry, no event or condition shall have
occurred which could reasonably be expected to result in a
Secured Debt Default;
(ii) evidence that the Company or such other
Obligor has duly authorized, executed (if applicable) and recorded (or
caused to be recorded) in each appropriate governmental office all
relevant filings and recordations to ensure that the New Secured Debt
is secured by the Collateral;
(iii) evidence that the officer's certificate
delivered pursuant to clause (i) above has been duly authorized by the
Board of Directors of the Company and has been duly executed and
delivered; and
(iv) a written notice specifying the name and
address of the Secured Debt Representative for such series of New
Secured Debt for purposes of Section 7.5.
Notwithstanding the foregoing, nothing in this Agreement shall be construed to
allow the Company or any other Obligor to incur additional Indebtedness unless
otherwise permitted by the terms of the Secured Debt Documents.
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ARTICLE 4. OBLIGATIONS ENFORCEABLE BY
THE COMPANY AND THE GUARANTORS
SECTION 4.1 Release of Liens.
(a) The Collateral Trustee's Liens upon the Collateral
will be released pursuant to Section 4.1(b) below:
(i) in whole, upon (A) the payment in full and
discharge of all outstanding Secured Debt and all other Secured
Obligations that are outstanding, due and payable at the time all of
the Secured Debt is paid in full and discharged, (B) the return in full
of all outstanding Credit-Linked Deposits (or similar deposits) made
under all Secured Debt Documents and (C) the termination or expiration
of all commitments to extend credit under all Secured Debt Documents
and the cancellation or termination of all outstanding letters of
credit issued pursuant to any Secured Debt Documents;
(ii) as to any Collateral that is sold,
transferred or otherwise disposed of by the Company or any other
Obligor in a transaction or other circumstance which is not prohibited
by all of the Secured Debt Documents at the time of such sale, transfer
or other disposition or to the extent of the interest sold, transferred
or otherwise disposed of; and
(iii) as to any Collateral other than Collateral
being released pursuant to clauses (i) or (ii) of this Section 4.1(a),
if consent to the release of such Collateral has been given by an Act
of Instructing Debtholders; provided that if such Collateral represents
all or substantially all of the Collateral, consent to release of such
Collateral has been given by the requisite percentage or number of
holders of each Series of Secured Debt under the applicable Secured
Debt Document, and in each case, such release has become effective in
accordance with such consent.
(b) The Collateral Trustee agrees for the benefit of the
Company and the other Obligors that if the Collateral Trustee at any time
receives:
(i) an officer's certificate of the Company
stating that (x) such officer has read Article 4 of this Agreement and
understands the provisions and the definitions relating hereto, (y)
such officer has made such examination or investigation as is necessary
to enable him or her to express an informed opinion as to whether or
not the conditions precedent in this Agreement and all other Secured
Debt Documents, if any, relating to the release of the Collateral have
been complied with and (z) in the opinion of such officer, such
conditions precedent, if any, have been complied with;
(ii) the proposed instrument or instruments
releasing such Lien as to such property in recordable form, if
applicable; and
(iii) the written confirmation of each Priority
Debt Representative (or, at any time after a Discharge of Priority Lien
Obligations, each Parity Debt Representative (such confirmation to be
given following receipt of, and based solely on, the officer's
certificate described in 4.1 (b)(i) above) that, in its view, such
release is
24
permitted by Section 4.1(a) and the respective Secured Debt Documents
governing the Secured Obligations the holders of which such Secured
Debt Representative represents,
then the Collateral Trustee will execute (with such acknowledgements and/or
notarizations as are required) and deliver such release to the Company or other
applicable Obligor on or before the later of (x) the date specified in such
request for such release and (y) the fifth Business Day after the date of
receipt of the items required by this Section 4.1(b) by the Collateral Trustee.
(c) The Collateral Trustee hereby agrees that:
(i) in the case of any release pursuant to
clause (ii) of Section 4.1(a), if the terms of any such sale, transfer
or other disposition require the payment of the purchase price to be
contemporaneous with the delivery of the applicable release, then, at
the request of the Company or other applicable Obligor, the Collateral
Trustee shall either be present at the closing of such transaction or
shall deliver the release under customary escrow arrangements that
permit such contemporaneous payment and delivery of the release; and
(ii) at any time when a Secured Debt Default
under a Series of Secured Debt that constitutes Parity Lien Debt has
occurred and is continuing, within one Business Day of the receipt by
it of any Act of Instructing Debtholders pursuant to Section
4.1(a)(iii), the Collateral Trustee shall deliver a copy of such Act of
Instructing Debtholders to each Secured Debt Representative.
(d) Each Secured Debt Representative hereby agrees that:
(i) as soon as reasonably practicable after
receipt of an officer's certificate from the Company pursuant to
Section 4.1(b)(i) it will, to the extent required by such Section,
either provide (x) the written confirmation required by Section
4.1(b)(iii), (y) a written statement that such release is not permitted
by Section 4.1(a) or (z) a request for further information from the
Company reasonably necessary to determine whether the proposed release
is permitted by Section 4.1(a) and after receipt of such information
such Secured Debt Representative will as soon as reasonably practicable
either provide the written confirmation or statement required pursuant
to clause (x) or (y), as applicable; and
(ii) within one Business Day of the receipt by it
of any notice from the Collateral Trustee pursuant to Section
4.1(c)(ii), such Secured Debt Representative shall deliver a copy of
such notice to each registered holder of the Series of Priority Lien
Debt or Series of Parity Lien Debt for which it acts as Secured Debt
Representative.
