Exhibit 4.4
SPONSOR
PLEDGE AGREEMENT
of
Company Stock and
NE LP Partnership Interests
THIS SPONSOR PLEDGE AGREEMENT (this "Agreement") is made and
entered into as of February 19, 1998 by ESI NORTHEAST ENERGY ACQUISITION
FUNDING, INC., a Florida corporation ("ESI Funding"), ESI NORTHEAST ENERGY GP,
INC., a Florida corporation ("ESI GP"), ESI NORTHEAST ENERGY LP, INC., a Florida
corporation ("ESI LP"), each having its principal office at ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRACTEBEL NORTHEAST GENERATION GP, INC., a
Delaware corporation having its principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Tractebel GP"), TRACTEBEL ASSOCIATES NORTHEAST LP,
INC., a Delaware corporation having its principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Tractebel LP" and together with ESI GP,
ESI LP and Tractebel GP, the "Owners of NE LP") and TRACTEBEL POWER, INC., a
Delaware corporation having its principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Tractebel" and together with ESI Funding, the
"Shareholders of the Company"), in favor of State Street Bank and Trust Company,
a Massachusetts banking corporation ("State Street Bank") having an office at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, as collateral agent (the
"Collateral Agent") for State Street Bank, as trustee (the "Trustee") for the
holders (the "Holders") of the 7.99% Secured Bonds Due 2011 of ESI TRACTEBEL
ACQUISITION CORP., a Delaware corporation (the "Company"). The Owners of NE LP
and the Shareholders of the Company shall be referred to herein collectively as
the "Sponsor Pledgors" and each individually as a "Sponsor Pledgor." Capitalized
terms used and not defined herein shall have the meanings given to such terms in
the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Shareholders of the Company are the legal and
beneficial owners of all of the issued and outstanding shares of capital stock
set forth on Schedule I hereto (the "Pledged Shares") of the Company; and
WHEREAS, the Owners of NE LP are the legal and beneficial
owners of all of the partnership interests including the "Interests," as defined
in the Agreement of Limited Partnership of Northeast Energy, LP, dated as of
November 21, 1997 among the Owners of NE LP (the "NE LP Partnership Agreement")
set forth on Schedule I hereto (the "Pledged Partnership Interests") in
Northeast Energy, LP, a Delaware limited partnership ("NE LP" and together with
the Company, the "Owned Entities"); and
WHEREAS, the Company and State Street Bank, as trustee and
collateral agent, have entered into that certain indenture dated as of February
19, 1998 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Indenture"), pursuant to which the Company issued $220
million in aggregate principal amount of 7.99% Secured Bonds due 2011 (together
with any bonds issued in replacement thereof or in exchange or substitution
therefor, the "Bonds"); and
WHEREAS, the terms of the Indenture require that each Sponsor
Pledgor (i) pledge to the Collateral Agent for its benefit, for the benefit of
the Trustee and the ratable benefit of the Holders of the Bonds, and grant to
the Collateral Agent for the ratable benefit of the Holders of Bonds a security
interest in, the Pledged Collateral (as defined herein) and (ii) execute and
deliver this Agreement in order to secure the payment and performance by the
Company, NE LP and NE LLC of all of the Obligations of the Company, NE LP and NE
LLC under the Indenture, the Notes, the Bond Guaranty and the Bonds.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order
to induce the Holders of Bonds to purchase the Bonds, each Sponsor Pledgor
hereby agrees with the Collateral Agent for its benefit, the benefit of the
Trustee and the ratable benefit of the Holders of Bonds as follows:
SECTION 1. Pledge. Each Sponsor Pledgor hereby pledges to the
Collateral Agent for its benefit and for the ratable benefit of the Holders of
Bonds, and grants to the Collateral Agent for its benefit, for the benefit of
the Trustee and the ratable benefit of the Holders of Bonds, a continuing
perfected first priority security interest in all of its right, title and
interest now owned or thereafter acquired in the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares,
including, without limitation, all dividends, cash, options, warrants,
rights, instruments, subscriptions and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares or any of the foregoing; and
(b) the Pledged Partnership Interests, and all products and proceeds of
any of the Pledged Partnership Interests, including, without limitation,
all dividends, cash, rights, and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Partnership Interests or any of the
foregoing including distributions of "Cash Flow" (as defined in the NE LP
Partnership Agreement); and
(c) all additional shares of, and all securities convertible into and
all warrants, options or other rights to purchase, Capital Stock of, or
other Equity Interests in, the Owned Entities from time to time acquired by
each Sponsor Pledgor in any manner, and the certificates, if any,
representing such additional shares and Equity Interests (any such
additional shares and Equity Interests and other items shall constitute
part of the Pledged Shares or the Pledged Partnership Interests, as
applicable, under and as defined in this Agreement), and all products and
proceeds of any of the foregoing, including, without limitation, all
dividends, cash, options, warrants, rights, instruments, subscriptions, and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
foregoing.
