EXHIBIT 4.9
EXECUTION COPY
SECURITY AGREEMENT
by and between
AES Red Oak, L.L.C.
and
The Bank of New York, as Collateral Agent
Dated as of March 1, 2000
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS............................................................................2
Section 1.1 DEFINITIONS..........................................................2
Section 1.2 REFERENCES TO ASSIGNMENT.............................................9
ARTICLE II
ASSIGNMENT, SECURITY INTEREST; POWER OF ATTORNEY.......................................9
Section 2.1 PLEDGE AND SECURITY INTEREST.........................................9
Section 2.2 POWER OF ATTORNEY...................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES........................................................11
Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................11
ARTICLE IV
COVENANTS AND SPECIAL PROVISIONS......................................................12
Section 4.1 MAINTENANCE OF RECORDS..............................................12
Section 4.2 PAYMENT UNDER CONTRACTS AND RECEIVABLES.............................12
Section 4.3 DOCUMENTS AND INSTRUMENTS...........................................12
Section 4.4 CONSENTS............................................................12
ARTICLE V
COLLATERAL............................................................................13
Section 5.1 PROTECTION OF THE COLLATERAL AGENT'S INTERESTS......................13
Section 5.2 FURTHER ACTION......................................................13
Section 5.3 FINANCING STATEMENTS................................................13
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ARTICLE VI
REMEDIES UPON OCCURRENCE OF TRIGGER EVENT.............................................13
Section 6.1 REMEDIES............................................................13
Section 6.2 DISPOSITION OF THE COLLATERAL.......................................14
Section 6.3 WAIVER OF CLAIMS....................................................15
Section 6.4 APPLICATION OF PROCEEDS.............................................16
Section 6.5 REMEDIES CUMULATIVE.................................................16
Section 6.6 DISCONTINUANCE OF PROCEEDINGS.......................................16
ARTICLE VII
INDEMNITY.............................................................................17
Section 7.1 INDEMNITY...........................................................17
Section 7.2 INDEMNITY OBLIGATIONS SECURED BY COLLATERAL.........................18
ARTICLE VIII
MISCELLANEOUS.........................................................................18
Section 8.1 NOTICES.............................................................18
Section 8.2 AMENDMENT...........................................................19
Section 8.3 NO WAIVER...........................................................19
Section 8.4 OBLIGATIONS OF THE COMPANY..........................................19
Section 8.5 SUCCESSORS AND ASSIGNS..............................................20
Section 8.6 GOVERNING LAW.......................................................20
Section 8.7 CONTINUING LIABILITY OF THE COMPANY.................................21
Section 8.8 NO THIRD-PARTY BENEFICIARIES........................................21
Section 8.9 CONTINUING ASSIGNMENT AND SECURITY INTEREST.........................21
Section 8.10 HEADINGS............................................................21
Section 8.11 SEVERABILITY........................................................21
Section 8.12 COUNTERPARTS........................................................21
Section 8.13 LIMITED-RECOURSE....................................................22
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of March 1, 2000, by and between AES RED
OAK, L.L.C., a limited liability company organized and validly existing under
the laws of the State of Delaware (the "COMPANY") and THE BANK OF NEW YORK, a
bank duly organized and existing under the laws of the State of New York
("BNY"), as collateral agent (together with its successors in such capacity,
the "COLLATERAL AGENT") for the benefit of and on behalf of the Senior
Parties defined below.
A. The Company is providing for the development, construction,
ownership, leasing and operation of a nominal 820 MW (net) gas-fired combined
cycle electric generating facility and related equipment and facilities (the
"PROJECT") to be located in the Borough of Sayreville, Middlesex County, New
Jersey.
B. The Company intends to finance the development and construction
of the Project, in part, through the issuance, from time to time, of certain
securities (the "SECURITIES") pursuant to a Trust Indenture, dated as of
March 1, 2000 between the Company and BNY, as trustee (the "TRUSTEE") and
depositary bank, as it may be amended, supplemented or modified and in effect
from time to time (the "INDENTURE").
C. In connection with the commencement of commercial operation of
the Project, the Company is required to deliver the Debt Service Reserve
Letter of Credit (the "DSR LETTER OF CREDIT"). Dresdner Bank AG, acting
through its New York Branch ("DRESDNER"), as issuing bank, has agreed to
issue the DSR Letter of Credit subject to the terms and conditions contained
in the DSR LOC Reimbursement Agreement, dated as of March 1, 2000 (as
amended, supplemented and in effect from time to time, the "DSR LOC
REIMBURSEMENT AGREEMENT"), among each of the banks and financial institutions
parties thereto (including the issuing bank) (the "DSR LOC BANKS") and
Dresdner, as issuing bank and as agent for such banks (including the issuing
bank) and financial institutions (in such capacity as agent, and together
with its successors and assigns, in such capacity, the "DSR LOC PROVIDER").
D. In connection with the Company's obligations under Section 18.2
of the Power Purchase Agreement, the Company intends to deliver the Power
Purchase Agreement Letter of Credit (the "PPA LOC"). Dresdner, as issuing
bank, has agreed to issue the PPA LOC subject to the terms and conditions
contained in the PPA LOC Reimbursement Agreement, dated as of March 1, 2000
(as amended, supplemented and in effect from time to time, the "PPA LOC
REIMBURSEMENT AGREEMENT"), among each of the banks (including the issuing
bank) and financial institutions parties thereto (the "PPA LOC BANKS") and
Dresdner, as issuing bank and as agent for such banks and financial
institutions (in such capacity as agent, and together with its successors and
assigns, in such capacity, the "PPA LOC PROVIDER").
E. The Company intends to finance certain working capital
requirements of the Project by entering into a Working Capital Agreement (as
amended, supplemented or modified and in effect from time to time, the
"WORKING CAPITAL AGREEMENT") among the Company, each of the banks and
financial institutions party thereto (the "WORKING CAPITAL BANKS") and
Dresdner, as
agent bank thereunder (together with its successors and assigns, in such
capacity, the "WORKING CAPITAL PROVIDER").
F. All obligations of the Company under the Securities, the DSR LOC
Reimbursement Agreement and related evidences of indebtedness, the PPA LOC
Reimbursement Agreement and related evidences of indebtedness, the Collateral
Agency Agreement (defined below), and the Working Capital Agreement and
related evidences of indebtedness (collectively, the "FINANCING DOCUMENTS")
to the Trustee, the DSR LOC Provider, the PPA LOC Provider, the Collateral
Agent, the Working Capital Provider, each successor to any such person and
any person providing Senior Debt to the Company who becomes a party to the
Collateral Agency Agreement in accordance with its terms (collectively, the
"SENIOR PARTIES") will be secured by a certain Mortgage, this Agreement, the
Indenture, the Pledge Agreement and the Assignment of Leases and Income, each
between the Company and the Collateral Agent.