SECTION 4.2 Delivery of Copies to Secured Debt Representatives. The
Company will deliver to each Secured Debt Representative a copy of each
officer's certificate delivered to the Collateral Trustee pursuant to Section
4.1(b), together with copies of all documents delivered to the Collateral
Trustee with such officer's certificate. The Secured Debt Representatives will
not be obligated to take notice thereof or to act thereon, subject to Section
4.1(d).
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SECTION 4.3 Collateral Trustee not Required to Serve, File or Record.
The Collateral Trustee is not required to serve, file, register or record any
instrument releasing or subordinating its security interest in any Collateral.
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE
SECTION 5.1 No Implied Duty. The Collateral Trustee will not have any
fiduciary duties nor will it have responsibilities other than those expressly
assumed by it in this Agreement and the other Security Documents. The Collateral
Trustee shall not be required to take any action which is contrary to applicable
law or any provision of this Agreement or the other Security Documents.
SECTION 5.2 Appointment of Agents and Advisors. The Collateral Trustee
may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys, accountants,
appraisers or other experts or advisors selected by it in good faith as it may
reasonably require and shall not be responsible for any misconduct or negligence
on the part of any of them.
SECTION 5.3 Other Agreements. The Collateral Trustee has accepted and
is bound by the Security Documents executed by the Collateral Trustee as of the
date of this Agreement and, as directed by an Act of Instructing Debtholders,
the Collateral Trustee may execute additional Security Documents delivered to it
after the date of this Agreement, provided, however, that such additional
Security Documents do not adversely affect the rights, privileges, benefits and
immunities of the Collateral Trustee. The Collateral Trustee shall not otherwise
be bound by, or be held obligated by, the provisions of any credit agreement,
indenture or other agreement governing Secured Debt (other than this Agreement
and the other Security Documents).
SECTION 5.4 Solicitation of Instructions.
(a) The Collateral Trustee may at any time solicit
written confirmatory instructions, in the form of an Act of Instructing
Debtholders or an order of a court of competent jurisdiction, as to any action
which it may be requested or required to take, or which it may propose to take,
in the performance of any of its obligations under this Agreement.
(b) No written direction given to the Collateral Trustee
by an Act of Instructing Debtholders, which in the sole judgment of the
Collateral Trustee imposes, purports to impose or might reasonably be expected
to impose upon the Collateral Trustee any obligation or liability not set forth
in or arising under this Agreement and the other Security Documents shall be
binding upon the Collateral Trustee unless the Collateral Trustee elects, at its
sole option, to accept such direction.
SECTION 5.5 Limitation of Liability. The Collateral Trustee shall not
be responsible or liable for any action taken or omitted to be taken by it
hereunder or under any other Security Document, except for its own gross
negligence, bad faith or willful misconduct as determined by a court of
competent jurisdiction.
SECTION 5.6 Documents in Satisfactory Form. The Collateral Trustee
shall be entitled to require that all agreements, certificates, opinions,
instruments and other documents at
26
any time submitted to it, including those expressly provided for in this
Agreement, be delivered to it in a form and with substantive provisions
reasonably satisfactory to it.
SECTION 5.7 Entitled to Rely. The Collateral Trustee may conclusively
rely upon any certificate, notice or other document (including any facsimile)
reasonably believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper person or persons and need not investigate
any fact or matter stated in any such document. The Collateral Trustee may seek
and rely upon any judicial order or judgment, upon any advice, opinion or
statement of legal counsel, independent consultants and other experts selected
by it in good faith and upon any certification, instruction, notice or other
writing delivered to it by the Company or any other Obligor in compliance with
the provisions of this Agreement or delivered to it by any Secured Debt
Representative as to the Secured Debtholders for whom it acts, without being
required to determine the authenticity thereof or the correctness of any fact
stated therein or the propriety or validity of service thereof. The Collateral
Trustee may act in reliance upon any instrument comporting with the provisions
of this Agreement or any signature reasonably believed by it to be genuine and
may assume that any person purporting to give notice or receipt or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so. To the extent an officer's certificate
or an opinion of counsel is required or permitted under this Agreement to be
delivered to the Collateral Trustee in respect of any matter, the Collateral
Trustee may rely conclusively on such officer's certificate or opinion of
counsel as to such matter.
SECTION 5.8 Secured Debt Default. The Collateral Trustee shall not be
required to inquire as to the occurrence or absence of any Secured Debt Default
and shall not be affected by or required to act upon any notice or knowledge as
to the occurrence of any Secured Debt Default unless and until it receives a
Notice of Actionable Default or a Responsible Officer of the Collateral Trustee
has actual knowledge that an Actionable Default has occurred and is continuing.
SECTION 5.9 Actions by Collateral Trustee. As to any matter not
expressly provided for by this Agreement, the Collateral Trustee shall act or
refrain from acting as directed by an Act of Instructing Debtholders and shall
be fully protected if it does so.
SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee.
The Collateral Trustee shall not be required to advance or expend any funds or
otherwise incur any financial liability in the performance of its duties or the
exercise of its powers or rights hereunder unless it has been provided with
security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or
continuing to take such action.
SECTION 5.11 Rights of the Collateral Trustee. In the event there is
any bona fide, good faith disagreement between the other parties to this
Agreement or any of the other Security Documents resulting in adverse claims
being made in connection with Collateral held by the Collateral Trustee and the
terms of this Agreement or any of the other Security Documents do not
unambiguously mandate the action the Collateral Trustee is to take or not to
take in connection therewith under the circumstances then existing, or the
Collateral Trustee is in doubt as to what action it is required to take or not
to take hereunder, it shall be entitled to refrain from
27
taking any action (and shall incur no liability for doing so) until directed
otherwise in writing by a request signed jointly by the parties hereto entitled
to give such direction or by order of a court of competent jurisdiction.
SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of
Collateral.
(a) Beyond the exercise of reasonable care in the custody
of Collateral in its possession, the Collateral Trustee shall have no duty as to
any Collateral in its possession or control or in the possession or control of
any agent or bailee or any income thereon or as to preservation of rights
against prior parties or any other rights pertaining thereto and the Collateral
Trustee shall not be responsible for filing any financing or continuation
statements or recording any documents or instruments in any public office at any
time or times or otherwise perfecting or maintaining the perfection of any
security interest in the Collateral. The Collateral Trustee shall be deemed to
have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and the Collateral Trustee shall not be
liable or responsible for any loss or diminution in the value of any of the
Collateral by reason of the act or omission of any carrier, forwarding agency or
other agent or bailee selected by the Collateral Trustee in good faith.
(b) The Collateral Trustee shall not be responsible for
the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Liens in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder, except to the extent such action or
omission constitutes gross negligence, bad faith or willful misconduct on the
part of the Collateral Trustee, for the validity or sufficiency of the
Collateral or any agreement or assignment contained therein, for the validity of
the title of any Obligor to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessments or Liens upon the Collateral or
otherwise as to the maintenance of the Collateral. The Collateral Trustee hereby
disclaims any representation or warranty to the present and future holders of
the Secured Obligations concerning the perfection of the Liens and security
interests granted hereunder or in the value of any of the Collateral.
SECTION 5.13 Assumption of Rights, Not Assumption of Duties.
Notwithstanding anything to the contrary contained herein, (a) each of the
parties thereto shall remain liable under each of the Security Documents (other
than this Agreement) to the extent set forth therein to perform all of their
respective duties and obligations thereunder to the same extent as if this
Agreement had not be executed, (b) the exercise by the Collateral Trustee of any
of its rights, remedies or powers hereunder shall not release such parties from
any of their respective duties or obligations under the other Security Documents
and (c) the Collateral Trustee shall not be obligated to perform any of the
obligations or duties of any of the parties thereunder other than the Collateral
Trustee.
SECTION 5.14 No Liability for Clean Up of Hazardous Materials. In the
event that the Collateral Trustee is required to acquire title to an asset for
any reason, or take any managerial action of any kind in regard thereto, in
order to carry out any fiduciary or trust obligation for the benefit of another,
which in the Collateral Trustee's sole discretion may cause the Collateral
Trustee to be considered an "owner or operator" under the provisions of the
28
Comprehensive Environmental Response Cleanup and Liability Act or any similar
Environmental Laws (collectively, "CERCLA") or otherwise cause the Collateral
Trustee to incur, or be exposed to, any Environmental Liability or any liability
under CERCLA or any other federal, state or local law, the Collateral Trustee
reserves the right, instead of taking such action, either to resign as
Collateral Trustee or to arrange for the transfer of the title or control of the
asset to a court appointed receiver. The Collateral Trustee shall not be liable
to any person for any Environmental Liability or any environmental claims or
contribution actions under any federal, state or local law, rule or regulation
by reason of the Collateral Trustee's actions and conduct as authorized,
empowered and directed hereunder or relating to the discharge, Release or
threatened Release of Hazardous Materials into the environment.
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE
SECTION 6.1 Resignation or Removal of Collateral Trustee. Subject to
the appointment of a successor Collateral Trustee as provided in Section 6.2 and
the acceptance of such appointment by the successor Collateral Trustee, (a) the
Collateral Trustee may resign at any time by giving not less than 30 days'
notice of resignation to each Secured Debt Representative and the Company and
(b) the Collateral Trustee may be removed at any time, with or without cause, by
an Act of Instructing Debtholders.
SECTION 6.2 Appointment of Successor Collateral Trustee. Upon any such
resignation or removal, a successor Collateral Trustee may be appointed by an
Act of Instructing Debtholders. If no successor Collateral Trustee shall have
been so appointed and shall have accepted such appointment within 30 days after
the predecessor Collateral Trustee gave notice of resignation or was removed,
the retiring Collateral Trustee may (at the expense of the Company), at its
option, appoint a successor Collateral Trustee, or petition a court of competent
jurisdiction for appointment of a successor Collateral Trustee, which shall be a
bank or trust company (a) authorized to exercise corporate trust powers, (b)
having a combined capital and surplus of at least $500,000,000 and (c)
maintaining an office in New York, New York. The Collateral Trustee shall
fulfill its obligations hereunder until a successor Collateral Trustee meeting
the requirements of this Section 6.2 has accepted its appointment as Collateral
Trustee and the provisions of Section 6.3 have been satisfied.
SECTION 6.3 Succession. When the person so appointed as successor
Collateral Trustee accepts such appointment:
(a) such person shall succeed to and become vested with
all the rights, powers, privileges and duties of the predecessor Collateral
Trustee, and the predecessor Collateral Trustee shall be discharged from its
duties and obligations hereunder, and
(b) the predecessor Collateral Trustee shall promptly
transfer all Liens and collateral security and other property of the Trust
Estates within its possession or control to the possession or control of the
successor Collateral Trustee and shall execute instruments and assignments as
may be necessary or desirable or reasonably requested by the successor
Collateral Trustee to transfer to the successor Collateral Trustee all Liens,
interests, rights, powers and remedies of the predecessor Collateral Trustee in
respect of the Security Documents or the Trust Estates.
29
Thereafter the predecessor Collateral Trustee shall remain entitled to enforce
the immunities granted to it in Article 5 and the provisions of Sections 7.7 and
7.8.
ARTICLE 7. MISCELLANEOUS PROVISIONS
SECTION 7.1 Amendment.
