Exhibit 4.7
EXECUTION COPY
--------------------------------------------------------------------------------
SECURITY AGREEMENT
by and between
AES Ironwood, L.L.C.
and
IBJ Whitehall Bank & Trust Company, as Collateral Agent
Dated as of June 1, 1999
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.................................................2
Section 1.2 References to Assignment....................................8
ARTICLE II
ASSIGNMENT, SECURITY INTEREST; POWER OF ATTORNEY
Section 2.1 Pledge and Security Interest................................8
Section 2.2 Power of Attorney...........................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company..............10
ARTICLE IV
COVENANTS AND SPECIAL PROVISIONS
Section 4.1 Maintenance of Records.....................................11
Section 4.2 Payment under Contracts and Receivables....................11
Section 4.3 Instruments................................................11
Section 4.4 Consents...................................................11
ARTICLE V
COLLATERAL
Section 5.1 Protection of the Collateral Agent's Interests.............12
Section 5.2 Further Action.............................................12
Section 5.3 Financing Statements.......................................12
i
ARTICLE VI
REMEDIES UPON OCCURRENCE OF TRIGGER EVENT
Section 6.1 Remedies...................................................12
Section 6.2 Disposition of the Collateral..............................13
Section 6.3 Waiver of Claims...........................................14
Section 6.4 Application of Proceeds....................................15
Section 6.5 Remedies Cumulative........................................15
Section 6.6 Discontinuance of Proceedings..............................15
ARTICLE VII
INDEMNITY
Section 7.1 Indemnity..................................................16
Section 7.2 Indemnity Obligations Secured by Collateral................17
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices....................................................17
Section 8.2 Amendment..................................................18
Section 8.3 No Waiver..................................................18
Section 8.4 Obligations of the Company.................................18
Section 8.5 Successors and Assigns.....................................19
Section 8.6 Governing Law..............................................19
Section 8.7 Continuing Liability of the Company........................20
Section 8.8 No Third Party Beneficiaries...............................20
Section 8.9 Continuing Assignment and Security Interest................20
Section 8.10 Headings...................................................20
Section 8.11 Severability...............................................20
Section 8.12 Counterparts...............................................20
Section 8.13 Non-Recourse...............................................21
ii
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of June 1, 1999, by and between AES
IRONWOOD, L.L.C., a limited liability company organized and validly existing
under the laws of the State of Delaware (the "Company") and IBJ WHITEHALL BANK &
TRUST COMPANY, a bank duly organized and existing under the laws of the State of
New York ("IBJ"), as collateral agent (together with its successors in such
capacity, the "Collateral Agent") for the benefit of and on behalf of the Senior
Parties defined below.
A. The Company is providing for the development, construction,
ownership and operation of a nominal 705 MW (net) gas-fired combined cycle
electric generating facility and related equipment and facilities (the
"Project") to be located in South Lebanon Township, Lebanon County,
Pennsylvania.
B. The Company intends to finance the development and construction of
the Project, in part, through the issuance, from time to time, of certain
securities (the "Securities") pursuant to a Trust Indenture, dated as of June 1,
1999 between the Company and IBJ, as trustee (the "Trustee") and depositary
bank, as it may be amended or supplemented from time to time (the "Indenture").
C. In connection with the commencement of commercial operation of the
Project, the Company is required to deliver the Debt Service Reserve Letter of
Credit (the "DSR Letter of Credit"). Dresdner Bank AG, New York Branch
("Dresdner"), as issuing bank, has agreed to issue the DSR Letter of Credit
subject to the terms and conditions contained in the DSR LOC Reimbursement
Agreement, dated as of June 1, 1999 (as amended, supplemented or modified and in
effect from time to time, the "DSR LOC Reimbursement Agreement"), among each of
the banks and financial institutions parties thereto and Dresdner, as issuing
bank and as agent for such banks (including the issuing bank) and financial
institutions (in such capacity as agent, and together with its successors and
assigns, the "DSR LOC Provider").
D. In connection with the Company's obligations under Section 19.2 of
the Power Purchase Agreement, the Company may deliver the Construction Period
Letter of Credit (the "CP LOC"). Dresdner, as issuing bank, has agreed to issue
the CP LOC subject to the terms and conditions contained in the CP LOC
Reimbursement Agreement, dated as of June 1, 1999 (as amended, supplemented or
modified and in effect from time to time, the "CP LOC Reimbursement Agreement"),
among each of the banks (including the issuing bank) and financial institutions
parties thereto and Dresdner, as issuing bank and as agent for such banks and
financial institutions (in such capacity as agent, and together with its
successors and assigns, the "CP LOC Provider").
E. The Company may finance certain working capital requirements of the
Project by entering into a working capital agreement with a financial
institution for the provision of credit to the Company (such financial
institution, the "Working Capital Provider").
F. All obligations of the Company under the Securities, the DSR LOC
Reimbursement Agreement and related evidences of indebtedness, the CP LOC
Reimbursement Agreement and related evidences of indebtedness, the Collateral
Agency Agreement (defined
below), and any working capital agreement (collectively, the "Financing
Documents") to the Trustee, the DSR LOC Provider, the CP LOC Provider, the
Collateral Agent, any Working Capital Provider, each successor to any such
person and any person providing Senior Debt to the Company who becomes a party
to the Collateral Agency Agreement in accordance with its terms (collectively,
the "Senior Parties") will be secured by a certain Mortgage, this Agreement, the
Indenture, the Pledge Agreement and the Assignment of Leases and Income, each
between the Company and the Collateral Agent (collectively, the "Security
Documents").
G. The Collateral Agent, the Company, the DSR LOC Provider, the CP LOC
Provider and the Trustee entered into the Collateral Agency and Intercreditor
Agreement (as amended, supplemented or modified and in effect from time to time,
the "Collateral Agency Agreement") to set forth their mutual understanding with
respect to (a) the exercise of certain rights, remedies and options by the
respective parties thereto under the above described documents, (b) the priority
of their respective security interests created by the Security Documents, (c)
the application of project revenues and certain other monies and items and (d)
the appointment of the Collateral Agent as collateral agent.