G. The Collateral Agent, the Company, the DSR LOC Provider, the PPA
LOC Provider, the Working Capital Provider and the Trustee entered into the
Collateral Agency and Intercreditor Agreement (as amended, supplemented and
in effect from time to time, the "COLLATERAL AGENCY AGREEMENT") to set forth
their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the
above described documents, (b) the priority of their respective security
interests created by the Security Documents, (c) the application of project
revenues and certain other monies and items and (d) the appointment of the
Collateral Agent as collateral agent.
H. It is a condition precedent to the obligations of the Senior
Parties under the Financing Documents that the Company duly execute and
deliver this Agreement to further secure the Company's obligations under the
Financing Documents and the other Obligations (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company hereby agrees with the Collateral Agent as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Except as otherwise provided herein, for
the purposes of this Agreement, capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Indenture. Unless otherwise stated, any reference herein to any document
shall mean such document and all schedules, exhibits, and attachments thereto
as amended, supplemented or modified in accordance with the terms of this
Agreement or the Collateral Agency Agreement and in effect from time to time
and any reference herein to any Person shall include its successors and
permitted assigns. References to any law or regulations shall be deemed
references to such law or regulation or any successor law or regulation as
the same may have been or may be amended, modified or supplemented from time
to time. In
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addition, wherever used in this Agreement and unless the context requires
otherwise, the following terms shall have the following meanings:
"ACCOUNT" and "ACCOUNTS" shall mean, individually and collectively,
the Construction Account, Revenue Account, Operating and Maintenance Account,
Restoration Account, Major Maintenance Reserve Account, Fuel Conversion
Payment Volume Rebate Account, Subordinated Debt Account, Distribution
Account, DSR LOC Reimbursement Fund, PPA LOC Reimbursement Fund, Bond Payment
Account, Bond Proceeds Account, Construction Interest Account and Debt
Service Reserve Account, as each such account (and each such subaccount
thereof) is defined under the Collateral Agency Agreement or the Indenture,
as applicable, and each other account established, created or modified from
time to time pursuant to the provisions of the Indenture and the Collateral
Agency Agreement.
"AGREEMENT" means this Security Agreement as originally executed and
as the same may from time to time be amended, modified or supplemented.
"ASSIGNED AGREEMENTS" means the following contracts:
(a) i. the Power Purchase Agreement;
ii. the Xxxxxxxx Guaranty;
iii. the EPC Contract;
iv. the Raytheon Guaranty;
v. the Operations Agreement;
vi. the Maintenance Services Agreement;
vii. the Interconnection Agreement;
viii. the Services Agreement;
ix. the Water Supply Agreement;
x. the Ground Lease Agreement;
xi. the Sublease Agreement;
xii. the Construction Agency Agreement;
xiii. the License Agreement for Private Grade
Crossing between Consolidated Rail Corporation and the Company,
dated February 18, 2000;
xiv. the License Agreement for Utility Lines
Occupation between Consolidated Rail Corporation and the Company,
dated February 23, 2000;
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xv. the Temporary Construction License Option
and Agreement between Hercules Incorporated and the Company,
dated October 30, 1999;
xvi. the Equity Subscription Agreement;
xvii. the URC Security Agreement;
(b) any contract with a third party assigned to the Company;
(c) the Consents; and
(d) all Contracts (and Contract Rights), other than the
Contracts (and Contract Rights) specifically itemized in the foregoing
list of Assigned Agreements,
as each such Assigned Agreement identified in (a)-(d) above may be
amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement or the Collateral Agency
Agreement, including, without limitation, to the extent of the
Company's rights in such Assigned Agreement, (i) all rights of the
Company to receive moneys due and to become due under or pursuant to
the Assigned Agreements, (ii) all rights of the Company to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect
to any Assigned Agreement, (iii) all claims of the Company for damages
arising out of default under any Assigned Agreement, (iv) the right of
the Company to terminate, amend, supplement or modify any Assigned
Agreement, to give any waiver, consent or notice thereunder, to make
any election thereunder, to exercise and perform any option or purchase
right thereunder, to perform thereunder, and to compel performance and
otherwise exercise all remedies thereunder and (v) to the extent not
included in the foregoing, all proceeds of any and all of the
foregoing.
"BANK ACCOUNT" means (i) a deposit, custody, or other account
(whether, in any case, time or demand or interest or non-interest bearing and
whether maintained at a branch or office located within or without the United
States) of the Company or in which the Company has any interest, (ii) all
amounts from time to time credited to such account, (iii) all cash,
securities, Instruments, Documents, Chattel Paper, General Intangibles,
accounts and other property from time to time credited to such account or
representing investments and reinvestments of amounts from time to time
credited to such account and (iv) all interest, principal payments, dividends
and other distributions payable on or with respect to, and all proceeds of,
(A) all property so credited or representing such investments and
reinvestments and (B) such account.
