Exhibit 10.24
EXECUTION COPY
Calpine Corporation Note Pledge
FIRST AMENDMENT NOTE PLEDGE AGREEMENT
THIS FIRST AMENDMENT NOTE PLEDGE AGREEMENT (this "Pledge Agreement"),
dated as of July 16, 2003, made by Calpine Corporation, a Delaware corporation
(the "Company"), in favor of The Bank of New York, as Collateral Trustee
(together with any successor(s) thereto in such capacity, the "Collateral
Trustee") for the benefit of the Secured Parties.
W I T N E S S E T H
WHEREAS, the Company intends to enter into an Amended and
Restated Credit Agreement dated as of July 16, 2003 (as amended, modified,
renewed, restated or replaced from time to time, the "Credit Agreement") among,
inter alia, the Company, the Lenders referred to therein and The Bank of Nova
Scotia, as Administrative Agent (the "Credit Agreement Agent"), relating to a
$500,000,000 senior secured credit facility to be made available in the form of
revolving loans and term loans, including letters of credit to be issued
thereunder;
WHEREAS, the Company intends to (a) issue $500,000,000 in
aggregate principal amount of Second Priority Senior Secured Floating Rate Notes
due 2007 (the "2007 Notes") pursuant to the Indenture dated as of July 16, 2003
(the "2007 Indenture") between the Company and Wilmington Trust Company, as
Trustee (together with its successors in such capacity, the "2007 Trustee"), (b)
issue $1,150,000,000 in aggregate principal amount of 8.50% Second Priority
Senior Secured Notes due 2010 (the "2010 Notes") pursuant to the Indenture dated
as of July 16, 2003 (the "2010 Indenture") between the Company and Wilmington
Trust Company, as Trustee (together with its successors in such capacity, the
"2010 Trustee"), (c) issue $900,000,000 in aggregate principal amount of 8.75%
Second Priority Senior Secured Notes due 2013 (the "2013 Notes") pursuant to the
Indenture dated as of July 16, 2003 (the "2013 Indenture") between the Company
and Wilmington Trust Company, as Trustee (together with its successors in such
capacity, the "2013 Trustee"), and (d) borrow $750,000,000 in Term Loans (the
"Term Loans") pursuant to a Term Loan Agreement dated as of July 16, 2003 (the
"Term Loan Agreement") between the Company and Xxxxxxx Xxxxx Credit Partners
L.P., as Administrative Agent (together with its successors in such capacity,
the "Term Loan Administrative Agent");
WHEREAS, the Company intends to secure its Secured
Obligations, including its obligations under the Credit Agreement and any future
Priority Lien Debt, on a priority basis, and, subject to such priority, its
obligations under the 2007 Notes, 2010 Notes, 2013 Notes and Term Loans and any
future Parity Lien Debt equally and ratably, with security interests in, and
pledge of, among other things, all present and future Pledged Collateral (as
defined below);
WHEREAS, the Company has entered into a Collateral Trust
Agreement dated as of July 16, 2003 (the "Collateral Trust Agreement") among,
inter alia, the Company, the Subsidiaries of the Company named therein and the
Collateral Trustee which sets forth the terms on which the Company has appointed
the Collateral Trustee as trustee for the present and future
holders of the Secured Obligations to receive, hold, maintain, administer,
enforce and distribute the Existing Security Documents and all other Security
Documents, including this Pledge Agreement, at any time delivered to the
Collateral Trustee and all interests, rights, powers and remedies of the
Collateral Trustee thereunder and the proceeds thereof;
WHEREAS, the Company will derive substantial direct and
indirect benefit from the making of the extensions of credit under each of the
Credit Agreement and the Term Loan Agreement and the offering of each of the
2007 Notes, 2010 Notes and 2013 Notes;
WHEREAS, it is a condition precedent to the obligation of the
lenders to make their respective extensions of credit to the Company under each
of the Credit Agreement and the Term Loan Agreement, and condition precedent to
the obligation of the purchasers to purchase each of the 2007 Notes, the 2010
Notes and the 2013 Notes, that the Company shall have executed and delivered
this Pledge Agreement to the Collateral Trustee for the benefit of the Secured
Parties; and
WHEREAS, this Pledge Agreement amends and restates in its
entirety the Note Pledge Agreement dated as of May 9, 2002 made by the Company
in favor of The Bank of Nova Scotia, as agent;
NOW, THEREFORE, in consideration of the premises contained herein and
for good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Collateral Trustee" is defined in the preamble.
"Collateral Trust Agreement" is defined in the recitals.
"Company" is defined in the preamble.
"Pledge Agreement" is defined in the preamble.