(a) No amendment or supplement to the provisions of this
Agreement or any other Security Document (to which the Collateral Trustee is a
party) will be effective without the approval of the Collateral Trustee acting
as directed by an Act of Instructing Debtholders, except that:
(i) any amendment or supplement that has the
effect solely of adding or maintaining Collateral, securing additional
Secured Debt that was otherwise permitted by the terms of the Secured
Debt Documents to be secured by the Collateral or preserving or
perfecting the Liens thereon or the rights of the Collateral Trustee
therein will become effective when executed and delivered by the
Company or any other applicable Obligor party thereto and the
Collateral Trustee;
(ii) no amendment or supplement that reduces,
impairs or adversely affects the right of any Secured Debtholder (A) to
vote its outstanding Secured Debt as to any matter described as subject
to an Act of Instructing Debtholders (or amends the provisions of this
clause (ii) or the definition of "Act of Instructing Debtholders" or
"Actionable Default"), (B) to share in the order of application
described in Section 3.4 in the proceeds of enforcement of or
realization on any Collateral, in each case that has not been released
in accordance with the provisions described in Section 4.1 or (C) to
require that Liens securing Secured Obligations be released only as set
forth in the provisions described in Section 4.1 shall become effective
without the consent of the requisite percentage or number of holders of
each Series of Secured Debt so affected under the applicable Secured
Debt Document;
(iii) no amendment or supplement that imposes any
obligation upon the Collateral Trustee or any Secured Debt
Representative or adversely affects the rights of the Collateral
Trustee or any Secured Debt Representative, respectively, in its
capacity as such shall become effective without the consent of the
Collateral Trustee or such Secured Debt Representative, respectively;
and
(iv) any amendment or supplement that has the
effect solely of adding a parallel debt hereunder in respect of any
future Series of Secured Debt that shall become entitled to the
benefits of this Agreement, which is in form substantially the same as
the Credit Agreement Parallel Debt and the Indenture Parallel Debt
contained herein, will become effective when executed and delivered by
the Company or any other applicable Obligor party thereto, the
applicable Secured Debt Representative with respect to such future
Series of Secured Debt and the Collateral Trustee.
The Collateral Trustee shall not enter into any such amendment or supplement
unless it shall have received an officer's certificate of the Company to the
effect that such amendment or supplement will not result in a breach of any
provision or covenant contained in any of the
30
Secured Debt Documents. Prior to executing any amendment or supplement pursuant
to this Section 7.1, the Collateral Trustee shall be entitled to receive an
opinion of counsel of the Company to the effect that the execution of such
document is authorized or permitted hereunder, and with respect to amendments
adding Collateral, an opinion of counsel of the Company addressing customary
perfection, and if such additional Collateral consists of equity interests of
any person, priority, matters with respect to such additional Collateral.
Notwithstanding the foregoing, any amendment, supplement or other agreement
regarding the provisions of the Security Documents that releases Collateral will
be effective only in accordance with the requirements set forth in Section 4.1.
(b) The Collateral Trustee, acting as directed by an Act
of Instructing Debtholders, and the Obligors may, at any time and from time to
time, without the consent of any Parity Lien Secured Parties, enter into
amendments or other written agreements supplemental to any Security Document
that is a Priority Lien Document for the purpose of adding to, or deleting from,
or waiving or consenting to any departures from any provisions of, any Security
Document that is a Priority Lien Document or changing in any manner the rights
of the holders of the Priority Lien Secured Parties or the Obligors thereunder.
Any amendment or waiver of, or any consent under, any provision of any Priority
Lien Document that is a Security Document (except to the extent that such
amendment, waiver or consent, would have the effect of releasing Collateral from
the Junior Trust Estate not in accordance with Section 4.1) shall apply
automatically to any comparable provision of any comparable Parity Lien Document
without the consent of or notice to any Parity Lien Secured Parties and without
any action by any Obligor or any Parity Lien Secured Parties. The Company shall
promptly notify the Parity Lien Secured Parties of any amendment or waiver of,
or any consent under, any provision of any Priority Lien Document that is a
Security Document that applies automatically to any comparable provision of any
comparable Parity Lien Document, which notice shall include a copy of such
amendment, waiver or consent, as applicable, provided that the failure to give
such notice shall not affect the validity of such amendment or waiver of, or
consent under, the Priority Lien Documents.
(c) Without an Act of Instructing Debtholders, no Parity
Lien Document that is a Security Document (but that is not also a Priority Lien
Document) may be amended, supplemented or otherwise modified or entered into to
the extent such amendment, supplement or modification, or the terms of any new
Parity Lien Document that is a Security Document, would be inconsistent with any
of the terms of the Priority Lien Documents or this Agreement. The Parity Lien
Secured Parties agree that each Parity Lien Document that is a Security Document
(but that is not also a Priority Lien Document) shall include the following
language:
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Collateral Trustee pursuant to this Agreement
and the exercise of any right or remedy by such Collateral Trustee hereunder are
subject to the provisions of the Collateral Trust Agreement, dated as of
December 23, 2003 (the "Collateral Trust Agreement") among Credit Suisse First
Boston, acting through its Cayman Islands Branch, as Administrative Agent, the
Collateral Trustee, Law Debenture Trust Company of New York, as Trustee, NRG
Energy, Inc. and NRG Power Marketing Inc., as the Credit Agreement Borrowers,
and the other Guarantors party thereto (as amended, modified or supplemented
from time to time). In the event of any
31
conflict between the terms of the Collateral Trust Agreement and this Agreement,
the terms of the Collateral Trust Agreement shall govern."
