Exhibit 10.6
EXECUTION COPY
INTERCREDITOR AGREEMENT
dated as of August 11, 2003
among
WILMINGTON TRUST COMPANY
as Existing First Priority Corporate Trustee,
and
XXXX X. XXXXXX, XX.
as Existing First Priority Individual Trustee,
and
BANK ONE, NA (MAIN OFFICE CHICAGO)
as Existing First Priority Collateral Agent,
and
XXXXX FARGO BANK MINNESOTA, N.A.
as Second Priority Collateral Trustee,
and
DYNEGY HOLDINGS INC.
as a Grantor and other parties referred to herein as Grantors
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms............................................3
SECTION 1.02. Certain References...............................................7
ARTICLE II
SUBORDINATION AND RELATIVE PRIORITIES OF LIENS IN COLLATERAL
SECTION 2.01. Subordination and Relative Priorities of Security
Interests and Liens..............................................8
SECTION 2.02. Rights in Collateral.............................................9
SECTION 2.03. Obligations Unconditional.......................................12
SECTION 2.04. Waiver of Claims................................................12
SECTION 2.05. Agreement by the Grantors.......................................13
SECTION 2.06. No Warranties, Etc..............................................13
SECTION 2.07. Reinstatement of First Priority Secured Obligations.............14
SECTION 2.08. Sharing Arrangements............................................14
SECTION 2.09. First Priority Collateral Parties as Bailees....................15
SECTION 2.10. Second Priority Secured Holders to be Subrogated to
Rights of First Priority Secured Holders......................16
SECTION 2.11. Obligation of the Grantors Unconditional........................16
SECTION 2.12. Rights in NGL Assets. .........................................16
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Amendments, Supplements and Waivers.............................17
SECTION 3.02. Notices.........................................................19
SECTION 3.03. Headings........................................................19
SECTION 3.04. Severability....................................................19
SECTION 3.05. Binding Effect..................................................20
SECTION 3.06. Governing Law...................................................20
SECTION 3.07. Effectiveness...................................................20
SECTION 3.08. Reexecution of Agreement........................................20
SECTION 3.09. Third-Party Beneficiaries.......................................20
SECTION 3.10. Counterparts....................................................20
SECTION 3.11. Joinder. .......................................................20
INTERCREDITOR AGREEMENT, dated August 11, 2003 (said agreement, as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Agreement") by and among WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity but solely as corporate
trustee (together with any successor corporate trustee appointed pursuant to the
First Priority Collateral Trust Agreement (as hereinafter defined), the
"Existing First Priority Corporate Trustee"), XXXX X. XXXXXX, XX., an individual
residing in the State of Delaware, not in his individual capacity but solely as
individual trustee (together with any successor individual trustee appointed
pursuant to the First Priority Collateral Trust Agreement (referred to below),
the "Existing First Priority Individual Trustee"; and, together with the First
Priority Corporate Trustee, the "Existing First Priority Collateral Trustees")
the foregoing trustees being trustees for the Shared Secured Parties (as
referred to below), BANK ONE, NA (MAIN OFFICE CHICAGO) (together with any
successor collateral agent appointed pursuant to the First Priority Non-Shared
Security Agreement (referred to below), the "Existing First Priority Collateral
Agent") as collateral agent for the Non-Shared Secured Parties (as referred to
below), XXXXX FARGO BANK MINNESOTA, N.A. not in its individual capacity but
solely as collateral trustee (together with any successor collateral trustee
appointed pursuant to the 2003 Second Lien Note Indenture, the "Second Priority
Collateral Trustee"), the foregoing trustee being the trustee for the 2003
Second Priority Secured Holders (as hereinafter defined), and DYNEGY HOLDINGS
INC. (the "Borrower") and the other Persons listed on the signature pages hereof
as additional grantors (together with the Borrower, collectively, the
"Grantors"). Certain capitalized terms used herein not otherwise defined in this
Agreement are used in this Agreement as defined in the Credit Agreement or the
First Priority Collateral Trust Agreement (as defined herein).
PRELIMINARY STATEMENTS:
(1) The Borrower entered into a Credit Agreement dated as of April 1,
2003, as amended by the First Amendment to the Credit Agreement dated as of May
15, 2003, the Second Amendment to the Credit Agreement dated as of June 27, 2003
and the Third Amendment to the Loan Documents dated as of July 15, 2003 (such
Credit Agreement, as so amended and as such agreement may hereafter be amended,
amended and restated, supplemented, replaced or otherwise modified from time to
time, being the "Credit Agreement"), with Dynegy Inc., as the parent guarantor
(the "Parent Guarantor"), Citibank, N.A. and Bank of America, N.A., as
administrative agents (the "Administrative Agents") for the Lenders, Bank One,
NA (Main Office Chicago), as Collateral Agent for the Lenders, and the various
banks, financial institutions and other lenders parties thereto (said banks,
financial institutions and other lenders being the "Senior Lenders").
(2) In order to induce the Lenders and the Administrative Agents to
enter into the Credit Agreement, the Grantors granted, pursuant to the terms of
(i) that certain Shared Security Agreement dated as of April 1, 2003 (said
agreement (including, without limitation, the schedules thereto), as amended,
amended and restated, supplemented, replaced or otherwise modified from time to
time, being the "First Priority Shared Security Agreement") made by the Shared
Grantors to the Existing First Priority Collateral Trustees and granting a
continuing first priority security interest in and to the Collateral to the
Existing First Priority Collateral Trustees for the benefit of the Shared
Secured Parties (as defined in the Credit Agreement) to secure the Senior
Secured Obligations and the Junior Secured Obligations (each as defined in the
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First Priority Collateral Trust Agreement), (ii) that certain Non-Shared
Security Agreement dated as of April 1, 2003 (said agreement (including, without
limitation, the schedules thereto), as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, being the "First
Priority Non-Shared Security Agreement", together with the First Priority Shared
Security Agreement, collectively, the "First Priority Security Agreements") made
by the Non-Shared Grantors to the Existing First Priority Collateral Agent and
granting a continuing first priority security interest in and to the Non-Shared
Collateral (as defined in the First Priority Non-Shared Security Agreement) for
the benefit of the Non-Shared Secured Parties to secure the Non-Shared Secured
Obligations and (iii) the Pre-Closing Mortgages and Post-Closing Mortgages (each
as defined in the Credit Agreement) delivered by the Shared Grantors to the
Existing First Priority Collateral Trustees to secure such Senior Secured
Obligations and Junior Secured Obligations (collectively, the "First Priority
Mortgages").
(3) The Borrower entered into an Indenture dated as of August 11,
2003 (said agreement, as amended, amended and restated, supplemented, replaced
or otherwise modified from time to time, being the "2003 Second Lien Note
Indenture") with Wilmington Trust Company, as indenture trustee (the "2003
Second Lien Note Trustee") in connection with the Borrower's issuance on August
11, 2003 of (i) floating rate second priority senior secured notes due 2008,
(ii) 9.875% second priority senior secured notes due 2010 and of (iii) 10.125%
second priority senior secured notes due 2013 (collectively, the "2003 Second
Lien Notes", and together with the 2003 Second Lien Note Indenture, the "2003
Second Lien Note Indenture Agreements").
(4) In order to induce the 2003 Second Lien Note Trustee to enter
into the 2003 Second Lien Note Indenture, the Grantors have agreed to grant,
pursuant to the terms of (i) that certain Second Lien Secured Security Agreement
dated as of August 11, 2003 (said agreement (including, without limitation, the
schedules thereto), as amended, amended and restated, supplemented, replaced or
otherwise modified from time to time, being the "Second Priority Shared Security
Agreement"), (ii) that certain Second Lien Non-Shared Security Agreement dated
as of August 11, 2003 (said agreement (including, without limitation, the
schedules thereto), as amended, amended and restated, supplemented, replaced or
otherwise modified from time to time, being the "Second Priority Non-Shared
Security Agreement", together with the Second Priority Shared Security
Agreement, collectively, the "Second Priority Security Agreements") and (iii)
those certain Second Priority Mortgages (as defined herein) made by the Grantors
(as such term is defined in the Second Priority Security Agreements) to the
Second Priority Collateral Trustee, as trustee under the 2003 Second Lien Note
Indenture, a continuing second priority security interest in and to the
collateral thereunder to the Second Priority Collateral Trustee for the ratable
benefit of the 2003 Second Lien Note Holders to secure the obligations of the
Borrower under the 2003 Second Lien Note Indenture.