2
SECTION 2. Security for Obligations. This Agreement secures the prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all Obligations of the Company, NE LP and NE LLC
under the Indenture, the Note, the Bond Guaranty and the Bonds (including,
without limitation, interest, premium and Registration Default Damages, if any,
and any other Obligations accruing after the date of any filing by the Company
of any petition in bankruptcy or the commencement of any bankruptcy, insolvency
or similar proceeding with respect to the Company (the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. Each Sponsor Pledgor hereby
agrees that all certificates or instruments representing or evidencing the
Pledged Collateral shall be immediately delivered to and held at all times by
the Collateral Agent pursuant hereto in the State of New York and shall be in
suitable form for transfer by delivery, or issued in the name of such Sponsor
Pledgor and accompanied by instruments of transfer or assignment duly executed
in blank and undated and bearing appropriate signature guarantees, and in either
case having attached thereto all requisite federal or state stock transfer tax
stamps, all in form and substance satisfactory to the Collateral Agent. The
Collateral Agent shall have the right to transfer Pledged Collateral into its
name, as Collateral Agent hereunder, or into the name of its nominee.
SECTION 4. Representations and Warranties. Each Sponsor Pledgor hereby
makes all representations and warranties applicable to such Sponsor Pledgor
contained in the Indenture. Each Sponsor Pledgor further represents and warrants
that:
(a) The execution, delivery and performance by each Sponsor Pledgor of
this Agreement are within each Sponsor Pledgor's full power and authority
(corporate or other), have been duly authorized by all necessary action
(corporate or other), and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the certificate of
incorporation, bylaws or agreement of limited partnership of such Sponsor
Pledgor or of any agreement, judgment, injunction, order, decree or other
instrument binding upon such Sponsor Pledgor, or result in the creation or
imposition of any Lien on any assets of such Sponsor Pledgor, other than
the Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued and
are fully paid and non-assessable.
(c) The execution, delivery and performance of the NE LP Partnership
Agreement creating the Pledged Partnership Interests has been duly
authorized by each of the Owners of NE LP and such NE LP Partnership
Agreement constitutes the valid and binding obligations of each such Owner
of NE LP in accordance with its terms.
3
(d) The Pledged Shares constitute all of the authorized, issued and
outstanding Equity Interests of the Company and constitute all of the
Equity Interests of the Company beneficially owned by the Shareholders of
the Company. The Pledged Partnership Interests constitute all of the
authorized Equity Interests of NE LP and constitute all of the Equity
Interests of the NE LP beneficially owned by the Owners of NE LP.
(e) The Shareholders of the Company are the legal, record and
beneficial owners of the Pledged Shares, free and clear of any Lien or
claims of any Person except for the security interest created by this
Agreement. The Owners of NE LP are the legal, record and beneficial owners
of the Pledged Partnership Interests, free and clear of any Lien or claims
of any Person except for the security interest created by this Agreement.
(f) Each Sponsor Pledgor has full power and authority to enter into
this Agreement and has the right to vote, pledge and grant a security
interest in the Pledged Collateral as provided by this Agreement.
(g) This Agreement has been duly executed and delivered by each Sponsor
Pledgor and constitutes a legal, valid and binding obligation of each
Sponsor Pledgor, enforceable against each Sponsor Pledgor in accordance
with its terms.
