Exhibit 10.11
EXECUTION VERSION
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT dated as of March 15, 2005 executed
and delivered by each of the undersigned parties identified as
"Pledgors" on the signature pages hereto and the other Persons
who may be come Pledgors hereunder pursuant to the execution and
delivery of a Pledge Agreement Supplement substantially in the
form of Annex 1 hereto (each a "Pledgor" and collectively, the
"Pledgors") in favor of XXXXX GROUP LTD. (the "Pledgee").
WHEREAS, pursuant to that certain Convertible Note dated as
of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Note"), by and among
BAYCORP HOLDINGS, LTD., a Delaware corporation ("Holdings"),
GREAT BAY POWER MARKETING, INC., a Maine corporation ("GB
Power"), GREAT BAY HYDRO CORPORATION, a New Hampshire corporation
("GB Hydro"), BAYCORP VENTURES, LLC, a Delaware limited liability
company ("BayCorp Ventures"), NACOGDOCHES POWER, LLC, a New
Hampshire limited liability company ("NAC Power"), NACOGDOCHES
GAS, LLC, a New Hampshire limited liability company ("NAC Gas"),
GREAT BAY HYDRO MAINE, LLC, a Maine limited liability company
("GB Maine") and GREAT BAY HYDRO XXXXXX, LLC, a Maine limited
liability company ("GB Xxxxxx"; together with Holdings, GB Power,
GB Hydro, BayCorp Ventures, NAC Power, NAC Gas, GB Maine and GB
Xxxxxx, collectively the "Borrower") and the Pledgee, the Pledgee
has agreed to make available to the Borrower certain financial
accommodations on the terms and conditions contained in the Note;
WHEREAS, the Borrower and each of the other Pledgors, though
separate legal entities, are mutually dependent on each other in
the conduct of their respective businesses as an integrated
operation and have determined it to be in their mutual best
interests to obtain financing from the Pledgee through their
collective efforts;
WHEREAS, each Pledgor acknowledges that it will receive
direct and indirect benefits from the Pledgee making such
financial accommodations available to the Borrower under the
Note; and
WHEREAS, it is a condition precedent to the extension of
such financial accommodations under the Note that the Pledgors
execute and deliver this Agreement, among other things, to grant
to the Pledgee a security interest in the Collateral as security
for the Secured Obligations.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties agree as follows:
Section 1. Definitions. Terms not otherwise defined herein
are used herein with the respective meanings given them in the
Note. Terms defined in the Uniform Commercial Code as in effect
in the State of New York shall have the respective definitions as
so defined. In addition, as used in this Agreement:
"Bankruptcy Code" means United States Bankruptcy Code (11
U.S.C. Section 101 et seq.), as in effect from time to time, and
any successor statute thereto.
"Issuer" means with respect to an Equity Interest, the
Person who issued such Equity Interest and shall include each of
the Persons identified as an Issuer on Schedule 1 attached hereto
(or any addendum or supplement thereto), and any successors
thereto, whether by merger or otherwise.
"Pledgor Subsidiaries" means NAC Gas, GB Maine and GB
Xxxxxx.
"Proceeds" means all proceeds (including proceeds of
proceeds) of any of the Collateral including all: (a) rights,
benefits, distributions, premiums, profits, dividends, interest,
cash, instruments, documents of title, accounts, contract rights,
inventory, equipment, general intangibles, payment intangibles,
deposit accounts, chattel paper, and other property from time to
time received, receivable, or otherwise distributed in respect of
or in exchange for, or as a replacement of or a substitution for,
any of the Collateral, or proceeds thereof (including any cash,
Equity Interests, or other instruments issued after any
recapitalization, readjustment, reclassification, merger or
consolidation with respect to the Issuers and any security
entitlements, as defined in Section 8-102(a)(17) of the UCC, with
respect thereto); (b) "proceeds," as such term is defined in
Section 9-102(a)(64) of the UCC; (c) proceeds of any insurance,
indemnity, warranty, or guaranty (including guaranties of
delivery) payable from time to time with respect to any of the
Collateral, or proceeds thereof; and (d) payments (in any form
whatsoever) made or due and payable to a Pledgor from time to
time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the
Collateral, or proceeds thereof.
"Secured Obligations" means, collectively, (a) with respect
to the Borrower, the unpaid principal of and interest on all
indebtedness, liabilities, obligations, covenants and duties of
the Borrower owing to the Pledgee of any kind, nature or
description, under or in respect of the Note, any other Loan
Document to which the Borrower is a party, whether direct or
indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and
including all interest (including interest that accrues after the
filing of a case under the Bankruptcy Code) and any and all
costs, fees (including reasonable attorneys fees), and expenses
which the Borrower is required to pay pursuant to any of the
foregoing, by law, or otherwise and (b) with respect to any other
Pledgor, all indebtedness, liabilities, obligations, covenants
and duties of such Pledgor owing to the Pledgee of any kind,
nature or description, under or in respect of the Loan Documents
to which such Pledgor is a party, whether direct or indirect,
absolute or contingent, due or to become due, contractual
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or tortious, liquidated or unliquidated, and including all
interest (including interest that accrues after the filing of a
case under the Bankruptcy Code) and any and all costs, fees
(including reasonable attorneys fees), and expenses which such
Pledgor is required to pay or has guaranteed pursuant to any of
the foregoing, by law, or otherwise.