NOW, THEREFORE, in consideration of the premises and in order to
induce the First Priority Collateral Trustees to permit the Second Priority
Collateral Trustee to enter into the Second Priority Collateral Documents (as
defined herein), the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. The following terms shall have
the following meanings as used herein (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Eligible Priority Debt" means the indebtedness secured on a pari
passu basis with the Existing First Priority Secured Obligations (on all or part
of the Collateral) and permitted under the provisions of the Credit Agreement
(if in effect) and the 2003 Second Lien Note Indenture.
"Eligible Priority Debt Agreement" means any agreement or instrument
(including any Eligible Priority Debt Collateral Documents) pursuant to which
any Eligible Priority Debt was incurred or issued and which governs such
Eligible Priority Debt.
"Eligible Priority Debt Agreement Default" means the occurrence and
continuance of an event of default under the Eligible Priority Debt Agreements,
and as a result thereof, the Eligible Priority Debt Defaulted Party has the
right to declare all of the obligations of the Borrower under the Eligible
Priority Debt Agreements to be due and payable prior to the stated maturity
thereof.
"Eligible Priority Debt Collateral Documents" means any Eligible
Priority Debt Agreements pursuant to which any Lien or security interest was
created or granted to secure Eligible Priority Debt Secured Obligations.
"Eligible Priority Debt Collateral Parties" means any trustees, agents
or other persons to whom Liens were granted pursuant to any Eligible Priority
Debt Collateral Documents for the benefit of any Eligible Priority Debt Holders
"Eligible Priority Debt Defaulted Party" means the Eligible Priority
Debt Representative or the percentage of Eligible Priority Debt Holders
specified in the Eligible Priority Debt Agreements that have the right
thereunder upon the occurrence and continuance of an event of default under such
Eligible Priority Debt Agreements (without the requirement that any further time
elapse) to declare all of the obligations of the Borrower under such Eligible
Priority Debt Agreements to be due and payable prior to the stated maturity
thereof.
"Eligible Priority Debt Holders" means at any time the holders of
Eligible Priority Debt under the Eligible Priority Debt Agreements.
"Eligible Priority Debt Representatives" means the representatives of
the Eligible Priority Debt Holders under the Eligible Priority Debt Agreements
including the Eligible Priority Debt Collateral Parties.
"Eligible Priority Debt Secured Obligations" means all obligations
under the Eligible Priority Debt Agreements that are permitted under the Credit
Agreement (if in effect) and the 2003 Second Lien Note Indenture to be secured
by the Liens created under the Eligible
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Priority Debt Collateral Documents on a pari passu basis (on all or part of the
Collateral) with the Existing First Priority Secured Obligations so long as the
property and assets covered by such Liens also secure the Existing First
Priority Secured Obligations.
"Existing First Priority Collateral Agent" has the meaning specified
in the recital of parties hereto.
"Existing First Priority Collateral Documents" means the "Collateral
Documents" as defined in the Credit Agreement and any other collateral documents
executed in connection with the granting of security pursuant to the Credit
Agreement or the other Loan Documents (as defined in the Credit Agreement).
"Existing First Priority Collateral Trustees" has the meaning
specified in the recital of parties hereto.
"Existing First Priority Secured Obligations" means the "Secured
Obligations" as defined in the Credit Agreement.
"First Priority Agreement Default" means (a) for so long as any
Existing First Priority Secured Obligations are secured by the Existing First
Priority Collateral Documents, any default under any Existing First Priority
Collateral Document and/or (b) at any time that the Eligible Priority Debt
Secured Obligations are secured by any Lien under the First Priority Collateral
Documents, an Eligible Priority Debt Agreement Default.
"First Priority Collateral Documents" means, collectively, the
Existing First Priority Collateral Documents and the Eligible Priority Debt
Collateral Documents.
"First Priority Collateral Parties" means, collectively, each of the
trustees, agents, representatives and persons referred to in the definition of
First Priority Controlling Collateral Parties.
"First Priority Collateral Trust Agreement" means the Collateral Trust
and Intercreditor Agreement dated as of April 1, 2003 by the Shared Grantors to
the First Priority Collateral Trustees, as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time.
"First Priority Controlling Collateral Parties" means (a) until the
Existing First Priority Secured Obligations have been Paid in Full, the Existing
First Priority Collateral Trustees and the Existing First Priority Collateral
Agent, and (b) if the Existing First Priority Secured Obligations have been Paid
in Full and any Eligible Priority Debt Secured Obligations are outstanding, the
Required Eligible Priority Debt Collateral Parties.
"First Priority Representatives" means at any time, collectively, (a)
the "Representatives" as defined in the First Priority Collateral Trust
Agreement and the First Priority Collateral Agent and (b) the Eligible Priority
Debt Representatives.
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"First Priority Secured Agreements" means (a) the agreements and other
documents evidencing and governing the terms of the "Secured Obligations" as
defined in the First Priority Collateral Trust Agreement and (b) the Eligible
Priority Debt Agreements.
"First Priority Secured Holders" means the Non-Shared Secured Parties,
the Shared Secured Parties (each as defined in the Credit Agreement) and the
Eligible Priority Debt Holders and Eligible Priority Debt Representatives.
"First Priority Secured Obligations" means the (a) Shared Secured
Obligations (as defined in the Credit Agreement) and (b) Eligible Priority Debt
Secured Obligations.
"Moody's" means Xxxxx'x Investor Services, Inc.
"NGL Assets" has the meaning specified in the 2003 Second Lien Note
Indenture.
"Other Indenture Debt" means the indebtedness secured on a parity
basis with the 2003 Second Lien Notes (on all or part of the Collateral) and
permitted under the provisions of the Credit Agreement (if in effect) and the
2003 Second Lien Note Indenture.
"Other Indenture Debt Agreement" means any agreement or instrument
pursuant to which any Other Indenture Debt was incurred or issued and which
governs such Other Indenture Debt.
"Other Indenture Debt Collateral Documents" means any Other Indenture
Debt Agreements pursuant to which any Lien or security interest was created or
granted to secure Other Indenture Debt Secured Obligations.
"Other Indenture Debt Collateral Parties" means any trustees, agents
or other Persons to whom Liens were granted pursuant to any Other Indenture Debt
Collateral Documents for the benefit of Other Indenture Debt Holders.
"Other Indenture Debt Holders" means at any time the registered
holders of Other Indenture Debt issued under any Other Indenture Debt Agreement.
"Other Indenture Debt Representatives" means any representatives of
the Other Indenture Debt Holders under any Other Indenture Debt Agreement
including any Other Indenture Debt Collateral Parties.
"Other Indenture Debt Secured Holders" means the Other Indenture Debt
Representatives and the Other Indenture Debt Holders.
"Other Indenture Debt Secured Obligations" means all the obligations
under the Other Indenture Debt Agreements that are permitted under the Credit
Agreement (if in effect) to be secured by the Liens created under the Other
Indenture Debt Agreements so long as the property and assets covered by such
Liens also secure the Second Priority Secured Obligations.
"Payment in Full" means (a) the payment in full in cash of (i) all
principal and interest in respect of the First Priority Secured Obligations and
(ii) all other valid First Priority
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Secured Obligations that are claimed within 30 days of the last date on which
all principal and interest in respect of the First Priority Secured Obligations
shall have been paid in full and (b) the termination in full of all commitments
in respect of the First Priority Secured Obligations. "Paid in Full" shall have
the correlative meaning.
"Pledged Equity" means Collateral that consists of equity interests of
any Person.
"Required Eligible Priority Debt Collateral Parties" means the
Required Eligible Priority Debt Representatives or the Required Eligible Debt
Holders.
"Required Eligible Priority Debt Holders" means Eligible Priority Debt
Holders that own or hold more then 50% of all outstanding Eligible Priority
Debt.
"Required Eligible Priority Debt Representatives" means the agents,
trustees and other representatives representing the Required Eligible Priority
Debt Holders.