"Pledged Collateral" is defined in Section 2.1.
"Pledged Note Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Notes identified opposite the name of such
Person, and each Person that is the issuer of any Pledged Notes that are
obtained by the Company in the future.
"Pledged Notes" means all promissory notes of any Pledged Note Issuer
which are delivered by the Company to the Collateral Trustee as Pledged Property
hereunder, as such promissory notes, in accordance with Section 4.5, are
amended, modified or supplemented from
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time to time and together with any promissory notes of any Pledged Note Issuer
taken in extension or renewal.
"Pledged Property" means all Pledged Notes and all other assignments of
any amounts due or to become due, all other instruments which are now being
delivered by the Company to the Collateral Trustee or may from time to time
hereafter be delivered by the Company to the Collateral Trustee for the purpose
of pledge under this Pledge Agreement or any other Secured Debt Document, and
all instruments, proceeds and rights from time to time received by or
distributable to the Company in respect of any of the foregoing.
"Secured Parity Lien Parties" means any Person who is holding a Parity
Lien Obligation (including any Parity Debt Representative), at any time.
"Secured Parties" means any Person who is holding a Secured Obligation
(including any Secured Debt Representative), at any time.
"Secured Priority Lien Parties" means any Person who is holding a
Priority Lien Obligation (including any Priority Lien Agent), at any time.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
New York.
SECTION 1.2. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Collateral Trust
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge Agreement, including its preamble and recitals, with
such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. The Company hereby (i)
pledges, hypothecates, assigns, charges, mortgages, delivers and transfers to
the Collateral Trustee, for its benefit and the benefit of the Secured Priority
Lien Parties, and hereby grants to the Collateral Trustee, for its benefit and
the benefit of the Secured Priority Lien Parties, a continuing first priority
security interest in, all of the following property (the "Pledged Collateral")
and (ii) pledges, hypothecates, assigns, charges, mortgages, delivers and
transfers to the Collateral Trustee, for its benefit and the benefit of the
Secured Parity Lien Parties, and hereby grants to the Collateral Trustee, for
its benefit and the benefit of the Secured Parity Lien Parties, a continuing
second priority security interest in, all of the Pledged Collateral
(a) all promissory notes of each Pledged Note Issuer
identified in Attachment 1 hereto;
(b) all other Pledged Notes issued from time to time;
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(c) all other Pledged Property, whether now or hereafter
delivered to the Collateral Trustee in connection with this Pledge
Agreement;
(d) all interest and other payments and rights with
respect to any Pledged Property; and
(e) all proceeds of any of the foregoing.
SECTION 2.2. Security for Obligations; Separate Liens. This Pledge
Agreement and the security interests and Liens granted and created herein
secures the payment and performance of all Secured Obligations of the Company
now or hereafter, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest (including any
interest accruing at the then applicable rate provided in any applicable Secured
Debt Document after the maturity of the loans and reimbursement obligations
therein and interest accruing at the then applicable rate provided in any
applicable Secured Debt Document after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Company, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), fees, premiums, penalties,
indemnifications, expenses or otherwise, and including all amounts that
constitute part of the Secured Obligations and would be owed by the Company but
for the fact that they are unenforceable or not allowed due to a pending
Bankruptcy Case or Insolvency Proceeding. Without limiting the generality of the
foregoing, it is the intent of the parties that (i) the Liens securing the
Parity Lien Obligations are subject and subordinate to the Liens securing the
Priority Lien Obligations up to the Priority Lien Cap and (ii) this Pledge
Agreement creates two separate and distinct Liens: the first Lien securing the
payment and performance of the Priority Lien Obligations and the second Lien
securing the payment and performance of the Parity Lien Obligations.
SECTION 2.3. Delivery of Pledged Property. All instruments representing
or evidencing any Pledged Collateral, including all Pledged Notes, shall be
delivered to and held by or on behalf of (and, in the case of Pledged Notes,
endorsed to the order of) the Collateral Trustee pursuant hereto, shall be in
suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.
SECTION 2.4. Payment on Pledged Notes. In the event that any payment of
principal or interest is to be made on any Pledged Note at a time when no
Actionable Default has occurred and is continuing, such payment may be paid
directly to the Company. If an Actionable Default has occurred and is
continuing, then any such payment shall be paid directly to the Collateral
Trustee.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and, subject to Section 4.1 of the Collateral Trust Agreement and the
other Secured Debt Documents, shall
(a) remain in full force and effect until payment in full
of all Secured Obligations and the termination or expiration of all
commitments to extend credit under all Credit Facilities, the
Indebtedness under which constitutes Priority Lien Debt,
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(b) be binding upon the Company and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Collateral Trustee hereunder, to the benefit of the Collateral Trustee
and each other Secured Party.
