Exhibit 10.23
EXECUTION COPY
Calpine Corporation LLC Pledge
SECOND AMENDMENT PLEDGE AGREEMENT (Membership Interests)
THIS SECOND AMENDMENT PLEDGE AGREEMENT (this "Pledge Agreement"), dated
as of July 16, 2003, made by Calpine Corporation, a Delaware corporation (the
"Company"), in favor of The Bank of New York, as Collateral Trustee (together
with any successor(s) thereto in such capacity, the "Collateral Trustee") for
the benefit of the Secured Parties.
W I T N E S S E T H
WHEREAS, the Company intends to enter into an Amended and
Restated Credit Agreement dated as of July 16, 2003 (as amended, modified,
renewed, restated or replaced from time to time, the "Credit Agreement") among,
inter alia, the Company, the Lenders referred to therein and The Bank of Nova
Scotia, as Administrative Agent (the "Credit Agreement Agent"), relating to a
$500,000,000 senior secured credit facility to be made available in the form of
revolving loans and term loans, including letters of credit to be issued
thereunder;
WHEREAS, the Company intends to (a) issue $500,000,000 in
aggregate principal amount of Second Priority Senior Secured Floating Rate Notes
due 2007 (the "2007 Notes") pursuant to the Indenture dated as of July 16, 2003
(the "2007 Indenture") between the Company and Wilmington Trust Company, as
Trustee (together with its successors in such capacity, the "2007 Trustee"), (b)
issue $1,150,000,000 in aggregate principal amount of 8.50% Second Priority
Senior Secured Notes due 2010 (the "2010 Notes") pursuant to the Indenture dated
as of July 16, 2003 (the "2010 Indenture") between the Company and Wilmington
Trust Company, as Trustee (together with its successors in such capacity, the
"2010 Trustee"), (c) issue $900,000,000 in aggregate principal amount of 8.75%
Second Priority Senior Secured Notes due 2013 (the "2013 Notes") pursuant to the
Indenture dated as of July 16, 2003 (the "2013 Indenture") between the Company
and Wilmington Trust Company, as Trustee (together with its successors in such
capacity, the "2013 Trustee"), and (d) borrow $750,000,000 in Term Loans (the
"Term Loans") pursuant to a Term Loan Agreement dated as of July 16, 2003 (the
"Term Loan Agreement") between the Company and Xxxxxxx Xxxxx Credit Partners
L.P., as Administrative Agent (together with its successors in such capacity,
the "Term Loan Administrative Agent");
WHEREAS, the Company intends to secure its Secured
Obligations, including its obligations under the Credit Agreement and any future
Priority Lien Debt, on a priority basis, and, subject to such priority, its
obligations under the 2007 Notes, 2010 Notes, 2013 Notes and Term Loans and any
future Parity Lien Debt equally and ratably, with security interests in, and
pledge of, among other things, all present and future Pledged Collateral (as
defined below);
WHEREAS, the Company has entered into a Collateral Trust
Agreement dated as of July 16, 2003 (the "Collateral Trust Agreement") among,
inter alia, the Company, the Subsidiaries of the Company named therein and the
Collateral Trustee which sets forth the terms on which the Company has appointed
the Collateral Trustee as trustee for the present and future
holders of the Secured Obligations to receive, hold, maintain, administer,
enforce and distribute the Existing Security Documents and all other Security
Documents, including this Pledge Agreement, at any time delivered to the
Collateral Trustee and all interests, rights, powers and remedies of the
Collateral Trustee thereunder and the proceeds thereof;
WHEREAS, the Company will derive substantial direct and
indirect benefit from the making of the extensions of credit under each of the
Credit Agreement and the Term Loan Agreement and the offering of each of the
2007 Notes, 2010 Notes and 2013 Notes;
WHEREAS, it is a condition precedent to the obligation of the
lenders to make their respective extensions of credit to the Company under each
of the Credit Agreement and the Term Loan Agreement, and condition precedent to
the obligation of the purchasers to purchase each of the 2007 Notes, the 2010
Notes and the 2013 Notes, that the Company shall have executed and delivered
this Pledge Agreement to the Collateral Trustee for the benefit of the Secured
Parties; and
WHEREAS, this Pledge Agreement amends and restates in its
entirety the First Amendment Pledge Agreement (Membership Interests) dated as of
May 9, 2002 made by the Company in favor of The Bank of Nova Scotia, as agent;
NOW, THEREFORE, in consideration of the premises contained herein and
for good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Collateral Trustee" is defined in the preamble.