"Required Other Indenture Debt Collateral Parties" means the Required
Other Indenture Debt Representatives or the Required Other Indenture Debt
Holders.
"Required Other Indenture Debt Holders" means Other Indenture Debt
Holders that own or hold more then 50% of all outstanding Other Indenture Debt.
"Required Other Indenture Debt Representatives" any trustees, agents
or other representatives representing the Required Other Indenture Debt Holders.
"Required Ratings" has the meaning specified in Section 2.02 hereto.
"S&P" means Standard & Poor's Rating Group.
"Second Lien Note Secured Obligations" means at any time any
obligations, whether matured or unmatured, contingent or liquidated, of each
Grantor arising out of or evidenced by the Second Priority Secured Agreements
(other than the Other Indenture Debt Secured Obligations), whether for
principal, interest, expenses, premiums, indemnities, fees or other amounts,
whether or not such obligations are due and payable at such time.
"Second Priority Collateral Documents" means the Second Priority
Security Agreements, Second Priority Mortgages and the Other Indenture Debt
Collateral Documents.
"Second Priority Collateral Parties" means the Second Priority
Collateral Trustee and the Other Indenture Debt Collateral Parties.
"Second Priority Collateral Trustee" has the meaning specified in the
recital of parties hereto.
"Second Priority Controlling Collateral Parties" means (a) until the
Second Lien Note Secured Obligations have been paid in full, the Second Priority
Collateral Trustee and (b) if any Other Indenture Debt Secured Obligations are
outstanding, the Required Other Indenture Debt Collateral Parties.
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"Second Priority Mortgages" means the "Mortgages" as defined in the
2003 Second Lien Note Indenture.
"Second Priority Representatives" means at any time, collectively, the
2003 Second Lien Note Trustee, as the representative hereunder for the 2003
Second Lien Note Holders and the Other Indenture Debt Representative, as the
representative hereunder for the Other Indenture Debt Holders, the Second
Priority Collateral Trustee and the Other Indenture Debt Collateral Parties.
"Second Priority Secured Agreements" means, collectively, the 2003
Second Lien Note Indenture Agreements, the Other Indenture Debt Agreements and
each agreement or instrument delivered by the Grantors pursuant thereto
(including, without limitation, the Second Priority Collateral Documents).
"Second Priority Secured Holders" means, at any time, the 2003 Second
Priority Secured Holders and the Other Indenture Debt Secured Holders.
"Second Priority Secured Obligations" means (a) the Second Lien Note
Secured Obligations and (b) the Other Indenture Debt Secured Obligations.
"Second Priority Security Agreements" has the meaning specified in the
Preliminary Statements.
"2003 Second Lien Note Holders" means at any time the registered
holders of the 2003 Second Lien Notes issued under the 2003 Second Lien Note
Indenture.
"2003 Second Lien Note Indenture" has the meaning specified in the
Preliminary Statements.
"2003 Second Lien Note Indenture Defaulted Party" means the 2003
Second Lien Note Trustee or the percentage of 2003 Second Lien Note Holders
specified in the 2003 Second Lien Note Indenture that have the right thereunder
upon the occurrence and continuance of an Event of Default under the 2003 Second
Lien Note Indenture (without the requirement that any further time elapse) to
declare all of the Second Priority Secured Obligations of the Borrower under the
2003 Second Lien Note Indenture to be due and payable prior to the stated
maturity thereof.
"2003 Second Lien Note Trustee" has the meaning specified in the
Preliminary Statements.
"2003 Second Priority Secured Holders" means the Second Priority
Collateral Trustee, the 2003 Second Lien Note Trustee and the 2003 Second Lien
Note Holders.
SECTION 1.02. Certain References. In this Agreement, the words
"hereof", "herein" and "hereunder", and words of similar import, shall refer to
this Agreement as a whole and not to any particular provision of this Agreement.
All section, schedule and exhibit
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references set forth in this Agreement are, unless otherwise specified,
references to such section in, or schedule or exhibit to, this Agreement.
ARTICLE II
SUBORDINATION AND RELATIVE PRIORITIES OF LIENS IN COLLATERAL
SECTION 2.01. Subordination and Relative Priorities of Security
Interests and Liens. Each of the Second Priority Collateral Parties, on behalf
of itself and each related Second Priority Representative and each related
Second Priority Secured Holder (i) acknowledges and agrees that each Grantor (x)
has granted a security interest in the Collateral owned by it (1) under the
First Priority Shared Collateral Documents to the First Priority Collateral
Parties, for the benefit of the First Priority Representatives and the First
Priority Secured Holders, and (2) under the First Priority Non-Shared Collateral
Documents to the Existing First Priority Collateral Agent for the benefit of
certain of the First Priority Secured Holders as described therein and (y) may
grant additional security interests to any of the First Priority Collateral
Parties for the benefit of the First Priority Secured Holders so long as such
Grantor also grants a second lien security interest in such Collateral (subject
to Section 2.12) to the Second Priority Collateral Parties for the benefit of
the Second Priority Secured Holders and such grant to the Second Priority
Collateral Parties is hereby consented to by the First Priority Secured Holders,
in each case, to secure certain of the First Priority Secured Obligations (as
described therein) and that such security interest is and shall be senior and
prior in all respects to the security interests in the Collateral granted to the
Second Priority Collateral Parties, for the benefit of the Second Priority
Secured Holders, under the Second Priority Collateral Documents; provided
however, that if granting a Lien with respect to the Replacement Assets (as
defined in the Indenture) or any property other than the NGL Assets requires the
consent of a third party, such Grantor will use all commercially reasonable
efforts to obtain such consent to grant such first priority security interests
and such second priority security interests and if such third party does not
consent to the granting of such first priority and second priority Liens, such
Grantor will not be required to provide such first priority and second priority
Liens, (ii) agrees that until Payment in Full of all First Priority Secured
Obligations, no Second Priority Secured Holder shall have any claim to or in
respect of Collateral that is subject to the security interests granted under
the First Priority Collateral Documents, or any proceeds of or realization on
such Collateral, on a parity with or prior to the claim of the First Priority
Secured Obligations, and (iii) subject to Section 2.12(a), agrees that
notwithstanding such security interest and any rights of the Second Priority
Secured Holders under the Second Priority Collateral Documents or otherwise, so
long as (1) any First Priority Secured Obligations are secured by a Lien under
the First Priority Collateral Documents and (2) the applicable Collateral is
subject to the security interests granted under the First Priority Collateral
Documents, none of the Second Priority Secured Holders shall have any right or
claim in respect of the exercise of rights and remedies of the First Priority
Collateral Parties, Existing First Priority Collateral Agent, First Priority
Representatives and the First Priority Secured Holders, whether under the First
Priority Collateral Documents or otherwise, in respect of the Collateral, nor
shall the First Priority Collateral Parties, the Existing First Priority
Collateral Agent, the First Priority Representatives or the First Priority
Secured Holders have any obligation regarding any such exercise or any other
obligation or duty in respect of the interests of the Second Priority Secured
Holders.
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SECTION 2.02. Rights in Collateral. (a) Subject to the other
provisions set forth in Section 2.02(a), the parties hereto agree that, after
the date hereof and until the First Priority Secured Obligations are Paid in
Full, in no event shall any Second Priority Secured Holder have a Lien on or
security interest in any Collateral that is not subject to the first priority
lien of the First Priority Collateral Parties created under the First Priority
Collateral Documents with respect to such Collateral (other than, subject to the
provisions of Section 2.12, Collateral constituting NGL Assets). Notwithstanding
(i) anything to the contrary contained in any Second Priority Collateral
Document and irrespective of the time, order or method of attachment or
perfection of the security interests created by the First Priority Collateral
Documents or the Second Priority Collateral Documents, (ii) anything contained
in any filing or agreement to which the First Priority Representatives, First
Priority Collateral Parties, any First Priority Secured Holders, any Second
Priority Secured Holder or any other party hereto may be a party and (iii) the
rules for determining priority under the Uniform Commercial Code or any other
law governing the relative priorities of secured creditors, any security
interest in any Collateral pursuant to the First Priority Collateral Documents
has and shall have priority over any security interest in such Collateral
pursuant to the Second Priority Collateral Documents.