"CHATTEL PAPER" shall have the meaning assigned to that term under
the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"COLLATERAL" means, in each case whether now or hereafter existing
or now owned or hereafter acquired by the Company whether or not the same is
now contemplated, anticipated or foreseeable, xxxxxx or inchoate, tangible or
intangible, all of the rights, titles and interests of the Company in and to
the following wherever the same may be located except to the extent that the
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assignment of any of the following is prohibited under Applicable Law or that
under such law the assignment of such Collateral would create a significant
risk of termination or loss of such Collateral or the Company's rights or
benefits thereto or therein:
(a) the Assigned Agreements;
(b) to the extent permitted by Applicable Law, all
Governmental Approvals;
(c) all Receivables;
(d) proceeds of all insurance contracts;
(e) all (i) Accounts, except to the extent a valid and
perfected security interest in such assets is created by the Collateral
Agency Agreement and subject to the qualifications below, (ii) other
accounts (including all Bank Accounts), (iii) any funds held in any
escrow account established or created by the Contracts and (iv)
Casualty Proceeds and Eminent Domain Proceeds;
(f) proceeds of any Permitted Investments;
(g) all Information;
(h) any guarantees, and, to the extent evidencing or
pertaining to other items of Collateral, all documents of title,
policies and certificates of insurance, surety bonds, securities,
Chattel Paper, other Documents or Instruments, including but not
limited to all insurance with respect to the Project, business
interruption, workers compensation and comprehensive automobile,
bodily injury, and property damage;
(i) all General Intangibles including but not limited to the
name and goodwill of the Company;
(j) all claims (including the right to xxx or otherwise
recover on such claims) with respect to (i) the items referred to in
the definition of Collateral, (ii) warranties relating to any
Collateral, (iii) any breach of any Contract constituting Collateral or
any Assigned Agreement and (iv) rights against third parties for (A)
loss, destruction, requisition, confiscation, condemnation, seizure,
forfeiture or infringement of, or damage to, any Collateral, (B)
payments due or to become due under leases, rentals and hires of any
Collateral and (C) proceeds payable under or unearned premiums with
respect to policies of insurance relating to any Collateral;
(k) all Inventory;
(l) all Machinery and Equipment;
(m) all books, manuals, records, charts, ledgercards, files,
correspondence, drawings, schematics, computer programs, tapes, disks
and related data processing software that at any time evidence or
contain information relating to any Collateral or are
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otherwise necessary or helpful in the collection thereof,
realization thereupon or operation or maintenance of the Facility;
(n) all goods and other property, whether or not delivered (i)
the sale, lease or furnishing of which gives or purports to give rise
to any Receivables or (ii) securing any Receivables, including all of
the Company's rights as an unpaid vendor or lienor, including stoppage
in transit, replevin and reclamation with respect to such goods and
other properties;
(o) all documents of title, policies and certificate of
insurance, securities, Chattel Paper and other Documents or Instruments
evidencing or pertaining to any Collateral;
(p) the promissory note from AES URC payable to the Company in
connection with the loan between AES URC, as borrower, and the Company,
as lender;
(q) any fixture and improvement to the Site including, without
limitation, the structures, buildings and chattels constituting the
Facility, and otherwise contemplated by the Contracts, except to the
extent a valid and perfected first priority security interest in such
assets has been created by the Mortgage;
(r) any other assets of the Company except to the extent a
valid and perfected first priority security interest in such assets has
been created by the Mortgage;
(s) all products and proceeds (including cash) of all of the
foregoing Collateral;
provided, however, that, notwithstanding anything to the contrary herein or
hereto, (i) the Bond Payment Account, the Bond Proceeds Account, the
Construction Interest Account and the Debt Service Reserve Account (and each
subaccount thereof) shall constitute Collateral absolutely and exclusively
for the benefit of the holders of Securities (and the Trustee on their
behalf), (ii) the DSR LOC Reimbursement Fund shall constitute Collateral
absolutely and exclusively for the benefit of the DSR LOC Provider and (iii)
the PPA LOC Reimbursement Fund shall constitute Collateral absolutely and
exclusively for the benefit of the PPA LOC Provider.
"CONSENTS" shall mean each of the following Consents:
(1) Consent to Assignment, dated as of March 1, 2000, by and
between the Power Purchaser and the Collateral Agent, and consented to
by the Company;
(2) Consent to Assignment, dated as of March 1, 2000, by and
between the PPA Guarantor and the Collateral Agent, and consented to by
the Company;
(3) Consent to Assignment, dated as of March 1, 2000, by and
between the Contractor and the Collateral Agent, and consented to by
the Company;
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(4) Consent to Assignment, dated as of March 1, 2000, by and
between the EPC Guarantor and the Collateral Agent, and consented to by
the Company;
(5) Consent to Assignment, dated as of March 1, 2000, by and
between AES Sayreville, L.L.C. and the Collateral Agent, and consented
to by the Company;
(6) Consent to Assignment, dated as of March 1, 2000, by and
between Jersey Central Power & Light Company d/b/a GPU Energy and the
Collateral Agent, and consented to by the Company;
(7) Consent to Assignment, dated as of March 1, 2000, by and
between the Borough of Sayreville and the Collateral Agent, and
consented to by the Company; and
(8) Consent to Assignment, dated as of March 1, 2000, by and
between the Maintenance Services Provider and the Collateral Agent, and
consented to by the Company.
"CONTRACT RIGHTS" means all rights of the Company (including,
without limitation, all rights to payment) under each Contract, except to the
extent that a valid and perfected first priority security interest over such
rights is created by and contained within the Mortgage.
"CONTRACTS" means all contracts or agreements to which the Company
is or becomes a party or under which the Company is a beneficiary or has
rights thereto.
"DOCUMENTS" shall have the meaning assigned to that term under the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and shall include, but not be limited to, any bills of lading, dock
warrants, dock receipts or warehouse receipts.
"GENERAL INTANGIBLES" means general intangibles as defined in the
Uniform Commercial Code in effect on the date hereof in the State of New
York, and shall include, but not be limited to, all trademarks, trademark
applications, trademark and service xxxx registrations (including, without
limitation, all renewals of trademark and servicemark registrations, and all
rights corresponding thereto throughout the world, but excluding any such
registration that would be rendered invalid, abandoned, void or unenforceable
by reason of its being included as part of the Collateral), tradenames,
business names, fictitious business names, company names, business
identifiers, prints, labels, trade styles and service marks (whether or not
registered), trade dress, including logos or designs, copyrights, patents,
patent applications (including, without limitation, the inventions and
improvements described and claimed therein together with the reissues,
division, continuations, renewals, extensions and continuations in-part
thereof), goodwill of the Company's business symbolized by any of the
foregoing, all inventions, processes, production methods, proprietary
information, know-how, trade secrets, license rights, license agreements,
permits, franchises and any rights to tax refunds.
"INDEMNITEE" means the Trustee, any co-Trustee or Successor Trustee,
the DSR LOC Provider, the DSR LOC Issuing Bank, the DSR LOC Banks, the PPA
LOC Provider, the PPA LOC Issuing Bank, the PPA LOC Banks, the Working
Capital Provider, the Working Capital
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Banks, the holders of Securities, the Collateral Agent and their respective
officers, directors, employees, representatives and agents.
"INFORMATION" means all information, data, plans, blueprints,
designs, recorded knowledge, surveys, architectural, structural, mechanical
and engineering plans and specifications, studies, data, reports and
drawings, test reports, manuals, material standards, processing standards,
performance standards, catalogs, computer and automatic machinery software
and programs, all accounting information and all media in which or on which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such
information, knowledge, records or data, prepared by or on behalf of, or
acquired by and on behalf of, the Company specifically for the acquisition,
occupancy, use, operation, maintenance, repair or restoration of the Facility
or any part thereof.
"INSTRUMENT" shall have the meaning assigned that term under the
Uniform Commercial Code in effect on the date hereof in the State of New
York, and shall include, but not be limited to, any drafts, checks,
certificates of deposit, notes, shares, participation or transferable
warrants.