"Collateral Trust Agreement" is defined in the recitals.
"Company" is defined in the preamble.
"Distributions" means all cash distributions made in respect of the
Pledged Interests, whether of net income, return of capital or otherwise, and
all other distributions (whether similar or dissimilar to the foregoing) on or
with respect to any Pledged Interests or other rights or interests constituting
Pledged Collateral.
"Pledge Agreement" is defined in the preamble.
"Pledged Collateral" is defined in Section 2.1.
"Pledged Interests Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Interests identified opposite the name of
such Person, and each Person that
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is the issuer of any membership interests that are obtained by the Company in
the future and pledged hereunder.
"Pledged Interests" means all membership interests in the Pledged
Interests Issuer, as such interests are amended, modified or supplemented from
time to time and together with any interest in the Pledged Interests Issuer
taken in extension or renewal thereof or substitution therefor.
"Pledged Property" means all Pledged Interests, all securities, all
assignments of any amounts due or to become due, all other instruments which are
now being delivered by the Company to the Collateral Trustee or may from time to
time hereafter be delivered by the Company to the Collateral Trustee for the
purpose of pledge under this Pledge Agreement or any other Secured Debt
Document, and all proceeds of any of the foregoing.
"Secured Parity Lien Parties" means any Person who is holding a Parity
Lien Obligation (including any Parity Debt Representative), at any time.
"Secured Parties" means any Person who is holding a Secured Obligation
(including any Secured Debt Representative), at any time.
"Secured Priority Lien Parties" means any Person who is holding a
Priority Lien Obligation (including any Priority Lien Agent), at any time.
"Securities Act" is defined in Section 6.2.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
New York.
SECTION 1.2. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Collateral Trust
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein
or the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. The Company hereby (i)
pledges, hypothecates, assigns, charges, mortgages, delivers, and transfers to
the Collateral Trustee, for its benefit and the benefit of the Secured Priority
Lien Parties, and hereby grants to the Collateral Trustee, for its benefit and
the benefit of the Secured Priority Lien Parties, a continuing first priority
security interest in, all of the following property (the "Pledged Collateral")
and (ii) pledges, hypothecates, assigns, charges, mortgages, delivers, and
transfers to the Collateral Trustee, for its benefit and the benefit of the
Secured Parity Lien Parties, and hereby grants to the Collateral Trustee, for
its benefit and the benefit of the Secured Parity Lien Parties, a continuing
second priority security interest in, all of the Pledged Collateral:
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(a) all Pledged Interests identified in Attachment 1
hereto;
(b) and the certificates representing the Pledged
Interests and all dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Interests;
(c) all additional membership interests of any issuer of
the Pledged Interests from time to time acquired by the Company in any
manner, and the certificates representing such additional membership
interests, and all dividends, distributions, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
membership interests;
(d) all other Pledged Interests issued from time to time;
(e) all other Pledged Property, whether now or hereafter
delivered to the Collateral Trustee in connection with this Pledge
Agreement;
(f) all Distributions, interest, and other payments and
rights with respect to any Pledged Property; and
(g) all proceeds of any of the foregoing.