(h) Upon the delivery to the Collateral Agent of the Pledged Collateral
and the filing of Uniform Commercial Code (the "UCC") financing statements,
the pledge of the Pledged Collateral pursuant to this Agreement creates a
valid and perfected first priority security interest in the Pledged
Collateral, securing the payment of the Secured Obligations for the benefit
of the Collateral Agent, the Trustee and the Holders of Bonds, and
enforceable as such against all creditors of the Sponsor Pledgors and any
Persons purporting to purchase any of the Pledged Collateral from the
Sponsor Pledgors.
(i) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the
pledge by any Sponsor Pledgor of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement
by any Sponsor Pledgor or (ii) for the exercise by the Collateral Agent of
the voting or other rights provided for in this Agreement or the remedies
in respect of the Pledged Collateral pursuant to this Agreement (except as
may be required in connection with such disposition by laws affecting the
offering and sale of securities).
(j) No litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the best knowledge
of any Sponsor Pledgor, threatened by or against such Sponsor Pledgor or
against any of its properties or revenues with respect to this Agreement or
any of the transactions contemplated hereby.
(k) The pledge of the Pledged Collateral pursuant to this Agreement is
not prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System).
4
(l) All information set forth herein relating to the Pledged Collateral
is accurate and complete in all respects.
SECTION 5. Further Assurance. The Sponsor Pledgors will at all times
cause the security interests granted pursuant to this Agreement to constitute
valid perfected first priority security interests in the Pledged Collateral,
enforceable as such against all creditors of Sponsor Pledgors and (except as
otherwise specifically provided herein) any Persons purporting to purchase any
Pledged Collateral from the Sponsor Pledgors. Each Sponsor Pledgor will,
promptly upon request by the Collateral Agent, execute and deliver or cause to
be executed and delivered, or use its best efforts to procure, all stock powers,
proxies, tax stamps, assignments, instruments and other documents, all in form
and substance satisfactory to the Collateral Agent, deliver any instruments to
the Collateral Agent and take any other actions that are necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect, continue the
perfection of, or protect the first priority of the Collateral Agent's security
interest in, the Pledged Collateral, to protect the Pledged Collateral against
the rights, claims, or interests of third persons, to enable the Collateral
Agent to exercise or enforce its rights and remedies hereunder, or otherwise to
effect the purposes of this Agreement. Each Sponsor Pledgor also hereby
authorizes the Collateral Agent to file any financing or continuation statements
with respect to the Pledged Collateral without the signature of such Sponsor
Pledgor to the extent permitted by applicable law. The Sponsor Pledgors will pay
all costs incurred in connection with any of the foregoing.
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, each Sponsor Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Shares or the
Pledged Partnership Interests or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Indenture; provided,
however, that such Sponsor Pledgor shall not exercise or shall refrain from
exercising any such right if such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof or be
inconsistent with or violate any provisions of this Agreement or the
Indenture.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the Indenture,
each Sponsor Pledgor shall be entitled to receive, and to utilize (subject
to the provisions of the Indenture) free and clear of the Lien of this
Agreement, all regular and ordinary cash dividends paid from time to time
in respect of the Pledged Shares and the Pledged Partnership Interests.
(c) Any and all (i) dividends, other distributions, interest and
principal payments paid or payable in the form of instruments and/or other
property (other than cash interest payments permitted under Section 6(b)
hereof and cash dividends permitted under Section 6(c) hereof) received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral, (ii) dividends and other distributions paid or payable
in cash in respect of any Pledged Shares or the Pledged Partnership
5
Interests in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, shall in each
case be forthwith delivered to the Collateral Agent to hold as Pledged
Collateral and shall, if received by a Sponsor Pledgor, be received in
trust for the benefit of the Collateral Agent, the Trustee and the Holders
of Bonds, be segregated from the other property and funds of such Sponsor
Pledgor and be forthwith delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary
endorsements).
(d) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to each Sponsor Pledgor all such proxies and other
instruments as such Sponsor Pledgor may reasonably request for the purpose
of enabling such Sponsor Pledgor to exercise the voting and other rights
that it is entitled to exercise pursuant to Sections 6(a) through 6(c)
above.