"INVENTORY" means (i) all inventory, including (A) all goods held
for sale or lease or to be furnished under the Assigned Agreements, (B) all
work in process and (C) all raw materials, other by-products and other
materials, and supplies of every nature and description used or that might be
used or consumed in the Company's business and (ii) all documents evidencing
and general intangibles relating to any of the foregoing.
"MACHINERY AND EQUIPMENT" means (i) all machinery, equipment, spare
parts, tools, furniture, furnishings and instruments of conveyance, including
vessels and automotive vehicles, (ii) all other goods except goods that
constitute General Intangibles and (iii) all replacements and substitutions
for, and all accessions to, the foregoing, in each case wherever located and
whether or not the same constitutes a "fixture".
"OBLIGATIONS" means, collectively, all indebtedness, obligations and
Financing Liabilities for which the Company is liable to the Senior Parties
under or pursuant to any and all Financing Documents whether direct or
indirect, primary or secondary, fixed or contingent, now or hereafter arising
out of or in relation to any such agreements.
"RECEIVABLES" means any and all rights to the payment of money or
other forms of consideration of any kind at any time now or hereafter owing
or to be owing to the Company, including, without limitation, all of the
Company's rights to payment for capacity and energy, fuel conversion services
and ancillary services under the Power Purchase Agreement, and any other
goods or products sold or services performed, whether now in existence or
arising from time to time hereafter, including, without limitation, accounts
receivable, letters of credit and the right of the Company to receive payment
thereunder, insurance proceeds, notes, drafts, Instruments, Documents,
acceptances, the right to receive payment from AES and AES Red Oak, Inc.
pursuant to, and subject to the conditions of, the Equity Subscription
Agreement, the right to receive payment from AES URC pursuant to, and subject
to the terms and conditions of, the URC Loan Agreement and all other debts,
obligations, and liabilities in whatever form, now or
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hereafter owing to the Company from any other Person, and whether evidenced
by an account, note, contract, security agreement, Chattel Paper or other
evidence of indebtedness or security, together with (i) all security pledged,
assigned, hypothecated or granted to or held by the Company to secure the
foregoing, (ii) all of the Company's right, title and interest in and to any
goods of the Company, the sale of which gave rise thereto, (iii) all
guarantees (if any), endorsements and indemnifications on, or of, any of the
foregoing, (iv) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection therewith, (v) all
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers and (vi) all other writings related in
any way to the foregoing.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code in
effect in the State of New York.
"URC LOAN AGREEMENT" means the loan agreement between AES URC, as
borrower, and the Company, as lender.
"URC NOTE" means the promissory note from AES URC payable to the
Company in connection with the URC Loan Agreement.
Section 1.2 REFERENCES TO ASSIGNMENT. Any reference in this
Agreement to an assignment shall include, as the case may require, a sale,
conveyance, setting over or transfer whether conditional or unconditional and
whether direct or indirect.
ARTICLE II
ASSIGNMENT, SECURITY INTEREST; POWER OF ATTORNEY
Section 2.1 PLEDGE AND SECURITY INTEREST. (a) As security for the
prompt and complete payment and performance and observance when due of the
Obligations, the Company hereby grants, pledges, assigns and transfers to the
Collateral Agent for the benefit of the Senior Parties a continuing lien on
and a continuing security interest in, to and under the Collateral, which
shall at all times be (i) a valid and, upon the making of all necessary
filings or the taking of possession of all requisite items of Collateral, to
the extent perfectible in accordance with Applicable Law, a first priority
perfected lien and security interest, (subject only to Permitted Liens) and
(ii) enforceable against the Company, and (upon the making of all necessary
filings or the taking of possession of all requisite items of Collateral to
the extent perfectible under Applicable Law) all third parties in accordance
with the terms hereof as security for the Obligations, and the Collateral
shall not at any time be subject to any lien (other than Permitted Liens)
that is prior to, on a parity with or junior to the lien and security
interest created hereunder.
(b) The Company agrees and confirms that the execution and delivery
of the Consents to which the Company is a party will constitute, (i) notice
to each consenting party of the assignment by the Company of all of the
Company's right, title and interest in and to the
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Collateral that is the subject of such Consent and its proceeds and (ii) if
such party is required to make payments to the Collateral Agent of amounts
due under the relevant Assigned Agreement, unconditional and (subject to
provisions regarding release in this Agreement and the Collateral Agency
Agreement) irrevocable instructions from the Company to each such party, that
all payments due or to become due and all amounts payable to the Company
thereunder shall, until the Obligations are paid in full, be made directly to
the Revenue Account.
Section 2.2 POWER OF ATTORNEY. To the fullest extent permitted by
Applicable Law and until the Obligations are paid in full, the Company hereby
irrevocably appoints the Collateral Agent as its attorney-in-fact with right
of substitution, to act, upon the occurrence and during the continuance of a
Trigger Event and provided the Collateral Agent has received the Senior Party
Certificates from the Required Senior Parties pursuant to Section 2.3 of the
Collateral Agency Agreement (except with respect to a bankruptcy event in
respect of the Company in which case no Senior Party Certificates are
required), as 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 Agent's discretion, to take any action
and to execute any and all documents and instruments that the Collateral
Agent may deem necessary or advisable to accomplish the purpose of this
Agreement.
To the fullest extent permitted by Applicable Law, the Company
hereby confirms and ratifies any and all actions and things performed or done
by the Collateral Agent, or any of its representatives hereunder, as
attorney-in-fact for the Company in each case pursuant to the powers granted
hereunder and exercised in accordance with this Agreement and in a manner not
inconsistent with the Collateral Agency Agreement. The powers conferred on
the Collateral Agent hereunder, and the exercise by the Collateral Agent of
such powers, shall not impose any duty on the Collateral Agent to exercise
any such powers.
This special power of attorney shall be deemed to be coupled with an
interest and cannot be revoked by the Company until the Obligations have been
fully paid, performed and indefeasibly discharged. Upon the occurrence and
during the continuance of a Trigger Event, and provided the Collateral Agent
has received the Senior Party Certificates from the Required Senior Parties
pursuant to Section 2.3 of the Collateral Agency Agreement (except with
respect to a bankruptcy event in respect of the Company in which case no
Senior Party Certificates are required), the Company shall abstain from
exercising any rights under any of the Contracts or the Security Documents
which shall be inconsistent with the exercise of the rights and functions
herein granted to the Collateral Agent as the attorney-in-fact, including
abstaining from collecting, claiming and receiving any moneys under the
Assigned Agreements; PROVIDED, that nothing herein shall prevent the Company
from undertaking the Company's operations in the ordinary course of business
in accordance with the Security Documents and the Contracts.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants, which representations and warranties shall
survive execution and delivery of this Agreement, as follows:
(a) All filings, registrations and recordings necessary to
create, preserve, protect and (in the case of the security interest in the
Collateral, to the extent perfectible in accordance with Applicable Law)
perfect the security interest granted by the Company to the Collateral Agent
hereby in respect of the Collateral have been accomplished and such security
interest constitutes a valid and enforceable and (to the extent perfectible
in accordance with Applicable Law) perfected security interest in the
Collateral superior and prior to the rights of all other Persons and subject
to no other Liens or assignments, in each case other than Permitted Liens.