SECTION 2.2. Security for Obligations; Separate Liens. This Pledge
Agreement and the security interests and Liens granted and created herein
secures the payment and performance of all Secured Obligations of the Company
now or hereafter, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest (including any
interest accruing at the then applicable rate provided in any applicable Secured
Debt Document after the maturity of the loans 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,
relating to the Company, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), fees, premiums, penalties,
indemnifications, expenses or otherwise, and including all amounts that
constitute part of the Secured Obligations and would be owed by the Company but
for the fact that they are unenforceable or not allowed due to a pending
Bankruptcy Case or Insolvency Proceeding. Without limiting the generality of the
foregoing, it is the intent of the parties that (i) the Liens securing the
Parity Lien Obligations are subject and subordinate to the Liens securing the
Priority Lien Obligations up to the Priority Lien Cap and (ii) this Pledge
Agreement creates two separate and distinct Liens: the first Lien securing the
payment and performance of the Priority Lien Obligations and the second Lien
securing the payment and performance of the Parity Lien Obligations.
SECTION 2.3. Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Pledged Collateral, including all
Pledged Interests, shall be delivered to and held by or on behalf of the
Collateral Trustee pursuant hereto, shall be in suitable form for transfer by
delivery, and shall be accompanied by all necessary instruments of transfer or
assignment, duly executed in blank.
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SECTION 2.4. Intentionally Omitted.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and, subject to Section 4.1 of the Collateral Trust Agreement and the
other Secured Debt Documents, shall
(a) remain in full force and effect until payment in full
of all Secured Obligations and the termination or expiration of all
commitments to extend credit under all Credit Facilities the
Indebtedness under which constitutes Priority Lien Debt,
(b) be binding upon the Company and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Collateral Trustee hereunder, to the benefit of the Collateral Trustee
and each other Secured Party.
Without limiting the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any right or obligation under the
Secured Debt Documents to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Secured Party under any Secured Debt Document (including
this Pledge Agreement) or otherwise, subject, however, to any contrary
provisions in such assignment or transfer, and to the applicable provisions of
each of the Secured Debt Documents. Upon the payment in full and discharge of
all Secured Obligations that are then outstanding, due and payable and the
termination or expiration of all commitments to extend credit under all Credit
Facilities, the Indebtedness under which constitutes Priority Lien Debt, the
security interest granted herein shall terminate and all rights to the Pledged
Collateral shall revert to the Company. Upon any such termination or release of
the Lien provided for hereunder in accordance with the Secured Debt Documents,
the Collateral Trustee will, at the Company's sole expense, deliver to the
Company, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Interests, together with all other Pledged Collateral held by the
Collateral Trustee hereunder, and execute and deliver to the Company such
documents as the Company shall reasonably request to evidence such termination
or release.
SECTION 2.6. Security Interest Absolute. All rights of the
Collateral Trustee and the security interests granted to the Collateral Trustee
hereunder, and all obligations of the Company hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of any of the
Secured Debt Documents,
(b) the failure of any Secured Party or any holder of any
Secured Obligation
(i) to assert any claim or demand or to enforce
any right or remedy against the Company, any other Obligor or
any other Person under the provisions of any of the Secured
Debt Documents or otherwise, or
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(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations of the Company or any other Obligor,
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations or
any other extension, compromise or renewal of any Secured Obligation of
the Company or any other Obligor,
(d) any reduction, limitation, impairment or termination
of any Secured Obligations of the Company or any other Obligor for any
reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and the Company hereby
waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Secured Obligations
of the Company, any other Obligor or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
any of the Secured Debt Documents,
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Pledged Collateral), or
any amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations, or
(g) any other circumstances which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Company, any other Obligor, any surety or any guarantor.
SECTION 2.7. [Intentionally Omitted.]