; provided, however, that if the jurisdiction in which any such Parity Lien
Document shall be filed prohibits the inclusion of the language above or would
prevent a document containing such language to be recorded of record, the Parity
Debt Representatives and the Priority Debt Representatives agree, prior to such
Parity Lien Document being entered into, to negotiate in good faith replacement
language stating that the lien and security interest granted under such Parity
Lien Document is subject to the provisions of this Agreement.
SECTION 7.2 Further Assurances The Company and each of the other
Obligors shall do or cause to be done all acts and things which may be required,
or which the Collateral Trustee from time to time may reasonably request, to
assure and confirm that the Collateral Trustee holds, for the benefit of the
holders of the applicable Secured Obligations, duly created and enforceable and
except, with respect to any Series of Secured Debt, to the extent not required
to be perfected by the Secured Debt Documents relating to such Series of Secured
Debt, perfected Liens upon the Collateral, including after-acquired Collateral
and any property or assets which become Collateral pursuant to the definition
thereof after the date hereof, subject, in the case of Parity Lien Obligations
with respect to the Collateral that secures such Parity Lien Obligations, only
to the Priority Liens and those Liens that arise by operation of law and are not
voluntarily granted, in each case as contemplated by the Secured Debt Documents.
Upon the reasonable request of the Collateral Trustee at any
time and from time to time, the Company and each of the other Obligors shall
promptly execute, acknowledge and deliver such security documents, instruments,
certificates, notices and other documents, and take such other actions as shall
be reasonably required, or that the Collateral Trustee may reasonably request,
to create, perfect, protect, assure or enforce the Liens and benefits intended
to be conferred, in each case as contemplated by the Secured Debt Documents for
the benefit of the holders of Secured Obligations.
SECTION 7.3 Successors and Assigns.
(a) Except as provided in Section 5.2, the Collateral
Trustee may not, in its capacity as such, delegate any of its duties or assign
any of its rights hereunder, and any attempted delegation or assignment of any
such duties or rights shall be null and void. All obligations of the Collateral
Trustee hereunder shall inure to the sole and exclusive benefit of, and be
enforceable by, each Secured Debt Representative and each present and future
holder of Secured Obligations, each of whom shall be entitled to enforce this
Agreement as a third party beneficiary hereof, and all of their respective
successors and assigns.
(b) Neither the Company nor any other Obligor may
delegate any of its duties or assign any of its rights hereunder, and any
attempted delegation or assignment of any such duties or rights shall be null
and void. All obligations of the Company and the other Obligors hereunder shall
inure to the sole and exclusive benefit of, and be enforceable by, the
Collateral Trustee, each Secured Debt Representative and each present and future
holder of Secured Obligations, each of whom shall be entitled to enforce this
Agreement as a third party beneficiary hereof, and all of their respective
successors and assigns.
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SECTION 7.4 Delay and Waiver. No failure to exercise, no course of
dealing with respect to the exercise of, and no delay in exercising, any right,
power or remedy arising under this Agreement or any of the other Security
Documents shall impair any such right, power or remedy or operate as a waiver
thereof. No single or partial exercise of any such right, power or remedy shall
preclude any other or future exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not exclusive
of any remedies provided by law.
SECTION 7.5 Notices. Any communications, including notices and
instructions, between the parties hereto or notices provided herein to be given
may be given to the following addresses:
If to the Collateral Trustee: Deutsche Bank Trust Company Americas
00 Xxxx Xxxxxx, 00xx Xxxxx
Mail Stop: NYC60-2710
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxxxxx
Fax: (000) 000-0000
If to the Company or any other Obligor:
NRG Energy, Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: Treasurer, Chief Financial
Officer and General Counsel
Fax: (000) 000-0000
If to the Administrative Agent: Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010
Attention: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to the Trustee: Law Debenture Trust Company of New
York
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
and if to any other Secured Debt Representative, to such address as it may
specify by written notice to the parties named above.
Each notice hereunder shall be in writing and may be
personally served or sent by facsimile or United States mail or courier service
and shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of facsimile, or
three business days after depositing it in the United States mail with postage
prepaid
33
and properly addressed. Each party may change its address for notice hereunder
to any other location within the continental United States by giving written
notice thereof to the other parties as set forth in this Section 7.5.
Promptly following any Discharge of Priority Lien Obligation
each Priority Debt Representative with respect to each applicable Series of
Priority Lien Debt that is so discharged shall provide written notice of such
discharge to the Collateral Trustee and to each other Secured Debt
Representative.
SECTION 7.6 Entire Agreement. This Agreement states the complete
agreement of the parties relating to the undertaking of the Collateral Trustee
set forth herein and supersedes all oral negotiations and prior writings in
respect of such undertaking.
SECTION 7.7 Compensation; Expenses.
The Obligors jointly and severally agree to pay, promptly upon
demand:
(a) such compensation to the Collateral Trustee and its
agents, co-agents and sub-agents as the Company and the Collateral Trustee shall
agree in writing from time to time;
(b) all reasonable costs and expenses incurred in the
preparation, execution, delivery, filing, recordation, administration or
enforcement of this Agreement or any other Security Document or any consent,
amendment, waiver or other modification relating thereto;
(c) all reasonable fees, expenses and disbursements of
legal counsel and any auditors, accountants, consultants or appraisers or other
professional advisors and agents engaged by the Collateral Trustee or any
Secured Debt Representative incurred in connection with the negotiation,
preparation, closing, administration, performance or enforcement of this
Agreement and the other Security Documents or any consent, amendment, waiver or
other modification relating thereto and any other document or matter requested
by the Company;
(d) all reasonable costs and expenses of creating,
perfecting, releasing or enforcing the Collateral Trustee's security interests
in the Collateral, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, and title insurance premiums;
(e) all other reasonable costs and expenses incurred by
the Collateral Trustee or any Secured Debt Representative in connection with the
negotiation, preparation and execution of the Security Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby or the exercise of rights or performance of
obligations by the Collateral Trustee thereunder; and
(f) after the occurrence of any Secured Debt Default, all
costs and expenses incurred by the Collateral Trustee or any Secured Debt
Representative in connection with the preservation, collection, foreclosure or
enforcement of the Collateral subject to the Security Documents or any interest,
right, power or remedy of the Collateral Trustee or in connection with the
collection or enforcement of any of the Secured Obligations or the proof,
protection, administration or resolution of any claim based upon the Secured
Obligations in any Bankruptcy
34
Case or Insolvency Proceeding, including all fees and disbursements of
attorneys, accountants, auditors, consultants, appraisers and other
professionals engaged by the Collateral Trustee or the Secured Debt
Representatives.