The Company hereby represents that it has not, prior to the date of this
Agreement, assigned or granted any other security interest in the Collateral,
respectively, to any other Person.
(b) The Company is the owner of all Receivables and all of
its rights, title and interest in and to all Assigned Agreements, free from
any Lien or other right, title or interest of any Person, other than the
Liens created under this Agreement and other than Permitted Liens. The
Company is not in default under or in breach of, and no Authorized Officer of
the Company knows of any default by any other party under or breach by any
other party of, any of the Contracts that in either case could reasonably be
expected to result in a Material Adverse Effect.
(c) As to Collateral (other than Assigned Agreements and
Receivables), the Company is or will become the sole owner of all such
Collateral, free from any Lien or other right, title or interest of any
Person (other than the Liens created under this Agreement and other than
Permitted Liens).
(d) Except for the Consents and for approvals to transfer
Governmental Approvals, no other consent of any other Person and no
Governmental Approval is required as at the date of the execution and
delivery of this Agreement (i) for the grant by the Company of its respective
pledge, assignment, and security interest with respect to the Collateral or
for the execution, delivery or performance of this Agreement by the Company,
(ii) for the pledge, assignment and security interest granted by the Company
with respect to the Collateral or (iii) for the exercise by the Collateral
Agent of the rights, remedies and powers provided for in this Agreement or
the Collateral Agency Agreement or the remedies with respect to the
Collateral pursuant to this Agreement or the Collateral Agency Agreement,
assuming in the case of this clause (iii) that the Collateral Agent has all
requisite power and authority to conduct its business generally.
(e) Except for financing statements filed or to be filed in
respect of the security interests granted by the Company under or as permitted
by this Agreement or the Collateral Agency Agreement, to the best knowledge of
the Company after due inquiry there is no
11
financing statement (or similar instrument) filed under the law of any
jurisdiction covering or purporting to cover any interest of any kind in the
Collateral.
ARTICLE IV
COVENANTS AND SPECIAL PROVISIONS
Section 4.1 MAINTENANCE OF RECORDS. The Company will keep and
maintain, at its own cost and expense, complete (in all material respects)
records of the Collateral (including the Information, any records to be
prepared and maintained under the Assigned Agreements, the Receivables and
the Contracts), including, but not limited to, the originals of all
documentation, records of all payments received, all credits granted thereon
and all other dealings therewith, and the Company will make the same
available to the Collateral Agent, at the Company's own cost and expense, at
all reasonable times upon demand. The Company shall, at the Company's own
cost and expense, deliver copies (or, if a Trigger Event has occurred and is
continuing, originals) of all Collateral (including the Assigned Agreements,
the Information, any writings evidencing the Receivables and the Contracts),
including documentation and relevant books and records, to the Collateral
Agent or to its representatives at any time upon its demand.
Section 4.2 PAYMENT UNDER CONTRACTS AND RECEIVABLES. If the Company
receives any payment or moneys directly from any party to the Assigned
Agreements, or from any account debtor or other obligor under any Receivable
constituting a part of the Collateral, the Company shall receive such
payments in a constructive trust for the benefit of the Collateral Agent and
shall immediately notify the Collateral Agent in writing and transmit and
deliver such payment or moneys to the Collateral Agent in the same form as
received, together with any necessary endorsement, for application as set
forth in the Collateral Agency Agreement.
Section 4.3 DOCUMENTS AND INSTRUMENTS. If the Company owns or
acquires any Document or Instrument, the Company shall forthwith, but in any
event no later than 10 days after such acquisition, as the case may be,
forthwith deliver such Document or Instrument to the Collateral Agent,
appropriately endorsed to the order of the Collateral Agent as further
security under this Agreement.
Section 4.4 CONSENTS. The Company shall use its commercially
reasonable efforts to obtain, at the expense of the Company, after the date
of the execution and delivery of this Agreement, such other consents and
Government Approvals as may be necessary after the date of this Agreement,
(i) for the grant by the Company of its pledge, assignment, and security
interest granted hereby or for the execution, delivery or performance of this
Agreement by the Company, (ii) for the perfection (to the extent perfectible
in accordance with Applicable Law) or maintenance of the pledge, assignment,
and security interest created hereby with respect to the Collateral
(including the first priority nature of such pledge, assignment and security
interest with respect to the Collateral) or (iii) for the exercise by the
Collateral Agent of the rights, remedies and powers provided for in this
Agreement or the Collateral Agency Agreement or the remedies with respect to
the Collateral pursuant to this Agreement or the Collateral Agency Agreement.
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ARTICLE V
COLLATERAL
Section 5.1 PROTECTION OF THE COLLATERAL AGENT'S INTERESTS. The
Company will not do anything to impair the rights of the Collateral Agent or
the Senior Parties in the Collateral, PROVIDED THAT, nothing herein shall
prevent the Company, prior to the exercise by the Collateral Agent of any
such rights, from undertaking its operations in the ordinary course of
business as contemplated by the Project Contracts, Security Documents and the
Financing Documents. The Company retains all liability and responsibility in
connection with the Collateral, and agrees that its liability with respect to
the Obligations shall in no way be affected or diminished by reason of the
fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to the Company; PROVIDED, that this sentence
shall not limit the remedies that the Company might otherwise have under the
Collateral Agency Agreement in the event the Collateral Agent, or its agents
or designees, fails to perform its obligations under the Collateral Agency
Agreement in accordance with the standards set forth therein.
Section 5.2 FURTHER ACTION. The Company will, at the Company's own
expense, make, execute, endorse, acknowledge, file and deliver to the
Collateral Agent such lists, descriptions and designations of the Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements,
certificates, reports and other assurances or instruments and take such
further steps relating to the Collateral and other property or rights covered
by the interests hereby granted, which the Collateral Agent reasonably
requests to perfect, preserve or protect its ownership and security interests
in the Collateral.