SECTION 2.8. Waiver of Subrogation. Until such time as the Secured
Obligations have been indefeasibly paid in full and discharged and all
commitments to extend credit under all Credit Facilities the Indebtedness under
which constitutes Priority Lien Debt shall have been permanently terminated or
expired, the Company hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company or any other Obligor that
arise from the existence, payment, performance or enforcement of the Company's
obligations under this Pledge Agreement or any other Secured Debt Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of the
Collateral Trustee against the Company or any other Obligor or any collateral
which the Collateral Trustee now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including the right to take or receive from the Company or any other
Obligor, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to the Company in violation of the preceding sentence and
the Secured Obligations shall not have been indefeasibly paid in full, in cash,
and all commitments to extend credit under all Credit Facilities the
Indebtedness under which constitutes Priority Lien Debt
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shall have not been permanently terminated or expired, such amount shall be
deemed to have been paid to the Company for the benefit of, and held in trust
for, the Collateral Trustee, and shall forthwith be paid to the Collateral
Trustee to be credited and applied upon the Secured Obligations, whether matured
or unmatured, in accordance with the terms of the Collateral Trust Agreement.
The Company acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Secured Debt Documents and that
the waiver set forth in this Section is knowingly made in contemplation of such
benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. The Company represents and warrants
unto the Collateral Trustee and each Secured Party, as at the date of each
pledge and delivery hereunder (including each pledge and delivery of Pledged
Interests) by the Company to the Collateral Trustee of any Pledged Collateral,
as set forth in this Article.
SECTION 3.1.1 Ownership, No Liens, etc. The Company is the legal
and beneficial owner of, and has good and marketable title to (and has full
right and authority to pledge and assign) such Pledged Collateral, free and
clear of all liens, security interests, options, or other charges or
encumbrances, except any lien or security interest granted pursuant hereto in
favor of the Collateral Trustee.
SECTION 3.1.2 Valid Security Interest. The delivery of such Pledged
Collateral to the Collateral Trustee is effective to create a valid, perfected,
first priority or second priority, as the case may be, security interest in such
Pledged Collateral and all proceeds thereof, securing the Secured Obligations,
subject in each case to the provisions of Section 3.4 of the Collateral Trust
Agreement. No filing or other action will be necessary to perfect or protect
such security interest.
SECTION 3.1.3 As to Pledged Interests. In the case of any Pledged
Interests constituting such Pledged Collateral, all of such Pledged Interests
are duly authorized and validly issued, fully paid, and non-assessable, and
constitute all of the issued and outstanding shares of capital stock entitled to
vote in the election of the Board of Directors of each Pledged Share Issuer.
SECTION 3.1.4 Nature of Membership Interests. No right, title and
interest of the Company in the Pledged Interests Issuers are represented by a
certificate of interest or instrument, except such certificates or instruments,
if any, as have been delivered to the Collateral Trustee and are held in its
possession, together with transfer documents as required in this Pledge
Agreement (and the Company covenants and agrees that any such certificates or
instruments hereafter received by the Company with respect to any of the Pledged
Collateral will be held in trust for the Collateral Trustee and promptly
delivered to the Collateral Trustee).
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ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. The
Company will not sell, assign, transfer, pledge, or encumber in any other manner
the Pledged Collateral (except in favor of the Collateral Trustee hereunder and
as otherwise expressly permitted by the Secured Debt Documents). The Company
will warrant and defend the right and title herein granted unto the Collateral
Trustee in and to the Pledged Collateral (and all right, title, and interest
represented by the Pledged Collateral) against the claims and demands of all
Persons whomsoever. The Company agrees that at any time, and from time to time,
at the expense of the Company, the Company will promptly execute and deliver all
further instruments, and take all further action, that may be necessary or
desirable, or that the Collateral Trustee or any Secured Debt Representative may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. The Company hereby authorizes the Collateral Trustee to
cause the filing of any financing statement that (i) indicates the Pledged
Collateral and (ii) contains any other information required by Section 5 of
Article 9 of the Uniform Commercial Code of the jurisdiction wherein such
financing statement or amendment is filed regarding the sufficiency or filing
office acceptance of any financing statement or amendment, including whether the
Company is an organization, the type of organization and any organization
identification number issued to the Company; provided that this sentence shall
not be interpreted as requiring the Collateral Trustee to file any such
financing statements, continuation statements or other instruments.