The agreements in this Section 7.7 shall survive repayment of all other Secured
Obligations and the removal or resignation of the Collateral Trustee.
SECTION 7.8 Indemnity.
(a) The Obligors jointly and severally agree to defend,
indemnify, pay and hold harmless the Collateral Trustee, each Secured Debt
Representative, each Secured Debtholder and each of their respective Affiliates
and each and all of the directors, officers, partners, trustees, employees,
attorneys and agents, and (in each case) their respective heirs,
representatives, successors and assigns (each of the foregoing, an "Indemnitee")
from and against any and all Indemnified Liabilities; provided, no Indemnitee
shall be entitled to indemnification hereunder with respect to any Indemnified
Liability to the extent such Indemnified Liability is found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee.
(b) All amounts due under Section 7.8(a) shall be payable
upon demand.
(c) To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in Section 7.8(a) may be
unenforceable in whole or in part because they are violative of any law or
public policy, each of the Obligors shall contribute the maximum portion that it
is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(d) No Obligor shall ever assert any claim against any
Indemnitee, on any theory of liability, for any lost profits or special,
indirect or consequential damages or (to the fullest extent a claim for punitive
damages may lawfully be waived) any punitive damages arising out of, in
connection with, or as a result of, this Agreement or any other Secured Debt
Document or any agreement or instrument or transaction contemplated hereby or
relating in any respect to any Indemnified Liability, and each of the Obligors
hereby forever waives, releases and agrees not to xxx upon any claim for any
such lost profits or special, indirect, consequential or (to the fullest extent
lawful) punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
(e) The agreements in this Section 7.8 shall survive
repayment of all other Secured Obligations and the removal or resignation of the
Collateral Trustee.
SECTION 7.9 Severability. If any provision of this Agreement is
invalid, illegal or unenforceable in any respect or in any jurisdiction, the
validity, legality and enforceability of such provision in all other respects
and of all remaining provisions, and of such provision in all other
jurisdictions, shall not in any way be affected or impaired thereby.
SECTION 7.10 Headings. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
35
SECTION 7.11 Obligations Secured. All obligations of the Obligors set
forth in or arising under this Agreement shall be Secured Obligations and are
secured by all Liens granted by the Security Documents.
SECTION 7.12 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by, and shall be
construed and enforced in accordance with, the laws of the State of New York
without regard to conflicts of law principles.
SECTION 7.13 Consent to Jurisdiction. All judicial proceedings brought
against any party hereto arising out of or relating to this Agreement or any of
the other Security Documents may be brought in any state or federal court of
competent jurisdiction in the State, County and City of New York. By executing
and delivering this Agreement, each Obligor, for itself and in connection with
its properties, irrevocably (a) accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts, (b) waives any defense of
forum non conveniens, (c) agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to such party at its address provided in accordance with
Section 7.5, (d) agrees that service as provided in clause (c) above is
sufficient to confer personal jurisdiction over such party in any such
proceeding in any such court and otherwise constitutes effective and binding
service in every respect and (e) agrees each party hereto retains the right to
serve process in any other manner permitted by law or to bring proceedings
against any party in the courts of any other jurisdiction.
SECTION 7.14 Waiver of Jury Trial. Each party hereto hereby agrees to
waive its respective rights to a jury trial of any claim or cause of action
based upon or arising under this Agreement or any of the other Security
Documents or any dealings between them relating to the subject matter of this
Agreement or the intents and purposes of the other Security Documents. The scope
of this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
Agreement and the other Security Documents, including contract claims, tort
claims, breach of duty claims and all other common law and statutory claims.
Each party hereto acknowledges that this waiver is a material inducement to
enter into a business relationship, that each party hereto has already relied on
this waiver in entering into this Agreement, and that each party hereto will
continue to rely on this waiver in its related future dealings. Each party
hereto further warrants and represents that it has reviewed this waiver with its
legal counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. This waiver is irrevocable, meaning
that it may not be modified either orally or in writing (other than by a mutual
written waiver specifically referring to this Section 7.14 and executed by each
of the parties hereto), and this waiver shall apply to any subsequent
amendments, renewals, supplements or modifications of or to this Agreement or
any of the other Security Documents or to any other documents or agreements
relating thereto. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 7.15 Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
36
SECTION 7.16 Effectiveness. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto and receipt
by each party of written notification of such execution and written or
telephonic authorization of delivery thereof.
SECTION 7.17 Additional Obligors. The Company shall cause each
Subsidiary that becomes an Obligor or is required by any Secured Debt Document
to become a party to this Agreement to become a party to this Agreement, for all
purposes of this Agreement, by causing such subsidiary to execute and deliver to
the parties hereto a Collateral Trust Joinder, whereupon such subsidiary shall
be bound by the terms hereof to the same extent as if it had executed and
delivered this Agreement as of the date hereof. The Company agrees to provide
each Secured Debt Representative with a copy of each Collateral Trust Joinder
executed and delivered pursuant to this Section.