H. It is a condition precedent to the obligations of the Senior Parties
under the Financing Documents that the Company duly execute and deliver this
Agreement to further secure the Company's obligations under the Financing
Documents and the other Obligations (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company hereby agrees with the Collateral Agent as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Except as otherwise provided herein, for the
purposes of this Agreement, capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Indenture. Unless
otherwise stated, any reference herein to any document shall mean such document
and all schedules, exhibits, and attachments thereto as amended, supplemented or
modified in accordance with the terms of this Agreement or the Collateral Agency
Agreement and in effect from time to time and any reference herein to any Person
shall include its successors and permitted assigns. References to any law or
regulations shall be deemed references to such law or regulation or any
successor law or regulation as the same may have been or may be amended or
supplemented from time to time. In addition, wherever used in this Agreement and
unless the context requires otherwise, the following terms shall have the
following meanings:
"Account" and "Accounts" shall mean, individually and collectively, the
Construction Account, Revenue Account, Operating and Maintenance Account,
Restoration Account, Major Maintenance Reserve Account, Fuel Conversion Volume
Rebate Account, Subordinated Debt Account, Distribution Account, DSR LOC
Reimbursement Fund, CP LOC Reimbursement Fund, Bond Payment Account, Bond
Proceeds Account, Construction Interest Account and Debt
2
Service Reserve Account, as each such account (and each such subaccount thereof)
is defined under the Collateral Agency Agreement, and each other account
established, created or modified from time to time pursuant to the provisions of
the Indenture and the Collateral Agency Agreement.
"Agreement" means this Security Agreement as originally executed and as
the same may from time to time be amended, modified or supplemented.
"Assigned Agreements" means the following contracts:
(a) i. the Power Purchase Agreement;
ii. the Xxxxxxxx Guaranty;
iii. the EPC Contract;
iv. the Siemens Guaranty;
v. the Operations Agreement;
vi. the Maintenance Services Agreement;
vii. the Interconnection Agreement;
viii. the Services Agreement;
ix. the Effluent Supply Agreement;
x. the Pennsy Agreements;
xi. the Equity Subscription Agreement;
(b) any contract with a third party assigned to the Company;
(c) the Consents; and
(d) all Contracts (and Contract Rights), other than the
Contracts (and Contract Rights) specifically itemized in the foregoing
list of Assigned Agreements,
as each such Assigned Agreement identified in (a)-(d) above may be
amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement or the Collateral Agency
Agreement, including, without limitation, to the extent of the
Company's rights in such Assigned Agreement, (i) all rights of the
Company to receive moneys due and to become due under or pursuant to
the Assigned Agreements, (ii) all rights of the Company to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect
to any Assigned Agreement, (iii) all claims of the Company for damages
arising out of default under any Assigned Agreement, (iv) the right of
the Company to terminate, amend, supplement or modify any Assigned
Agreement, to give any waiver, consent or notice thereunder, to make
any election
3
thereunder, to exercise and perform any option or purchase right
thereunder, to perform thereunder, and to compel performance and
otherwise exercise all remedies thereunder and (v) to the extent not
included in the foregoing, all proceeds of any and all of the
foregoing.
"Bank Account" means (i) a deposit, custody, or other account (whether,
in any case, time or demand or interest or non-interest bearing and whether
maintained at a branch or office located within or without the United States) of
the Company or in which the Company has any interest, (ii) all amounts from time
to time credited to such account, (iii) all cash, securities, instruments,
documents, Chattel Paper, general intangibles, accounts and other property from
time to time credited to such account or representing investments and
reinvestments of amounts from time to time credited to such account and (iv) all
interest, principal payments, dividends and other distributions payable on or
with respect to, and all proceeds of, (A) all property so credited or
representing such investments and reinvestments and (B) such account.
"Chattel Paper" shall have the meaning assigned to that term under the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Collateral" means, in each case whether now or hereafter existing or
now owned or hereafter acquired by the Company whether or not the same is now
contemplated, anticipated or foreseeable, xxxxxx or inchoate, tangible or
intangible, all of the rights, titles and interests of the Company in and to the
following wherever the same may be located except to the extent that the
assignment of any of the following is prohibited under Applicable Law or that
under such law the assignment of such Collateral would create a significant risk
of termination or loss of such Collateral or the Company's rights thereto or
therein:,
(a) the Assigned Agreements;
(b) to the extent permitted by Applicable Law and all
Governmental Approvals;
(c) all Receivables;
(d) proceeds of all insurance contracts;
(e) all (i) Accounts, subject to the qualifications below,
(ii) other accounts (including all Bank Accounts), (iii) any funds held
in any escrow account established or created by the Contracts and (iv)
Eminent Domain Proceeds;
(f) proceeds of any Permitted Investments;
(g) all Information;
(h) any guarantees, and, to the extent evidencing or
pertaining to other items of Collateral, all documents of title,
policies and certificates of insurance, surety bonds, securities,
Chattel Paper, other Documents or Instruments, including but not
limited to all insurance with respect to the Project, business
interruption, workers compensation and comprehensive automobile,
bodily, injury, and property damage;
4
(i) all General Intangibles including but not limited to the
name and goodwill of the Company;
(j) all claims (including the right to xxx or otherwise
recover on such claims) with respect to (i) the items referred to in
the definition of Collateral, (ii) warranties relating to any
Collateral, (iii) any breach of any Contract constituting Collateral or
any Assigned Agreement and (iv) rights against third parties for (A)
loss, destruction, requisition, confiscation, condemnation, seizure,
forfeiture or infringement of, or damage to, any Collateral, (B)
payments due or to become due under leases, rentals and hires of any
Collateral and (C) proceeds payable under or unearned premiums with
respect to policies of insurance relating to any Collateral;
(k) all Inventory;
(l) all Machinery and Equipment;
(m) all books, manuals, records, charts, ledgercards, files,
correspondence, drawings, schematics, computer programs, tapes, disks
and related data processing software that at any time evidence or
contain information relating to any Collateral or are otherwise
necessary or helpful in the collection thereof, realization thereupon
or operation or maintenance of the Facility;
(n) all goods and other property, whether or not delivered (i)
the sale, lease or furnishing of which gives or purports to give rise
to any Receivables or (ii) securing any Receivables, including all of
the Company's rights as an unpaid vendor or lienor, including stoppage
in transit, replevin and reclamation with respect to such goods and
other properties;
(o) all documents of title, policies and certificate of
insurance, securities, chattel paper and other documents or instruments
evidencing or pertaining to any Collateral;
(p) any fixture and improvement to the Site including, without
limitation, the structures, buildings and chattels constituting the
Facility, and otherwise contemplated by the Contracts, except to the
extent a valid and perfected first priority security interest in such
assets has been created by the Mortgage;
(q) any other assets of the Company except to the extent a
valid and perfected first priority security interest in such assets has
been created by the Mortgage;
(r) all products and proceeds (including cash) of all of the
foregoing Collateral;
provided, however, that, notwithstanding anything to the contrary herein or
hereto, (i) the Bond Payment Account, the Bond Proceeds Account, the
Construction Interest Account and the Debt Service Reserve Account (and each
Subaccount thereof) shall constitute Collateral absolutely and exclusively for
the
5
benefit of the holders of Securities (and the Trustee on their behalf), (ii) the
DSR LOC Reimbursement Fund shall constitute Collateral absolutely and
exclusively for the benefit of the DSR LOC Provider and (iii) the CP LOC
Reimbursement Fund shall constitute Collateral absolutely and exclusively for
the benefit of the CP LOC Provider.
"Consents" shall mean each of the following Consents:
(i) Consent to Assignment, dated as of June 1, 1999, by and
between the Power Purchaser and the Collateral Agent, and consented to
by the Company;
(ii) Consent to Assignment, dated as of June 1, 1999, by and
between the PPA Guarantor and the Collateral Agent, and consented to by
the Company;
(iii) Consent to Assignment, dated as of June 1, 1999, by and
between the Contractor and the Collateral Agent, and consented to by
the Company;
(iv) Consent to Assignment, dated as of June 1, 1999, by and
between Siemens Corporation and the Collateral Agent, and consented to
by the Company;
(v) Consent to Assignment, dated as of June 1, 1999, by and
between AES Prescott, L.L.C. and the Collateral Agent, and consented to
by the Company;
(vi) Consent to Assignment, dated as of June 1, 1999, by and
between Metropolitan Edison Company d/b/a GPU Energy and the Collateral
Agent, and consented to by the Company;
(vii) Consent to Assignment, dated as of June 1, 1999, by and
between City of Lebanon Authority and the Collateral Agent, and
consented to by the Company; and
(viii) Consent to Assignment, dated as of June 1, 1999, by and
between Pennsy Supply, Inc. and the Collateral Agent, and consented to
by the Company
"Contract Rights" means all rights of the Company (including, without
limitation, all rights to payment) under each Contract, except to the extent
that a valid and perfected first priority security interest over such rights is
created by and contained within the Mortgage.
"Contracts" means all contracts or agreements to which the Company is
or becomes a party or under which the Company is a beneficiary or has rights
thereto.
"Documents" shall have the meaning assigned to that term under the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and shall include, but not be limited to, any bills of lading, dock
warrants, dock receipts or warehouse receipts.
"General Intangibles" means general intangibles as defined in the
Uniform Commercial Code in effect on the date hereof in the State of New York,
and shall include, but not be limited to, all trademarks, trademark
applications, trademark and service xxxx registrations (including, without
limitation, all renewals of trademark and servicemark registrations, and all
rights corresponding thereto throughout the world, but excluding any such
registration that would be rendered invalid, abandoned, void or unenforceable by
reason of its being included as part of the Collateral), tradenames, business
names, fictitious business names, company names, business
6
identifiers, prints, labels, trade styles and service marks (whether or not
registered), trade dress, including logos or designs, copyrights, patents,
patent applications (including, without limitation, the inventions and
improvements described and claimed therein together with the reissues, division,
continuations, renewals, extensions and continuations in-part thereof), goodwill
of the Company's business symbolized by any of the foregoing, all inventions,
processes, production methods, proprietary information, know-how, trade secrets,
license rights, license agreements, permits, franchises and any rights to tax
refunds.
"Indemnitee" means the Trustee, any co-Trustee or Successor Trustee,
the DSR LOC Provider, the DSR LOC Issuing Bank, the DSR LOC Banks, the CP LOC
Provider, the CP LOC Issuing Bank, the CP LOC Banks, the holders of Securities,
the Collateral Agent and their respective officers, directors, employees,
representatives and agents.
"Information" means all information, data, plans, blueprints, designs,
recorded knowledge, surveys, architectural, structural, mechanical and
engineering plans and specifications, studies, data, reports and drawings, test
reports, manuals, material standards, processing standards, performance
standards, catalogs, computer and automatic machinery software and programs, all
accounting information and all media in which or on which any information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or
data, prepared by or on behalf of, or acquired by and on behalf of, the Company
specifically for the acquisition, occupancy, use, operation, maintenance, repair
or restoration of the Facility or any part thereof.
"Instrument" shall have the meaning assigned that term under the
Uniform Commercial Code in effect on the date hereof in the State of New York,
and shall include, but not be limited to, any drafts, checks, certificates of
deposit, notes, shares, participation or transferable warrants.
"Inventory" means (i) all inventory, including (A) all goods held for
sale or lease or to be furnished under the Assigned Agreements, (B) all work in
process and (C) all raw materials, other by-products and other materials, and
supplies of every nature and description used or that might be used or consumed
in the Company's business and (ii) all documents evidencing and general
intangibles relating to any of the foregoing.
"Machinery and Equipment" means (i) all machinery, equipment, spare
parts, tools, furniture, furnishings and instruments of conveyance, including
vessels and automotive vehicles, (ii) all other goods except goods that
constitute General Intangibles and (iii) all replacements and substitutions for,
and all accessions to, the foregoing, in each case wherever located and whether
or not the same constitutes a "fixture".
"Obligations" means, collectively, all indebtedness, obligations and
Financing Liabilities for which the Company is liable to the Senior Parties
under or pursuant to any and all Financing Documents whether direct or indirect,
primary or secondary, fixed or contingent, now or hereafter arising out of or in
relation to any such agreements.
"Receivables" means any and all rights to the payment of money or other
forms of consideration of any kind at any time now or hereafter owing or to be
owing to the Company,
7
including, without limitation, all of the Company's rights to payment for
capacity and energy, fuel conversion services and ancillary services under the
Power Purchase Agreement, and any other goods or products sold or services
performed, whether now in existence or arising from time to time hereafter,
including, without limitation, accounts receivable, letters of credit and the
right of the Company to receive payment thereunder, insurance proceeds, notes,
drafts, Instruments, Documents, acceptances, the right to receive payment from
AES and AES Ironwood pursuant to, and subject to the conditions of, the Equity
Subscription Agreement, and all other debts, obligations, and liabilities in
whatever form, now or hereafter owing to the Company from any other Person, and
whether evidenced by an account, note, contract, security agreement, Chattel
Paper or other evidence of indebtedness or security, together with (i) all
security pledged, assigned, hypothecated or granted to or held by the Company to
secure the foregoing, (ii) all of the Company's right, title and interest in and
to any goods of the Company, the sale of which gave rise thereto, (iii) all
guarantees (if any), endorsements and indemnifications on, or of, any of the
foregoing, (iv) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection therewith, (v) all
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers and (vi) all other writings related in any
way to the foregoing.
"Uniform Commercial Code" means the Uniform Commercial Code in effect
in the State of New York.
Section 1.2 References to Assignment. Any reference in this Agreement
to an assignment shall include, as the case may require, a sale, conveyance,
setting over or transfer whether conditional or unconditional and whether direct
or indirect.
ARTICLE II
ASSIGNMENT, SECURITY INTEREST; POWER OF ATTORNEY
Section 2.1 Pledge and Security Interest. (a) As security for the
prompt and complete payment and performance and observance when due of the
Obligations, the Company hereby grants, pledges, assigns and transfers to the
Collateral Agent for the benefit of the Senior Parties a continuing lien on and
a continuing security interest in, to and under the Collateral, which shall at
all times be (i) a valid and, upon the making of all necessary filings or the
taking of possession of all requisite items of Collateral, to the extent
perfectible in accordance with applicable law, perfected lien and security
interest, (ii) a first priority lien and security interest (subject only to
Permitted Liens) and (iii) enforceable against the Company, and (upon the making
of all necessary filings or the taking of possession of all requisite items of
Collateral to the extent perfectible under applicable law) all third parties in
accordance with the terms hereof as security for the Obligations, and the
Collateral shall not at any time be subject to any lien (other than Permitted
Liens) that is prior to, on a parity with or junior to the lien and security
interest created hereunder.
(b) The Company agrees and confirms that the execution and delivery of
the Consents to which the Company is a party will constitute, (i) notice to each
consenting party of
8
the assignment by the Company of all of the Company's right, title and interest
in and to the Collateral that is the subject of such Consent and its proceeds
and (ii) if such party is required to make payments to the Collateral Agent of
amounts due under the relevant Assigned Agreement, unconditional and (subject to
provisions regarding release in this Agreement and the Collateral Agency
Agreement) irrevocable instructions from the Company to each such party, that
all payments due or to become due and all amounts payable to the Company
thereunder shall, until the Obligations are paid in full, be made directly to
the Revenue Account or as otherwise directed by the Collateral Agent.
Section 2.2 Power of Attorney. To the fullest extent permitted by
applicable law and until the Obligations are paid in full, the Company hereby
irrevocably appoints the Collateral Agent as its attorney-in-fact with right of
substitution, to act, upon the occurrence and during the continuance of a
Trigger Event and provided the Collateral Agent has received the Senior Party
Certificates from the Required Senior Parties pursuant to Section 2.3 of the
Collateral Agency Agreement (except with respect to a bankruptcy event in
respect of the Company in which case no Senior Party Certificates are required),
as the Company's attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company or otherwise, from time to time in
the Collateral Agent's discretion, to take any action and to execute any and all
documents and instruments that the Collateral Agent may deem necessary or
advisable to accomplish the purpose of this Agreement.
To the fullest extent permitted by applicable law, the Company hereby
confirms and ratifies any and all actions and things performed or done by the
Collateral Agent, or any of its representatives hereunder, as attorney-in-fact
for the Company in each case pursuant to the powers granted hereunder and
exercised in accordance with this Agreement and in a manner not inconsistent
with the Collateral Agency Agreement. The powers conferred on the Collateral
Agent hereunder, and the exercise by the Collateral Agent of such powers, shall
not impose any duty on the Collateral Agent to exercise any such powers.
This special power of attorney shall be deemed to be coupled with an
interest and cannot be revoked by the Company until the Obligations have been
fully paid, performed and indefeasibly discharged. Upon the occurrence and
during the continuance of a Trigger Event, and provided the Collateral Agent has
received the Senior Party Certificates from the Required Senior Parties pursuant
to Section 2.3 of the Collateral Agency Agreement (except with respect to a
bankruptcy event in respect of the Company in which case no Senior Party
Certificates are required), the Company shall abstain from exercising any rights
under any of the Contracts or the Security Documents which shall be inconsistent
with the exercise of the rights and functions herein granted to the Collateral
Agent as the attorney-in-fact, including abstaining from collecting, claiming
and receiving any moneys under the Assigned Agreements; provided, that nothing
herein shall prevent the Company from undertaking the Company's operations in
the ordinary course of business in accordance with the Security Documents and
the Contracts.
9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. The Company
represents and warrants, which representations and warranties shall survive
execution and delivery of this Agreement and the repayment and full performance
of the Obligations, as follows:
(a) All filings, registrations and recordings necessary to
create, preserve, protect and (in the case of the security interest in the
Collateral, to the extent perfectible in accordance with applicable law) perfect
the security interest granted by the Company to the Collateral Agent hereby in
respect of the Collateral have been accomplished and such security interest
constitutes a valid and enforceable and (to the extent perfectible in accordance
with applicable law) perfected security interest in the Collateral superior and
prior to the rights of all other Persons and subject to no other Liens or
assignments, other than Permitted Liens. The Company hereby represents that it
has not, prior to the date of this Agreement, assigned or granted any other
security interest in the Collateral, respectively, to any other Person.
(b) The Company is the owner of all Receivables and all of its
rights, title and interest in and to all Assigned Agreements, free from any Lien
or other right, title or interest of any Person, other than the Liens created
under this Agreement and other than Permitted Liens. The Company is not in
default under or in breach of, and no Authorized Officer of the Company knows of
any default by any other party under or breach by any other party of, any of the
Contracts that in either case could reasonably be expected to result in a
Material Adverse Effect.
(c) As to Collateral (other than Assigned Agreements and
Receivables), the Company is or will become the sole owner of all such
Collateral, free from any Lien or other right, title or interest of any Person
(other than the Liens created under this Agreement and other than Permitted
Liens).
(d) Except for the Consents and for approvals to transfer
Governmental Approvals, no other consent of any other Person and no Governmental
Approval is required as at the date of the execution and delivery of this
Agreement (i) for the grant by the Company of its respective pledge, assignment,
and security interest with respect to the Collateral or for the execution,
delivery or performance of this Agreement by the Company, (ii) for the pledge,
assignment and security interest granted by the Company with respect to the
Collateral or (iii) for the exercise by the Collateral Agent of the rights,
remedies and powers provided for in this Agreement or the Collateral Agency
Agreement or the remedies with respect to the Collateral pursuant to this
Agreement or the Collateral Agency Agreement, assuming in the case of this
clause (iii) that the Collateral Agent has all requisite power and authority to
conduct its business generally.
(e) Except for financing statements filed or to be filed in
respect of the security interests granted by the Company under or as permitted
by this Agreement or the Collateral Agency Agreement, there is no financing
statement (or similar instrument) filed under the law of any jurisdiction
covering or purporting to cover any interest of any kind in the Collateral.
10
ARTICLE IV
COVENANTS AND SPECIAL PROVISIONS
Section 4.1 Maintenance of Records. The Company will keep and maintain,
at its own cost and expense, complete (in all material respects) records of the
Collateral (including the Information, any records to be prepared and maintained
under the Assigned Agreements, the Receivables and the Contracts), including,
but not limited to, the originals of all documentation, records of all payments
received, all credits granted thereon and all other dealings therewith, and the
Company will make the same available to the Collateral Agent, at the Company's
own cost and expense, at all reasonable times upon demand. The Company shall, at
the Company's own cost and expense, deliver copies (or, if a Trigger Event has
occurred and is continuing, originals) of all Collateral (including the Assigned
Agreements, the Information, the Receivables and the Contracts), including
documentation and relevant books and records, to the Collateral Agent or to its
representatives at any time upon its demand.
Section 4.2 Payment under Contracts and Receivables. If the Company
receives any payment or moneys directly from any party to the Assigned
Agreements, or from any account debtor or other obligor under any Receivable
constituting a part of the Collateral, the Company shall receive such payments
in a constructive trust for the benefit of the Collateral Agent and shall
immediately transmit and deliver such payment or moneys to the Collateral Agent
in the same form as received, together with any necessary endorsement, for
application as set forth in the Collateral Agency Agreement.
Section 4.3 Documents and Instruments. If the Company owns or acquires
any Document or Instrument, the Company shall forthwith, but in any event no
later than 10 days after such acquisition, as the case may be, promptly deliver
such Document or Instrument to the Collateral Agent, appropriately endorsed to
the order of the Collateral Agent as further security under this Agreement.
Section 4.4 Consents. The Company shall use its commercially reasonable
efforts to obtain, at the expense of the Company, after the date of the
execution and delivery of this Agreement, such other consents and Government
Approvals as may be necessary after the date of this Agreement, (i) for the
grant by the Company of its pledge, assignment, and security interest granted
hereby or for the execution, delivery or performance of this Agreement by the
Company, (ii) for the perfection (to the extent perfectible in accordance with
applicable law) or maintenance of the pledge, assignment, and security interest
created hereby with respect to the Collateral (including the first priority
nature of such pledge, assignment and security interest with respect to the
Collateral) or (iii) for the exercise by the Collateral Agent of the rights,
remedies and powers provided for in this Agreement or the Collateral Agency
Agreement or the remedies with respect to the Collateral pursuant to this
Agreement or the Collateral Agency Agreement.
11
ARTICLE V
COLLATERAL
Section 5.1 Protection of the Collateral Agent's Interests. The Company
will not do anything to impair the rights of the Collateral Agent or the Senior
Parties in the Collateral, provided that, nothing herein shall prevent the
Company, prior to the exercise by the Collateral Agent of any such rights, from
undertaking its operations in the ordinary course of business as contemplated by
the Project Contracts, Security Documents and the Financing Documents. The
Company retains all liability and responsibility in connection with the
Collateral, and agrees that its liability with respect to the Obligations shall
in no way be affected or diminished by reason of the fact that such Collateral
may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable
to the Company; provided, that this sentence shall not limit the remedies that
the Company might otherwise have under the Collateral Agency Agreement in the
event the Collateral Agent, or its agents or designees, fails to perform its
obligations under the Collateral Agency Agreement in accordance with the
standards set forth therein.
Section 5.2 Further Action. The Company will, at the Company's own
expense, make, execute, endorse, acknowledge, file and deliver to the Collateral
Agent such lists, descriptions and designations of the Collateral, warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the interests hereby granted,
which the Collateral Agent reasonably requests to perfect, preserve or protect
its ownership and security interests in the Collateral.
Section 5.3 Financing Statements. The Company agrees to sign and file
in the appropriate jurisdictions such financing statements and continuation
statements (or similar statements or instruments of registration under the law
of any applicable jurisdiction) as are necessary to establish and maintain the
security interests contemplated hereunder as, to the extent stated herein,
valid, enforceable, first priority security interests and the other rights and
security contemplated herein, all in accordance with the Uniform Commercial
Code, or its equivalent, as enacted in any relevant jurisdictions or any other
relevant law. The Company will pay any applicable filing fees and related
expenses in connection therewith. The Company authorizes the Collateral Agent to
file any such financing statements and any continuation statement or amendments
thereto naming the Company as debtor with respect to its interest in the
Collateral without the signature of the Company.
ARTICLE VI
REMEDIES UPON OCCURRENCE OF TRIGGER EVENT
Section 6.1 Remedies. If a Trigger Event under the Collateral Agency
Agreement shall have occurred and be continuing and, subject to the provisions
of the Collateral Agency Agreement (including without limitation Section 2.3
thereof) and any mandatory requirements of applicable law then in effect, the
Collateral Agent, in addition to any rights under applicable law
12
or the Collateral Agency Agreement, may exercise, without any further demand,
advertisement or notice (except as provided herein or otherwise required under
applicable law or the Collateral Agency Agreement) all rights as a secured party
under the Uniform Commercial Code, or its equivalent, in any relevant
jurisdiction and may, acting pursuant to the Collateral Agency Agreement to the
fullest extent permitted by law (and the Company hereby waives all restrictions
on exercise that lawfully may be waived):
(a) personally, or by agents or attorneys, immediately retake
possession, physical or otherwise, of the Collateral or any part
thereof, from the Company or any other Person who then has possession
of any part thereof with or without notice or process of law and, for
that purpose, may enter upon the Company's premises where any of the
Collateral is located and remove the same, and use any and all
services, supplies and other facilities and materials of in connection
with such removal;
(b) instruct the obligor under any agreement or instrument
evidencing or constituting Collateral to make any payment required by
the terms of such agreement or instrument directly to the Collateral
Agent;
(c) apply all amounts, securities, investments and other
property credited to the Accounts in accordance with the Collateral
Agency Agreement;
(d) sell, assign or otherwise liquidate, or direct the Company
to sell, assign or otherwise liquidate, any or all of the Collateral,
and take possession of the proceeds of any such sale or liquidation to
the fullest extent permitted by Applicable Law;
(e) take possession of the Collateral or any part thereof, by
directing the Company in writing to deliver the same to the Collateral
Agent at any place designated by the Collateral Agent, in which event
the Company shall, at its own expense, forthwith cause the same to be
moved and delivered to the place so designated by the Collateral Agent,
it being understood that the obligation of the Company to deliver its
interest in the Collateral is of the essence of this Agreement and that
the Collateral Agent shall be entitled to a decree requiring specific
performance by the Company, of such obligation; and
(f) enforce any or all of the rights and remedies of the
Company under the Assigned Agreements.
Section 6.2 Disposition of the Collateral. (a) Any Collateral
repossessed by the Collateral Agent pursuant to and in accordance with Section
6.1, and any other Collateral whether or not so repossessed by the Collateral
Agent, may be sold, assigned, leased or otherwise disposed of, in general, in
such manner, at such time, at such place and on such terms as the Collateral
Agent may fix in the notice of sale described below. Any of the Collateral may
be sold, leased or otherwise disposed of in any commercially reasonable manner.
Any such disposition shall be by public or private sale upon not less than 10
days' written notice (which the Company agrees is reasonable notification) to
the Company specifying the time at which such disposition is to be made and the
intended sale or offering price or other consideration therefor, and shall be
subject, for the 10 days after the giving of such notice, to the right of the
13
Company to acquire the Collateral at a price or for such other consideration at
least equal to the intended sale or offering price or other consideration so
specified. To the extent permitted by applicable law, the Collateral Agent on
behalf of the Senior Parties may bid for and become the purchaser of the
Collateral or any item thereof, offered for sale in accordance with this Section
6.2. If, under mandatory requirements of applicable law, the Collateral Agent
shall be required to make disposition of the Collateral within a period of time
which does not permit the giving of notice to the Company as specified, then the
Collateral Agent shall only be required to give the Company such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of applicable law. In lieu of exercising the power of sale
hereunder, the Collateral Agent may proceed by a suit at law or in equity to
foreclose the pledge and security interest under this Agreement and sell the
Collateral or any portion thereof under a judgment or decree of a court or
courts of competent jurisdiction.
(b) As used herein, the term "proceeds" includes all cash,
securities and other property received in respect of the Collateral, including
any cash, securities or other property received under any reorganization,
liquidation or adjustment of debt of the Company, and any portion of the
Collateral or the products, profits or proceeds thereof which are distributed in
kind.
(c) The Collateral Agent shall incur no liability as a result
of the manner of sale of the Collateral or any part thereof, at any private sale
conducted in a commercially reasonable manner and in good faith. The Company
hereby waives, to the full extent permitted by applicable law, any claims
against the Collateral Agent arising by reason of the fact that the price at
which the Collateral or any part thereof may have been sold at a private sale
was less than the price which might have been obtained at a public sale, or was
less than the aggregate amount of the Obligations, even if the Collateral Agent
accepts the first offer received which the Collateral Agent in good xxxxx xxxxx
to be commercially reasonable under the circumstances and does not offer the
Collateral to more than one offeree.
Section 6.3 Waiver of Claims. (a) Except as otherwise provided in this
Agreement, the Company hereby waives, to the extent permitted by applicable law,
notice and judicial hearing in connection with the Collateral Agent's taking
possession or the Collateral Agent's disposition of any of the Collateral,
including, without limitation, any and all prior notice and hearing for any
prejudgment remedy or remedies and any such right which the Company would
otherwise have under the constitution or any statute of the United States,
state, or any political subdivision of any such jurisdiction, and the Company
hereby further waives, to the extent permitted by applicable law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the gross negligence or
willful misconduct of the Collateral Agent or any Person acting on its
behalf or instruction;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisal, valuation, stay,
extension or moratorium in force under any applicable law in order to
prevent or delay the
14
enforcement of this Agreement or the absolute sale of the Collateral or
any portion thereof, and the Company, for itself and all who may claim
under it, insofar as it or they now or hereafter lawfully may, hereby
waives the benefit of all such laws.
(b) Any sale of, or the grant of options to purchase, or any
other realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Company therein,
and shall be a perpetual bar both at law and in equity against the Company and
against any Persons claiming or attempting to claim the Collateral so sold,
optioned or realized upon, or any part thereof, through the Company.
Section 6.4 Application of Proceeds. (a) The proceeds in cash of any
Collateral obtained pursuant to Section 6.1 or disposed of pursuant to Section
6.2 shall be applied in accordance with Section 4.1 of the Collateral Agency
Agreement.
(b) The Company shall remain liable to the extent of any
deficiency between (i) the amount of the proceeds in cash of the Collateral
received and recovered by the Collateral Agent and (ii) the aggregate amount of
the Obligations.
Section 6.5 Remedies Cumulative. (a) No failure or delay on the part of
the Collateral Agent or any Senior Party in exercising any right, power or
privilege hereunder or under the Collateral Agency Agreement and no course of
dealing between the Company, on the one hand, and the Collateral Agent or any
Senior Party, on the other hand, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege under this
Agreement, the Mortgage or the Collateral Agency Agreement preclude any other
exercise thereof or the exercise of any other right, power or privilege
hereunder. To the fullest extent permitted by law, the rights, powers and
remedies herein, in the Mortgage or in the Collateral Agency Agreement are
cumulative and not exclusive of any rights, powers or remedies which the
Collateral Agent or any Senior Party would otherwise have. No notice to or
demand on the Company shall entitle the Company to any further notice or demand
in similar circumstances or constitute a waiver of the rights of the Collateral
Agent or any Senior Party to any other action in any circumstances without
notice or demand.
(b) The Collateral Agent is not required to take any
discretionary action under this Agreement unless it receives written direction
from the Required Senior Parties. The Collateral Agent is entitled to receive
indemnification to its satisfaction before taking any action as directed by the
Required Senior Parties.
Section 6.6 Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then the Company, the Collateral
Agent and each Senior Party shall be restored to their former positions and
rights under this Agreement with respect to the Collateral subject to the
security interests created under this Agreement, and all rights, remedies and
powers of the Collateral Agent shall continue as if no such proceeding had been
instituted.
15
ARTICLE VII
INDEMNITY
Section 7.1 Indemnity. (a) The Company shall indemnify, reimburse and
hold each Indemnitee harmless from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements of whatsoever kind or nature, including
reasonable attorneys' fees and expenses in connection therewith (herein referred
to as "expenses"), which may be imposed on, asserted against or incurred by any
of the Indemnitees in any way arising out of their entering into, or the
enforcement by the Collateral Agent (by itself or through one of more other
Indemnitees) of its rights under, this Agreement or the documents executed in
connection herewith, or in any other way connected with the performance or the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of or the preservation of any rights, remedies
and powers of the Collateral Agent (or such other Indemnitees) hereunder or
thereunder, or in any way relating to or arising out of the manufacture,
ownership, ordering, purchase, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or for
property damage, or negligence of any form) or any contract claim arising from
the transactions contemplated hereby or by the Collateral Agency Agreement;
provided, that no Indemnitee shall be indemnified for expenses to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. The
Company agrees that upon notice by any Indemnitee of any assertion that could
give rise to an expense, the Company shall assume full responsibility for the
defense thereof, and the Company may assume such responsibility regardless of
any notice by the Collateral Agent or an Indemnitee if the Company shall
unconditionally assume such responsibility pursuant to an assumption agreement
reasonably satisfactory in form and substance to the Collateral Agent (unless
such Indemnitee shall decline to permit such assumption); provided, that the
Collateral Agent shall retain the right, at the expense of the Company, to
monitor any such assertion by engaging a single firm of counsel of its choice,
and provided, further, that the Company shall obtain the consent of the
Collateral Agent, which consent shall not be unreasonably withheld or delayed,
prior to the settlement of any such assertion. Each Indemnitee agrees to notify
the Company promptly of any such assertion of which such Indemnitee has
knowledge; provided, that its failure to do so or delay in doing so shall not
impair its right to indemnification in accordance with this paragraph, except to
the extent such failure or delay shall materially impair the ability of the
Company to defend such claim.
(b) Without limiting the application of Section 7.l(a), to the
extent there are insufficient revenues in the Revenue Account for such purpose,
the Company agrees, promptly on demand, to pay or reimburse the Collateral Agent
for any fees, costs and expenses of whatever kind or nature paid or incurred in
connection with the exercise of any of the rights, remedies or powers granted
under this Agreement, including without limitation the creation, preservation or
protection of the Collateral Agent's rights to the Collateral Agent's Liens on,
and security interest in, the Collateral, including, without limitation, all
fees and taxes in connection
16
with the recording or filing of instruments and documents in public offices,
payment or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees, costs,
and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral. From the date such
amounts shall have been paid by the Collateral Agent or its agents,
representatives, successors and assigns until actually paid by the Company.
(c) Without limiting the application of Section 7.1(a) or (b),
the Company agrees to pay, indemnify and hold each Indemnitee harmless from and
against any expenses which such Indemnitee may suffer, expend or incur in
consequence of or growing out of any misrepresentation by the Company in this
Agreement or in any statement or writing contemplated by or made or delivered
pursuant to or in connection with this Agreement.
(d) If and to the extent that the obligations of the Company
under this Section 7.1 are unenforceable for any reason, the Company hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
Section 7.2 Indemnity Obligations Secured by Collateral. (a) Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Company contained in this Article VII shall
continue in full force and effect notwithstanding the full repayment of the
Obligations or the prior termination of this Agreement, the Collateral Agency
Agreement or any Project Contracts.
(b) The Collateral Agent shall, as soon as practicable after
any claim for which it will seek indemnification hereunder is made against it,
(i) provide the Company with reasonable detail thereof, (ii) apprise the Company
of the Collateral Agent's proposals to define or to settle such claims and any
development in relation thereto and (iii) to the extent reasonably available,
provide the Company with an estimate as to the likely costs (legal or otherwise)
which the Collateral Agent may have to incur in relation to such claim.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. All notices required to be given under this
Agreement shall be in writing and shall be delivered personally (by hand
delivery or by overnight courier) or by facsimile transmission (with receipt of
transmission confirmation) or mailed (certified mail, postage prepaid) to the
Parties at the following addresses or facsimile numbers and shall be effective
upon receipt (when sent by personal delivery or by certified mail) and upon
receipt of transmission conformation (when sent by facsimile):
17
If to Collateral Agent, to:
IBJ Whitehall Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets Trust Services, 10th Floor
Facsimile: 000-000-0000
If to the Company, to:
AES Ironwood, L.L.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention:
Facsimile: 000-000-0000
Either Party from time to time may change its address, facsimile number or other
information for the purposes of notices to such Party by giving notice
specifying such change to the other Party.
Section 8.2 Amendment. This Agreement may be changed, waived,
discharged, or terminated only by an instrument in writing and signed by the
Collateral Agent and the Company and any waiver shall be effective only in the
specific instance and for the specific purpose for which given.
Section 8.3 No Waiver. No failure on the part of the Collateral Agent
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 8.4 Obligations of the Company. Notwithstanding anything to the
contrary contained in this Agreement, the obligations of the Company specified
in this Agreement shall be absolute and unconditional (except to the extent
expressly provided otherwise) and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever (other than
termination as provided in Section 8.9), including, without limitation: (i) any
renewal, extension, amendment or modification of, or addition or supplement to
or deletion from, the Collateral Agency Agreement, any other Security Document,
any Financing Document, Project Contract or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (ii) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such instrument or agreement or this Agreement or any exercise or
non-exercise of any right, remedy, power or privilege under or in respect of
this Agreement, the Collateral Agency Agreement, any other Security Document,
any Financing Document or any Project Contract; (iii) any furnishing of any
additional security to the Collateral Agent or any acceptance thereof or any
sale, exchange, release, surrender or realization of or upon any security by the
Collateral Agent; or (iv) any invalidity, irregularity or unenforceability
18
of all or part of the Obligations or of any security therefor. In the event of
any inconsistency between this Agreement and the Collateral Agency Agreement,
the latter shall govern.
Section 8.5 Successors and Assigns. Any corporation or bank into which
the Collateral Agent may be merged or converted or with which it may be
consolidated, or any corporation or bank resulting from any merger, conversion
or consolidation to which the Collateral Agent shall be a party, or any
corporation or bank succeeding to all or substantially all of the corporate
trust business of the Collateral Agent, shall be the successor of the Collateral
Agent hereunder, provided such corporation or bank shall be otherwise qualified
and eligible under this Section 8.5, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties and shall
inure to the benefit of the Collateral Agent; provided, that the Company may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Collateral Agent (which consent shall be
subject to the terms of the Collateral Agency Agreement), and the Collateral
Agent may assign its rights only to a successor Collateral Agent under the
Collateral Agency Agreement or in connection with the exercise of its rights and
remedies under this Agreement. All agreements, statements, representations and
warranties made by the Company herein or in any certificate or other instrument
delivered by the Company or on its behalf under this Agreement shall be
considered to have been relied upon by the Senior Parties and the Collateral
Agent and shall survive the execution and delivery of this Agreement, the
Collateral Agency Agreement, any other Financing Document or any Project
Contract, regardless of any investigation made by the Collateral Agent or any
other Person.
Section 8.6 Governing Law. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this Security
Agreement and any action for enforcement of any judgment in respect thereof may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Security Agreement, the Company hereby accepts for itself and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and appellate courts from any appeal thereof. The Company
hereby irrevocably designates, appoints and empowers CT Corporation System, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any action or proceeding. If for any reason such
designee, appointee and agent shall cease to be available to act as such, the
Company, agrees to designate a new designee, appointee and agent in New York
City on the terms and for the purposes of this provision satisfactory to the
Collateral Agent. The Company irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, in
accordance with Section 8.1. The Company hereby irrevocably waives any objection
19
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Security Agreement brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of the Collateral
Agent to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Company in any other jurisdiction.
Section 8.7 Continuing Liability of the Company. Notwithstanding
anything to the contrary contained in this Agreement, the Company shall remain
liable to perform all of the obligations binding upon it with respect to the
Collateral to the same extent as if this Agreement had not been executed. The
exercise by the Collateral Agent of any of the rights hereunder shall not
release the Company from any of its duties or obligations in respect of any of
the Collateral except, to the extent that such Collateral is foreclosed upon
hereunder, in which event the Company shall be released only in respect of the
obligations under or in respect of such Collateral that arise after such
foreclosure.
Section 8.8 No Third-Party Beneficiaries. The agreements of the parties
hereto are solely for the benefit of the Company, the Collateral Agent, the
Indemnitees and the Senior Parties, and no other Person shall have any rights
hereunder.
Section 8.9 Continuing Assignment and Security Interest. This Agreement
shall create a continuing security interest in the Collateral and shall remain
in full force and effect until the discharge of the Collateral Agency Agreement
as provided in Section 7.11 thereof. At such time, the security interest granted
and Liens and the assignment made hereby shall terminate and all rights to the
Collateral shall revert to the Company. Upon any such termination, the
Collateral Agent shall, at the Company's expense, execute and deliver to the
Company such documents as the Company shall reasonably request to evidence such
termination.
Section 8.10 Headings. Headings used in this Agreement are for
convenience of reference only and do not constitute part of this Agreement for
any purpose.
Section 8.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent
in order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 8.12 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
20
Section 8.13 Limited-Recourse. In the event of no-performance by the
Company of its Obligations under this Agreement, or any part thereof, or for any
claim based thereon or otherwise in respect thereof or related thereto, no
recourse shall be had to (i) any assets or properties of any of the Members (or
any person that controls any Members within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) or (ii) any Affiliate of the
Company or any incorporators, officers, directors or employees thereof, and no
judgment relating to the obligations of the Company under this Agreement, the
Obligations, or any part thereof, or for any claim based thereon or otherwise in
respect thereof or related thereto, shall be obtainable by the Senior Parties or
the Collateral Agent against any Members or Affiliate of the Company or any
other incorporator, stockholder, officer, employee or director past, present or
future of the Company or any Affiliate of the Company; provided, however, that
nothing contained herein shall prevent the taking of any action permitted by law
against the Company or any of its Affiliates, or in any way affect or impair the
rights of the Collateral Agent or Senior Parties to take any action permitted by
law, in either case to realize upon the Collateral and, provided further, that
nothing herein shall be deemed to affect the obligations of any Affiliate of the
Company under any Transaction Document to which such Affiliate is a party.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
AES IRONWOOD, L.L.C.
By /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
IBJ WHITEHALL BANK & TRUST
COMPANY, as Collateral Agent
By /s/ Xxxxxx XxXxxxxxxx
--------------------------------
Name: Xxxxxx XxXxxxxxxx
Title: Assistant Vice President
IN PRESENCE OF:
/s/ Xxxxxxx Xxxxxx
-------------------------------
Witness:
/s/ Xxxxxxx Xxxxxx
-------------------------------
Witness:
CORPORATE ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 25th day of
June, 1999 by Xxxxxxxx X. Xxxxxx, who is Vice President of AES Ironwood, L.L.C.,
a Delaware limited liability company, on behalf of the company.
/s/ Xxxxxxxxx Xxx Dominus
---------------------------------------
Notary Public
XXXXXXXXX XXX DOMINUS
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires Oct. 13, 2000
My Commission Expires: October 13, 0000
XXXXXXXXX XXXXXXXXXXXXXX
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 25th day of
June, 1999 by Xxxxxx XxXxxxxxxx, who is Assistant Vice President of IBJ
Whitehall Bank & Trust Company, a New York banking corporation, on behalf of the
corporation.
/s/ Xxxxxxxxx Xxx Dominus
---------------------------------------
Notary Public
XXXXXXXXX XXX DOMINUS
Notary Public, State of New York
No. 00-0000000
Qualified in New York County
Commission Expires Oct. 13, 2000
My Commission Expires: October 13, 2000