Section 5.3 FINANCING STATEMENTS. The Company agrees to prepare,
sign and file in the appropriate jurisdictions such financing statements and
continuation statements (or similar statements or instruments of registration
under the law of any applicable jurisdiction) as are necessary to establish
and maintain the security interests contemplated hereunder as, to the extent
stated herein, valid, enforceable, first priority security interests and the
other rights and security contemplated herein, all in accordance with the
Uniform Commercial Code, or its equivalent, as enacted in any relevant
jurisdictions or any other relevant law. The Company will pay any applicable
filing fees and related expenses in connection therewith.
ARTICLE VI
REMEDIES UPON OCCURRENCE OF TRIGGER EVENT
Section 6.1 REMEDIES. If a Trigger Event under the Collateral Agency
Agreement shall have occurred and be continuing and, subject to the
provisions of the Collateral Agency Agreement (including without limitation
Section 2.3 thereof) and any mandatory requirements of Applicable Law then in
effect, the Collateral Agent, in addition to any rights under Applicable Law
or the Collateral Agency Agreement, may exercise, without any further demand,
13
advertisement or notice (except as provided herein or otherwise required
under Applicable Law or the Collateral Agency Agreement) all rights as a
secured party under the Uniform Commercial Code, or its equivalent, in any
relevant jurisdiction and may, acting pursuant to the Collateral Agency
Agreement to the fullest extent permitted therein and by law (and the Company
hereby waives all restrictions on exercise that lawfully may be waived):
(a) personally, or by agents or attorneys, immediately retake
possession, physical or otherwise, of the Collateral or any part
thereof, from the Company or any other Person who then has possession
of any part thereof with or without notice or process of law and, for
that purpose, may enter upon the Company's premises where any of the
Collateral is located and remove the same, and use any and all
services, supplies and other facilities and materials of in connection
with such removal;
(b) instruct the obligor under any agreement or instrument
evidencing or constituting Collateral to make any payment required by
the terms of such agreement or instrument directly to the Collateral
Agent;
(c) apply all amounts, securities, investments and other
property credited to the Accounts in accordance with the Collateral
Agency Agreement;
(d) sell, assign or otherwise liquidate, or direct the Company
to sell, assign or otherwise liquidate, any or all of the Collateral,
and take possession of the proceeds of any such sale or liquidation to
the fullest extent permitted by Applicable Law;
(e) take possession of the Collateral or any part thereof, by
directing the Company in writing to deliver the same to the Collateral
Agent at any place designated by the Collateral Agent, in which event
the Company shall, at its own expense, forthwith cause the same to be
moved and delivered to the place so designated by the Collateral Agent,
it being understood that the obligation of the Company to deliver its
interest in the Collateral is of the essence of this Agreement and that
the Collateral Agent shall be entitled to a decree requiring specific
performance by the Company, of such obligation; and
(f) enforce any or all of the rights and remedies of the
Company under the Assigned Agreements.
Section 6.2 DISPOSITION OF THE COLLATERAL. (a) Any Collateral
repossessed by the Collateral Agent pursuant to and in accordance with the
Collateral Agency Agreement or Section 6.1 of this Agreement, may be sold,
assigned, leased or otherwise disposed of, in general, in such manner, at
such time, at such place and on such terms as the Collateral Agent may fix in
the notice of sale described below. Any of the Collateral may be sold, leased
or otherwise disposed of in any commercially reasonable manner. Any such
disposition shall be by public or private sale upon not less than 10 days'
written notice (which the Company agrees is reasonable notification) to the
Company specifying the time at which such disposition is to be made and the
intended sale or offering price or other consideration therefor, and shall be
subject, for the 10 days after the giving of such notice, to the right of the
Company to acquire the Collateral at a
14
price or for such other consideration at least equal to the intended sale or
offering price or other consideration so specified. To the extent permitted
by Applicable Law, the Collateral Agent on behalf of the Senior Parties may
bid for and become the purchaser of the Collateral or any item thereof,
offered for sale in accordance with this Section 6.2. If, under mandatory
requirements of Applicable Law, the Collateral Agent shall be required to
make disposition of the Collateral within a period of time which does not
permit the giving of notice to the Company as specified, then the Collateral
Agent shall only be required to give the Company such notice of disposition
as shall be reasonably practicable in view of such mandatory requirements of
Applicable Law. In lieu of exercising the power of sale hereunder, the
Collateral Agent may proceed by a suit at law or in equity to foreclose the
pledge and security interest under this Agreement and sell the Collateral or
any portion thereof under a judgment or decree of a court or courts of
competent jurisdiction.
(b) As used herein, the term "proceeds" includes all cash,
securities and other property received in respect of the Collateral,
including any cash, securities or other property received under any
reorganization, liquidation or adjustment of debt of the Company, and any
portion of the Collateral or the products, profits or proceeds thereof which
are distributed in kind.
(c) The Collateral Agent shall incur no liability as a
result of the manner of sale of the Collateral or any part thereof, at any
private sale conducted in a commercially reasonable manner and in good faith.
The Company hereby waives, to the full extent permitted by Applicable Law,
any claims against the Collateral Agent arising by reason of the fact that
the price at which the Collateral or any part thereof may have been sold at a
private sale was less than the price which might have been obtained at a
public sale, or was less than the aggregate amount of the Obligations, even
if the Collateral Agent accepts the first offer received which the Collateral
Agent in good xxxxx xxxxx to be commercially reasonable under the
circumstances and does not offer the Collateral to more than one offeree.
Section 6.3 WAIVER OF CLAIMS. (a) Except as otherwise provided in
this Agreement, the Company hereby waives, to the extent permitted by
Applicable Law, notice and judicial hearing in connection with the Collateral
Agent's taking possession or the Collateral Agent's disposition of any of the
Collateral, including, without limitation, any and all prior notice and
hearing for any prejudgment remedy or remedies and any such right which the
Company would otherwise have under the constitution or any statute of the
United States, state, or any political subdivision of any such jurisdiction,
and the Company hereby further waives, to the extent permitted by Applicable
Law:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the gross negligence
or willful misconduct of the Collateral Agent or any Person acting on
its behalf or instruction;
(ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of
the Collateral Agent's rights hereunder; and
15
(iii) all rights of redemption, appraisal, valuation,
stay, extension or moratorium in force under any Applicable Law in
order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and the
Company, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
(b) Any sale of, or the grant of options to purchase, or
any other realization upon, any Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the Company
therein, and shall be a perpetual bar both at law and in equity against the
Company and against any Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, through
the Company.
Section 6.4 APPLICATION OF PROCEEDS. (a) The proceeds in cash of any
Collateral obtained pursuant to Section 6.1 or disposed of pursuant to
Section 6.2 shall be applied in accordance with Section 4.1 of the Collateral
Agency Agreement.