SECTION 4.2. Certificates, etc. The Company agrees that all
certificates evidencing Pledged Interests, if any, delivered by the Company
pursuant to this Pledge Agreement will be accompanied by duly executed undated
blank stock powers, or other equivalent instruments of transfer reasonably
acceptable to the Collateral Trustee. The Company will, from time to time upon
the reasonable request of the Collateral Trustee or any Secured Debt
Representative, promptly deliver to the Collateral Trustee such stock powers,
instruments, and similar documents, reasonably satisfactory in form and
substance to the Collateral Trustee, with respect to the Pledged Collateral as
the Collateral Trustee or any Secured Debt Representative may reasonably request
and will, from time to time upon the reasonable request of the Collateral
Trustee after the occurrence of any Actionable Default, promptly transfer any
Pledged Interests into the name of any nominee designated by the Collateral
Trustee.
SECTION 4.3. Continuous Pledge. Subject to Section 2.5, the
Company will, at all times, keep pledged to the Collateral Trustee pursuant
hereto all Pledged Interests and all other shares of capital stock constituting
Pledged Collateral, all Distributions with respect thereto, and all other
Pledged Collateral and other securities, instruments, proceeds, and rights from
time to time received by or distributable to the Company in respect of any
Pledged Collateral.
SECTION 4.4. Voting Rights. The Company agrees after any
Actionable Default shall have occurred and be continuing and the Collateral
Trustee has notified the Company of the Collateral Trustee's intention to
exercise its voting power under this Section 4.4
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(i) the Collateral Trustee may exercise (to the
exclusion of the Company) the voting power and all other
incidental rights of ownership with respect to any Pledged
Interests or other shares of capital stock constituting
Pledged Collateral and the Company hereby grants the
Collateral Trustee an irrevocable proxy, exercisable under
such circumstances, to vote the Pledged Interests and such
other Pledged Collateral; and
(ii) promptly to deliver to the Collateral
Trustee such additional proxies and other documents as may be
necessary to allow the Collateral Trustee to exercise such
voting power.
The Collateral Trustee agrees that unless an Actionable Default shall have
occurred and be continuing and the Collateral Trustee shall have given the
notice referred to in this Section 4.4, the Company shall have the exclusive
voting power with respect to any membership interests (including any of the
Pledged Interests) constituting Pledged Collateral and the Collateral Trustee
shall, upon the written request of the Company, promptly deliver such proxies
and other documents, if any, as shall be reasonably requested by the Company
which are necessary to allow the Company to exercise voting power with respect
to any such membership interests (including any of the Pledged Interests)
constituting Pledged Collateral; provided, however, that no vote shall be cast,
or consent, waiver, or ratification given, or action taken by the Company that
would materially impair any Pledged Collateral or be inconsistent with or
violate any material provision of any of the Secured Debt Documents (including
this Pledge Agreement).
SECTION 4.5. Additional Undertakings. The Company will not take or
omit to take any action the taking or the omission of which would result in any
material impairment or alteration of any obligation of the maker of any
instrument constituting Pledged Collateral.
ARTICLE V
THE COLLATERAL TRUSTEE
SECTION 5.1. Collateral Trustee Appointed Attorney-in-Fact. The
Company hereby irrevocably appoints the Collateral Trustee the Company's
attorney-in-fact, with full authority in the place and stead of the Company and
in the name of the Company or otherwise, from time to time in the Collateral
Trustee's discretion, to take any action and to execute any instrument which the
Collateral Trustee may deem necessary or advisable to accomplish the purposes of
this Pledge Agreement, including without limitation:
(a) after the occurrence and continuance of an Actionable
Default, to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
(c) after the occurrence and continuance of an Actionable
Default, to file any claims or take any action or institute any
proceedings which the Collateral Trustee may deem necessary or
desirable for the collection of any of the Pledged Collateral or
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otherwise to enforce the rights of the Collateral Trustee with respect
to any of the Pledged Collateral or
The Company hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Trustee May Perform. If the Company fails
to perform any agreement contained herein, the Collateral Trustee may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Collateral Trustee incurred in connection therewith shall be payable by the
Company pursuant to Section 6.4.