"Securities Act" means the Securities Act of 1934, as
amended.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
Section 2. Pledge. As security for the prompt performance
and payment in full of the Secured Obligations, each Pledgor
hereby pledges to the Pledgee for the benefit of the Pledgee, and
grants to the Pledgee for the benefit of the Pledgee a security
interest in, all of such Pledgor's right, title and interest in,
to and under the following (collectively, the "Collateral"):
(a) (i) in the case of Holdings, its Equity Interests in
the Pledgor Subsidiaries, and (ii) in the case of the Pledgor
Subsidiaries, all Equity Interests now or hereafter owned,
acquired or held by such Pledgor Subsidiaries, including without
limitation, the Equity Interests described in Schedule 1 attached
hereto;
(b) all other investment property and financial assets of
the Pledgor Subsidiaries;
(c) all payments due or to become due to such Pledgor in
respect of any of the foregoing;
(d) all of such Pledgor's claims, rights, powers,
privileges, authority, puts, calls, options, security interests,
liens and remedies, if any, in respect of any of the foregoing;
(e) all of such Pledgor's rights to exercise and enforce
any and every right, power, remedy, authority, option and
privilege of such Pledgor relating to any of the foregoing
including, without limitation, any power to (i) terminate, cancel
or modify any agreement, (ii) execute any instruments and to take
any and all other action on behalf of and in the name of such
Pledgor in respect of any of the foregoing and the applicable
Issuer thereof, (iii) exercise voting rights or make
determinations, (iv) exercise any election (including, but not
limited to, election of remedies), (v) exercise any "put", right
of first offer or first refusal, or other option, (vi) exercise
any right of redemption or repurchase, (vii) give or receive any
notice, consent, amendment, waiver or approval, (viii) demand,
receive, enforce, collect or receipt for any of the foregoing,
(ix) enforce or execute any checks, or other instruments or
orders, and (x) file any claims and to take any action in
connection with any of the foregoing;
(f) all certificates and instruments representing or
evidencing any of the foregoing;
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(g) all other rights, titles, interests, powers, privileges
and preferences pertaining to any of the foregoing; and
(h) all Proceeds of any of the foregoing.
Section 3. Representations and Warranties. Each Pledgor
hereby represents and warrants to the Pledgee as follows:
(a) Title and Liens. Such Pledgor is, and will at all
times continue to be, the legal and beneficial owner of the
Collateral of such Pledgor. None of the Collateral is subject to
any adverse claim or other Lien other than Permitted Liens. No
Person has control of any of the Collateral other than the
Pledgee.
(b) Authorization. Such Pledgor has the right and power,
and has taken all necessary action to authorize it, to execute,
deliver and perform this Agreement in accordance with its terms.
The execution, delivery and performance of this Agreement in
accordance with its terms, including the granting of the security
interest hereunder, do not and will not, by the passage of time,
the giving of notice, or both: (i) require any Governmental
Approval or violate any Applicable Law relating to such Pledgor;
(ii) conflict with, result in a breach of or constitute a default
under the organizational documents of such Pledgor, or any
indenture, agreement or other instrument to which such Pledgor is
a party or by which it or any of the Collateral of such Pledgor
or its other property may be bound; or (iii) result in or require
the creation or imposition of any Lien upon or with respect to
any of the Collateral of such Pledgor or such Pledgor's other
property whether now owned or hereafter acquired.
(c) Validity and Perfection of Security Interest. This
Agreement is effective to create in favor of the Pledgee, for the
benefit of the Pledgee, a legal, valid and enforceable security
interest in the Collateral. Such security interest will be
perfected (i) with respect to any such Collateral that is a
"security" (as such term is defined in the UCC) and is evidenced
by a certificate, when such Collateral is delivered to the
Pledgee with duly executed stock powers with respect thereto,
(ii) with respect to any such Collateral that is a "security" (as
such term is defined in the UCC) but is not evidenced by a
certificate, when UCC financing statements in appropriate form
are filed in the appropriate filing offices in the jurisdiction
of organization of the Pledgors or when control is established by
the Pledgee over such interests in accordance with the provision
of Section 8-106 of the UCC, or any successor provision, and
(iii) with respect to any such Collateral that is not a
"security" (as such term is defined in the UCC), when UCC
financing statements in appropriate form are filed in the
appropriate filing offices in the jurisdiction of organization of
the Pledgors. Except as set forth in this subsection, no action
is necessary to perfect the security interest granted by any
Pledgor under this Agreement.
