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EXHIBIT 10.4
AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT ("Agreement") is made
as of the 19th day of November, 1996, by and between COGENTRIX/BIRCHWOOD TWO,
L.P., a Delaware limited partnership ("Pledgor"), and BIRCHWOOD POWER PARTNERS,
L.P., a Delaware limited partnership ("Lender").
W I T N E S S E T H:
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WHEREAS, all one hundred (100) shares of the issued and outstanding
stock of the Corporation (as hereinafter defined) were previously owned by
Corporate Trinity Company, a Delaware corporation ("CTC"), and such shares were
previously pledged to Lender pursuant to that certain Stock Pledge Agreement
dated as of May 18, 1994 by and between CTC and Lender (the "Original Pledge
Agreement");
WHEREAS, Lender has previously assigned all of its rights to the shares
under the Original Pledge Agreement in favor of Credit Suisse, as security
agent, under the Security Deposit Agreement (as hereinafter defined) pursuant to
that certain Borrower Stock Assignment dated as of May 18, 1994 (the "Original
Stock Assignment");
WHEREAS, CTC granted Lender an option to purchase shares of the stock
of the Corporation pursuant to that certain Letter Agreement dated May 13, 1994
(the "Stock Option"), and Lender has assigned its rights under the Stock Option
to (i) Pledgor as to a fifty percent (50%) interest and (ii) SEI Birchwood, Inc.
("SEI Birchwood") as to a fifty percent (50%) interest pursuant to that certain
Assignment dated November 19, 1996 among Lender, Pledgor and SEI Birchwood;
WHEREAS, Pledgor intends to exercise the Stock Option and acquire fifty
(50) shares of the issued and outstanding stock of the Corporation from CTC
pursuant to the Stock Option;
WHEREAS, the parties hereto desire to enter into this Agreement to
amend and restate the Original Pledge Agreement in order to affirm and provide
that the shares transferred to Pledgor remain subject to a pledge in favor of
Lender in accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, and intending to be legally bound thereby, the
parties hereto hereby agree as follows:
1. Defined Terms. When used herein, the following terms shall have the
following meanings:
"Affiliate" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control
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with such first Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
"Collateral" shall mean the property and interests in property
described in Sections 2 and 4 hereof.
"Corporation" shall mean Greenhost, Inc., a Delaware corporation.
"Dividends" shall mean any cash dividends or distributions, any and all
stock or liquidating dividends, other distributions in property, return of
capital or other distributions made by the Corporation on or in respect of the
Pledged Securities, whether declared from the net profits or excess cash flow of
the Corporation or resulting from a subdivision, combination or reclassification
of the outstanding capital stock of the Corporation or received in exchange for
the Pledged Securities or of any part thereof as a result of any merger or
consolidation to which the Corporation may be a party or otherwise.
"Event of Default" shall mean any of the events specified in Section 5
hereof.
"Loan Agreement" means the Loan and Contribution Agreement, dated as of
May 18, 1994 between Greenhost, Inc., as Borrower, and Birchwood Power Partners,
L.P., as Lender, as the same may be amended, modified or supplemented from time
to time.
"Loan Documents" means the Notes, the Loan Agreement, the New Loan
Agreement and any collateral documents thereto.
"Margin Stock" shall have the meaning given such term in Regulation U
of the Board of Governors of the Federal Reserve System, 12 C.F.R. Section 221.
"New Loan Agreement" means the Term Loan and Working Capital Agreement,
dated as of November 19, 1996 between Greenhost, Inc., as Borrower, and
Birchwood Power Partners, L.P., as Lender, as the same may be amended, modified
or supplemented from time to time.
"Notes" means (i) the promissory note executed by Corporation in the
form of Exhibit A to the Loan Agreement, payable to the order of Lender, in the
amount of twenty million seventy nine thousand dollars ($20,079,000), (ii) the
Working Capital Note executed by Corporation in the form of Exhibit A to the New
Loan Agreement, payable to the order of Lender, in the amount of three million
dollars ($3,000,000) and (iii) the Term Note executed by Corporation in the form
of Exhibit B to the New Loan Agreement payable to the order of Lender, in the
amount of two million five hundred thousand dollars ($2,500,000).