(b) Whether or not any bankruptcy proceeding or similar event or
proceeding has been commenced by or against any Grantor until the First Priority
Secured Obligations are Paid in Full, (i) the Second Priority Collateral Parties
will not (A) exercise or seek to exercise any rights or exercise any remedies
with respect to any Collateral that is subject to the security interests granted
under the First Priority Collateral Documents, (B) institute any action or
proceeding with respect to such rights or remedies with respect to any
Collateral (except as provided in Section 2.12), including without limitation,
any action of foreclosure, (C) contest, protest or object to any foreclosure
proceeding or action brought by the First Priority Collateral Parties or any
other exercise by the First Priority Collateral Parties of any rights and
remedies under any First Priority Collateral Documents relating to the
Collateral that is subject to the security interests granted under the First
Priority Collateral Documents, (D) object to the forbearance by the First
Priority Collateral Parties to the bringing or pursuing of any foreclosure
proceeding or action or any other exercise of any rights or remedies relating to
the Collateral that is subject to the security interests granted under the First
Priority Collateral Documents, (E) take or receive from the Grantors or any of
their Subsidiaries, directly or indirectly, in cash or other property or by set
off or in any other manner, the Collateral or any part thereof or proceeds
therefrom in satisfaction of the Second Priority Secured Obligations, (F)
contest or seek to invalidate any Liens or security interests securing the First
Priority Secured Obligations, or the perfection thereof, or the validity or
enforceability of this Agreement or (G) take or permit any action prejudicial to
or inconsistent with the priority position of the Lien on the Collateral to
secure the First Priority Secured Obligations over the Lien on the Collateral to
secure the Second Priority Secured Obligations and (ii) the First Priority
Collateral Parties shall have the exclusive right to enforce rights and exercise
remedies with respect to the Collateral that is subject to the security
interests granted under the First Priority Collateral Documents. Notwithstanding
the foregoing, the Second Priority Collateral Parties may enforce rights,
exercise remedies and take actions (A) without any condition or restriction
whatsoever, at any time after the Payment in Full of the First Priority Secured
Obligations, (B) as necessary to perfect a Lien upon any Collateral by any
method of perfection except through possession or control or (C) as necessary to
prove, preserve or protect (but not enforce) the Liens securing the Second
Priority Secured Obligations.
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(c) In exercising rights and remedies with respect to the Collateral,
the First Priority Controlling Collateral Parties may enforce the provisions of
the First Priority Collateral Documents and exercise remedies thereunder, all in
such order and in such manner as they may determine in the exercise of their
sole and exclusive discretion (as between the First Priority Controlling
Collateral Parties, the First Priority Representatives and First Priority
Secured Holders, on the one hand, and the Second Priority Secured Holders, on
the other hand), including, without limitation, (i) the exercise of all rights
and remedies in respect of the Collateral and/or the First Priority Secured
Obligations, (ii) the enforcement or forbearance from enforcement of any Lien in
respect of the Collateral, (iii) the release, with or without consideration, of
the Collateral from the Liens of the First Priority Collateral Documents, (iv)
the exercise of rights and powers of a holder of shares of stock included in the
Collateral under the First Priority Collateral Documents, (v) the acceptance of
the Collateral in full or partial satisfaction of the First Priority Secured
Obligations and (vi) the exercise of all rights and remedies of a secured lender
under the Uniform Commercial Code or any similar Law of any applicable
jurisdiction.
(d) The parties further agree that:
(i) upon any Disposition of Collateral that is permitted by the
terms of the 2003 Second Lien Note Indenture such Collateral shall be
automatically and simultaneously released from the Lien created by the Second
Priority Collateral Documents;
(ii) upon any release by the First Priority Collateral Parties
of all or any portion of the Collateral (other than Pledged Equity so long as
any 2003 Second Lien Notes are outstanding) from the Liens under the First
Priority Collateral Documents, such Collateral shall also be automatically and
simultaneously released from the Lien created by the Second Priority Collateral
Documents; and
(iii) so long as the 2003 Second Lien Notes are outstanding and
such 2003 Second Lien Notes are rated "Baa3" or better by Moodys and "BBB-" by
S&P (the "Required Ratings"), upon any release of all or any portion of the
Collateral (including Pledged Equity) from the Liens under the First Priority
Collateral Documents, such Collateral shall also be automatically and
simultaneously released from the Lien created by the Second Priority Collateral
Documents.
The Second Priority Secured Parties agree at the expense of the
applicable Grantor to execute and deliver to the First Priority Controlling
Collateral Parties or the applicable Grantor(s) such termination statements,
releases and other documents and to take such further action as such First
Priority Controlling Collateral Parties or the applicable Grantor(s) may request
to effectively confirm such release.
(e) Without limiting the provisions of Section 2.02(d), if after the
occurrence and during the continuance of a First Priority Agreement Default, the
First Priority Controlling Collateral Trustees release their Lien in any part or
all of the Collateral in connection with (i) the sale, transfer or other
disposition thereof or (ii) the collection, or otherwise for the application, of
the proceeds thereof to the First Priority Secured Obligations, in each case
with respect to clauses (i) and (ii) in accordance with the First Priority
Collateral Documents, then, simultaneously with
11
such release, the Lien and security interest created pursuant to the First
Priority Collateral Documents to which the First Priority Controlling Collateral
Trustees are not a party and the Second Priority Collateral Documents in such
Collateral shall be automatically released, and upon any such release the First
Priority Collateral Parties and Second Priority Collateral Parties shall, with
respect to such First Priority Collateral Documents and Second Priority
Collateral Documents, as applicable, execute or cause to be executed such
release documents and instruments and shall take such further actions as the
First Priority Controlling Collateral Parties shall request; provided that no
such documents or instruments shall contain any representations or warranties
from, or allow any recourse to, any First Priority Collateral Parties or any
Second Priority Collateral Parties. Any action taken in accordance with this
Section 2.02(e) shall be effective notwithstanding the cessation of any First
Priority Agreement Default
(f) Each of the Second Priority Collateral Parties, for and on behalf
of the Second Priority Secured Holders, hereby irrevocably constitutes and
appoints the First Priority Collateral Parties and any officer or agent of the
First Priority Collateral Parties with full power of substitution, as their true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of each of the Second Priority Collateral Parties, for and on
behalf of the Second Priority Secured Holders, and in the name of each of the
Second Priority Collateral Parties, for and on behalf of the Second Priority
Secured Holders, or in the name of the First Priority Collateral Parties from
time to time in the discretion of the First Priority Collateral Parties for the
purpose of carrying out the terms of this paragraph, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of Section 2.02(d) and
(e), including, without limitation, any financing statements, endorsements,
assignments or other instruments of transfer or release; provided that no such
documents or instruments shall contain any representations or warranties from,
or allow any recourse to, any First Priority Collateral Parties or any Second
Priority Collateral Parties. The Eligible Priority Debt Representatives, for
themselves and on behalf of the Eligible Priority Debt Holders, hereby
irrevocably constitute and appoint the First Priority Collateral Trustees, the
First Priority Collateral Agent and any officer or agent of the First Priority
Collateral Trustees and the First Priority Collateral Agent, as the case may be,
with full power of substitution, as their true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Eligible
Priority Debt Representatives, for themselves and on behalf of the Eligible
Priority Debt Holders, and in the name of the Eligible Priority Debt
Representatives, for themselves and on behalf of the Eligible Priority Debt
Holders, or in the name of the First Priority Collateral Trustees or the First
Priority Collateral Agent, as the case may be, from time to time in the
discretion of the First Priority Collateral Trustees or the First Priority
Collateral Agent, as the case may be, for the purpose of carrying out the terms
of Section 2.02(d) and (e), to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this paragraph, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer or release; provided, that, no such documents or
instruments shall contain any representations or warranties from, or allow any
recourse to, any First Priority Collateral Parties or any Second Priority
Collateral Parties. Notwithstanding any such release by the Second Priority
Collateral Parties as contemplated in Section 2.02(e), it is understood that the
Lien of the Second Priority Collateral Parties in any proceeds realized from
such sale, transfer or other disposition shall, subject to the terms of this
Agreement and the other Second Priority Collateral Documents, continue (unless
such proceeds are applied to the payment of First Priority
12
Secured Obligations) and, following Payment in Full of the First Priority
Secured Obligations, any proceeds remaining from any such sale, transfer, other
disposition or collection shall, unless otherwise required by applicable Law, be
made available (and the Grantors hereby agree to take any and all actions
requested by the Second Priority Secured Controlling Collateral Parties
necessary to make such proceeds available) to the Second Priority Controlling
Collateral Parties for application against the Second Priority Secured
Obligations pursuant to the terms of this Agreement.