(d) Pledged Equity Interests. The information set forth on
Schedule 1 hereto with respect to the Collateral of such Pledgor
is true and correct.
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(e) Name, Organization, Etc. Such Pledgor's exact legal
name, type of legal entity, jurisdiction of formation,
organizational identification number and location of its chief
executive office are as set forth on Schedule 1. Except as set
forth on such Schedule, since the date of such Pledgor's
formation, such Pledgor has not changed its name or merged with
or otherwise combined its business with any other Person.
(f) Authorization of Equity Interest. All Equity Interests
which constitute Collateral are duly authorized, validly issued,
fully paid and nonassessable and are not subject to preemptive
rights of any Person.
(g) Interests in Partnerships and LLCs. None of the
Collateral consisting of an interest in a partnership or in a
limited liability company (i) is dealt in or traded on a
securities exchange or in securities markets, (ii) by its terms
expressly provides that it is a security governed by Article 8 of
the UCC or (iii) is an investment company security.
Section 4. Covenants. Each Pledgor hereby unconditionally
covenants and agrees as follows:
(a) No Liens; No Sale of Collateral. Such Pledgor will not
create, assume, incur or permit or suffer to exist any adverse
claim or other Lien on any of the Collateral other than Permitted
Liens and shall not enter into any document, instrument or
agreement (other than this Agreement) which prohibits or purports
to prohibit the creation or assumption of any Lien on any of the
Collateral. Such Pledgor will not sell, lease, lend, assign,
transfer or otherwise dispose of all or any portion of the
Collateral (or any interest therein) except in the ordinary
course of business.
(b) Change of Name, Etc. Without giving the Pledgee at
least 30-days' prior written notice and to the extent such action
is not otherwise prohibited by any of the Loan Documents, such
Pledgor shall not: (i) change its name; (ii) reorganize or
otherwise become formed under the laws of another jurisdiction or
(iii) become bound by a security agreement of another Person
under Section 9-203(d) of the UCC.
(c) Defense of Title. Such Pledgor will warrant and defend
its title to and ownership of the Collateral of such Pledgor, at
its sole cost and expense, against the claims of all Persons.
(d) Delivery of Certificates, Etc. If a Pledgor shall
receive any certificate (including, without limitation, any
certificate representing a stock and/or liquidating dividends,
other distributions in property, return of capital or other
distributions made on or in respect of the Collateral, whether
resulting from a subdivision, combination or reclassification of
outstanding Equity Interests or received in exchange for
Collateral or any part thereof or as a result of any merger,
consolidation, acquisition or other exchange of assets or on the
liquidation, whether voluntary or involuntary, or otherwise),
instrument, option or rights in respect of any Collateral,
whether in addition to, in substitution of, as a conversion of,
or in exchange for, any Collateral, or otherwise in respect
thereof, such Pledgor shall hold the same in trust for the
Pledgee and promptly deliver the
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same to the Pledgee in the exact form received, duly indorsed by
such Pledgor to the Pledgee, if required, together with an
undated stock power covering such certificate (or other
appropriate instrument of transfer) duly executed in blank by
such Pledgor and with, if the Pledgee so requests, signature
guaranteed, to be held by the Pledgee, subject to the terms of
this Agreement, as Collateral.
(e) Uncertificated Securities. With respect to any
Collateral that constitutes a security and is not represented or
evidence by a certificate or instrument, such Pledgor shall cause
the Issuer thereof either (i) to register the Pledgee as the
registered owner of such security or (ii) to agree in writing
with the Pledgee and such Pledgor that such Issuer will comply
with the instructions with respect to such security originated by
the Pledgee without further consent of such Pledgor.
(f) Security Entitlements and Securities Accounts. With
respect to any Collateral consisting of a security entitlement or
a securities account, such Pledgor shall, and shall cause the
applicable securities intermediary, to enter into an agreement
with, and in form and substance acceptable to, the Pledgee,
granting control to the Pledgee over such Collateral.
(g) Additional Shares. Such Pledgor shall not permit any
Issuer to issue any additional Equity Interests unless such
Equity Interests are pledged hereunder as provided herein.
Further, such Pledgor shall not permit any Issuer to amend or
modify its articles or certificate of incorporation, articles of
organization, certificate of limited partnership, by-laws,
operating agreement, partnership agreement or other comparable
organizational instrument in a manner which would adversely
affect the voting, liquidation, preference or other similar
rights of any holder of the Equity Interests pledged hereunder.
(h) Issuer Acknowledgment. Such Pledgor shall, upon the
Pledgee's request therefor, cause each Issuer of Collateral
pledged by such Pledgor and which Issuer is not a Pledgor itself,
to execute and deliver to the Pledgee an Acknowledgment and
Consent substantially in the form of Schedule 2 attached hereto.
Section 5. Voting Rights; Dividends, etc.