Without limiting the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any right or obligation under the
Secured Debt Documents to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Secured Party under any Secured Debt Document (including
this Pledge Agreement) or otherwise, subject, however, to any contrary
provisions in such assignment or transfer, and to the applicable provisions of
each of the Secured Debt Documents. Upon the payment in full and discharge of
all Secured Obligations that are then outstanding, due and payable and the
termination or expiration of all commitments to extend credit under all Credit
Facilities, the Indebtedness under which constitutes Priority Lien Debt, the
security interest granted herein shall terminate and all rights to the Pledged
Collateral shall revert to the Company. Upon any such termination or any release
of the Lien provided for hereunder in accordance with the Secured Debt
Documents, the Collateral Trustee will, at the Company's sole expense, deliver
to the Company, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Notes, together with all other Pledged Collateral held by the Collateral
Trustee hereunder, and execute and deliver to the Company such documents as the
Company shall reasonably request to evidence such termination or release.
It is understood and agreed that (i) the Company may convert the
Indebtedness underlying the Pledged Notes to equity and, upon the conversion to
equity of all Indebtedness from a Pledged Note Issuer to the Company, the
promissory note of such Pledged Note Issuer shall be released from the Security
Documents and cancelled and (ii) the Company may substitute new non-recourse
secured promissory notes for promissory notes previously pledged to the
Collateral Trustee.
SECTION 2.6. Security Interest Absolute. All rights of the Collateral
Trustee and the security interests granted to the Collateral Trustee hereunder,
and all obligations of the Company hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of any of the
Secured Debt Documents,
(b) the failure of any Secured Party or any holder of any
Secured Obligation
(i) to assert any claim or demand or to enforce
any right or remedy against the Company, any other Obligor or
any other Person under the provisions of any of the Secured
Debt Documents or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations of the Company or any other Obligor,
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(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations or
any other extension, compromise or renewal of any Secured Obligation of
the Company or any other Obligor,
(d) any reduction, limitation, impairment or termination
of any Secured Obligations of the Company or any other Obligor for any
reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and the Company hereby
waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Secured Obligations
of the Company, any other Obligor or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
any of the Secured Debt Documents,
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Pledged Collateral), or
any amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations, or
(g) any other circumstances which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Company, any other Obligor, any surety or any guarantor.
SECTION 2.7. [Intentionally Omitted].
SECTION 2.8. Waiver of Subrogation. Until such time as the Secured
Obligations have been indefeasibly paid in full and discharged, and all
commitments to extend credit under all Credit Facilities the Indebtedness under
which constitutes Priority Lien Debt shall have been permanently terminated or
expired, the Company hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company or any other Obligor that
arise from the existence, payment, performance or enforcement of the Company's
obligations under this Pledge Agreement or any other Secured Debt Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of the
Collateral Trustee against the Company or any other Obligor or any collateral
which the Collateral Trustee now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including the right to take or receive from the Company or any other
Obligor, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to the Company in violation of the preceding sentence and
the Secured Obligations shall not have been indefeasibly paid in full, in cash,
and all commitments to extend credit under all Credit Facilities the
Indebtedness under which constitutes Priority Lien Debt shall have not been
permanently terminated or expired, such amount shall be deemed to have been paid
to the Company for the benefit of, and held in trust for, the Collateral
Trustee, and shall forthwith be paid to the Collateral Trustee to be credited
and applied upon the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Collateral Trust
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Agreement. The Company acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Secured Debt
Documents and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. The Company represents and warrants unto
the Collateral Trustee and each Secured Party, as at the date of each pledge and
delivery hereunder (including each pledge and delivery of a Pledged Note) by the
Company to the Collateral Trustee of any Pledged Collateral, as set forth in
this Article.
SECTION 3.1.1 Ownership, No Liens, etc. The Company is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Pledged Collateral, free and clear of
all liens, security interests, options, or other charges or encumbrances, except
any lien or security interest granted pursuant hereto in favor of the Collateral
Trustee.
SECTION 3.1.2 Valid Security Interest. The delivery of such Pledged
Collateral to the Collateral Trustee is effective to create a valid, perfected,
first priority or second priority, as the case may be, security interest in such
Pledged Collateral and the proceeds thereof, securing the Secured Obligations,
subject in each case to the provisions of Section 3.4 of the Collateral Trust
Agreement. No other filing or other action will be necessary to perfect or
protect such security interest.