(g) In addition to the provisions set forth above in this Section
2.02, the parties hereto further agree that the Liens on any Collateral held by
the Second Priority Collateral Trustee and the Second Priority Secured Holders
shall be released in accordance with, and subject to the terms and conditions
set forth in the 2003 Second Lien Note Indenture.
SECTION 2.03. Obligations Unconditional. The Second Priority
Collateral Parties acknowledge and agree on behalf of the Second Priority
Secured Holders to the relative priority as to the Collateral and the
application of the proceeds therefrom as provided herein and acknowledge and
agree that such priorities and the application of the proceeds from the
Collateral shall not be affected or impaired in any manner whatsoever including,
without limitation, on account of:
(a) any lack of validity or enforceability of any First Priority
Secured Agreement or any Second Priority Secured Agreement;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the First Priority Secured Obligations, the
Second Priority Secured Obligations, or any amendment or waiver or other
modification, whether by course of conduct or otherwise, of the terms of
any First Priority Secured Agreement, the 2003 Second Lien Note Indenture,
or any other Second Priority Secured Agreement;
(c) any exchange, release or nonperfection of any security interest
in any Collateral, or any release, amendment, waiver or other modification,
whether in writing or by course of conduct or otherwise, of all or any of
the First Priority Secured Obligations, Second Priority Secured Obligations
or any guarantee thereof;
(d) the actual date and time of execution delivery, recording, filing
or perfection of any security interests created in the Collateral;
(e) the commencement of any bankruptcy or similar proceeding in
respect of any Grantor; or
(f) any other circumstances (except payment or discharge in full)
which otherwise might constitute a defense available to, or a discharge of,
any Grantor in respect of the First Priority Secured Obligations, the
Second Priority Secured Obligations or of any Second Priority Collateral
Party in respect of this Agreement.
SECTION 2.04. Waiver of Claims. To the maximum extent permitted by
law, each of the Second Priority Collateral Parties, for itself and each related
Second Priority Secured Holder, waives any claim it might have against the First
Priority Collateral Parties, the First
13
Priority Representatives or the First Priority Secured Holders with respect to,
or arising out of, any action or failure to act or any error of judgment or
negligence on the part of the First Priority Collateral Parties, the First
Priority Representatives, the First Priority Secured Holders or their respective
directors, officers, employees or agents with respect to any exercise of rights
or remedies under the First Priority Collateral Documents or any transaction
relating to the Collateral. Neither the First Priority Collateral Parties, any
First Priority Representative, any First Priority Secured Holder nor any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so, except to the extent arising out of the gross negligence or
willful misconduct of the First Priority Collateral Parties, any First Priority
Representative, any First Priority Secured Holders or such other Person, or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor, the Second Priority Collateral Parties, any
Second Priority Secured Holder or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
SECTION 2.05. Agreement by the Grantors. (a) Each Grantor hereby
agrees that it will not, and will not permit any of its Subsidiaries to take any
action in contravention of the provisions of this Agreement.
(b) So long as the Second Priority Secured Obligations are still
outstanding and the Second Priority Collateral Documents are still in effect, if
at any time the Collateral has been sold or otherwise disposed of (whether
pursuant to the exercise of remedies by the First Priority Collateral Parties or
otherwise) and the First Priority Collateral Parties hold cash proceeds that
would otherwise be paid to the applicable Grantor in accordance with the First
Priority Collateral Documents, each Grantor by its signature to this Agreement
irrevocably instructs the applicable First Priority Collateral Parties to turn
over any such remaining proceeds to the Second Priority Controlling Collateral
Parties for application to the Second Priority Secured Obligations upon the sale
or disposition of the Collateral as set forth in this Section 2.05(b).
(c) At any time that the First Priority Secured Obligations secured
by a Lien under the First Priority Collateral Documents are Paid in Full, if at
such time the First Priority Collateral Parties continue to hold any
certificates representing shares of stock or instruments of indebtedness
included in the Collateral or any other item of Collateral, each Grantor shall,
as of the date of this Agreement, instruct the applicable First Priority
Collateral Parties to turn over such certificates, instruments and other items
of Collateral directly to the Second Priority Controlling Collateral Parties to
be held by it under the Second Priority Collateral Documents upon the occurrence
of the events and circumstances set forth in this Section 2.05. In no event
shall the Second Priority Collateral Parties have any liability for the failure
of any First Priority Collateral Party to follow the instructions or directions
of the Grantors pursuant to this Section 2.05(c).
SECTION 2.06. (a) No Warranties, Etc. The Second Priority Collateral
Parties acknowledge and agree that (i) none of the First Priority Collateral
Parties, the First Priority Representatives or the First Priority Secured
Holders have made any representation or warranty herein or in the other Second
Priority Collateral Documents with respect to the validity, legality,
completeness, collectibility or enforceability of the First Priority Secured
Agreements and (ii) the First Priority Collateral Parties may manage the Liens
of the First Priority Secured Holders in the
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Collateral without regard to any rights or interests that the Second Priority
Collateral Parties or the other Second Priority Secured Holders may have in the
Collateral.
(b) Waiver of Marshalling and Similar Rights. Each of the Second
Priority Collateral Parties for itself and on behalf of the Second Priority
Secured Holders agrees not to assert and hereby waive, to the fullest extent
permitted by applicable Law, any right to demand, request, plead or otherwise
assert, or otherwise claim the benefit of, any marshalling, appraisement,
valuation or other similar rights a junior secured creditor may have under
applicable Law.
(c) Waiver of Requirements. Each of the Second Priority Collateral
Parties hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to this Agreement and any requirement that the First
Priority Collateral Parties, the First Priority Representatives or the First
Priority Secured Holders protect, secure, perfect or insure (i) any Lien under
the First Priority Collateral Documents or otherwise, (ii) any Collateral or
(iii) any other property subject thereto or exhaust any right or take any action
against the Grantors, or any of their Subsidiaries or any other Person or any
Collateral or any other collateral.
(d) No Liability of First Priority Collateral Parties. This Agreement
shall not create any agency relationship between the First Priority Collateral
Parties, on the one hand, and the Second Priority Collateral Parties, and/or the
Second Priority Secured Holders, on the other hand. The First Priority
Collateral Parties and their respective officers, directors, employees and
agents shall not be responsible, directly or indirectly, to the Second Priority
Collateral Parties, and/or the Second Priority Secured Holders for any action
taken or omitted by the First Priority Collateral Parties hereunder, or under
the First Priority Secured Agreements or otherwise, nor shall they be liable or
responsible for any loss, cost or expense suffered or incurred by the Second
Priority Collateral Parties, and/or the Second Priority Secured Holders, other
than any such loss, cost or expense found in a final non-appealable judgment by
a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the First Priority Collateral Parties or their respective
officers, directors, employees or agents. Without limiting the generality of the
foregoing, the First Priority Collateral Parties or their respective officers,
directors, employees and agents make no representation or warranty herein and
shall not be deemed to have made any representation and warranty herein: (i) as
to the accuracy, validity, legality or enforceability of the First Priority
Secured Agreements, the Second Priority Secured Agreements or any report,
certificate, instrument or agreement delivered pursuant hereto or thereto or
(ii) as to the validity, sufficiency, perfection or value of the Collateral.
SECTION 2.07. Reinstatement of First Priority Secured Obligations. The
First Priority Secured Obligations owed to each First Priority Secured Holder
under the First Priority Collateral Documents shall continue to be effective, or
to be reinstated, as the case may be, as to any payment in respect of any First
Priority Secured Obligation that is rescinded or must otherwise be returned by
an First Priority Secured Holder upon the occurrence or as a result of
applicable provisions of the Bankruptcy Code, all as though such payment has not
been made.
SECTION 2.08. Sharing Arrangements. (a) Each of the Second Priority
Collateral Parties for themselves and on behalf of the related Second Priority
Secured Holders hereby agree that the provisions of the First Priority
Collateral Documents with respect to
15
allocations and distributions of proceeds of the Collateral shall prevail
notwithstanding any event or circumstance, including, without limitation, in the
event that, through the operation of any bankruptcy, reorganization, insolvency
or other laws or otherwise, any of the Liens of the First Priority Secured
Holders in the Collateral is avoided in whole or in part for any reason or is
enforced with respect to some, but not all, of the First Priority Secured
Obligations then outstanding.
(b) The Second Priority Collateral Parties and the Second Priority
Secured Holders agree that they shall not be entitled to benefit from any
avoidance action affecting or otherwise relating to any distribution or
allocation made in accordance with the First Priority Collateral Documents,
whether by preference or otherwise, it being understood and agreed that the
benefit of any such avoidance action otherwise allocable to them shall instead
be allocated and turned over for application in accordance with the priorities
set forth in the First Priority Collateral Documents.
(c) Until the First Priority Secured Obligations are Paid in Full,
the Collateral or proceeds thereof received in connection with the sale or other
disposition of, or collection on, such Collateral upon the exercise of remedies,
shall be applied to the First Priority Secured Obligations. Upon the Payment in
Full of the First Priority Secured Obligations, the First Priority Collateral
Parties shall deliver to the Second Priority Controlling Collateral Parties any
proceeds of Collateral held by them in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct to be applied to the Second Priority Secured Obligations in such order as
specified in the relevant Second Priority Collateral Documents. In the event
that any payment or distribution shall be received by the Second Priority
Collateral Parties in a manner that is inconsistent with the provisions of any
First Priority Collateral Documents, such payment or distribution shall be
segregated and held in trust by the Second Priority Collateral Parties for the
benefit of, and shall be paid over or delivered to, the First Priority
Controlling Collateral Parties in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct, for
application to the First Priority Secured Obligations in accordance with the
First Priority Collateral Documents. Any of the First Priority Collateral
Parties is hereby authorized to make any such endorsements as agent for the
Second Priority Collateral Parties. This authorization is coupled with an
interest and is irrevocable.
(d) If the Second Priority Collateral Parties shall acquire by
indemnification, subrogation or otherwise (including pursuant to the Second
Priority Collateral Documents), any lien, estate, right or other interest in, or
possession or control of, any of the assets of any Grantor that would otherwise
constitute Collateral, that lien, estate, right or other interest shall be
subject to the relative priorities set forth herein.
SECTION 2.09. First Priority Collateral Parties as Bailees. Subject to
Section 2.06(c) hereof, each of the First Priority Collateral Parties
acknowledge that, to the extent that the Collateral under the First Priority
Collateral Documents includes items (such as stock certificates, instruments,
cash or security entitlement) which are held in the possession of (or in the
case of cash or a security entitlement under the control of) the First Priority
Collateral Parties or a third party on their behalf, pursuant to the First
Priority Collateral Documents, such First Priority Collateral Parties are also
holding such items in their possession (or under their control)
16
as bailee of the Second Priority Collateral Parties solely for purposes of
perfecting the security interest of the Second Priority Collateral Parties in
such items; provided that nothing in this Section 2.09 shall require the First
Priority Collateral Parties to deliver any Collateral to the Second Priority
Collateral Parties until the First Priority Secured Obligations are Paid in
Full. Pursuant to Section 2.05(c), after Payment in Full of the First Priority
Secured Obligations, the Grantors shall instruct the applicable First Priority
Collateral Parties to deliver to the Second Priority Controlling Collateral
Parties all of the aforesaid items in the possession of such First Priority
Collateral Parties at such time.
SECTION 2.10. Second Priority Secured Holders to be Subrogated to
Rights of First Priority Secured Holders. Subject to the Payment in Full of all
First Priority Secured Obligations, the Second Priority Secured Holders shall be
subrogated equally and ratably to the rights of the First Priority Secured
Holders to receive payments or distributions of assets of the Grantors
applicable to the First Priority Secured Obligations until all amounts owing on
the First Priority Secured Obligations shall be Paid in Full, and for the
purpose of such subrogation no payments or distributions to the First Priority
Secured Holders by or on behalf of any Grantor or by or on behalf of the Second
Priority Secured Holders by virtue of Article II of this Agreement which
otherwise would have been made to the Second Priority Secured Holders shall, as
among the Grantors, their creditors other than the First Priority Secured
Holders and the Second Priority Secured Holders, be deemed to be payment by any
Grantor to or on account of the First Priority Secured Obligations, it being
understood that the provisions of this Article II are intended solely for the
purpose of defining the relative rights of the Second Priority Secured Holders,
on the one hand, and the First Priority Secured Holders, on the other hand.
SECTION 2.11. Obligation of the Grantors Unconditional. Nothing
contained in this Article II or elsewhere in this Agreement is intended to or
shall impair, as between the Grantors, their creditors other than the First
Priority Secured Holders and the Second Priority Secured Holders, the obligation
of the Grantors, which is absolute and unconditional, to pay the Second Priority
Secured Holders the principal of and interest on the Second Priority Secured
Obligations as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the Second
Priority Secured Holders and the creditors of the Grantors other than the First
Priority Secured Holders, nor shall anything herein or therein prevent the
Second Priority Collateral Parties or the Second Priority Secured Holders from
exercising all remedies otherwise permitted by applicable law upon default under
the Second Priority Secured Agreements or the Second Priority Collateral
Documents, subject to the rights, if any, under this Article II of the First
Priority Secured Holders.
SECTION 2.12. Rights in NGL Assets. Notwithstanding anything in this
Agreement or in any Second Priority Collateral Document to the contrary, the
parties hereto agree that:
(a) (i) the priorities set forth in this Agreement in respect of the
NGL Assets that constitutes Collateral at any time on and after the date of this
Agreement and the rights and remedies of the First Priority Secured Holders in
respect of such Collateral shall apply without regard to whether or not any of
the First Priority Secured Holders are secured by such Collateral at the
relevant time (and if not so secured, the First Priority Secured Holders shall
be deemed to be secured by the NGL Assets solely for purposes of this Agreement
and the sharing provision
17
set forth in clause (ii) herein) and (ii) that any proceeds or distributions in
respect of the NGL Assets received by the Second Priority Secured Holders at any
time prior to the date on which the First Priority Secured Obligations have been
Paid in Full shall be held for the benefit of, and promptly turned over to, the
First Priority Collateral Parties in accordance with the terms hereof; provided,
that the Grantors acknowledge and agree that the Second Priority Secured Holders
shall have the rights set forth in Section 2.10;
(b) the Second Priority Collateral Parties will, at the direction of
the First Priority Controlling Collateral Trustees, and at the cost and expense
of the Grantors, (i) at any time that none of the First Priority Secured
Obligations are secured by the NGL Assets, exercise any rights or remedies with
respect to any Collateral that constitutes NGL Assets and take any other action
related thereto and (ii) institute any action or proceeding to effect or enforce
such rights and remedies, including without limitation any action of
foreclosure; and
(c) the aggregate amount of any Second Priority Secured Obligations
secured by Liens granted by the Borrower and the other Grantors on NGL Assets in
favor of the Second Priority Collateral Parties pursuant to the Second Priority
Collateral Documents shall not exceed an amount equal to (x) the maximum amount
permitted to be secured by the NGL Assets under the Indentures on the date of
the incurrence of such Second Priority Secured Obligations less (y) the amount
of all First Priority Secured Obligations and any previously incurred Second
Priority Secured Obligations secured by NGL Assets on such date, and such amount
shall be set forth in a certificate by a Responsible Officer of the Borrower
demonstrating the calculation thereof in reasonable detail.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Amendments, Supplements and Waivers. (a) Except as set
forth in this Section 3.01, no amendment or waiver of any provision of this
Agreement, and no consent to any departure by the First Priority Collateral
Parties, the Second Priority Collateral Parties, the Borrower and any Grantor,
shall in any event be effective unless the same shall be in writing and signed
by First Priority Collateral Parties, the Second Priority Collateral Parties,
the Borrower or any Grantor, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it is
given. This Agreement contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written understandings.
(b) The First Priority Collateral Parties and the Grantors may, at
any time and from time to time, without the consent of any Second Priority
Collateral Party or any Second Priority Secured Holder enter into amendments or
other written agreements supplemental to any First Priority Collateral Document
for the purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any First Priority Collateral Document or
changing in any manner the rights of the holders of the First Priority Secured
Obligations or the Grantors thereunder. Any amendment or waiver of, or any
consent under, any provision of any First Priority Collateral Document (except
to the extent that such amendment, waiver or consent,
18
would have the effect of releasing Collateral from the Liens securing Second
Priority Secured Obligations in violation of Article II or of releasing the
Pledged Equity at any time that the 2003 Second Lien Notes are outstanding and
do not have the Required Ratings) shall apply automatically to the comparable
provision of the comparable Second Priority Collateral Document without the
consent of or notice to any Second Priority Collateral Party or any Second
Priority Secured Holder and without any action by any Grantor or the Second
Priority Collateral Parties; provided that the Borrower has delivered to the
Second Priority Collateral Parties a certificate from an Authorized Officer
stating that such amendment, waiver or consent does not have the effect of
releasing Liens securing the Second Priority Secured Obligations in violation of
Article II or of releasing the Pledged Equity at any time that the 2003 Second
Lien Notes are outstanding and do not have the Required Ratings. The Borrower
shall promptly notify the Second Priority Collateral Parties of any amendment or
waiver of, or any consent under, any provision of any First Priority Collateral
Document that applies automatically to the comparable provision of the
comparable Second Priority Collateral Document, which notice shall include a
copy of such amendment, waiver or consent, as applicable, provided that the
failure to give such notice shall not affect the validity of such amendment or
waiver of, or consent under, either the First Priority Collateral Documents or
the First Priority Collateral Documents.
(c) The First Priority Collateral Parties and the Grantors may, at
any time and from time to time, without the consent of any Second Priority
Collateral Party or any Second Priority Secured Holder, enter into amendments or
other written agreements supplemental to any First Priority Collateral Document
for the purpose of granting to the First Priority Collateral Parties a first
priority security interest in additional assets of the Grantors to secure the
First Priority Secured Obligations. Any such amendment or written agreements
supplemental to any First Priority Collateral Document shall apply automatically
to the comparable Second Priority Collateral Document without the consent of or
notice to the Second Priority Collateral Party or any Second Priority Secured
Holder and without any action by any Grantor or the Second Priority Collateral
Parties, and effective upon delivery by any First Priority Representative to
each of the Second Priority Collateral Parties of written notice of such
amendment or other written supplemental agreement, the Second Priority
Collateral Parties shall automatically be granted a second priority security
interest in such additional assets of the Grantors to secure the Second Priority
Secured Obligations. The First Priority Secured Parties and the Grantors may
also, at any time and from time to time, without the consent of any Second
Priority Collateral Party or any Second Priority Secured Holder, amend or waive
provisions of this Agreement relating to or establishing rights among the First
Priority Secured Parties or the First Priority Secured Holders and the Grantors
so long as such amendment or waiver would not reasonably be expected to have a
material and adverse effect on any of the rights or obligations of the Second
Priority Secured Parties or Second Priority Secured Holders under this
Agreement; provided that notice of such amendment or waiver is delivered to the
Second Priority Collateral Parties. Without limiting the generality of the
foregoing sentences, if the Person(s) who would otherwise be First Priority
Controlling Collateral Parties hereunder shall agree with the Borrower to any
modification of the definition of First Priority Controlling Collateral Parties,
such modification shall be effective upon notice thereof to the other parties to
this Agreement.
(d) Without the prior written consent of the First Priority
Collateral Parties and the First Priority Representatives, no Second Priority
Collateral Document may be amended, supplemented or otherwise modified or
entered into to the extent such amendment, supplement
19
or modification, or the terms of any new Second Priority Collateral Document,
would be inconsistent with any of the terms of the First Priority Secured
Agreements. The Second Priority Collateral Parties agree that each Second
Priority Collateral Document shall include the following language:
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the [Collateral Trustee] [Collateral Agent]
pursuant to this Agreement and the exercise of any right or remedy by such
[Collateral Trustee] [Collateral Agent] hereunder are subject to the provisions
of the Intercreditor Agreement, dated as of August [__], 2003 (the
"Intercreditor Agreement") among Wilmington Trust Company, as Existing First
Priority Corporate Trustee, Xxxx X. Xxxxxx, Xx., as Existing First Priority
Individual Trustee, Bank One NA (Main Office Chicago), as Existing First
Priority Collateral Agent, the Collateral Trustee, and Dynegy Holdings Inc., as
a Grantor and other parties referred to therein as Grantors and such other
parties as may be added thereto from time to time in accordance with Section
3.11 thereof. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern.".
; provided, however, that if the jurisdiction in which any such Second Priority
Collateral Document shall be filed prohibits the inclusion of the language above
or would prevent a document containing such language to be recorded of record,
the First Priority Controlling Collateral Trustees and the applicable Second
Priority Collateral Parties agree to negotiate in good faith on replacement
language (or a document in lieu thereof) stating that the lien and security
interest granted under such Second Priority Collateral Document is subject to
the provisions of this Agreement prior to such Second Priority Collateral
Document being entered into.
SECTION 3.02. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall, unless otherwise
stated herein, be in writing (including telex and telecopy communications) and
shall be sent by mail (by registered or certified mail, return receipt
requested), overnight prepaid courier, telex, telecopier or hand delivery; if to
the Grantors, Existing First Priority Collateral Agent, Existing First Priority
Collateral Trustees and the Second Priority Collateral Trustee, to their
addresses specified on their respective signature pages hereto and as any party
added pursuant to Section 3.11, to their address specified in the joinder
agreement signed by them. All such notices, requests, demands and communications
shall be deemed to have been duly given or made, (i) when delivered by hand,
(ii) five Business Days after being deposited in the mail, postage prepaid,
(iii) the next Business Day if delivered by an overnight prepaid courier, (iv)
when telexed with answerback received, (v) when telecopied or (vi) when
published in The Wall Street Journal or such other publication.
SECTION 3.03. Headings. Section, subsection and other headings used in
this Agreement are for convenience only and shall not affect the construction of
this Agreement.
SECTION 3.04. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
20
SECTION 3.05. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and shall inure to the
benefit of the First Priority Representatives on behalf of the First Priority
Secured Holders and the Second Priority Representatives on behalf of the Second
Priority Secured Holders and their respective successors and assigns and nothing
herein or in any other First Priority Collateral Document or Second Priority
Collateral Document is intended or shall be construed to give any other Person
any right, remedy or claim under, to or in respect of this Agreement, any other
First Priority Collateral Document or the Collateral.
SECTION 3.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, except as
otherwise required by mandatory provisions of law.
SECTION 3.07. Effectiveness. This Agreement shall become effective on
the execution and delivery hereof and shall remain in effect so long as the
First Priority Collateral Trustees shall have any obligations hereunder.
SECTION 3.08. Reexecution of Agreement. This Agreement shall be
reexecuted at any time and from time to time, at the request of the First
Priority Representative(s), with such changes in the form hereof (including,
without limitation, changes on the cover page and adding supplemental signatures
and notary statements) as may be necessary to comply with the filing or
recording requirements of any jurisdiction where this Agreement is to be filed.
SECTION 3.09. Third-Party Beneficiaries. The First Priority Collateral
Parties, the First Priority Representatives and the other First Priority Secured
Holders are third-party beneficiaries to this Agreement and the other First
Priority Collateral Documents and may from time to time enforce their rights as
explicit beneficiaries hereunder pursuant to the terms and conditions of this
Agreement and the other First Priority Collateral Documents.
SECTION 3.10. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.
SECTION 3.11. Joinder. The Borrower and each of the other Grantors
agrees that it shall not issue or incur any Eligible Priority Debt or Other
Indenture Debt unless, each Eligible Priority Debt Collateral Parties or the
Other Indenture Debt Collateral Parties, as the case may be, under the Eligible
Priority Debt Agreements or Other Indenture Debt Agreements, respectively,
becomes a party to this Agreement and each of the Eligible Priority Debt
Representatives or the Other Indenture Debt Representatives, as the case may be,
acknowledges and agrees thereto. Such Eligible Priority Debt Collateral Parties
or Other Indenture Debt Collateral Parties shall become party hereto by
executing a signature page to this Agreement. Upon such Eligible Priority Debt
Collateral Parties becoming a party to this Agreement, each such Person shall
have all the rights and obligations of the Eligible Priority Debt Collateral
Parties or Other Indenture Debt Collateral Parties, as the case may be, under
this Agreement.
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as
Existing First Priority Corporate
Trustee
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title:
Address: Xxxxxx Square North
0000 Xxxxx Xxxxxx Xx.
Xxxxxxxxxx, XX 00000
Attn: Corporate Trust Division
XXXX X. XXXXXX, XX., not in his
individual capacity, but solely as
Existing First Priority Individual
Trustee
By: /s/ Xxxx X. Xxxxxx, XX.
-------------------------------------
Title: Existing First Priority
Individual Trustee
Address: 0000 Xxxxx Xxxxxx Xx.
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Corporate Trust Division
BANK ONE, NA (MAIN OFFICE CHICAGO), as
Existing First Priority Collateral Agent
By: /s/ Xxxxxx Xxx Xxxxxxx
-------------------------------------
Title: Vice President
Address: 1 Bank Xxx Xxxxx
Xxxxx XX0-0000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx Xxx Xxxxxxx
22
XXXXX FARGO BANK MINNESOTA, N.A., not in
its individual capacity, but solely as
Second Priority Collateral Trustee
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Title: Corporate Trust Officer
Address: Corporate Trust Services
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx
23
ACKNOWLEDGED AND AGREED ON THE DATE
HEREOF:
DYNEGY HOLDINGS INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Title: Assistant Treasurer
Address: 0000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxx
Xxxxx Xxxxxxxx
24
DYNEGY POWER CORP.
DPC II INC.
DYNEGY ENGINEERING, INC.
DYNEGY SERVICES, INC.
DYNEGY POWER MANAGEMENT
SERVICES, L.P.,
By: Dynegy Services, Inc., its
general partner
CALCASIEU POWER, INC.
DYNEGY OPERATING COMPANY
DYNEGY PARTS AND TECHNICAL SERVICES,
INC.
DYNEGY POWER MANAGEMENT SERVICES, INC.
HEP COGEN, INC.
XXXXXXXX XXXXX, INC.
DYNEGY POWER INVESTMENTS, INC.
DYNEGY POWER SERVICES, INC.
DYNEGY POWER NEVADA, INC.
MICHIGAN COGEN, INC.
MICHIGAN POWER, INC.
MICHIGAN POWER HOLDINGS, INC.
OCG COGEN, INC.
OYSTER CREEK COGEN, INC.
RRP COMPANY
DPC COLOMBIA - OPON POWER RESOURCES
COMPANY
TERMO SANTANDER HOLDING, LLC
RIVERSIDE GENERATION, INC.
RIVERSIDE GENERATING COMPANY, L.L.C.
ROLLING HILLS GENERATION, INC.
DYNEGY RENAISSANCE POWER, INC.
DYNEGY NORTHEAST GENERATION, INC.
XXXXXX POWER, L.L.C.
DYNEGY MIDSTREAM GP, INC.
DYNEGY MIDSTREAM SERVICES, LIMITED
PARTNERSHIP
By: Dynegy Midstream G.P., Inc., its
general partner
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Xxxxxx X. Xxx
Xx. Vice President-Treasurer
25
DYNEGY LIQUIDS MARKETING AND TRADE
DYNEGY OPI, LLC
DYNEGY NGL PIPELINE COMPANY, LLC
DYNEGY INTRASTATE PIPELINE, LLC
DYNEGY ENERGY PIPELINE COMPANY LLC
DYNEGY UPPER HOLDINGS, L.L.C.
DYNEGY HOLDING COMPANY, L.L.C.
DMG ENTERPRISES, INC.
HAVANA DOCK ENTERPRISES, LLC
DMT HOLDINGS, INC.
DMT G.P., L.L.C.
DMT HOLDINGS, L.P.
DYNEGY MARKETING AND TRADE
DYNEGY COAL TRADING & TRANSPORTATION,
L.L.C.
NGC STORAGE, INC.
BLACK THUNDER MEMBER, INC.
ILLINOVA CORPORATION
ILLINOVA GENERATING COMPANY
IGC XXXXXX COUNTY, INC.
IGC XXXXXX FRONTIER, INC.
IPG FERNDALE, INC.
IPG PARIS, INC.
CHARTER OAK (PARIS) INC.
ILLINOVA ENERGY PARTNERS, INC.
PARISH POWER, INC.
CALCASIEU POWER, LLC
DELTA COGEN, INC.
DYNEGY POWER HOLDINGS, INC.
COGEN POWER, INC.
COGEN POWER, L.P.
By: CoGen Power, Inc., its general
partner
DYNEGY LIQUIDS G.P., L.L.C.
By: Dynegy Midstream Services,
Limited Partnership, its sole
member
By: Dynegy Midstream G.P., Inc.
its general partner
DYNEGY INC.
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Xxxxxx X. Xxx
Xx. Vice President-Treasurer
26
MIDSTREAM BARGE COMPANY, L.L.C.
DYNEGY REGULATED HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Xxxxxx X. Xxx
Xx. Vice President-Treasurer
27
BG HOLDINGS, INC.
BLACK MOUNTAIN COGEN, INC.
BLUEGRASS GENERATION, INC.
BLUEGRASS GENERATION COMPANY, L.L.C.
DYNEGY CABRILLO II LLC
BLUE RIDGE GENERATION INC.
BLUE RIDGE GENERATION LLC
CHICKAHOMINY GENERATING COMPANY
CHICKAHOMINY POWER, LLC
FLORIDA MERCANTILE POWER, INC.
PALMETTO POWER, L.L.C.
GASIFICATION SERVICES, INC.
GEORGIA MERCANTILE POWER, INC.
HEARD COUNTY POWER, L.L.C.
XXXX COUNTY IPP, INC.
HARTWELL INDEPENDENT POWER
PARTNERS, INC.
HARTWELL POWER COMPANY
DYNEGY DANSKAMMER, L.L.C.
DYNEGY ROSETON, L.L.C.
DYNEGY XXXXXX POWER RETAIL, L.L.C.
DYNEGY GLOBAL ENERGY, INC.
DYNEGY BROADBAND MARKETING AND TRADE
DYNEGY GP INC.
DYNEGY TECHNOLOGY CAPITAL CORP.
DYNEGY STRATEGIC INVESTMENTS, L.P.
By: Dynegy Strategic Investments GP,
L.L.C., its general partner
DYNEGY STRATEGIC INVESTMENTS GP, L.L.C.
RENAISSANCE POWER, L.L.C.
ROLLING HILLS GENERATING, L.L.C.
DYNEGY POWER MARKETING, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
Vice President
28
DYNEGY ENERGY SERVICES, INC.
ILLINOIS POWER ENERGY, INC.
DES NORTHEAST, INC.
DEM GP, LLC
DYNEGY ENERGY MARKETING, LP
By: DEM GP, LLC, its general partner
DYNEGY ADMINISTRATIVE SERVICES COMPANY
NIPC, INC.
DFS L.P., LLC
DFS GENERAL PARTNER, LLC
DYNEGY FINANCIAL SERVICES,
LIMITED PARTNERSHIP
DYNEGY XXXXXX MEMBER, INC.
DYNEGY MIDWEST GENERATION , INC.
DYNEGY I.T., INC.
CHESAPEAKE POWER, INC.
XXXXX RIVER ENERGY CORP.
DPC POWER RESOURCES HOLDING COMPANY
DRY CREEK POWER, INC.
ROCKINGHAM POWER, L.L.C.
DYNEGY POWER DEVELOPMENT COMPANY
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
Vice President
29
DYNEGY MANAGEMENT, INC.
DMS LP, INC.
DMT L.P., L.L.C.
DYNEGY STRATEGIC INVESTMENTS LP, INC.
DEM LP, LLC
By: /s/ Xxxxx X. Xxxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxxxx
President