(b) The Company shall remain liable to the extent of any
deficiency between (i) the amount of the proceeds in cash of the Collateral
received and recovered by the Collateral Agent and (ii) the aggregate amount
of the Obligations.
Section 6.5 REMEDIES CUMULATIVE. (a) No failure or delay on the part
of the Collateral Agent or any Senior Party in exercising any right, power or
privilege hereunder or under the Collateral Agency Agreement and no course of
dealing between the Company, on the one hand, and the Collateral Agent or any
Senior Party, on the other hand, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege under this
Agreement, the Mortgage or the Collateral Agency Agreement preclude any other
exercise thereof or the exercise of any other right, power or privilege
hereunder. To the fullest extent permitted by law but subject to Section
8.13, the rights, powers and remedies herein, in the Mortgage or in the
Collateral Agency Agreement are cumulative and not exclusive of any rights,
powers or remedies which the Collateral Agent or any Senior Party would
otherwise have. No notice to or demand on the Company shall entitle the
Company to any further notice or demand in similar circumstances or
constitute a waiver of the rights of the Collateral Agent or any Senior Party
to any other action in any circumstances without notice or demand.
(b) The Collateral Agent is not required to take any
discretionary action under this Agreement unless it receives written
direction from the Required Senior Parties. The Collateral Agent is entitled
to receive indemnification to its satisfaction before taking any action as
directed by the Required Senior Parties.
Section 6.6 DISCONTINUANCE OF PROCEEDINGS. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then the
Company, the Collateral Agent and each Senior Party shall be restored to
their former positions and rights under this Agreement with respect to the
Collateral subject to the security
16
interests created under this Agreement, and all rights, remedies and powers
of the Collateral Agent shall continue as if no such proceeding had been
instituted.
ARTICLE VII
INDEMNITY
Section 7.1 INDEMNITY. (a) The Company shall indemnify, reimburse
and hold each Indemnitee harmless from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements of whatsoever kind or nature, including
reasonable attorneys' fees and expenses in connection therewith (herein
referred to as "EXPENSES"), which may be imposed on, asserted against or
incurred by any of the Indemnitees in any way arising out of their entering
into, or the enforcement by the Collateral Agent (by itself or through one of
more other Indemnitees) of its rights under, this Agreement or the documents
executed in connection herewith, or in any other way connected with the
performance or the administration of the transactions contemplated hereby or
thereby or the enforcement of any of the terms of or the preservation of any
rights, remedies and powers of the Collateral Agent (or such other
Indemnitees) hereunder or thereunder, or in any way relating to or arising
out of the manufacture, ownership, ordering, purchase, delivery, control,
acceptance, lease, financing, possession, operation, condition, sale, return
or other disposition or use of the Collateral (including, without limitation,
latent or other defects, whether or not discoverable), the violation of the
laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine
of strict liability, or for or on account of injury to or the death of any
Person (including any Indemnitee), or for property damage, or negligence of
any form) or any contract claim arising from the transactions contemplated
hereby or by the Collateral Agency Agreement; PROVIDED, that no Indemnitee
shall be indemnified for Expenses to the extent caused by the gross
negligence or willful misconduct of such Indemnitee. The Company agrees that
upon notice by any Indemnitee of any assertion that could give rise to an
Expense, the Company shall assume full responsibility for the defense
thereof, and the Company may assume such responsibility regardless of any
notice by the Collateral Agent or an Indemnitee if the Company shall
unconditionally assume such responsibility pursuant to an assumption
agreement reasonably satisfactory in form and substance to the Collateral
Agent (unless such Indemnitee shall decline to permit such assumption);
PROVIDED, that the Collateral Agent shall retain the right, at the expense of
the Company, to monitor any such assertion by engaging a single firm of
counsel of its choice, and PROVIDED, FURTHER, that the Company shall obtain
the consent of the Collateral Agent, which consent shall not be unreasonably
withheld or delayed, prior to the settlement of any such assertion. Each
Indemnitee agrees to notify the Company promptly of any such assertion of
which such Indemnitee has knowledge; PROVIDED, that its failure to do so or
delay in doing so shall not impair its right to indemnification in accordance
with this paragraph, except to the extent such failure or delay shall
materially impair the ability of the Company to defend such claim.
(b) Without limiting the application of Section 7.l(a), to the
extent there are insufficient revenues in the Revenue Account for such purpose,
the Company agrees, promptly
17
on demand, to pay or reimburse the Collateral Agent for any fees, costs and
expenses of whatever kind or nature paid or incurred in connection with the
exercise of any of the rights, remedies or powers granted under this
Agreement, including without limitation the creation, preservation or
protection of the Collateral Agent's rights to, or the Collateral Agent's
Liens on and security interest in, the Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any
taxes or Liens upon or in respect of the Collateral, premiums for insurance
with respect to the Collateral and all other fees, costs, and expenses in
connection with protecting, maintaining or preserving the Collateral and the
Collateral Agent's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral. From the date such amounts
shall have been paid by the Collateral Agent or its agents, representatives,
successors and assigns until actually paid by the Company.
(c) Without limiting the application of Section 7.1(a) or
(b), the Company agrees to pay, indemnify and hold each Indemnitee harmless
from and against any Expenses which such Indemnitee may suffer, expend or
incur in consequence of or growing out of any misrepresentation by the
Company in this Agreement or in any statement or writing made or delivered
pursuant to or in connection with this Agreement.
(d) If and to the extent that the obligations of the
Company under this Section 7.1 are unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under Applicable Law.
Section 7.2 INDEMNITY OBLIGATIONS SECURED BY COLLATERAL. (a) Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Company contained in this Article VII shall
continue in full force and effect notwithstanding the full repayment of the
Obligations or the prior termination of this Agreement, the Collateral Agency
Agreement or any Project Contracts.
(b) The Collateral Agent shall, as soon as practicable
after any claim for which it will seek indemnification hereunder is made
against it, (i) provide the Company with reasonable detail thereof, (ii)
apprise the Company of the Collateral Agent's proposals to define or to
settle such claims and any development in relation thereto and (iii) to the
extent reasonably available, provide the Company with an estimate as to the
likely costs (legal or otherwise) which the Collateral Agent may have to
incur in relation to such claim.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 NOTICES. All notices required to be given under this
Agreement shall be in writing and shall be delivered personally (by hand
delivery or by
18
overnight courier) or by facsimile transmission (with receipt of transmission
confirmation) or mailed (certified mail, postage prepaid) to the Parties at
the following addresses or facsimile numbers and shall be effective upon
receipt (when sent by personal delivery or by certified mail) and upon
receipt of transmission conformation (when sent by facsimile):
If to Collateral Agent, to: 000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Facsimile: 000-000-0000
If to the Company, to:
AES Red Oak, L.L.C.
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Project Manager
Facsimile: 000-000-0000
Either Party from time to time may change its address, facsimile number or
other information for the purposes of notices to such Party by giving notice
specifying such change to the other Party.
Section 8.2 AMENDMENT. This Agreement may be changed, waived,
discharged, or terminated only by an instrument in writing and signed by the
Collateral Agent and the Company and any waiver shall be effective only in
the specific instance and for the specific purpose for which given.
Section 8.3 NO WAIVER. No failure on the part of the Collateral
Agent or any of its agents to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or remedy hereunder
preclude any other or further 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 8.4 OBLIGATIONS OF THE COMPANY. Notwithstanding anything to
the contrary contained in this Agreement, the obligations of the Company
specified in this Agreement shall be absolute and unconditional (except to
the extent expressly provided otherwise) and shall remain in full force and
effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence
whatsoever (other than termination as provided in Section 8.9), including,
without limitation: (i) any renewal, extension, amendment or modification of,
or addition or supplement to or deletion from, the Collateral Agency
Agreement, any other Security Document, any Financing Document, Project
Contract or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof; (ii) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such
instrument or agreement or this Agreement or any exercise or non-exercise of
any right, remedy, power or privilege under or in respect of this Agreement,
the Collateral Agency Agreement, any other Security Document, any Financing
Document or any Project Contract; (iii) any furnishing of any additional
security to the Collateral Agent or any acceptance
19
thereof or any sale, exchange, release, surrender or realization of or upon
any security by the Collateral Agent; or (iv) any invalidity, irregularity or
unenforceability of all or part of the Obligations or of any security
therefor. In the event of any inconsistency between this Agreement and the
Collateral Agency Agreement, the latter shall govern.
Section 8.5 SUCCESSORS AND ASSIGNS. Any corporation or bank into
which the Collateral Agent may be merged or converted or with which it may be
consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Collateral Agent shall be a party,
or any corporation or bank succeeding to all or substantially all of the
corporate trust business of the Collateral Agent, shall be the successor of
the Collateral Agent hereunder, provided such corporation or bank shall be
otherwise qualified and eligible under this Section 8.5, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and permitted assigns of
the parties and shall inure to the benefit of the Collateral Agent; PROVIDED,
that the Company may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Collateral
Agent (which consent shall be subject to the terms of the Collateral Agency
Agreement), and the Collateral Agent may assign its rights only to a
successor Collateral Agent under the Collateral Agency Agreement or in
connection with the exercise of its rights and remedies under this Agreement.
All agreements, statements, representations and warranties made by the
Company herein or in any certificate or other instrument delivered by the
Company or on its behalf under this Agreement shall be considered to have
been relied upon by the Senior Parties and the Collateral Agent and shall
survive the execution and delivery of this Agreement, the Collateral Agency
Agreement, any other Financing Document or any Project Contract, regardless
of any investigation made by the Collateral Agent or any other Person.
Section 8.6 GOVERNING LAW. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT
TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this Agreement
and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery
of this Agreement, the Company hereby accepts for itself and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction
of the aforesaid courts and appellate courts from any appeal thereof. The
Company hereby irrevocably designates, appoints and empowers CT Corporation
System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any action or
proceeding. If for any reason such designee, appointee and agent shall cease
to be available to act as such, the Company, agrees to designate a new
designee, appointee and agent in The City of New York on the terms and for
the
2
purposes of this provision. The Company irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, in accordance with Section 8.1. The Company hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement brought in the courts referred to above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right
of the Collateral Agent to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against the Company in
any other jurisdiction.
Section 8.7 CONTINUING LIABILITY OF THE COMPANY. Notwithstanding
anything to the contrary contained in this Agreement, the Company shall
remain liable to perform all of the obligations binding upon it with respect
to the Collateral to the same extent as if this Agreement had not been
executed. The exercise by the Collateral Agent of any of the rights hereunder
shall not release the Company from any of its duties or obligations in
respect of any of the Collateral except, to the extent that such Collateral
is foreclosed upon hereunder, in which event the Company shall be released
only in respect of the obligations under or in respect of such Collateral
that arise after such foreclosure.
Section 8.8 NO THIRD-PARTY BENEFICIARIES. The agreements of the
parties hereto are solely for the benefit of the Company, the Collateral
Agent, the Indemnitees and the Senior Parties, and no other Person shall have
any rights hereunder.
Section 8.9 CONTINUING ASSIGNMENT AND SECURITY INTEREST. This
Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the discharge of the Collateral
Agency Agreement as provided in Section 7.11 thereof. At such time, the
security interest granted and Liens and the assignment made hereby shall
terminate and all rights to the Collateral shall revert to the Company. Upon
any such termination, the Collateral Agent shall, at the Company's expense,
execute and deliver to the Company such documents as the Company shall
reasonably request to evidence such termination.
Section 8.10 HEADINGS. Headings used in this Agreement are for
convenience of reference only and do not constitute part of this Agreement
for any purpose.
Section 8.11 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Collateral
Agent in order to carry out the intentions of the parties hereto as nearly as
may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Section 8.12 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so
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executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
Section 8.13 LIMITED-RECOURSE. In the event of non-performance by
the Company of the Obligations or its obligations under this Agreement, or
any part thereof, or for any claim based thereon or otherwise in respect
thereof or related thereto, no recourse shall be had to (i) any assets or
properties of any of the Member (or any person that controls any Member
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) or (ii) any Affiliate of the Company or any incorporators,
officers, directors or employees thereof, and no judgment relating to the
obligations of the Company under this Agreement, the Obligations, or any part
thereof, or for any claim based thereon or otherwise in respect thereof or
related thereto, shall be obtainable by the Senior Parties or the Collateral
Agent against any Members or any Affiliate of the Company or any other
incorporator, stockholder, officer, employee or director past, present or
future of the Company or any Affiliate of the Company; provided, however,
that nothing contained herein shall prevent the taking of any action
permitted by law against the Company or any of its Affiliates, or in any way
affect or impair the rights of the Collateral Agent or Senior Parties to take
any action permitted by law, in either case to realize upon the Collateral
and, provided further, that nothing herein shall be deemed to affect the
obligations of any Affiliate of the Company under any Transaction Document to
which such Affiliate is a party.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
AES RED OAK, L.L.C.
By /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
THE BANK OF NEW YORK, as Collateral Agent
By /s/ XXXXXXXX XXXXXXX
-----------------------------------
Name: XxxxXxxx Xxxxxxx
Title: Vice President