SECTION 5.3. Collateral Trustee's Rights and Duties Subject to
Collateral Trust Agreement. Notwithstanding anything to the contrary contained
in this Pledge Agreement, in acting under and by virtue of this Pledge
Agreement, the Collateral Trustee shall be entitled to all of the rights,
privileges and immunities provided to it in the Collateral Trust Agreement, and
the rights and duties of the Collateral Trustee hereunder are subject in all
respects to the terms, conditions and limitations set forth in the Collateral
Trust Agreement (including, without limitation, the provisions of Article 5
thereof), reference to which is made for all purposes; provided, however, that
any forbearance by the Collateral Trustee in exercising any right or remedy
available to it under the Collateral Trust Agreement shall not give rise to a
defense on the part of the Company with respect to the Collateral Trustee's
exercise of any right or remedy pursuant to this Pledge Agreement or as
otherwise afforded by applicable law.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If an Actionable Default shall have
occurred and be continuing:
(a) The Collateral Trustee may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Pledged Collateral) and also may, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
of the Collateral Trustee's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral
Trustee may deem commercially reasonable in each case subject to the
terms and provisions of the Collateral Trust Agreement. The Company
agrees that, to the extent notice of sale shall be required by law, at
least ten days' prior notice to the Company of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Collateral Trustee shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Collateral Trustee may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) The Collateral Trustee may, in each case subject to
the terms and provisions of the Collateral Trust Agreement,
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(i) transfer all or any part of the Pledged
Collateral into the name of the Collateral Trustee or its
nominee, with or without disclosing that such Pledged
Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the
Pledged Collateral to make payment to the Collateral Trustee
of any amount due or to become due thereunder,
(iii) enforce collection of any of the Pledged
Collateral by suit or otherwise, and surrender, release or
exchange all or any part thereof, or compromise or extend or
renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with
respect thereto,
(iv) endorse any checks, drafts, or other
writings in the Company's name to allow collection of the
Pledged Collateral,
(v) take control of any proceeds of the Pledged
Collateral, and
(vi) execute (in the name, place and stead of the
Company) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Pledged Collateral.
SECTION 6.2. Securities Laws. If the Collateral Trustee shall
determine to exercise its right to sell all or any of the Pledged Collateral
pursuant to Section 6.1, the Company agrees that, upon request of the Collateral
Trustee, the Company will, at its own expense:
(a) execute and deliver, and cause each Pledged Interests
Issuer of the Pledged Collateral contemplated to be sold and the
members thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things,
as may be necessary or advisable to register such Pledged Collateral
under the provisions of the Securities Act of 1933, as from time to
time amended (the "Securities Act"), and to cause the registration
statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related
prospectus which are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Pledged
Collateral under the state securities or "Blue Sky" laws and to obtain
all necessary governmental approvals for the sale of the Pledged
Collateral;
(c) cause each such issuer to make available to its
security holders, as soon as practicable, an earnings statement that
will satisfy the provisions of Section 11(a) of the Securities Act; and
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(d) do or cause to be done all such other acts and things
as may be necessary to make such sale of the Pledged Collateral or any
part thereof valid and binding and in compliance with applicable law.