SECTION 3.1.3 As to Pledged Notes. In the case of each Pledged Note
constituting such Pledged Collateral, all of such Pledged Notes are duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligations of the issuers thereof, and are not in default.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. The Company
will not sell, assign, transfer, pledge, or encumber in any other manner the
Pledged Collateral (except in favor of the Collateral Trustee hereunder and as
otherwise expressly permitted by the Secured Debt Documents) and the Company
will warrant and defend the right and title herein granted unto the Collateral
Trustee in and to the Pledged Collateral (and all right, title, and interest
represented by the Pledged Collateral) against the claims and demands of all
Persons whomsoever. The Company agrees that at any time, and from time to time,
at the expense of the Company, the Company will promptly execute and deliver all
further instruments, and take all further action, that may be necessary or
desirable, or that the Collateral Trustee or any Secured Debt Representative may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. The Company hereby authorizes the Collateral Trustee to
cause the filing of any financing statement that (i) indicates the Pledged
Collateral and (ii) contains any other information required by Section 5 of
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Article 9 of the Uniform Commercial Code of the jurisdiction wherein such
financing statement or amendment is filed regarding the sufficiency or filing
office acceptance of any financing statement or amendment, including whether the
Company is an organization, the type of organization and any organization
identification number issued to the Company; provided that this sentence shall
not be interpreted as requiring the Collateral Trustee to file any such
financing statements, continuation statements or other instruments.
SECTION 4.2. [Intentionally Omitted].
SECTION 4.3. Continuous Pledge. Subject to Section 2.5, the Company
will, at all times, keep pledged to the Collateral Trustee pursuant hereto all
Pledged Notes, all interest, principal and other proceeds received by the
Collateral Trustee with respect to the Pledged Notes and all other Pledged
Collateral.
SECTION 4.4. [Intentionally Omitted].
SECTION 4.5. Additional Undertakings. Except as otherwise contemplated
by the terms of each applicable Secured Debt Document and the provisions hereof
(including the last paragraph of Section 2.5), the Company will not:
(a) enter into any agreement amending, supplementing, or
waiving any material provision of any Pledged Note (including any
underlying instrument pursuant to which such Pledged Note is issued) or
materially compromising or releasing or extending the time for payment
or any obligation of the maker thereof, in either case which would
result in any material impairment or material adverse alteration of any
obligation of the maker of any Pledged Note or other instrument
constituting Pledged Collateral; or
(b) take or omit to take any action the taking of the
omission of which would result in any material impairment or material
adverse alteration of any obligation of the maker of any Pledged Note
or other instrument constituting Pledged Collateral.
ARTICLE V
THE COLLATERAL TRUSTEE
SECTION 5.1. Collateral Trustee Appointed Attorney-in-Fact. The Company
hereby irrevocably appoints the Collateral Trustee 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
Trustee's discretion, to take any action and to execute any instrument which the
Collateral Trustee may deem necessary or advisable to accomplish the purposes of
this Pledge Agreement, including without limitation:
(a) after the occurrence and continuance of an Actionable
Default, to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and
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(c) to file any claims or take any action or institute
any proceedings which the Collateral Trustee may deem necessary or
desirable for the collection of any of the Pledged Collateral or
otherwise to enforce the rights of the Collateral Trustee with respect
to any of the Pledged Collateral.
The Company hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Trustee May Perform. If the Company fails to
perform any agreement contained herein, the Collateral Trustee may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Collateral Trustee incurred in connection therewith shall be payable by the
Company pursuant to Section 6.4.
SECTION 5.3. Trustee's Rights and Duties Subject to Collateral Trust
Agreement. Notwithstanding anything to the contrary contained in this Pledge
Agreement, in acting under and by virtue of this Pledge Agreement, the
Collateral Trustee shall be entitled to all of the rights, privileges and
immunities provided to it in the Collateral Trust Agreement, and the rights and
duties of the Collateral Trustee hereunder are subject in all respects to the
terms, conditions and limitations set forth in the Collateral Trust Agreement
(including, without limitation, the provisions of Article 5 thereof), reference
to which is made for all purposes; provided, however, that any forbearance by
the Collateral Trustee in exercising any right or remedy available to it under
the Collateral Trust Agreement shall not give rise to a defense on the part of
the Company with respect to the Collateral Trustee's exercise of any right or
remedy pursuant to this Pledge Agreement or as otherwise afforded by applicable
law.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If an Actionable Default shall have
occurred and be continuing:
(a) The Collateral Trustee may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Pledged Collateral) and also may, without
notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
of the Collateral Trustee's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral
Trustee may deem commercially reasonable in each case subject to the
terms and provisions of the Collateral Trust Agreement. The Company
agrees that, to the extent notice of sale shall be required by law, at
least ten days' prior notice to the Company of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Collateral Trustee shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Collateral Trustee may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
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(b) The Collateral Trustee may, in each case subject to
the terms and provisions of the Collateral Trust Agreement,
(i) transfer all or any part of the Pledged
Collateral into the name of the Collateral Trustee or its
nominee, with or without disclosing that such Pledged
Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the
Pledged Collateral to make payment to the Collateral Trustee
of any amount due or to become due thereunder,
(iii) enforce collection of any of the Pledged
Collateral by suit or otherwise, and surrender, release or
exchange all or any part thereof, or compromise or extend or
renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with
respect thereto,
(iv) endorse any checks, drafts, or other
writings in the Company's name to allow collection of the
Pledged Collateral,
(v) take control of any proceeds of the Pledged
Collateral, and
(vi) execute (in the name, place and stead of the
Company) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Pledged Collateral.