(a) So long as no Event of Default exists:
(i) each Pledgor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to
an owner of the Collateral or any part thereof for any
purpose not inconsistent with the terms and conditions of
any of the Loan Documents or any agreement giving rise to or
otherwise relating to any of the Secured Obligations; and
(ii) each Pledgor shall be entitled to retain and use
any and all cash dividends or interest paid on the
Collateral in the normal course of the applicable Issuer's
business, but any and all stock and/or liquidating
dividends, other distributions in property, return
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of capital or other distributions made on or in respect of
the Collateral, whether resulting from a subdivision,
combination or reclassification of outstanding Equity
Interests or received in exchange for Collateral or any part
thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets or on the
liquidation, whether voluntary or involuntary, or otherwise,
shall be and become part of the Collateral and, if received
by a Pledgor, shall forthwith be delivered to the Pledgee.
The Pledgee agrees to execute and deliver to a Pledgor, or cause
to be executed and delivered to a Pledgor, as appropriate, at the
sole cost and expense of such Pledgor, all such proxies, powers
of attorney, dividend orders and other instruments as such
Pledgor may reasonably request for the purpose of enabling such
Pledgor to exercise the voting and/or consensual rights and
powers which such Pledgor is entitled to exercise pursuant to
clause (i) above and/or to receive the dividends which such
Pledgor is authorized to retain pursuant to clause (ii) above.
(b) If an Event of Default exists, all rights of a Pledgor
to exercise the voting and/or consensual rights and powers which
a Pledgor is entitled to exercise pursuant to subsection (a)(i)
above and/or to receive the dividends and distributions which a
Pledgor is authorized to receive and retain pursuant to
subsection (a)(ii) above shall cease, and all such rights
thereupon shall become immediately vested in the Pledgee, which
shall have the sole and exclusive right and authority to exercise
such voting and/or consensual rights and powers which any Pledgor
shall otherwise be entitled to exercise pursuant to subsection
(a)(i) above and/or to receive and retain the dividends and
distributions which any Pledgor shall otherwise be authorized to
retain pursuant to subsection (a)(ii) above. Any and all money
and other property paid over to or received by the Pledgee
pursuant to the provisions of this subsection (b) shall be
retained by the Pledgee as additional Collateral hereunder and
shall be applied in accordance with the provisions of Section 7.
If any Pledgor shall receive any dividends, distributions or
other property which it is not entitled to receive under this
Section, such Pledgor shall hold the same in trust for the
Pledgee, without commingling the same with other funds or
property of or held by such Pledgor, and shall promptly deliver
the same to the Pledgee, in the identical form received, together
with any necessary endorsements.
Section 6. Remedies.
(a) In addition to any right or remedy that the Pledgee may
have under the other Loan Documents or otherwise under Applicable
Law, if an Event of Default shall exist, the Pledgee may exercise
any and all the rights and remedies of a secured party under the
UCC and may otherwise sell, assign, transfer, endorse and deliver
the whole or, from time to time, any part of the Collateral at a
public or private sale or on any securities exchange, for cash,
upon credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as the
Pledgee in its discretion shall deem appropriate. With respect
to any Collateral held or maintained with a securities
intermediary, the Pledgee shall be entitled to notify such
securities intermediary that such securities intermediary should
follow the entitlement orders of the Pledgee and that such
securities intermediary should no longer follow entitlement
orders of the Pledgor, without further consent of the Pledgor.
The Pledgee shall have the right (in its sole and absolute
discretion) to register any Equity Interests which are
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part of the Collateral in its own name as pledgee or the name of
its nominee (as Pledgee or as sub-agent), endorsed or assigned in
blank or in favor of the Pledgee. The Pledgee shall be
authorized at any sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who
will represent and agree that they are purchasing the Collateral
for their own account in compliance with the Securities Act and
any other Applicable Law and upon consummation of any such sale
the Pledgee shall have the right to assign, transfer, endorse and
deliver to the purchaser or purchasers thereof the Collateral so
sold. Each purchaser at any sale of Collateral shall take and
hold the property sold absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives (to the
fullest extent permitted by Applicable Law) all rights of
redemption, stay and/or appraisal which such Pledgor now has or
may at any time in the future have under any Applicable Law now
existing or hereafter enacted. Each Pledgor agrees that, to the
extent notice of sale shall be required by Applicable Law, at
least 5 days' prior written notice to such Pledgor of the time
and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. Any
such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the
Pledgee may fix and shall state in the notice or publication (if
any) of such sale. At any such sale, the Collateral, or portion
thereof to be sold, may be sold in one lot as an entirety or in
separate parcels, as the Pledgee may determine in its sole and
absolute discretion. The Pledgee shall not be obligated to make
any sale of the Collateral if it shall determine not to do so
regardless of the fact that notice of sale of the Collateral may
have been given. The Pledgee may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned.