SECTION 7.18 Continuing Nature of this Agreement. This Agreement,
including the subordination provisions hereof, shall be reinstated if at any
time any payment or distribution in respect of any of the Priority Lien
Obligations is rescinded or must otherwise be returned in an Insolvency
Proceeding or a Bankruptcy Case or otherwise by any of the Priority Lien Secured
Parties or any representative of any such party (whether by demand, settlement,
litigation or otherwise). In the event that all or any part of a payment or
distribution made with respect to the Priority Lien Obligations is recovered
from any of the Priority Lien Secured Parties in an Insolvency Proceeding or a
Bankruptcy Case or otherwise (and whether by demand, settlement, litigation or
otherwise), any payment or distribution received by any of the Parity Lien
Secured Parties with respect to the Parity Lien Obligations from the proceeds of
any Collateral or any title insurance policy required by any real property
mortgage at any time after the date of the payment or distribution that is so
recovered, whether pursuant to a right of subrogation or otherwise, shall be
deemed to have been received by the Parity Lien Secured Parties in trust as
property for the Priority Lien Secured Parties and the Parity Lien Secured
Parties shall forthwith deliver such payment or distribution to the Collateral
Trustee, for the benefit of the Priority Lien Secured Parties, for application
to the Priority Lien Obligations until such Priority Lien Obligations shall have
been paid in full in cash and all commitments in respect of Priority Lien
Obligations shall have been terminated.
SECTION 7.19 Insolvency. This Agreement shall be applicable both before
and after the commencement of any Insolvency Proceeding or Bankruptcy Case by or
against any Obligor. The relative rights, as provided for in this Agreement,
shall continue after the commencement of any such Insolvency Proceeding or
Bankruptcy Case on the same basis as prior to the date of the commencement of
any such case, as provided in this Agreement.
SECTION 7.20 Rights and Immunities of Secured Debt Representatives. The
Administrative Agent shall be entitled to all of the rights, protections,
immunities and indemnities set forth in the Credit Agreement, the Trustee shall
be entitled to all of the rights, protections, immunities and indemnities set
forth in the Indenture and any future Secured Debt Representative shall be
entitled to all of the rights, protections, immunities and indemnities set forth
in the credit agreement, indenture or other agreement governing the applicable
Secured Debt with respect to which such person shall act as representative, in
each case as if specifically set forth herein. In no event shall any Secured
Debt Representative be liable for any act or omission on the part of the
Obligors or the Collateral Trustee hereunder.
37
ARTICLE 8. CREDIT AGREEMENT PARALLEL DEBT FOR DUTCH AND SWISS
SECURITY INTERESTS
Without prejudice to the provisions of the Credit Agreement,
and for the purpose of ensuring and preserving the validity and continuity of
the security interests granted and to be granted under or pursuant to the Dutch
Security Documents and the Swiss Security Documents, the Credit Agreement
Borrowers hereby irrevocably and unconditionally undertake to pay to the
Collateral Trustee amounts equal to and in the currency of the total amount of
the Secured Obligations (as defined in the Credit Agreement), which from time to
time are due in accordance with and under the same terms and conditions as each
of the Secured Obligations (such payment undertakings and the obligations and
liabilities which are the result thereof hereinafter referred to as the "Credit
Agreement Parallel Debt").
The Credit Agreement Borrowers and the Collateral Trustee
acknowledge that (i) for this purpose the Credit Agreement Parallel Debt
constitutes undertakings, obligations and liabilities of the Credit Agreement
Borrowers to the Collateral Trustee which are separate and independent from, and
without prejudice to, the corresponding Secured Obligations which exist between
the Credit Agreement Borrowers and the Secured Parties (as defined in the Credit
Agreement) and (ii) the Credit Agreement Parallel Debt represents the Collateral
Trustee's own claims (vorderingen op naam) (Forderung in eigenem Namen) to
receive payment of the Credit Agreement Parallel Debt, provided that the total
amount of the Credit Agreement Parallel Debt shall never exceed the total amount
of the Secured Obligations.
Every payment of monies made by the Credit Agreement Borrowers
or the applicable Guarantors to the Administrative Agent (as defined in the
Credit Agreement) regarding the Credit Agreement shall, conditionally upon such
payment not subsequently being voided or reduced by virtue of any provisions or
enactments relating to bankruptcy, insolvency, liquidation or similar laws of
general application, be in satisfaction pro tanto of the covenant by the Credit
Agreement Borrowers contained in the first paragraph of this Article 8, provided
that, if any such payment as is mentioned above is subsequently voided or
reduced by virtue of any provisions or enactments relating to bankruptcy,
insolvency, liquidation or similar laws of general application, the Collateral
Trustee shall be entitled to receive a corresponding amount as Credit Agreement
Parallel Debt under the first paragraph under this Article 8 from the Credit
Agreement Borrowers and the Credit Agreement Borrowers shall remain liable to
satisfy such Credit Agreement Parallel Debt and such Credit Agreement Parallel
Debt shall be deemed not to have been discharged.
Subject to the provisions of the first paragraph of this
Article 8, but notwithstanding any of the other provisions of this Article 8:
(a) the total amount due and payable as Credit Agreement
Parallel Debt under this Article 8 shall be decreased to the extent the Credit
Agreement Borrowers or the applicable Guarantors shall have paid any amounts to
the Secured Parties or any of them to reduce the outstanding Secured Obligations
or any of the Secured Parties otherwise receives any amount in payment of the
Secured Obligations; and
38
(b) to the extent that the Credit Agreement Borrowers or
the applicable Guarantors shall have paid any amounts to the Collateral Trustee
under the Credit Agreement Parallel Debt or the Collateral Trustee otherwise
shall have received monies in payment of the Credit Agreement Parallel Debt, the
total amount due and payable under the Secured Obligations shall be decreased as
if said amounts were received directly in payment of the Secured Obligations.