"Obligations" means the unpaid principal of and interest on (including
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Corporation, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Notes and all other obligations
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and liabilities of the Corporation to the Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Notes, New
Loan Agreement, the Loan Agreement or this Agreement and any other document
made, delivered or given in connection therewith or herewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of counsel
to the Lender) or otherwise.
"Person" means any individual, partnership, corporation, business
trust, firm, joint stock company, trust, unincorporated association, joint
venture, business association, syndicate, government, governmental organization,
or other entity of whatever nature.
"Pledged Securities" shall mean all of the issued and outstanding
shares of stock of the Corporation held beneficially or of record by the
Pledgor.
"Project Control Account" shall have the meaning given to such term in
the Security Deposit Agreement.
"Project Loan Agreement": that certain Loan and Reimbursement
Agreement, dated as of May 18, 1994, between (i) Birchwood Power Partners, L.P.,
as Borrower, (ii) Credit Suisse, Banque Paribas, Barclays Bank PLC and Union
Bank of California, as Co-Agents, (iii) Credit Suisse and Credit Suisse, New
York Branch, as Issuing Bank, (iv) Credit Suisse, as Administrative Agent, and
(v) certain banks and institutions as set forth therein, as the same may be
amended, modified or supplemented from time to time.
"Secured Obligations" shall have the meaning given to such term in the
Security Deposit Agreement.
"Securities Laws" shall mean, collectively, the Securities Act of 1933,
as amended; the Securities Exchange Act of 1934, as amended; any similar statute
or statutes hereafter enacted analogous in purpose or effect; any state Blue Sky
or similar statute analogous in purpose or effect; and any and all rules or
regulations promulgated under any of the foregoing.
"Security Agent": Credit Suisse, in its capacity as security agent for
the Secured Parties under the Security Deposit Agreement, or any successor
security agent appointed pursuant to Section 2.6 of the Security Deposit
Agreement.
"Security Deposit Agreement" shall mean that certain Security Deposit
and Intercreditor Agreement among the Lender, Credit Suisse, as security agent,
and certain banks and institutions as set forth therein, dated as of May 18,
1994, as the same may be amended, modified or supplemented from time to time.
"Stock Option" shall have the meaning set forth in the preamble hereof.
2. Pledge. To induce Lender to enter into the New Loan Agreement, and
in consideration thereof and of any loans, advances or financial accommodations
heretofore or
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hereafter granted by Lender to or for the account of the Corporation, whether
pursuant to the New Loan Agreement or otherwise, all of which will inure to the
direct and material benefit of Pledgor, Pledgor hereby pledges, conveys,
hypothecates, mortgages, assigns, sets over, delivers and grants to Lender as
security for the payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of all Obligations of the Corporation, a
first and prior perfected lien on and security interest in all of the issued and
outstanding stock of the Corporation held beneficially or of record by Pledgor,
whether now owned or existing or hereafter acquired or arising, including,
without limitation, when acquired, all of the Pledged Securities, together with
all proceeds thereof and all cash, additional securities and other property at
any time and from time to time receivable or otherwise distributed in respect of
or in exchange for any and all of the foregoing (the "Collateral").
TO HAVE AND TO HOLD the Collateral, together with all rights, title,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto Lender, its successors and assigns forever, subject, however, to the terms,
covenants and conditions hereinafter set forth.
3. Representations, Warranties and Covenants. Pledgor hereby
represents, warrants and covenants to and with Lender as follows:
(a) Validity and Binding Effect. This Agreement constitutes a legal,
valid and binding obligation of the Pledgor, enforceable in accordance with its
terms, and upon delivery to the Lender of the stock certificates evidencing the
Pledged Securities, the security interest created pursuant to this Agreement
will constitute a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms against all creditors of
the Pledgor and any Persons purporting to purchase any Collateral from the
Pledgor, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(b) No Legal Bar; No Liens. The execution, delivery and performance of
this Agreement will not violate any provision of any requirement of law or
contractual obligation of the Pledgor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of the Pledgor
pursuant to any requirement of law or contractual obligation of the Pledgor,
except the security interests created by this Agreement.