In case the sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be
retained by the Pledgee until the sale price is paid by the
purchaser or purchasers thereof, but the Pledgee shall not incur
any liability to any Pledgor in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be
sold again upon like notice. At any public sale made pursuant to
this Agreement, the Pledgee and any other holder of any of the
Secured Obligations, to the extent permitted by Applicable Law,
may bid for or purchase, free from any right of redemption, stay
and/or appraisal on the part of any Pledgor (all said rights
being also hereby waived and released to the extent permitted by
Applicable Law), any part of or all the Collateral offered for
sale. For purposes hereof, a written agreement to purchase all
or any part of the Collateral shall be treated as a sale thereof;
the Pledgee shall be free to carry out such sale pursuant to such
agreement and no Pledgor shall be entitled to the return of any
Collateral subject thereto, notwithstanding the fact that after
the Pledgee shall have entered into such an agreement all Events
of Default may have been remedied or the Secured Obligations may
have been paid in full as herein provided. Each Pledgor hereby
waives any right to require any marshaling of assets and any
similar right. In addition to exercising the power of sale
herein
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conferred upon it, the Pledgee shall also have the option to
proceed by suit or suits at law or in equity to foreclose this
Agreement and sell the Collateral or any portion thereof pursuant
to judgment or decree of a court or courts having competent
jurisdiction. The rights and remedies of the Pledgee under this
Agreement are cumulative and not exclusive of any rights or
remedies which it otherwise has.
Section 7. Application of Proceeds of Sale and Cash. The
proceeds of any sale of the whole or any part of the Collateral,
together with any other moneys held by the Pledgee under the
provisions of this Agreement, shall be applied FIRST to pay
incurred and unpaid fees and expenses of the Pledgee under the
Loan Documents, SECOND, to the Pledgee for application by it
towards payment of the Secured Obligations, and THIRD, any
balance of such proceeds remaining after the then outstanding
Secured Obligations have been paid in full in cash, shall be paid
to the Borrower or to whomsoever may be lawfully entitled to
receive the same. Each Pledgor shall remain liable and will pay,
on demand, any deficiency remaining in respect of the Secured
Obligations.
Section 8. Pledgee Appointed Attorney-in-Fact. Each
Pledgor hereby constitutes and appoints the Pledgee as the
attorney-in-fact of such Pledgor with full power of substitution
either in the Pledgee's name or in the name of such Pledgor to do
any of the following: (a) to perform any obligation of such
Pledgor hereunder in such Pledgor's name or otherwise; (b) to ask
for, demand, xxx for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under and
by virtue of any Collateral; (c) to prepare, execute, file,
record or deliver notices, assignments, financing statements,
continuation statements, applications for registration or like
papers to perfect, preserve or release the Pledgee's security
interest in the Collateral; (d) to issue entitlement orders,
instructions and other orders to any securities intermediary in
connection with any of the Collateral held by or maintained with
such securities intermediary; (e) to verify facts concerning the
Collateral in such Pledgor's name, its own name or a fictitious
name; (f) to endorse checks, drafts, orders and other instruments
for the payment of money payable to such Pledgor, representing
any interest or dividend or other distribution payable in respect
of the Collateral or any part thereof or on account thereof and
to give full discharge for the same; (g) to exercise all rights,
powers and remedies which such Pledgor would have, but for this
Agreement, with respect to any of the Collateral; and (h) to
carry out the provisions of this Agreement and to take any action
and execute any instrument which the Pledgee may deem necessary
or advisable to accomplish the purposes hereof, and to do all
acts and things and execute all documents in the name of such
Pledgor or otherwise, deemed by the Pledgee as necessary, proper
and convenient in connection with the preservation, perfection or
enforcement of its rights hereunder. Nothing herein contained
shall be construed as requiring or obligating the Pledgee to make
any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by it, or to present or file
any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action
taken by the Pledgee or omitted to be taken with respect to the
Collateral or any part thereof shall give rise to any defense,
counterclaim or offset in favor of any Pledgor or to any claim or
action against the Pledgee. The power of attorney granted herein
is irrevocable and coupled with an interest and can only be
exercised following an Event of Default.
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Section 9. Pledgee's Duty of Care. Other than the exercise
of reasonable care to ensure that safe custody of the Collateral
while being held by the Pledgee hereunder, the Pledgee shall have
no duty or liability to preserve rights pertaining thereto, it
being understood and agreed that each Pledgor shall responsible
for preservation of all rights of such Pledgor in the Collateral.
The Pledgee shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession
if such Collateral is accorded treatment substantially equal to
that which the Pledgee accords its own property, it being
understood that the Pledgee shall not have responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not the Pledgee has or is
deemed to have knowledge of such matters or (b) taking any
necessary steps to preserve rights against any parties with
respect to any Collateral.
Section 10. Reimbursement of Pledgee. Each Pledgor agrees
to pay upon demand to the Pledgee the amount of any and all
expenses, including the fees disbursements and other charges of
its counsel and of any experts or agents, and its fully allocated
internal costs, that the Pledgee may incur in connection with (a)
any sale of, collection from, or other realization upon, any of
the Collateral, (b) the exercise or enforcement of any of the
rights of the Pledgee hereunder, or (c) the failure by any
Pledgor to perform or observe any of the provisions hereof or
otherwise in respect of the Collateral.
Section 11. Indemnification. Each Pledgor agrees to pay,
indemnify, and hold the Pledgee, and each of their respective
predecessor, affiliate, subsidiaries, successors and assigns,
together with their past, present and future officers, directors,
agents, attorneys, financial advisors, representatives, partners,
joint ventures, affiliates and the successor and assigns of any
and all of them (each, an "Indemnified Person") harmless from and
against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever ("Indemnified
Amounts") brought against or incurred by an Indemnified Person,
in any manner arising out of or, directly or indirectly, related
in any way to or connected with this Agreement, including without
limitation, the exercise by the Pledgee of any of its rights and
remedies under this Agreement or any other action taken by the
Pledgee pursuant to the terms of this Agreement; provided,
however, a Pledgor shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Amounts to the
extent arising from the gross negligence or willful misconduct of
such Indemnified Party, as determined by a court of competent
jurisdiction in a final, non-appealable judgment.
Section 12. Further Assurances. Each Pledgor shall, at its
sole cost and expense, take all action that may be necessary or
desirable in the Pledgee's sole discretion, so as at all times to
maintain the validity, perfection, enforceability and priority of
the Pledgee's security interest in the Collateral, or to enable
the Pledgee to exercise or enforce its rights hereunder,
including without limitation or otherwise in respect of the
Collateral. The Pledgee shall at all times have the right to
exchange the
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certificates representing such Equity Interests for certificates
of smaller or larger numbers of shares for any purpose consistent
with this Agreement.
Section 13. Securities Act. In view of the position of the
Pledgors in relation to the Collateral, or because of other
current or future circumstances, a question may arise under the
Securities Act, or any similar Applicable Law hereafter enacted
analogous in purpose or effect (the Securities Act and any such
similar Applicable Law as from time to time in effect being
called the "Federal Securities Laws") with respect to any
disposition of the Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws
might very strictly limit the course of conduct of the Pledgee if
the Pledgee were to attempt to dispose of all or any part of the
Collateral in accordance with the terms hereof, and might also
limit the extent to which or the manner in which any subsequent
transferee of any Collateral could dispose of the same.
Similarly, there may be other legal restrictions or limitations
affecting the Pledgee in any attempt to dispose of all or part of
the Collateral in accordance with the terms hereof under
applicable Blue Sky or other state securities laws or similar
Applicable Law analogous in purpose or effect. Each Pledgor
recognizes that in light of the foregoing restrictions and
limitations the Pledgee may, with respect to any sale of the
Collateral, limit the purchasers to those who will agree, among
other things, to acquire such Collateral for their own account,
for investment, and not with a view to the distribution or resale
thereof. Each Pledgor acknowledges and agrees that in light of
the foregoing restrictions and limitations, the Pledgee, in its
sole and absolute discretion, may, in accordance with Applicable
Law, (a) proceed to make such a sale whether or not a
registration statement for the purpose of registering such
Collateral or part thereof shall have been filed under the
Federal Securities Laws and (b) approach and negotiate with a
single potential purchaser to effect such sale. Each Pledgor
acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of
any such sale, the Pledgee shall incur no responsibility or
liability for selling all or any part of the Collateral in
accordance with the terms hereof at a price that the Pledgee, in
its sole and absolute discretion, may in good xxxxx xxxx
reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been
realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached.
The provisions of this Section will apply notwithstanding the
existence of public or private market upon which the quotations
or sales prices may exceed substantially the price at which the
Pledgee sells.
Section 14. [Reserved]
Section 15. Continuing Security Interest. This Agreement
shall create a continuing security interest in the Collateral and
shall remain in full force and effect until it terminates in
accordance with its terms.
Section 16. Security Interest Absolute. All rights of the
Pledgee hereunder, the grant of a security interest in the
Collateral and all obligations of each Pledgor hereunder, shall
be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of any Loan Document, any agreement
with respect to any of the Secured Obligations or any
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other agreement or instrument relating to any of the foregoing,
(b) any change in the time, manner or place of the payment of, or
in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure
from any Loan Document, or any other agreement or instrument
relating to any of the foregoing, (c) any exchange, release or
nonperfection of any other collateral, or any release or
amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Secured Obligations or (d) any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Pledgor in respect of the
Secured Obligations or in respect of this Agreement (other than
the indefeasible payment in full of all the Secured Obligations).
Section 17. No Waiver. Neither the failure on the part of
the Pledgee to exercise, nor the delay on the part of the Pledgee
in exercising any right, power or remedy hereunder, nor any
course of dealing between the Pledgee, on the one hand, and the
Pledgor, on the other hand, shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right,
power, or remedy hereunder preclude any other or the further
exercise thereof or the exercise of any other right, power or
remedy.
Section 18. Notices. Notices, requests and other
communications required or permitted hereunder shall be given in
accordance with, and subject to the provisions of, Section 16.1
of the Note.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE
FULLY PERFORMED, IN SUCH STATE.
SECTION 20. LITIGATION; OTHER MATTERS; WAIVERS.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR
CONTROVERSY AMONG ANY OF THE PLEDGORS AND THE PLEDGEE WOULD BE
BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD
RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PLEDGEE AND THE
PLEDGORS HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN
WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR THE
COLLATERAL.
(b) EACH PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW: (i) ANY CONSTITUTIONAL OR OTHER
RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME THE PLEDGEE
DISPOSES OF ALL OR ANY PART OF THE COLLATERAL
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AS PROVIDED IN THIS AGREEMENT; (ii) ALL RIGHTS OF REDEMPTION,
STAY, OR APPRAISAL THAT SUCH PLEDGOR NOW HAS OR MAY AT ANY TIME
IN THE FUTURE HAVE UNDER ANY APPLICABLE LAW NOW EXISTING OR
HEREAFTER ENACTED; AND (iii) EXCEPT AS EXPRESSLY REQUIRED UNDER
THIS AGREEMENT OR APPLICABLE LAW, ANY REQUIREMENT OF NOTICE,
DEMAND, OR ADVERTISEMENT FOR SALE.
(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY
EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL
UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL
SURVIVE THE PAYMENT OF THE SECURED OBLIGATIONS AND THE
TERMINATION OF THIS AGREEMENT.
Section 21. Amendments. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any
Pledgor herefrom shall in any event be effective unless the same
shall be in writing and signed by the parties hereto, and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 22. Binding Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns,
except that no Pledgor shall be permitted to assign this
Agreement or any interest herein or in the Collateral or any part
thereof.
Section 23. Termination. Upon indefeasible payment in full
of all of the Secured Obligations, this Agreement shall
terminate. Upon termination of this Agreement in accordance with
its terms, the Pledgee agrees to take such actions as any Pledgor
may reasonably request, and at the sole cost and expense of such
Pledgor, to evidence the termination of this Agreement.
Section 24. Severability. Whenever possible, each
provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under Applicable Law, but if any
provision of this Agreement shall be prohibited by or invalid
under Applicable Law, such provisions shall be ineffective only
to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining
provisions of this Agreement.
Section 25. Headings. Section headings used herein are for
convenience only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.
Section 26. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute but one agreement.
Section 27. Joint and Several Obligations of Pledgors. THE
OBLIGATIONS OF THE PLEDGORS HEREUNDER SHALL BE JOINT AND SEVERAL,
AND ACCORDINGLY, EACH PLEDGOR CONFIRMS THAT IT IS LIABLE FOR THE
FULL AMOUNT OF
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THE "SECURED OBLIGATIONS" AND ALL OF THE OBLIGATIONS AND
LIABILITIES OF EACH OF THE OTHER PLEDGORS HEREUNDER.
[Signatures on Next Page]
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IN WITNESS WHEREOF, each Pledgor has executed and
delivered this Pledge Agreement under seal as of this the
date first written above.
PLEDGORS:
BAYCORP HOLDINGS, LTD.
By: /s/ Xxxxx X. Xxxxxx Xx.
----------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: President
NACOGDOCHES GAS, LLC
By: /s/ Xxxxx X. Xxxxxx Xx.
----------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: Manager
GREAT BAY HYDRO MAINE, LLC
By: BAYCORP HOLDINGS, LTD., its sole
member
By: /s/ Xxxxx X. Xxxxxx Xx.
-----------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: President
GREAT BAY HYDRO XXXXXX, LLC
By: BAYCORP HOLDINGS, LTD., its sole
member
By: /s/ Xxxxx X. Xxxxxx Xx.
------------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: President
[Signature Pages to Pledge Agreement]
Agreed to, accepted and acknowledged
as of the date first written above.
PLEDGEE:
XXXXX GROUP LTD.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
[Signature Pages to Pledge Agreement]
ANNEX 1 TO PLEDGE AGREEMENT
FORM OF PLEDGE AGREEMENT SUPPLEMENT
THIS PLEDGE AGREEMENT SUPPLEMENT dated as of _____________
200__, (this "Supplement") executed and delivered by
________________ a ______________ (the "New Pledgor") in favor of
Xxxxx Group Ltd. (the "Pledgee").