For the avoidance of doubt, in the event that the Credit
Agreement Borrowers are in default in respect of the Secured Obligations, as set
forth in the Credit Agreement, the Credit Agreement Borrowers shall, at the same
time, be deemed in default in respect of their obligations under the Credit
Agreement Parallel Debt.
ARTICLE 9. INDENTURE PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS
Without prejudice to the provisions of the Indenture, and for
the purpose of ensuring and preserving the validity and continuity of the
security interests granted under or pursuant to the Dutch Security Documents and
the Swiss Security Documents, the Company hereby irrevocably and unconditionally
undertakes to pay to the Collateral Trustee amounts equal to and in the currency
of the total amount of the Parity Lien Obligations in respect of the Notes,
which from time to time are due in accordance with and under the same terms and
conditions as each of the Notes and the Indenture (such payment undertakings and
the obligations and liabilities which are the result thereof hereinafter
referred to as the "Indenture Parallel Debt").
The Company and the Collateral Trustee acknowledge that (i)
for this purpose the Indenture Parallel Debt constitutes undertakings,
obligations and liabilities of the Company to the Collateral Trustee which are
separate and independent from, and without prejudice to, the corresponding
Parity Lien Obligations in respect of the Notes that are issued by the Company
to the holders of the Notes and (ii) that the Indenture Parallel Debt represents
the Collateral Trustee's own claims (vorderingen op naam) (Forderung in eigenem
Namen) to receive payment of the Indenture Parallel Debt, provided that the
total amount of the Indenture Parallel Debt shall never exceed the total amount
of the Parity Lien Obligations in respect of the Notes.
Every payment of monies made by the Company or the applicable
Guarantors to the Trustee regarding the Parity Lien Obligations in respect of
the Notes shall, conditionally upon such payment not subsequently being voided
or reduced by virtue of any provisions or enactments relating to bankruptcy,
insolvency, liquidation or similar laws of general application, be in
satisfaction pro tanto of the covenant by the Company contained in the first
paragraph of this Article 9, provided that, if any such payment as is mentioned
above is subsequently voided or reduced by virtue of any provisions or
enactments relating to bankruptcy, insolvency, liquidation or similar laws of
general application, the Collateral Trustee shall be entitled to receive a
corresponding amount as Indenture Parallel Debt under the first paragraph of
this Article 9 from the Company and the Company shall remain liable to satisfy
such Indenture Parallel Debt and such Indenture Parallel Debt shall be deemed
not to have been discharged.
39
Subject to the provision in the first paragraph in this
Article 9, but notwithstanding any of the other provisions of this Article 9:
(a) the total amount due and payable as Indenture
Parallel Debt under this Article 9 shall be decreased to the extent the Company
or the applicable Guarantors shall have paid any amounts to the holders or any
of them to reduce the outstanding Parity Lien Obligations in respect of the
Notes or any of the holders otherwise receives any amount in payment of the
Parity Lien Obligations in respect of the Notes; and
(b) to the extent that the Company shall have paid any
amounts to the Collateral Trustee under the Indenture Parallel Debt or the
Collateral Trustee otherwise shall have received monies in payment of the
Indenture Parallel Debt, the total amount due and payable under the Parity Lien
Obligations in respect of the Notes shall be decreased as if said amounts were
received directly in payment of the Parity Lien Obligations in respect of the
Notes.
For the avoidance of doubt, in the event that the Company is
in default in respect of the Parity Lien Obligations in respect of the Notes, as
set forth in the Indenture, the Company shall, at the same time, be deemed in
default in respect of its obligations under the Indenture Parallel Debt.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Collateral Trust Agreement to be executed by their respective officers or
representatives hereunto duly authorized as of the day and year first above
written.
The Borrowers:
NRG ENERGY, INC.,
By: __________________________________
Name:
Title:
NRG POWER MARKETING INC.,
By: __________________________________
Name:
Title:
The Guarantors:
[INSERT AS APPLICABLE]
By: __________________________________
Name:
Title:
The Administrative Agent:
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
41
The Trustee:
LAW DEBENTURE TRUST COMPANY OF
NEW YORK, not in its individual capacity
but as Trustee under the Indenture,
By: ____________________________________
Name:
Title:
The Collateral Trustee:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
By: ____________________________________
Name:
Title:
42
Exhibit A to
Collateral Trust Agreement
Collateral Trust Joinder
The undersigned, _____________________, a _______________,
hereby agrees to become party as [an Obligor] [a Parity Debt Representative] [a
Priority Debt Representative] under the Collateral Trust Agreement dated as of
December 23, 2003, by and among NRG Energy, Inc., a Delaware corporation, NRG
Power Marketing Inc., Credit Suisse First Boston, acting through its Cayman
Islands Branch, as Administrative Agent under the Credit Agreement (as defined
therein), Law Debenture Company of New York, as Trustee under the Indenture (as
defined therein), and Deutsche Bank Trust Company Americas, as Collateral
Trustee, for all purposes thereof on the terms set forth therein, and to be
bound by the terms of said Collateral Trust Agreement as fully as if the
undersigned had executed and delivered said Collateral Trust Agreement as of the
date thereof.
The provisions of Article 7 of said Collateral Trust Agreement
shall apply with like effect to this Joinder.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Joinder as of ___________________, 20____.
[______________________________________]
By: ____________________________________
Name:
Title:
