EXHIBIT 4.5
EXECUTION COPY
SECURITY AGREEMENT
Dated as of December 6, 1999
Between
PROJECT ORANGE FUNDING, L.P.,
a Delaware limited partnership,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Agent for the Secured Parties
TABLE OF CONTENTS
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Page
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Section 1. Definitions.......................................................................... 2
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Section 2. Assignment, Pledge and Grant of Security Interest.................................... 2
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Section 3. Events of Default.................................................................... 7
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Section 4. Remedies............................................................................. 7
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Section 5. Remedies Cumulative; Delay Not Waiver................................................ 9
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Section 6. Covenants and Representations........................................................ 10
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Section 7. Notices.............................................................................. 11
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Section 8. Further Assurances................................................................... 12
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Section 9. Place of Perfection; Records......................................................... 12
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Section 10. Covenants of Grantor................................................................. 13
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Section 11. Continuing Assignment and Security Interest; Transfer of Senior Secured Notes........ 13
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Section 12. Severability......................................................................... 13
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Section 13. Successors and Assigns............................................................... 13
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Section 14. Headings............................................................................. 14
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Section 15. Governing Law........................................................................ 14
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Section 16. References to Other Documents........................................................ 14
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Section 17. Agreement for Security Purposes...................................................... 14
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Section 18. Scope of Liability................................................................... 14
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Section 19. Regarding the Agent.................................................................. 14
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SECURITY AGREEMENT
This Security Agreement ("Agreement") dated as of December 6, 1999, is
entered into by and between the Project Orange Funding, L.P., a Delaware limited
partnership, (together with its successors, including Project Orange Associates,
L.P., a Delaware limited partnership, as the survivor of the merger of Project
Orange Funding L.P. with and into Project Orange Associates, L.P. concurrently
with the issuance and sale of the Senior Secured Notes referred to below, the
"Grantor") and U.S. Bank Trust National Association, ("Agent"), as Agent for the
benefit of the holders from time to time ( "Holders" and, together with the
Agent and the Trustee, the "Secured Parties") of the Senior Secured Notes issued
pursuant to the Financing Agreement described below.
PREFACE
Grantor intends to operate the Project (as defined in the Financing
Agreement described below) located in Syracuse, Onondaga County, New York.
Grantor, Project Orange Capital Corp., a Delaware corporation, ("Capital
Co." and together with Grantor, the "Issuers") and U.S. Bank Trust National
Association, as Trustee (the "Trustee") and as Agent, have entered into that
certain Indenture dated as of December 6, 1999 (the "Financing Agreement") for
the issuance by Grantor of $68 million principal amount of its 10.5% Senior
Secured Notes due 2007 (the "Series A Notes").
The Holders of the Series A Notes will have the registration rights set
forth in the Registration Rights Agreement dated as of December 6, 1999 between
the Issuers and Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation (the "Initial
Purchaser") pursuant to which the Issuers agree to file with the Securities and
Exchange Commission (i) a registration statement relating to 10.5% Senior
Secured Notes due 2007 (the "Series B Notes") to be offered in exchange for the
Series A Notes and (ii) a shelf registration statement pursuant to Rule 415
under the Securities Act of 1933 relating to the resale by certain Holders of
the Series A Notes. The Series A Notes and the Series B Notes are collectively
referred to herein as the "Senior Secured Notes".
As a condition precedent to the issuance of the Senior Secured Notes under
the Financing Agreement, the City of Syracuse Development Agency, a New York
public benefit corporation ("SIDA") shall have granted the assignment and
security interest contemplated by the Security Agreement (the "SIDA Security
Agreement") dated as of December 6, 1999 between SIDA and the Agent.
As a condition precedent to the issuance of the Senior Secured Notes under
the Financing Agreement, Grantor shall have granted the assignment and security
interest contemplated by this Agreement.
AGREEMENT
In consideration of the premises herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby agrees with the Agent as follows:
Section 1. Definitions. All capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Financing Agreement.
Section 2. Assignment, Pledge and Grant of Security Interest.
(a) To secure the timely payment and performance of the Obligations (as
that term is defined in this Section), Grantor does hereby assign, grant and
pledge to, and subject to a security interest in favor of, the Agent, on behalf
of and for the benefit of the Secured Parties, all the estate, right, title and
interest, if any (and subject to the last sentence of this Section 2(a)), of
Grantor in, to and under:
(i) the following agreements and documents, as amended from time to
time (individually, an "Assigned Agreement," collectively, the "Assigned
Agreements"):
(A) the Niagara Mohawk Agreements;
(B) the Canadian Hunter Agreements;
(C) the O&M Agreement;
(D) the Fuel Supply Agreements;
(E) the Agency Agreement;
(F) the PILOT Agreement;
(G) the Natural Gas Transportation Agreements;
(H) the Asset Manager Agreements;
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(I) the University Agreements;
(J) the Steam Plant Operating Agreement;
(K) the Host Community Agreement;
(L) the insurance policies required to be maintained by Grantor
or any other Person under the Financing Agreement, including, without
limitation, any such policies insuring against loss of revenues by
reason of interruption of the operation of the Project and all loss
proceeds and other amounts payable to Grantor thereunder, and all
eminent domain proceeds;
(M) any agreements providing for the investment of equity or
payment of liquidated damages with respect to the Project entered into
on or after the date hereof;
(N) all other agreements, including vendor warranties, running
to Grantor or assigned to Grantor, relating to transport of material,
equipment and other parts of the Project, including all Project
Documents;
(O) the Ground Lease, the Easement Agreements, the Master Lease
and any other lease or sublease agreements or easement agreements
relating to the Project or the Premises or any ancillary facilities,
to which Grantor may become a party;
(P) the Consents, the Drawing Agreement, the Boiler Guaranty,
each Additional Project Document, and any other agreements to which
Grantor may become a party relating to the operation of the Project or
any part thereof;
(Q) all amendments, supplements, substitutions and renewals to
any of the aforesaid agreements; and
(R) all Applicable Permits;
(ii) all revenues derived in any other manner by Grantor from its
interest in the Project and its operation of the Project;
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(iii) all other personal property and fixtures of Grantor, whether now
owned or existing or hereafter acquired or arising, or in which Grantor may
have an interest, and wheresoever located, whether or not of a type which
may be subject to a security interest under the Uniform Commercial Code
(the "UCC"), including without limitation all goods, money, instruments,
investment securities, accounts, contract rights, documents, deposit
accounts, chattel paper, general intangibles, equipment, inventory,
machinery, tools, turbine generators (including without limitation those
certain LM5000 STIG 80 gas turbine generator sets and incorporating two (2)
GE aircraft derivative gas turbine engines, serial numbers 474157 and
474158, and two (2) Brush Electric generators, serial numbers 611 73A-3G
and 611 73A-5G, and any replacements thereof), boilers (including without
limitation that certain three pressured level, natural circulation, finned
tube heat recovery steam generator with supplemental firing capability
fabricated by Deltek and any replacements thereof), engines, appliances,
mechanical and electrical systems, elevators, lighting, alarm systems, fire
control systems, furnishings, furniture, service equipment, building or
maintenance equipment, building or maintenance materials, pipes and
pipelines, supplies, goods and property covered by any warehouse receipts
or bills of lading or other such documents, spare parts, maps, plans,
specifications, architectural, engineering, construction or shop drawings,
manuals or similar documents, copyrights, trademarks and trade names, and
any replacements, renewals or substitutions for any of the foregoing or
additional tangible or intangible personal property hereafter acquired by
Grantor;
(iv) the Accounts (as defined in the Depositary Agreement), including
any sub-accounts within such accounts, and all other accounts and sub-
accounts established by the Collateral Agent pursuant to the Depositary
Agreement;
(v) All Permitted Investments and other investment property and the
proceeds thereof; and
(vi) the proceeds of all of the foregoing (all of the collateral
described in the foregoing clauses (i) through (v) together with the
proceeds described in this clause (vi) being herein collectively referred
to as the "Collateral"), including, without limitation, (A) all rights of
Grantor to receive moneys due and to become due under or pursuant to the
Collateral, (B) all rights of Grantor to receive return of any premiums for
or proceeds of any insurance, indemnity, warranty or guaranty with respect
to the Collateral, (C) all claims of Grantor for damages arising out of or
for breach of or default under the Assigned
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Agreements or any other Collateral, (D) all rights of Grantor to terminate,
amend, supplement, modify or waive performance under the Assigned
Agreements, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder and (E) to the extent not included in the
foregoing, all proceeds receivable or received when any and all of the
foregoing Collateral is sold, collected, exchanged or otherwise disposed
of, whether voluntarily or involuntarily.
Anything contained in this Agreement or any other Financing Documents to
the contrary notwithstanding, Grantor is not assigning, granting or pledging to,
nor subjecting to a security interest in favor of, the Agent or the Secured
Parties any of Grantor's estate, right, title, interest in, to or under (1) any
of the Unassigned Rights or any revenues derived therefrom, (2) without limiting
the generality of Section 6(j) hereof or any other obligation of Grantor under
the Financing Documents, any agreement purported to be assigned pursuant to
clause (N) of Section 2(a)(i) hereof or any Applicable Permit, in each case the
assignment of which constitutes a breach or violation of the terms or conditions
of such agreement or Permit, (3) any of the Excluded Accounts, (4) the Steam
Plant and any improvements, accessions or additions thereto or (5) insurance
proceeds relating to the Steam Plant or (6) any turbine or associated equipment
leased by Grantor from General Electric Company or its affiliates pursuant to
its lease engine support program and neither the Agent nor its successors and
assigns will acquire or claim any right, title or interest in or lien on such
turbine or associated equipment by reason of its being installed at the Project.
(b) In order to effectuate the foregoing, Grantor has heretofore delivered
or concurrently with the delivery hereof is delivering to the Agent, a photocopy
of an executed counterpart of each of the Assigned Agreements. Grantor will
likewise deliver to Agent a photocopy of an executed counterpart of each future
lease, operation agreement, maintenance agreement and other agreement relating
to the Project, and amendments and supplements to the foregoing, included in the
Collateral, as they are entered into by Grantor promptly upon the execution
thereof. If delivery to the Agent of an executed counterpart of any agreement
leaves Grantor without an executed counterpart thereof, the Agent will release
its executed counterpart to Grantor upon Grantor's request, provided that no
Event of Default hereunder shall have occurred and be continuing, for Grantor's
temporary use in the enforcement of such agreement by judicial proceedings.
Nothing herein shall be construed as or shall constitute the consent or approval
of the Agent or any Holder to or of any such future lease, operation agreement,
maintenance agreement or other material agreement relating to the Project.
(c) Anything herein contained to the contrary notwithstanding, Grantor
shall remain liable under each of the Assigned Agreements, to perform all of the
obligations
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assumed by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Agent shall have no obligation or liability under
any of such Assigned Agreements by reason of or arising out of this Agreement,
nor shall the Agent be required or obligated in any manner to perform or fulfill
any obligations of Grantor thereunder or to make any payment, or to make any
inquiry as to the nature or sufficiency of any payment received by it, or
present or file any claim, or take any action to collect or enforce the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(d) Grantor does hereby constitute the Agent, acting on behalf of and for
the benefit of the Secured Parties, the true and lawful attorney of Grantor,
irrevocably, with full power upon and during the continuance of an Event of
Default (in the name of Grantor or otherwise) to ask, require, demand, receive,
compound and give acquittance for any and all moneys and claims for moneys due
and to become due under or arising out of the Assigned Agreements or any of the
other Collateral, including, without limitation, any insurance policies with
respect to the Project, to elect remedies thereunder, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or
take any action or institute any proceedings in connection therewith which the
Agent may deem to be necessary or advisable, provided, however, that the Agent
shall give Grantor notice of any action taken by the Agent as such attorney-in-
fact promptly after taking such action (provided that the Agent's failure to
promptly give any such notice shall in no way affect the Agent's rights
hereunder).
(e) Grantor agrees that, if any default by Grantor under any of the
Assigned Agreements shall occur, the Agent shall, at its option, be permitted
(but shall not be obligated) to remedy any such default by giving written notice
of such intent to Grantor and to the parties to each Assigned Agreement in
default. As between the Agent and the Grantor, the Agent shall have a reasonable
opportunity, but not fewer than sixty (60) days (or such other period as the
Agent and the Persons other than Grantor who are parties to the Assigned
Agreement may agree) after giving such notice, in which to cure such default and
upon the commencement thereof will proceed diligently to cure such default. Any
curing by the Agent of Grantor's default under any of the Assigned Agreements
shall not be construed as an assumption by the Agent of any obligations,
covenants or agreements of Grantor under such Assigned Agreements, and the Agent
shall not incur any liability to Grantor or any other Person as a result of any
actions undertaken by the Agent in curing or attempting to cure any such
default. This Agreement shall not be deemed to release or to affect in any way
the obligations of Grantor under the Assigned Agreements.
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(f) This Agreement secures the payment and performance of all obligations
of Grantor and of the other Credit Parties and SIDA, now existing or hereafter
arising, owing to the Secured Parties pursuant to the terms of the Indenture,
the Senior Secured Notes and the Collateral Documents including, without
limitation: (i) the principal, premium, if any, or interest on the Senior
Secured Notes (including any interest accruing after the commencement of any
bankruptcy or insolvency proceeding relating to the Issuers, whether or not such
interest is allowed or allowable as a claim in any such proceeding), and all
other obligations and liabilities of the Issuers including, without limitation,
indemnities, fees and interest incurred under, arising out of or in connection
with the Indenture, the Senior Secured Notes and the Collateral Documents, (ii)
any and all sums advanced by or on behalf of the Issuers in order to preserve
the Collateral or preserve its interest in the Collateral, and (iii) in the
event of any proceeding for collection or enforcement by or on behalf of any
Secured Party after an Event of Default shall have occurred and be continuing
and unwaived, the expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by or on behalf of any Secured Party of its rights under the Indenture,
the Senior Secured Notes and the Collateral Documents, together with attorneys'
fees and court costs (all such obligations being herein called the
"Obligations").
Section 3. Events of Default. The occurrence of an Event of Default under
the Financing Agreement (as such term is defined in the Financing Agreement),
whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an Event of Default
hereunder.
Section 4. Remedies. Subject to the terms of the Financing Agreement,
(a) if any Event of Default has occurred and is continuing, the Agent may
(i) declare all amounts payable by Issuers under the Financing
Agreement and the Senior Secured Notes to be due and payable immediately,
and thereupon the same shall become immediately due and payable;
(ii) proceed to protect and enforce the rights vested in it by
this Agreement, including, but not limited to, the right to cause all
revenues hereby pledged as security and all other moneys pledged hereunder
to be paid directly to it, and to enforce its rights hereunder to such
payments and all other rights hereunder by such appropriate judicial
proceedings as it shall deem most effective to protect and enforce any of
such rights, either at law or in equity or
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otherwise, whether for specific enforcement of any covenant or agreement
contained in any of the Assigned Agreements, or in aid of the exercise of
any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to enforce
any other legal or equitable right vested in it by this Agreement or by
law;
(iii) cause any action at law or suit in equity or other
proceeding to be instituted and prosecuted to collect or enforce any
obligations or rights included in the Collateral, or to foreclose or
enforce any other agreement or other instrument by or under or pursuant to
which such obligations are issued or secured, subject in each case to the
provisions and requirements thereof;
(iv) sell or otherwise dispose of any or all of the Collateral
or cause the Collateral to be sold or otherwise disposed of in one or more
sales or transactions, at such prices as the Agent may deem best, and for
cash or on credit or for future delivery, without assumption of any credit
risk, at any broker's board or at public or private sale, without demand of
performance or notice of intention to sell or of time or place of sale
(except such notice as is required by applicable law and cannot be waived
or as is otherwise expressly agreed to by the parties herein or in any
other Financing Document), it being agreed that the Agent may be a
purchaser on behalf of the Secured Parties, or on its own behalf at any
such sale and that the Agent or anyone else who may be the purchaser of any
or all of the Collateral so sold shall thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity of
redemption, of Grantor, any such demand, notice or right and equity being
hereby expressly waived and released to the extent permitted by law;
(v) incur expenses, including attorneys' fees, consultants'
fees, and other costs appropriate to the exercise of any right or power
under this Agreement;
(vi) perform any obligation of Grantor hereunder or under any
other Financing Document, and make payments, purchase, contest or
compromise any encumbrance, charge, or lien, and pay taxes and expenses,
without, however, any obligation so to do;
(vii) take possession of the Collateral and render it usable, and
repair and renovate the same, without, however, any obligation so to do,
and enter upon the Site or any other location where the same may be located
for that purpose, control, manage, operate, rent and lease the Collateral,
either separately or in conjunction with the Project, collect all rents and
income from
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the Collateral and apply the same to reimburse the Agent, or any agent
acting on its behalf, for any cost or expenses incurred hereunder or under
any of the Financing Documents and to the payment or performance of
Grantor's obligations hereunder or under any of the Financing Documents,
and apply any remaining excess balance to whomsoever is legally entitled
thereto;
(viii) secure the appointment of a receiver of the Project and/or the
Collateral or any part thereof; or
(ix) exercise any other or additional rights or remedies granted to
a secured party under the UCC. If, pursuant to applicable law, prior notice
of any such action is required to be given to Grantor, Grantor hereby
acknowledges that the minimum time required by such applicable law, or if
no minimum is specified, five (5) Business Days, shall be deemed a
reasonable notice period.
(b) All costs and expenses (including, but without being limited to,
reasonable attorneys, fees and expenses) incurred by the Agent in connection
with any such suit or proceeding, or in connection with the performance by the
Agent of any of Grantor' agreements contained in any exercise of its rights or
remedies hereunder, including, without limitation, any of the Assigned
Agreements pursuant to the terms of this Agreement, together with interest
thereon (to the extent permitted by law) computed at a rate per annum equal to
the Default Rate (as defined in the Financing Agreement) from the date on which
such costs or expenses are incurred to the date of payment thereof, shall
constitute additional indebtedness secured by this Agreement and shall be paid
by Grantor to the Agent on behalf of and for the benefit of the Secured Parties
on demand.
(c) Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral shall be deposited in the Redemption Account to be held, applied and
released in accordance with the Depositary Agreement.
Section 5. Remedies Cumulative; Delay Not Waiver. (a) No right, power
or remedy herein conferred upon or reserved to the Agent is intended to be
exclusive of any other right, power or remedy, and every such right, power and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right, power and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. Resort to any or all
security now or hereafter held by the Agent, may be taken
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concurrently or successively and in one or several consolidated or independent
judicial actions or lawfully taken nonjudicial proceedings, or both.
(b) No delay or omission of the Agent to exercise any right or power
accruing upon the occurrence and during the continuance of any Event of Default
as aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and every power
and remedy given by this Agreement may be exercised from time to time, and as
often as shall be deemed expedient, by the Agent.
Section 6. Covenants and Representations. Grantor covenants, represents
and warrants as follows:
(a) Grantor will duly and punctually pay all amounts payable to the
Secured Parties in accordance with, and subject to, the terms of the Financing
Agreement, the Senior Secured Notes and the other Financing Documents.
(b) Grantor will perform and comply, in all material respects, with all
obligations and conditions on its part to be performed under each of the
Assigned Agreements.
(c) Each Assigned Agreement to which Grantor is a party in effect on the
date hereof, an executed counterpart or true and complete copy of which has been
furnished to the Agent, has been duly authorized, executed and delivered by
Grantor, has not been amended or otherwise modified, and is in full force and
effect and is binding upon and enforceable against all parties thereto in
accordance with its terms. There exists no default under any Assigned Agreement
to which Grantor is a party by Grantor, or to the best of Grantor's knowledge,
by the other parties thereto.
(d) No effective financing statement or other instrument similar in effect
covering all or any part of Grantor's interest in the Collateral or SIDA's
interest in the collateral under the SIDA Security Agreement is on file in any
recording office, except such as may have been filed pursuant to this Agreement
and the other Financing Documents or pursuant to the documents evidencing
Permitted Liens.
(e) Except as permitted by the Financing Agreement, Grantor is lawfully
possessed of ownership of the Collateral and SIDA is lawfully possessed of
ownership of the collateral under the SIDA Security Agreement and has full
right, title and interest in all rights purported to be granted to it under the
Assigned Agreements, subject to no mortgages, liens, charges, or encumbrances
except Permitted Liens, and has full power and lawful authority to grant and
assign the Collateral hereunder. Grantor will, so long
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as any Obligations shall be outstanding, warrant and defend its title to the
Collateral and SIDA's title to the collateral under the SIDA Security Agreement
against the claims and demands of all Persons whomsoever.
(f) Grantor will not directly or indirectly create, incur, assume or
suffer to exist any liens (except for Permitted Liens) on or with respect to any
property or assets constituting a part of the Collateral and Grantor will at its
own cost and expense promptly take such action as may be necessary to discharge
any such liens on or with respect to any properties or assets constituting a
part of the Collateral or the collateral under the SIDA Security Agreement.
(g) Grantor represents and warrants to the Agent that it has not assigned
any of its rights under the Assigned Agreements except as provided in this
Agreement. Grantor will not make any other assignment of its rights under the
Assigned Agreements as contemplated by the Operative Documents (as in effect on
the Closing Date) and other than such assignments as constitute Permitted Liens.
(h) Grantor agrees that any action or proceeding to enforce this Agreement
or any Assigned Agreement may be taken by the Agent either in Grantor's name or
in the Agent's name, as the Agent may deem necessary.
(i) Except as otherwise permitted under the Financing Agreement, Grantor
shall not without the prior written consent of the Agent, (i) modify, amend,
terminate, waive or supplement any provision of any Assigned Agreement or any
other agreement, contract or instrument included in the Collateral, (ii) fail to
exercise promptly and diligently each and every material right which it may have
under each Assigned Agreement (other than any right of termination), or (iii)
fail to deliver to the Agent a copy of each demand, notice or document received
or given by it relating in any way to any of the Assigned Agreements.
(j) Except as disclosed in writing to the Agent, Grantor has obtained all
necessary consents to this Agreement from each of the parties to the Assigned
Agreements to which Grantor is a party (the "Contracting Parties"), and agrees
to obtain consents from each other Contracting Party and each future or
successor Contracting Party with respect to each material Assigned Agreement to
which Grantor is a party.
(k) Grantor shall give to the Agent prompt notice of any event of default
under any Assigned Agreement of which Grantor has knowledge or as to which
Grantor has received notice.
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Section 7. Notices. Unless otherwise specifically herein provided, all
notices required or permitted under the terms and provisions hereof shall be in
writing and any such notice shall become effective upon delivery in accordance
with Section 9.02 of the Financing Agreement.
Section 8. Further Assurances. (a) Grantor agrees that from time to time,
at the expense of Grantor, Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary or that the Agent may reasonably request, in order to perfect and
protect the assignment and security interest granted or intended to be granted
hereby or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, Grantor will: (i) if any Collateral shall be evidenced by a
promissory note or other instrument, deliver and pledge to the Agent for the
benefit of the Secured Parties such note or instrument duly endorsed (without
recourse) and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Agent and (ii) execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments, endorsements or notices, as may be reasonably necessary
or desirable, and as the Agent may reasonably request, in order to perfect and
preserve the assignments and security interests granted or purported to be
granted hereby; provided, however, that this Section 8(a) shall not apply to any
component, subassembly or supply of materials (x) which is located outside the
State of New York and (y) which has a purchase price of less than $1,000,000, in
each case before delivery of such component, subassembly or supply into the
State of New York.
(b) Grantor hereby authorizes the Agent to file one or more financing or
continuation statements and amendments thereto, relative to all or any part of
the Collateral without the signature of Grantor where permitted by law. Copies
of any such statement or amendment thereto shall promptly be delivered to
Grantor.
(c) Grantor shall pay all filing, registration and recording fees or
refiling, re-registration and re-recording fees, and all expenses incident to
the execution and acknowledgment of this Agreement, any assurance, and all
Federal, state, county and municipal stamp taxes and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution and delivery of this Agreement, any agreement supplemental hereto and
any instruments of further assurance.
Section 9. Place of Perfection; Records. The location of Grantor's
place of business and chief executive office is 00 Xxxxxxxxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxx 00000. Grantor shall give the Agent at least thirty (30) Business Days'
notice before it changes the location of its place of business and chief
executive office and shall at the
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expense of Grantor execute and deliver such instruments and documents as
required to maintain a prior perfected security interest and as requested by the
Agent. Grantor will hold and preserve such records and will permit
representatives of the Agent at any time during normal business hours to inspect
and make abstracts from such records.
Section 10. Covenants of Grantor. Grantor shall pay, before the imposition
of any fine, penalty, interest or cost attached thereto, all taxes, assessments
and other governmental or non-governmental charges or levies now or hereafter
assessed or levied against the Collateral or upon the security interest provided
for herein (except for liens for taxes and assessments not then delinquent or
which Grantor may, pursuant to the definition of "Permitted Liens" in the
Financing Agreement, permit to remain unpaid), as well as pay, or cause to be
paid, all claims for labor, materials or supplies which, if unpaid, might become
a prior Lien (other than a Permitted Lien) thereon, and will deliver receipts
showing payment of any of the foregoing to the Agent upon request.
Section 11. Continuing Assignment and Security Interest; Transfer of Senior
Secured Notes. This Agreement shall create a continuing assignment of and
security interest in the Collateral and shall (a) remain in full force and
effect until payment and performance in full of the Obligations (b) be binding
upon Grantor, its successors and assigns and (c) inure, together with the rights
and remedies of the Agent, to the benefit of the Agent and its respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), subject to the terms of the Financing Agreement, the
Holders may assign or otherwise transfer the Senior Secured Notes or other
evidences of indebtedness held by them to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to the Holders herein or otherwise. Upon the payment in full of the
Obligations, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Grantor. Upon any such termination, the Agent
will, at Grantor's expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.
Section 12. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 13. Successors and Assigns. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the parties and their
respective successors and assigns; provided, however, that Grantor may not
assign or
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delegate its rights or obligations hereunder without the prior written consent
of the Agent.
Section 14. Headings. The headings of the various Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
Section 15. Governing Law. This Agreement, including all matters of
construction, validity and performance and matters relating to the creation,
validity, enforcement or priority of the lien of, and security interests created
by, this Agreement upon the Collateral shall be governed by the laws of the
State of New York.
Section 16. References to Other Documents. All defined terms used in this
Agreement which refer to other documents shall be deemed to refer to such other
documents as they may be amended, supplemented or replaced from time to time,
provided such documents were not amended in breach of a covenant contained in
any agreement to which Grantor or the Agent is a party.
Section 17. Agreement for Security Purposes. This agreement is for security
purposes only. Accordingly, the Agent shall not have a right, pursuant to this
Agreement, to enforce Grantor's rights with respect to the Collateral until such
time as an Event of Default shall have occurred and is continuing at the time
such enforcement is sought.
Section 18. Scope of Liability. This Agreement is one of the Financing
Documents referred to in the Financing Agreement, and the recourse of the Agent
and the other Secured Parties against the Grantor and any of its Affiliates,
stockholders, officers, directors, partners or employees, for any liability to
the Agent or the other Secured Parties arising under this Agreement shall be
limited to the extent provided in the Financing Agreement.
Section 19. Regarding the Agent. The Agent shall be afforded in respect of
this Agreement all of the rights, powers, protections, immunities and
indemnities set forth in Article 4 and Article 5 of the Depositary Agreement
which are applicable between the Agent and the Issuer thereunder, and the
provisions of Article 4 and Article 5 of the Depositary Agreement which are
applicable between the Agent and the Issuer thereunder shall inure to the
benefit of the Agent in respect to this Agreement and be binding upon the
Grantor in such respect, in each case as if the same were specifically set forth
herein, mutatis mutandis. In furtherance and not in derogation of such rights,
powers, protections, immunities and indemnities set forth in Article 4 and
Article 5 of the Depositary Agreement:
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(a) The Agent is authorized to take all such action as is provided to be
taken by it as the Agent hereunder and all other action incidental thereto. As
to any matters not expressly provided for herein the Agent shall act or refrain
from acting in accordance with written instructions from the Required Holders
or, in the absence of such instructions, in accordance with its discretion.
(b) The Agent shall not be responsible for the existence, genuineness or
value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Lien on any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on its part
hereunder. The Agent shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement by the Grantor.
(c) At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Agent may appoint another bank or trust company or one or
more other Persons, either to act as co-agents or co-agents, jointly with the
Agent, or to act as separate agent or agents on behalf of the Agent with such
power and authority of the Agent as may be necessary for the effectual operation
of the provisions hereof and may be specified in the instrument of appointment
(which may, in the discretion of the Agent, include extending to such co-agent
or separate agent the provisions for the protection of the Agent contained in
Article 4 and Article 5 of the Depositary Agreement).
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IN WITNESS WHEREOF, Grantor and Agent have caused this Security Agreement
to be duly executed by their signatories thereunto duly authorized, as of the
day and year first above written.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Agent for the benefit of the
Secured Parties
By: /s/ Xxxx X. Xxxxxxx
___________________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
PROJECT ORANGE FUNDING, L.P.,
a Delaware limited partnership
By: G.A.S. Orange Associates, L.L.C.
a Delaware limited liability
company, its general partner
By: /s/ Xxxxxxx Xxxxxxx
_______________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
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