SECTION 6.2 [Intentionally Omitted].
SECTION 6.2. Compliance with Restrictions. The Company agrees that in
any sale of any of the Pledged Collateral whenever an Actionable Default shall
have occurred and be continuing, the Collateral Trustee is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Pledged Collateral), or in order to obtain any required approval
of the sale or of the purchaser by any governmental regulatory authority or
official, and the Company further agrees that such compliance shall not result
in such sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Collateral Trustee be liable nor accountable to
the Company for any discount allowed by the reason of the fact that such Pledged
Collateral is sold in compliance with any such limitation or restriction.
SECTION 6.3. Application of Proceeds. All cash proceeds received by the
Collateral Trustee in respect of any sale of, collection from, or other
realization upon, all or any part of the Pledged Collateral shall thereafter be
applied in accordance with Section 3.4 of the Collateral Trust Agreement.
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SECTION 6.4. Indemnity and Expenses.
(a) The Company agrees to indemnify the Collateral
Trustee from and against any and all Indemnified Liabilities with
respect to the execution, delivery, performance, administration or
enforcement of this Pledge Agreement to the extent provided in Section
7.8 of the Collateral Trust Agreement.
(b) The Company agrees to reimburse the Collateral
Trustee for all costs, fees and expenses relating to this Pledge
Agreement to the extent provided in Section 7.7 of the Collateral Trust
Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Security Document. This Pledge Agreement is a Security
Document executed pursuant to the Collateral Trust Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Company
herefrom shall in any event be effective unless the same shall be in writing and
signed by the Collateral Trustee in accordance with Section 7.1 of the
Collateral Trust Agreement, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it is
given.
SECTION 7.3. Protection of Collateral. The Collateral Trustee may from
time to time, at its option, perform any act which the Company agrees hereunder
to perform and which the Company shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Actionable Default) and
the Collateral Trustee may from time to time take any other action which the
Collateral Trustee or any Secured Debt Representative reasonably deems necessary
for the maintenance, preservation or protection of any of the Pledged Collateral
or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and shall be effected in the manner provided for in Section 7.5
of the Collateral Trust Agreement.
SECTION 7.5. Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
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SECTION 7.7. Governing Law, Entire Agreement, etc. THIS PLEDGE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE OTHER SECURITY
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
SECTION 7.8. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
PLEDGE AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL TRUSTEE OR THE COMPANY
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PLEDGED
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL TRUSTEE'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH PLEDGED COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE COMPANY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE
AGREEMENT.
SECTION 7.9. Waiver of Jury Trial. THE COLLATERAL TRUSTEE AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
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LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
PLEDGE AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL TRUSTEE OR THE COMPANY.
THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER SECURED
DEBT DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE SECURED PARTIES ENTERING INTO EACH SUCH SECURED DEBT
DOCUMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
CALPINE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title:
Address: 00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
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THE BANK OF NEW YORK, not in its individual
capacity, but solely as Collateral Trustee
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
15
ATTACHMENT 1
to
First Amendment Note Pledge Agreement
PLEDGED PROMISSORY NOTES
Pledged Note Issuers:
1. $99,750,000 Promissory Note from Calpine Eastern Corporation, dated June
1998.
2. $85,6000,000 Term Note from Calpine Xxxxxx, LLC, dated May 31, 2001.
3. $27,541,145 Subordinated Note from Calpine Xxxxxx, LLC, dated May 31, 2001.
4. $24,892,976 Promissory Note from Calpine Newark, LLC & Calpine Xxxxxx, Inc.
dated December 20, 2002.
5. Note from all of Calpine Corporation's wholly owned domestic subsidiaries
listed on the schedule attached thereto, dated May 17, 2002.