(c) No Consents Required. No consent or authorization of, filing with,
or other act by or in respect of, any arbitrator or governmental authority and
no consent of any other Person (including, without limitation, any creditor of
the Pledgor), is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
(d) No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Pledgor, threatened by or against the Pledgor or against any of
its properties or revenues with respect to this Agreement or any of the
transactions contemplated hereby.
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(e) Title. Upon exercise of the Stock Option by Pledgor and acquisition
of the fifty percent (50%) of the shares of the Corporation pursuant thereto,
Pledgor will be the legal and equitable owner of, and will have the complete and
unconditional authority to pledge, the Pledged Securities and the other
Collateral and will hold the same free and clear of all liens, charges,
encumbrances and security interests, except those in favor of Lender, and will
defend its title thereto against the claims of all persons whomsoever;
(f) Percentage Ownership. The Pledged Securities included in the
Collateral constitute fifty percent (50%) of the issued and outstanding shares
of common stock of the Corporation, are validly issued, fully paid and
nonassessable; there are no existing options, warrants or commitments of any
kind or nature or any outstanding securities or other instruments convertible
into shares of any class of stock of the Corporation; and no stock of the
Corporation is held in the treasury of the Corporation;
(g) No Violation of Securities Laws. Pledgor's execution and delivery
of this Agreement and the pledge of the Collateral hereunder do not, directly or
indirectly, violate or result in a violation of any Securities Law;
(h) Delivery of Certificates. Concurrently with the execution of this
Agreement, Pledgor shall deliver to Lender, or as the Lender may direct, all
certificates evidencing the Pledged Securities, accompanied by undated stock
powers executed in blank, and by such other instruments or documents as Lender
or its counsel may reasonably request;
(i) No New Stock. Pledgor will not, subsequent to the date of this
Agreement, cause or, to the extent it is able to do so, permit the Corporation
to issue (by means of a dividend or otherwise) any stock or securities
convertible into stock, unless and except upon first having obtained the prior
written consent of Lender;
(j) After-Acquired Collateral. Promptly, and in any event within ten
(10) days, after Pledgor acquires any additional stock in the Corporation or
receives or is issued any stock or other securities or property in respect of
any of the Collateral, whether or not for value paid for it, Pledgor shall (i)
deliver such stock or other securities or property (including, but not limited
to, any and all certificates evidencing any such stock or securities) to Lender,
together with stock powers or other appropriate instruments of transfer,
executed in blank, all to be held subject to the terms of this Agreement; (ii)
execute and deliver such pledge agreements, security agreements, financing
statements or other instruments, documents or agreements as may be necessary or
appropriate to confirm, evidence or perfect the security interests granted
hereby;
(k) Taxes. Pledgor will pay all taxes, assessments and charges levied,
assessed or imposed upon the Collateral before the same become delinquent or
become liens upon any of the Collateral;
(l) Margin Stock. None of the stock included in the Collateral is, as
of the date of this Agreement, Margin Stock and Pledgor shall, promptly after
learning thereof, notify
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Lender of any Collateral which is or becomes Margin Stock and execute and
deliver in favor of Lender any and all instruments, documents and agreements
necessary to cause the pledge of such Margin Stock to comply with all applicable
laws, rules and regulations;
(m) Additional Assurances. (i) Pledgor agrees to perform, at any time
and from time to time, all acts and do all things which Lender may request, now
or hereafter, to evidence, preserve, perfect or protect the creation, attachment
or perfection of the security interests herein granted to Lender;
(ii) The Pledgor will not (A) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Collateral other than in a transaction pursuant to which the net proceeds after
payment of the Obligations are deposited into the Project Control Account and,
subject to Section 5.4 of the New Loan Agreement, which does not violate the
terms or conditions of any "Project Contract" (as defined in the New Loan
Agreement), the Project Loan Agreement or the Loan Agreement, (B) create, incur
or permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Collateral, or any interest therein, except for the
security interest created by this Agreement, or (C) enter into any agreement or
undertaking restricting the right or ability of the Pledgor or the Lender to
sell, assign or transfer any of the Collateral;
(n) No Amendments. Without the prior written consent of Lender, Pledgor
will not approve or consent to any changes to the Articles or Certificate of
Incorporation or By-Laws of the Corporation which would in any way impair or
diminish the rights of Pledgor or Lender thereunder;
(o) Right to Perform. In the event that Pledgor fails or refuses to
perform any of its obligations set forth herein, Lender shall have the right,
without obligation, to do all things it deems necessary or advisable to
discharge the same, and any sums paid by Lender, or the cost thereof, including
without limitation, attorneys' fees, shall constitute secured Obligations and
bear interest until paid; and
(p) No Obligation. Pledgor acknowledges and agrees that nothing
contained herein shall obligate Lender or impose a duty upon Lender to assume
any duties or obligations of Pledgor with respect to any of the Collateral.
4. Collateral Assignment of Dividends.
(a) Irrespective of whether there exists an Event of Default hereunder,
Pledgor agrees that so long as any of the Notes are outstanding, any and all
Dividends paid by the Corporation with respect to the Pledged Securities are
hereby irrevocably assigned as collateral security by Pledgor to Credit Suisse,
as security agent under the Security Deposit Agreement and shall be delivered
to, Credit Suisse, as security agent under the Security Deposit Agreement for
deposit into the Project Control Account, to be applied and distributed in
accordance with the terms of the Security Deposit Agreement. Pledgor recognizes
and agrees that such assignment will provide collateral security for the payment
and performance of the obligations of Lender secured by the Security Deposit
Agreement (including, without
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limitation, all "Secured Obligations" referred to therein), and Pledgor confirms
that it is familiar with and has reviewed the terms and conditions of the
Security Deposit Agreement and related Project Loan Agreement. Until the Notes
are paid in full, Pledgor hereby irrevocably authorizes and directs the
Corporation to pay all Dividends with respect to the Pledged Securities into the
Project Control Account and confirms and agrees that Pledgee shall be entitled
to assign its rights under this Agreement, including this Section 4, to the
Security Agent under the terms of the Security Deposit Agreement.
(b) At such time as all of the Notes have been paid in full, any and
all Dividends thereafter declared shall no longer be subject to the provisions
of Section 4(a) above, and the assignment of Dividends and direction of payment
thereof to the Project Control Agreement provided for therein shall be of no
further force or effect.
5. Holding Collateral; Exchanges. Lender may hold any of the
Collateral, endorsed or assigned in blank, and may deliver any of the Collateral
to the issuer thereof for the purpose of making denominational exchanges or
registrations or transfers or for such other purpose in furtherance of this
Agreement as Lender may deem desirable.
6. Voting Rights. Pledgor shall retain all voting rights with respect
to the Pledged Securities and other Collateral until such time as an Event of
Default shall have occurred; provided, however, that no vote shall be cast or
corporate right exercised or other action taken which, in the Lender's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Loan Agreement, the New
Loan Agreement, this Agreement or any other Loan Document. If an Event of
Default shall occur and be continuing and the Lender shall give notice of its
intent to exercise such rights to the Pledgor, all shares of the Pledged
Securities shall be registered in the name of the Lender or its nominee, and the
Lender or its nominee may thereafter exercise (i) all voting, corporate and
other rights pertaining to such shares of the Pledged Securities at any meeting
of shareholders of the Corporation or otherwise), and (ii) any and all rights of
conversion, exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Securities as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the Corporation, or upon the exercise by the Pledgor or the Lender
of any right, privilege or option pertaining to such shares of the Pledged
Securities, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Securities with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Lender may determine), all without liability except to account for property
actually received by it, but the Lender shall have no duty to the Pledgor to
exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.
7. SEC Approval. Pledgor shall not exercise the Option until the date
the Securities and Exchange Commission shall have issued an order in SEC Docket
70-8935 authorizing SEI Birchwood to acquire the stock of fifty percent (50%) of
the Corporation
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under the Public Utility Holding Company Act of 1935 and such order shall have
become final.
8. Default. Each of the following shall constitute an "Event of
Default" hereunder:
(a) Default Under the New Loan Agreement. If there shall occur any
"Event of Default," as defined in Article 7 of the New Loan Agreement.
(b) Liens or Encumbrances. If any of the Collateral shall be attached
or levied upon or seized in any legal proceedings, or held by virtue of any Lien
or distress;
(c) Misrepresentation. If Pledgor or any Affiliate of Pledgor makes any
misrepresentation to Lender in connection with this Agreement or any transaction
relating thereto; or
(d) Covenants. If Pledgor shall default in the observance or
performance of any covenant or agreement contained in this Agreement.
9. Remedies. Upon and after an Event of Default, Lender shall have the
following rights and remedies:
(a) Secured Creditor. All of the rights and remedies of a secured party
under the Uniform Commercial Code of the State where such rights and remedies
are asserted, or under other applicable law, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights and remedies contained in this
Agreement.
(b) Right of Sale. Lender may, without demand and without
advertisement, notice or legal process of any kind (except as may be required by
law), all of which Pledgor waives, at any time or times (i) apply any Dividends
or other property received by Lender pursuant to Section 4 hereof to the
Obligations and the Secured Obligations and (ii) sell the remaining Collateral,
or any part thereof, at public or private sale or at any broker's board or
office of the Lender or on any securities exchange, for cash, upon credit or for
future delivery as Lender shall deem appropriate. Lender shall be authorized at
any such sale to restrict the prospective bidders or purchasers to Persons who
will represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or resale
thereof, and upon consummation of any such sale Lender shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of Pledgor, and Pledgor
hereby waives (to the extent permitted by law) all rights of redemption, stay
and/or appraisal which Pledgor now has or may have at any time in the future
under any rule of law or statute now existing or hereafter enacted. The Lender
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
the Pledgor, which right or equity is hereby waived or released. The Lender
shall apply any proceeds from time to time held by it and the
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net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Lender hereunder, including, without limitation, reasonable attorneys fees and
disbursements of counsel to the Lender, first to the payment in whole or in part
of the Obligations and secondly to the Secured Obligations, and only after such
application and after the payment by the Lender of any other amount required by
any provision of law, including, without limitation, Section 9-504(l)(c) of the
Uniform Commercial Code, need the Lender account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Lender or any Lender
arising out of the exercise by them of any rights hereunder. The Pledgor waives
and agrees not to assert any rights or privileges which it may acquire under
Section 9-112 of the Uniform Commercial Code.
(c) Notice. In addition thereto, Pledgor further agrees that in the
event that notice is necessary under applicable law, written notice mailed to
Pledgor in the manner specified in Section 12(o) ten (10) days prior to the date
of the disposition of the Collateral subject to the security interest created
herein at any such public sale or sale at any broker's board or on any such
securities exchange, or prior to the date after which private sale or any other
disposition of said Collateral will be made, shall constitute commercially
reasonable and fair notice.
(d) Securities Laws. In view of the position of Pledgor in relation to
the securities now or hereafter included in the Collateral, or because of other
present or future circumstances, a question may arise under the Securities Laws
with respect to any disposition of the Collateral permitted hereunder. Pledgor
understands that compliance with the Securities Laws may very strictly limit the
course of Lender's conduct if Lender attempts to dispose of all or any part of
the Collateral and may also limit the extent to which or the manner in which any
subsequent transferee of any Collateral may dispose of the same. Pledgor clearly
understands and agrees that Lender shall be entitled to place all or any part of
the Collateral for private placement by an investment banking firm, that any
such investment banking firm may purchase all or any part of the Collateral for
its own account, and that Lender shall be entitled to place all or any part of
the Collateral privately with a purchaser or purchasers, notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which Lender sells.
It is the intention of the parties hereto that the security
interests and liens of Lender shall in all relevant respects be subject to and
governed by said statutes, rules and regulations to the extent required by law
and that nothing in this Agreement shall be construed to diminish the control
exercised by Pledgor except in accordance with the provisions of any such
applicable statutory requirements and rules and regulations. Pledgor will, and
will cause the Corporation to, cooperate in filing all applications and in
taking all other actions (and in providing Lender with all information
appropriate to facilitate all other actions) which are necessary or appropriate
to comply, and which are not inconsistent with said statutes, rules and
regulations so as to permit enforcement of the rights of Lender hereunder.
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10. Power of Attorney; Proxy.
(a) Appointment of Lender as Pledgor's Lawful Attorney. Upon and
after an Event of Default, Pledgor irrevocably designates, makes, constitutes
and appoints Lender (and all persons designated by Lender) as its true and
lawful attorney (and agent-in-fact) and Lender, or Lender's agent, may, without
notice to Pledgor, and at such time or times thereafter as Lender or said agent,
in its discretion, may determine, in the name of Pledgor or Lender, (i)
transfer the Collateral on the books of the Corporation, with full power of
substitution in the premises; (ii) endorse the name of Pledgor upon any
checks, notes, acceptance, money orders, certificates, drafts or other forms of
payment of security that come into Lender's possession; and (iii) do all
acts and things necessary, in Lender's discretion, to fulfill the obligations of
Pledgor under this Agreement.
(b) Irrevocable Proxy. Upon occurrence of any Event of Default
hereunder, Lender, or its nominee, without notice or demand of any kind to
Pledgor, shall have the sole and exclusive right to exercise all voting powers
pertaining to any and all of the Collateral (and to give written consents in
lieu of voting thereon) and may exercise such power in such manner as Lender, in
its sole discretion, shall determine. THIS PROXY IS COUPLED WITH AN INTEREST AND
IS IRREVOCABLE. The exercise by Lender of any of its rights and remedies under
this Section shall not be deemed a disposition of Collateral under Article 9 of
the Uniform Commercial Code nor an acceptance by Lender of any of the Collateral
in satisfaction of any of the Obligations.
11. Termination. Pledgor acknowledges and agrees that this Agreement
shall continue in full force and effect unless and until all Obligations have
been fully paid and performed, after which Lender, at Pledgor's expense, shall
return all Collateral then in its possession and control to Pledgor.
12. Limitation on Liability. Neither the Pledgor, nor any shareholder,
officer, employee, director, agent or Affiliate (other than the Borrower) of the
Pledgor shall be personally liable for payment of the Obligations or Secured
Obligations by reason of this Pledge Agreement or for any other liabilities of
the Borrower under any Loan Document. Any judicial proceedings that the Security
Agent or any Secured Party may institute against the Pledgor shall be limited to
seeking (i) the preservation, enforcement, foreclosure or other sale or
disposition of the Collateral or of the pledge and security interest in the
Collateral granted by this Pledge Agreement and (ii) the performance by the
Pledgor of its covenants and obligations hereunder. The provisions of this
Section 9 shall not be deemed to waive any cause of action the Security Agent or
any Secured Party may have against any Person for fraud or willful misconduct by
such Person.
13. Miscellaneous.
(a) No Subrogation. Notwithstanding anything to the contrary in this
Agreement, the Pledgor hereby irrevocably waives all rights which may have
arisen in connection with this Agreement to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code, including Section 509 thereof,
under common law or otherwise) of the Lender against
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the Corporation or against any collateral security or guarantee or right of
offset held by the Lender for the payment of the Obligations or the Secured
Obligations. The Pledgor hereby further irrevocably waives all contractual,
common law, statutory or other rights of reimbursement, contribution,
exoneration or indemnity (or any similar right) from or against the Corporation
or any other Person which may have arisen in connection with this Agreement. So
long as the Obligations remain outstanding, if any amount shall be paid by or on
behalf of the Corporation to the Pledgor on account of any of the rights waived
in this paragraph, such amount shall be held by the Pledgor in trust, segregated
from other funds of such Pledgor, and shall, forthwith upon receipt by such
Pledgor, be turned over to the Lender in the exact form received by the Pledgor
(duly indorsed by the Pledgor to the Lender, if required), to be applied against
the Obligations whether matured or unmatured, in such order as the Lender may
determine. The provisions of this paragraph shall survive the term of this
Agreement and the payment in full of the Obligations and the Secured Obligations
and the termination of the Commitments referred to in Section 3.1 of the Loan
Agreement.
(b) Amendments, etc. with Respect to the Obligations. The Pledgor shall
remain obligated hereunder, and the Collateral shall remain subject to the
security interests granted hereby, notwithstanding that, without any reservation
of rights against the Pledgor, and without notice to or further assent by the
Pledgor, any demand for payment of any of the Obligations or the Secured
Obligations made by the Lender may be rescinded by the Lender, and any of the
Obligations or the Secured Obligations continued, and the Obligations or the
Secured Obligations, or the liability of the Corporation or any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Lender, and the Notes, the Loan Agreement, the
New Loan Agreement, the other Loan Documents, the Secured Obligations, the
Project Loan Agreement and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or part, as the Lender may deem advisable from time to time, and any
guarantee, right of offset or other collateral security at any time held by the
Lender for the payment of the Obligations or the Secured Obligations may be
sold, exchanged, waived, surrendered or released. The Lender shall not have any
obligation to protect, secure, perfect or insure any other Lien at any time held
by it as security for the Obligations or the Secured Obligations or any property
subject thereto. The Pledgor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations or the Secured Obligations and
notice of or proof of reliance by the Lender upon this Agreement; the
Obligations, and any of them, shall be deemed conclusively to have been created,
contracted or incurred in reliance upon this Agreement; and all dealings between
the Corporation and the Pledgor, on the one hand, and the Lender, on the other,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Agreement. The Pledgor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Corporation or the Pledgor with respect to the Obligations and the Secured
Obligations. When pursuing its rights and remedies hereunder against the
Pledgor, the Lender may, but shall be under no obligation to, pursue such rights
and remedies as it may have against the Corporation or any other Person or
against any collateral security or guarantee for the Obligations or the Secured
Obligations or any right of offset with respect thereto, and any failure by the
Lender to pursue
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such other rights or remedies or to collect any payments from the Corporation or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Corporation or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve the Pledgor of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Lender against the
Pledgor or the Collateral.
(c) Duty of Lender. The Lender's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as the Lender deals with similar securities and property
for its own account, except that the Lender shall have no obligation to invest
cash proceeds in its possession and may hold the same as demand deposits.
Neither the Lender nor any of its 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 or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof.
(d) Waiver. Each and every right granted to Lender under this
Agreement, or allowed it by law or in equity, shall be cumulative and may be
exercised singly or concurrently from time to time, and are not exclusive of any
other rights or remedies provided by law. No failure on the part of Lender to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. No waiver by Lender of any Event of Default shall constitute a waiver of
any subsequent Event of Default.
(e) No Assignment by Pledgor. No assignment hereof shall be made by
Pledgor without the prior written consent of Lender. Lender may assign, or sell
participations in, its right, title and interest in the Collateral at any time
hereafter without notice to or consent of Pledgor or the Corporation.
(f) Successors and Assigns; Survival. This Agreement shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
parties hereto. All representations, warranties and covenants made herein shall
survive the execution and delivery of this Agreement.
(g) Severability. If any provision of this Agreement or the application
thereof to any party thereto or circumstances shall be invalid or unenforceable
to any extent, the remainder of this Agreement and the application of such
provisions to any other party thereto or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
(h) Amendment. Neither this Agreement nor any provision hereof may be
amended, waived, discharged, modified or terminated except pursuant to a written
instrument signed by Pledgor and Lender.
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(i) Interpretation. No provision of this Agreement shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
(j) Lender Not a Joint Venturer. This Agreement shall not in any
respect be interpreted, deemed or construed as making Lender a partner or joint
venturer with Pledgor or as creating any similar relationship or entity, and
Pledgor agrees that it will not make any assertion, contention, claim or
counterclaim to the contrary in any action, suit or other legal proceeding
involving Lender and Pledgor.
(k) Attorney-in-Fact. Pledgor hereby designates and empowers Lender
irrevocably as its attorney-in-fact, at Pledgor's cost and expense, to do in the
name of Pledgor, any and all actions which Lender may deem necessary or
advisable to perform any of the obligations of Pledgor hereunder upon the
failure, refusal or inability of Pledgor to do so and Pledgor hereby indemnifies
and agrees to hold Lender harmless from any costs, damages, expenses or
liabilities arising against or incurred by Lender in connection therewith.
(l) Loan Document. This Agreement shall be construed as a Loan Document
and shall be subject to all of the benefits, terms and conditions of the Loan
Agreement and the New Loan Agreement with respect thereto.
(m) Conflict of Terms. Except as otherwise provided in this Agreement
by specific reference to the applicable provision of the Loan Agreement or the
New Loan Agreement, if any provision contained in this Agreement is in conflict
with, or inconsistent with, any provision in the Loan Agreement or the New Loan
Agreement, the provision contained in the Loan Agreement or the New Loan
Agreement, as the case may be, shall govern and control.
(n) Waivers by Pledgor. Except as otherwise provided for in this
Agreement, Pledgor hereby waives (i) presentment, demand and protest and notice
of presentment, protest, default, non-payment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Lender on which Pledgor may in any way be liable and hereby
ratifies and confirms whatever Lender may do in this regard; (ii) any bond or
security which might be required by any court prior to allowing Lender to
exercise any of Lender's remedies; and (iii) the benefit of all valuation,
appraisement and exemption laws.
(o) All notices, demands, requests, consents, and approvals desired,
necessary, required or permitted to be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been properly given if
personally delivered or sent, postage prepaid, by first class registered or
certified United States mail, return receipt requested, addressed to each party
hereto at the following address:
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If to Lender: Birchwood Power Partners, L.P.
c/o SEI Birchwood, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy No: (000) 000-0000
Confirmation No.: (000) 000-0000
and: Birchwood Power Partners, L.P.
c/o Cogentrix/Birchwood Two, L.P.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-00000
Attn: Xxxxxxxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
If to Pledgor: Cogentrix/Birchwood Two, L.P.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
or at such other address in the United States as Lender or Pledgor may from time
to time designate by like notice. Any such notice, demand, request or other
communication shall be considered given or delivered, as the case may be, on the
date of personal delivery or on the date of deposit in the United States mail as
provided above. Rejection or other refusal to accept or inability to deliver
because of changed address of which no notice was given shall be deemed to be
receipt of the notice, demand, request or other communication.
(p) Section Titles. The section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
(q) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
shall together constitute one and the same agreement. Any signature page to this
Agreement may be evidenced by a telecopy or other facsimile of any original
signature page, and any signature page of any counterpart hereof may be appended
to any other counterpart hereof to form a completely executed counterpart
hereof.
(r) GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA. EACH
PARTY HERETO HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
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LITIGATION RELATING TO TRANSACTIONS UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
(s) Submission To Jurisdiction; Waivers. Pledgor hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of any federal or state court sitting in King
Xxxxxx County, Virginia;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; and
(iii) agrees that nothing herein shall affect the right
to effect service of process in any manner permitted by law or shall limit the
right to xxx in any other jurisdiction.
(t) Integration. This Agreement contains the entire agreement and
understanding between the parties hereto concerning the pledge of the Pledged
Securities and expressly supersedes all prior understandings or agreements,
including, without limitation, the Original Pledge Agreement with respect to the
Pledged It is the intention of the parties hereto that the Pledged Securities
will at all times that the Obligations remain outstanding remain subject to the
lien and security interest created by the Original Stock Assignment, as the same
may be amended, modified or supplemented from time to time.
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IN WITNESS WHEREOF, this Agreement has been duly executed under seal as
of the day and year specified above.
"PLEDGOR"
COGENTRIX/BIRCHWOOD TWO, L.P.
By: Cogentrix of Birchwood I, Inc.,
a general partner
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
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"LENDER"
BIRCHWOOD POWER PARTNERS, L.P.
By: SEI Birchwood, Inc.,
a general partner
By: /s/ Xxxxx Marcelone Xxxxxx
---------------------------
Title: Vice President
---------------------------
By: Cogentrix/Birchwood Two, L.P.
a general partner
By: Cogentrix of Birchwood I, Inc.,
a general partner
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
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