WHEREAS, pursuant to that certain Note dated as of March [
], 2005 (as amended, restated, supplemented or otherwise modified
from time to time, the "Note"), by and among BAYCORP HOLDINGS,
LTD., a Delaware corporation ("Holdings"), GREAT BAY POWER
MARKETING, INC., a Maine corporation ("GB Power"), GREAT BAY
HYDRO CORPORATION, a New Hampshire corporation ("GB Hydro"),
BAYCORP VENTURES, LLC, a Delaware limited liability company
("Baycorp Ventures"), NACOGDOCHES POWER, LLC, a New Hampshire
limited liability company ("NAC Power"), NACOGDOCHES GAS, LLC, a
New Hampshire limited liability company ("NAC Gas"), GREAT BAY
HYDRO MAINE, LLC, a Maine limited liability company ("GB Maine")
and GREAT BAY HYDRO XXXXXX, LLC, a Maine limited liability
company ("GB Xxxxxx"; together with Holdings, GB Power, GB Hydro,
BayCorp Ventures, NAC Power, NAC Gas, GB Maine and GB Xxxxxx,
collectively the "Borrower") and the Pledgee, the Pledgee has
agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Note;
WHEREAS, it is a condition precedent to the Pledgee's
continued extension of such financial accommodations that the New
Pledgor execute this Supplement.
NOW, THEREFORE, in consideration of the above premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the New Pledgor,
the New Pledgor hereby agrees as follows:
Section 1. Accession to Pledge Agreement; Grant of Security
Interest. The New Pledgor agrees that it is a "Pledgor" under
the Pledge Agreement and assumes all obligations of a "Pledgor"
thereunder, all as if the New Pledgor had been an original
signatory to the Pledge Agreement. Without limiting the
generality of the foregoing, the New Pledgor hereby:
(a) pledges to the Pledgee, and grants to the Pledgee a
security interest in, all of the New Pledgor's right, title and
interest in, to and under the Collateral, including the Equity
Interests described on Exhibit I attached hereto, as security for
the Secured Obligations;
(b) makes to the Pledgee as of the date hereof each of the
representations and warranties contained in Section 3 of the
Pledge Agreement and agrees to be bound by each of the covenants
contained in the Pledge Agreement, including without limitation,
those contained in Section 4 thereof; and
(c) consents and agrees to each other provision set forth
in the Pledge Agreement.
SECTION 2. GOVERNING LAW. THIS SUPPLEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED,
AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 3. Definitions. Capitalized terms used herein and
not otherwise defined herein shall have their respective defined
meanings given them in the Pledge Agreement.
[Signatures on Next Page]
IN WITNESS WHEREOF, the New Pledgor has caused this Pledge
Agreement Supplement to be duly executed and delivered under seal
by its duly authorized officers as of the date first written
above.
[NEW PLEDGOR]
By:
--------------------------------
Name:
------------------------
Title:
------------------------
Address for Notices:
--------------------------
--------------------------
--------------------------
Attention:
------------------------
Telecopy Number:
------------------
Telephone Number:
------------------
Accepted:
XXXXX GROUP LTD.
By:
----------------------------
Name:
----------------------
Title:
----------------------
EXHIBIT I
Pledged Equity Interests
------------------------
Jurisdiction Class of Certificate
of Equity Number Percentage of
Pledgor Issuer Formation Interest (if any) Ownership
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
This Exhibit shall be deemed to be a supplement to Schedule 1 attached
to the Pledge Agreement.
SCHEDULE 1 TO PLEDGE AGREEMENT
Pledged Equity Interests:
------------------------
Jurisdiction Class of Certificate
Of Formation Equity Number Percentage of
Pledgor Issuer of Issuer Interest (if any) Ownership
---------- ---------- ---------- ---------- ---------- 100%
---------- ---------- ---------- ---------- ---------- 100%
Pledgor Information:
-------------------
Jurisdiction
of Organizational Location of Chief
Pledgor Formation ID No. Executive Office
---------- ---------- ---------- ------------------
---------- ---------- ---------- ------------------
SCHEDULE 2 TO PLEDGE AGREEMENT
Form of Acknowledgement and Consent
-----------------------------------
The undersigned hereby acknowledges receipt of a copy of the
Pledge Agreement dated as of March __, 2005 (the "Pledge
Agreement"), made by BAYCORP HOLDINGS, LTD., a Delaware
corporation ("Holdings"), NACOGDOCHES GAS, LLC, a New Hampshire
limited liability company ("NAC Gas"), GREAT BAY HYDRO MAINE,
LLC, a Maine limited liability company, and GREAT BAY HYDRO
XXXXXX, LLC, a Maine limited liability company, and the other
Pledgors party thereto in favor of Xxxxx Group Ltd. (the
"Pledgee"). Terms not otherwise defined herein have the
respective meanings given them in the Pledge Agreement.
The undersigned agrees for the benefit of the Pledgee as
follows:
(a) The undersigned will be bound by, and comply with, the
terms of the Pledge Agreement applicable to the undersigned,
including without limitation, Sections 4(e) and 4(g).
(b) The undersigned will notify the Pledgee in writing
promptly of the occurrence of any of the events described in
Section 4(d) of the Pledge Agreement.
(c) The undersigned will not permit any of the Equity
Interests issued by it (i) to be dealt in or traded on a
securities exchange or in securities markets; or (ii) to provide
by its terms that it is a security governed by Article 8 of the
UCC.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Acknowledgement and Consent under seal as of this
the date first written above.
[ISSUER]
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