SECTION 6.3. Compliance with Restrictions. The Company agrees that
in any sale of any of the Pledged Collateral whenever an Actionable Default
shall have occurred and be continuing, the Collateral Trustee is hereby
authorized to comply with any limitation or restriction in connection with such
sale as it may be advised by counsel is necessary in order to avoid any
violation of applicable law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Pledged Collateral), or in order to
obtain any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Company further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Collateral Trustee
be liable nor accountable to the Company for any discount allowed by the reason
of the fact that such Pledged Collateral is sold in compliance with any such
limitation or restriction.
SECTION 6.4. Application of Proceeds. All cash proceeds received
by the Collateral Trustee in respect of any sale of, collection from, or other
realization upon, all or any part of the Pledged Collateral shall thereafter be
applied in accordance with Section 3.4 of the Collateral Trust Agreement.
SECTION 6.5. Indemnity and Expenses.
(a) The Company agrees to indemnify the Collateral
Trustee from and against any and all Indemnified Liabilities with
respect to the execution, delivery, performance, administration or
enforcement of this Pledge Agreement to the extent provided in Section
7.8 of the Collateral Trust Agreement.
The Company agrees to reimburse the Collateral Trustee for all
costs, fees and expenses relating to this Pledge Agreement to the
extent provided in Section 7.7 of the Collateral Trust Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Security Document. This Pledge Agreement is a
Security Document executed pursuant to the Collateral Trust Agreement and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Company
herefrom shall in any event be effective unless the same shall be in writing and
signed by the Collateral Trustee in accordance
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with Section 7.1 of the Collateral Trust Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it is given.
SECTION 7.3. Protection of Collateral. The Collateral Trustee may
from time to time, at its option, perform any act which the Company agrees
hereunder to perform and which the Company shall fail to perform after being
requested in writing so to perform (it being understood that no such request
need be given after the occurrence and during the continuance of an Actionable
Default) and the Collateral Trustee may from time to time take any other action
which the Collateral Trustee or any Secured Debt Representative reasonably deems
necessary for the maintenance, preservation or protection of any of the Pledged
Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and shall be effected in the manner provided for in Section 7.5
of the Collateral Trust Agreement.
SECTION 7.5. Section Captions. Section captions used in this
Pledge Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of
this Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.7. Governing Law, Entire Agreement, etc. THIS PLEDGE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE OTHER SECURITY
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
SECTION 7.8. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
PLEDGE AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL TRUSTEE OR THE COMPANY
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PLEDGED
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL TRUSTEE'S OPTION,
IN THE
13
COURTS OF ANY JURISDICTION WHERE SUCH PLEDGED COLLATERAL OR OTHER PROPERTY MAY
BE FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE COMPANY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE
AGREEMENT.
SECTION 7.9. Waiver of Jury Trial. THE COLLATERAL TRUSTEE AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE COLLATERAL TRUSTEE OR THE COMPANY. THE COMPANY ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER SECURED DEBT DOCUMENT TO WHICH IT IS A
PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES
ENTERING INTO EACH SUCH SECURED DEBT DOCUMENT.
14
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
CALPINE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title:
Address: 00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
15
THE BANK OF NEW YORK, not in its individual
capacity, but solely as Collateral Trustee
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
16
EXECUTION COPY
Calpine Corporation LLC Pledge
ATTACHMENT 1
to
Second Amendment Pledge Agreement (Membership Interest)
PLEDGED MEMBERSHIP INTERESTS
% of
Membership
Interest
Pledged Interest Issuer: Pledged
----------------------- -------
Calpine Natural Gas Holdings, LLC 100%
Calpine Marketing, LLC 100%
Anacapa Land Company LLC 100%
Calpine Pittsburgh, LLC 100%
CPN Blue Spruce Holdings, LLC 100%
Calpine Calistoga Holdings, LLC 100%
Chippokes Energy Center, LLC 100%
Palmetto Energy Center, LLC 100%
Blue Heron Energy Center, LLC 100%
South Point Energy Center, LLC 100%
Calpine Sonoran Pipeline, LLC 100%
Los Esteros Critical Energy Center, LLC 100%
Calpine Natural Gas GP, LLC 100%