(e) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of each Sponsor Pledgor to exercise the voting and
other consensual rights that it would otherwise be entitled to exercise
pursuant to Section 6(a) shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which, to the extent permitted by
law, shall thereupon have the sole right to exercise such voting and other
consensual rights, and (ii) all cash interest payments and dividends and
other distributions payable in respect of the Pledged Collateral shall be
paid to the Collateral Agent and each Sponsor Pledgor's right to receive
such cash payments pursuant to Sections 6(b) and 6(c) hereof shall
immediately cease.
(f) Upon the occurrence and during the continuance of an Event of
Default, each Sponsor Pledgor shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent all such proxies, dividend
and interest payment orders and other instruments as the Collateral Agent
may reasonably request for the purpose of enabling the Collateral Agent to
exercise the voting and other rights that it is entitled to exercise
pursuant to Section 6(f) above.
(g) All payments of interest, principal or premium and all dividends
and other distributions that are received by a Sponsor Pledgor contrary to
the provisions of this Section 6 shall be received in trust for the benefit
of the Collateral Agent, the Trustee and the Holders, shall be segregated
from the other property or funds of such Sponsor Pledgor and shall be
forthwith delivered to the Collateral Agent as Pledged Collateral in the
same form as so received (with any necessary endorsements).
SECTION 7. Covenants. Each Sponsor Pledgor hereby covenants and agrees
with the Collateral Agent and the Holders of Bonds that it will comply with all
of the obligations, requirements and restrictions applicable to such Sponsor
Pledgor contained in the Indenture. Each Sponsor Pledgor further covenants and
agrees, from and after the date of this Agreement and until the Secured
Obligations have been paid in full, as follows:
6
(a) Each Sponsor Pledgor agrees that it will not (i) sell, assign,
transfer, convey or otherwise dispose of, or grant any option or warrant
with respect to, any of the Pledged Collateral without the prior written
consent of the Collateral Agent and except as permitted under the
Indenture, (ii) create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral, except for the security interest granted
under this Agreement, and at all times will be the sole beneficial owner
with respect to its Pledged Collateral, (iii) enter into any agreement or
understanding that purports to or that may restrict or inhibit the
Collateral Agent's rights or remedies hereunder, including, without
limitation, the Collateral Agent's right to sell or otherwise dispose of
the Pledged Collateral, (iv) take any action, or permit the taking of any
action by the Owned Entities, with respect to the Pledged Collateral the
taking of which would result in a material impairment of the economic value
of the Pledged Collateral as Collateral or a violation of the Indenture or
this Agreement, including, without limitation, the issuance by the Owned
Entities of any additional Equity Interests or promissory notes or the
incurrence by the Owned Entities of any Indebtedness to Persons other than
a Sponsor Pledgor (except as permitted by the Indenture), (v) permit the
Owned Entities to merge or consolidate with or into another person or
entity or sell or transfer all or substantially all of its assets to
another person or entity, except as permitted under the Indenture and
unless all outstanding Capital Stock, notes, other securities or Equity
Interests of the surviving entity in such merger or consolidation or of the
entity to whom such sale or transfer was made are, upon such merger or
consolidation, pledged hereunder to and deposited with the Collateral Agent
or (vi) fail to pay or discharge any tax, assessment or levy of any nature
not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment with regard to the Pledged
Collateral.
(b) Each Sponsor Pledgor agrees that immediately upon becoming the
beneficial owner of any additional shares of Capital Stock, notes, other
securities or Equity Interests of the Owned Entities (including as a result
of the merger or consolidation of the Owned Entities with or into another
entity) it will pledge and deliver to the Collateral Agent for its benefit,
the benefit of the Trustee and the ratable benefit of the Holders and grant
to the Collateral Agent for its benefit, the benefit of the Trustee and the
ratable benefit of the Holders, a continuing first priority security
interest in such shares, notes, other securities or Equity Interests (as
well as instruments of transfer or assignment duly executed in blank and
undated and any necessary stock transfer tax stamps, all in form and
substance satisfactory to the Collateral Agent). Each Sponsor Pledgor
further agrees that it will promptly deliver to the Collateral Agent a
certificate executed by a principal executive officer of such Sponsor
Pledgor describing such additional shares, notes, other securities or
Equity Interests and certifying that the same have been duly pledged and
delivered to the Collateral Agent hereunder.
(c) The Sponsor Pledgors agree that upon the acquisition or creation of
any new subsidiaries of any Owned Entity, the Sponsor Pledgors will
promptly pledge and deliver to the Collateral Agent for its benefit, the
benefit of the Trustee and the ratable benefit of the Holders and grant to
the Collateral Agent for its benefit, the benefit of the Trustee and the
7
ratable benefit of the Holders a first priority security interest in any
shares, notes, other securities or Equity Interests (as well as instruments
of transfer or assignment duly executed in blank and undated and any
necessary stock transfer tax stamps, all in form and substance satisfactory
to the Collateral Agent) of such subsidiaries.
SECTION 8. Power of Attorney. In addition to all of the powers granted
to the Collateral Agent pursuant to Section 11.06 of the Indenture, each Sponsor
Pledgor hereby appoints and constitutes the Collateral Agent as such Sponsor
Pledgor's attorney-in-fact to exercise all of the following powers upon and at
any time after the occurrence of an Event of Default: (i) collection of proceeds
of any Pledged Collateral; (ii) conveyance of any item of Pledged Collateral to
any purchaser thereof; (iii) giving of any notices or recording of any Liens
under Section 5 hereof; (iv) making of any payments or taking any acts under
Section 9 hereof and (v) paying or discharging taxes or Liens levied or placed
upon or threatened against the Pledged Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by the
Collateral Agent in its sole discretion, and such payments made by the
Collateral Agent to become the obligations of such Sponsor Pledgor to the
Collateral Agent, due and payable immediately without demand. The Collateral
Agent's authority hereunder shall include, without limitation, the authority to
endorse and negotiate, for the Collateral Agent's own account, any checks or
instruments in the name of each Sponsor Pledgor, execute and give receipt for
any certificate of ownership or any document, transfer title to any item of
Pledged Collateral, sign each Sponsor Pledgor's name on all financing statements
or any other documents deemed necessary or appropriate to preserve, protect or
perfect the security interest in the Pledged Collateral and to file the same,
prepare, file and sign each Sponsor Pledgor's name on any notice of Lien, and
prepare, file and sign each Sponsor Pledgor's name on a proof of claim in
bankruptcy or similar document against any customer of each Sponsor Pledgor, and
to take any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by each Sponsor Pledgor.
SECTION 9. Collateral Agent May Perform. If any Sponsor Pledgor fails
to perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Collateral Agent incurred in connection therewith shall be payable by such
Sponsor Pledgor under Section 14 hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the Collateral Agent's, the Trustee's and the Holders' of
Bonds security interest in and to the Pledged Collateral granted hereby and
shall not be interpreted to, and shall not, impose any duties on the Collateral
Agent in connection therewith. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
it being understood that the Collateral Agent shall not have any responsibility
for (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
8
SECTION 11. Subsequent Changes Affecting Collateral. Each Sponsor
Pledgor represents to the Collateral Agent, the Trustee and the Holders of Bonds
that such Sponsor Pledgor has made its own arrangements for keeping informed of
changes or potential changes affecting the Pledged Collateral (including, but
not limited to, rights to convert, rights to subscribe, payment of dividends,
payments of interest and/or principal, reorganization or other exchanges, tender
offers and voting rights), and such Sponsor Pledgor agrees that the Collateral
Agent and the Holders of Bonds shall have no responsibility or liability for
informing any Sponsor Pledgor of any such changes or potential changes or for
taking any action or omitting to take any action with respect thereto. Each
Sponsor Pledgor covenants that it will not, without the prior written consent of
the Collateral Agent, vote to enable, or take any other action to permit, the
Owned Entities to issue any capital stock, notes, other securities or Equity
Interests or to sell or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral or create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security interests
granted under this Agreement. Each Sponsor Pledgor will defend the right, title
and interest of the Collateral Agent, the Trustee and the Holders of Bonds in
and to the Pledged Collateral against the claims and demands of all Persons.
SECTION 12. Remedies Upon Default.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent on behalf of and for the benefit of the
Collateral Agent, the Trustee and the Holders of Bonds shall have, in
addition to all other rights given to such parties by law, by this
Agreement, the Company and Partner Pledge Agreement or the Indenture, all
of the rights and remedies with respect to the Pledged Collateral of a
secured party under the UCC as in effect in the State of New York at that
time. The Collateral Agent may, without notice and at its option, transfer
or register, and each Sponsor Pledgor shall register or cause to be
registered upon request therefor by the Collateral Agent, the Pledged
Collateral or any part thereof on the books of the Owned Entities into the
name of the Collateral Agent or the Collateral Agent's nominee(s), with or
without any indication that such Pledged Collateral is subject to the
security interest hereunder. In addition, with respect to any Pledged
Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the Collateral Agent may
sell or cause the same to be sold at any broker's board or at public or
private sale, in one or more sales or lots, at such price or prices as the
Collateral Agent may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk. The purchaser of any or
all Pledged Collateral so sold shall thereafter hold the same absolutely,
free from any claim, encumbrance or right of any kind whatsoever. Unless
any of the Pledged Collateral threatens to decline speedily in value or is
or becomes of a type sold on a recognized market, the Collateral Agent will
give the Sponsor Pledgors reasonable notice of the time and place of any
public sale thereof, or of the time after which any private sale or other
intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks,
insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Pledged Collateral shall
be deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is mailed to the Sponsor Pledgors as
provided below in Section 18.1, at least ten days before the time of the
sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Collateral Agent or any Holder of Bonds may, in its own name or in the name
9
of a designee or nominee, buy any of the Pledged Collateral at any public
sale and, if permitted by applicable law, at any private sale. All expenses
(including court costs and reasonable attorneys' fees and disbursements)
of, or incident to, the enforcement of any of the provisions hereof shall
be recoverable from the proceeds of the sale or other disposition of the
Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its
right to sell any or all of the Pledged Shares or the Pledged Partnership
Interests pursuant to Section 12(a) above, and if in the opinion of counsel
for the Collateral Agent it is necessary, or if in the opinion of the
Collateral Agent it is advisable, to have the Pledged Shares or the Pledged
Partnership Interests or that portion thereof to be sold, registered under
the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the Sponsor Pledgors will cause the applicable Owned Entity to (i)
execute and deliver, and cause its directors and officers to execute and
deliver, all at such Owned Entity's expense, all such instruments and
documents, and to do or cause to be done all such other acts and things as
may be necessary or, in the opinion of the Collateral Agent, advisable to
register such Pledged Shares or the Pledged Partnership Interests under the
provisions of the Securities Act, (ii) cause the registration statement
relating thereto to become effective and to remain effective for a period
of 180 days from the date of the first public offering of such Pledged
Shares, Pledged Partnership Interests or that portion thereof to be sold
and (iii) make all amendments thereto and/or to the related prospectus
that, in the opinion of the Collateral Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission applicable
thereto. The Sponsor Pledgors agree to cause such Owned Entity to comply
with the provisions of the securities or "Blue Sky" laws of any
jurisdiction that the Collateral Agent shall designate for the sale of the
Pledged Shares or the Pledged Partnership Interests and to make available
to such Owned Entity's security holders, as soon as practicable, an
earnings statement (which need not be audited) that will satisfy the
provisions of Section 11(a) of the Securities Act. The Sponsor Pledgors
will cause such Owned Entity to furnish to the Collateral Agent such number
of copies as the Collateral Agent may reasonably request of each
preliminary and final prospectus, to notify the Collateral Agent promptly
of the happening of any event as a result of which any then effective
prospectus includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of then existing
circumstances, and to cause the Collateral Agent to be furnished with such
number of copies as the Collateral Agent may request of such supplement to
or amendment of such prospectus. The Sponsor Pledgors will cause such Owned
Entity, to the extent permitted by law, to indemnify, defend and hold
harmless the Collateral Agent, the Trustee and the Holders of Bonds from
and against all losses, liabilities, expenses or claims (including
reasonable legal expenses and the reasonable costs of investigation) that
the Collateral Agent, the Trustee or the Holders of Bonds may incur under
the Securities Act or otherwise, insofar as such losses, liabilities,
expenses or claims arise out of or are based upon any alleged untrue
statement of a material fact contained in such registration statement (or
any amendment thereto) or in any preliminary or final prospectus (or any
amendment or supplement thereto), or arise out of or are based upon any
10
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except to the
extent that any such losses, liabilities, expenses or claims arise solely
out of or are based upon any such alleged untrue statement made or such
alleged omission to state a material fact included or excluded on the
written direction of the Collateral Agent. The Sponsor Pledgors will cause
such Owned Entity to bear all costs and expenses of carrying out its
obligations hereunder.
(c) In view of the fact that federal and state securities laws
may impose certain restrictions on the method by which a sale of the
Pledged Collateral may be effected after an Event of Default, each Sponsor
Pledgor agrees that upon the occurrence or existence of any Event of
Default, the Collateral Agent may, from time to time, attempt to sell all
or any part of the Pledged Collateral by means of a private placement,
restricting the prospective purchasers to those who will represent and
agree that they are purchasing for investment only and not for
distribution. In so doing, the Collateral Agent may solicit offers to buy
the Pledged Collateral, or any part of it, for cash, from a limited number
of investors who might be interested in purchasing the Pledged Collateral.
Each Sponsor Pledgor acknowledges and agrees that any such private sale may
result in prices and terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner.
The Collateral Agent shall be under no obligation to delay a sale of any of
the Pledged Collateral for the period of time necessary to permit a Owned
Entity to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Owned Entity
agrees to do so.
(d) Each Sponsor Pledgor further agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary
to make such sale or sales of all or any portion of the Pledged Collateral
pursuant to this Section 12 valid and binding and in compliance with any
and all other applicable requirements of law. Each Sponsor Pledgor further
agrees that a breach of any of the covenants contained in this Section 12
will cause irreparable injury to the Collateral Agent, the Trustee and the
Holders of Bonds, that the Collateral Agent, the Trustee and the Holders of
Bonds have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 12
shall be specifically enforceable against such Sponsor Pledgor, and each
Sponsor Pledgor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants except for a defense
that no Event of Default has occurred under the Indenture.
SECTION 13. Irrevocable Authorization and Instruction to the Company.
The Sponsor Pledgors hereby authorize and instruct the Owned Entities to comply
with any instruction received by a Owned Entity from the Collateral Agent that
(i) states that an Event of Default has occurred and (ii) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from any Sponsor Pledgor, and each Sponsor Pledgor agrees that such
Owned Entity shall be fully protected in so complying.
SECTION 14. Fees and Expenses. The Sponsor Pledgors will upon demand
pay to the Collateral Agent the amount of any and all reasonable fees and
expenses (including, without limitation, the reasonable fees and disbursements
of its counsel, of any investment banking firm, business broker or other selling
agent and of any other experts and agents retained by the Collateral Agent) that
11
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders of
Bonds hereunder or (iv) the failure by any Sponsor Pledgor to perform or observe
any of the provisions hereof.
SECTION 15. Security Interest Absolute. All rights of the Collateral
Agent and the Holders of Bonds and the security interests created hereunder, and
all obligations of each Sponsor Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) 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
amendment or waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Secured Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company or any Sponsor Pledgor in
respect of the Secured Obligations or of this Agreement.
SECTION 16. Application of Proceeds. 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 Pledged Collateral and any cash held
shall be applied by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral Agent
and the Trustee, and all expenses, liabilities and advances incurred or made by
the Collateral Agent or the Trustee in connection therewith, and any other
unreimbursed fees and expenses for which the Collateral Agent is to be
reimbursed pursuant to Section 14 hereof;
second, to the ratable payment (based on the principal amount of Bonds
deemed by the Indenture to be outstanding at the time of distribution) of
amounts due and unpaid on such outstanding Bonds for principal, premium, and
Registration Default Damages (if any) and interest without preference or
priority of any kind, according to amounts due and payable on the Bonds for
principal, premium and Registration Default Damages (if any) and interest,
respectively;
12
third, to the ratable payment (based on the principal amount of Bonds
deemed by the Indenture to be outstanding at the time of distribution) of all
other Secured Obligations, until all Secured Obligations shall have been paid in
full; and
fourth, to payment to the applicable Sponsor Pledgor or its successors
or assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds;
provided that, at the written request of the Trustee, the Collateral Agent shall
pay any proceeds or cash as set forth in clauses first through third of this
Section to the Trustee to be paid and distributed by the Trustee in accordance
with the provisions of the Indenture, the Note and the Bonds, which payment
shall release the Collateral Agent from all responsibility for such payments
except for payments as set forth in clause fourth of this Section.
SECTION 17. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Pledged Shares (whether now owned or acquired
hereafter by any Sponsor Pledgor) are uncertificated Pledged Shares, such
Sponsor Pledgor shall promptly notify the Collateral Agent, and shall promptly
take all actions required to perfect the security interest of the Collateral
Agent under applicable law. Each Sponsor Pledgor further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Collateral Agent with respect to any such pledge of uncertificated Pledged
Shares promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
Section 18.1. Notices. All notices, approvals, consents or
other communications required or desired to be given hereunder shall be in the
form and manner as set forth in Section 13.02 of the Indenture, and delivered to
the addresses set forth in such Section, or, in the case of the Collateral
Agent, to:
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: Corporate Trust Department-ESI Tractebel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
Section 18.2. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by a Sponsor Pledgor to the
Collateral Agent to take any action or omit to take any action under this
Agreement, such Sponsor Pledgor shall deliver to the Collateral Agent an
Officer's Certificate and an Opinion of Counsel in accordance with the
requirements of Section 13.04 of the Indenture.
Section 18.3. No Adverse Interpretation of Other Agreements.
This Agreement may not be used to interpret another pledge, security or debt
agreement of any Sponsor Pledgor, any Owned Entities or any subsidiary thereof.
No such pledge, security or debt agreement may be used to interpret this
Agreement.
13
Section 18.4. Severability. The provisions of this Agreement
are severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 18.5. No Recourse Against Others. Except to the extent
provided in the Indenture, the Company and Partner Pledge Agreement and this
Agreement, no director, officer, employee, stockholder or affiliate, as such, of
any Sponsor Pledgor or any Owned Entity shall have any liability for any
obligations of a Sponsor Pledgor under this Agreement or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Holder of
Bonds, by accepting a Bond, waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Bonds.
Section 18.6. Headings. The headings of the Articles and
Sections of this Agreement have been inserted for convenience of reference only,
are not to be considered a part hereof and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 18.7. Counterpart Originals. This Agreement may be
signed in two or more counterparts. Each signed copy shall be an original, but
all of them together represent one and the same agreement. Each counterpart may
be executed and delivered by telecopy, if such delivery is promptly followed by
the original manually signed copy sent by overnight courier.
Section 18.8. Benefits of Agreement. Nothing in this
Agreement, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Trustee and the Holders of Bonds, any
benefit or any legal or equitable right, remedy or claim under this Agreement.
Section 18.9. Amendments, Waivers and Consents. Any amendment
or waiver of any provision of this Agreement and any consent to any departure by
any Sponsor Pledgor from any provision of this Agreement shall be effective only
if made or given in compliance with all of the terms and provisions of the
Indenture necessary for amendments or waivers of, or consents to any departure
by such Sponsor Pledgor from any provision of the Indenture, as applicable, and
neither the Collateral Agent, the Trustee nor any Holder of Bonds shall be
deemed, by any act, delay, indulgence, omission or otherwise, to have waived any
right or remedy hereunder or to have acquiesced in any Event of Default or in
any breach of any of the terms and conditions hereof. Failure of the Collateral
Agent, the Trustee or any Holder of Bonds to exercise, or delay in exercising,
any right, power or privilege hereunder shall not operate as a waiver thereof.
No single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Collateral Agent, the Trustee or any
Holder of Bonds of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy that the Collateral Agent or such
Holder of Bonds would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any rights or remedies provided by law.
14
Section 18.10. Interpretation of Agreement. Time is of the
essence in each provision of this Agreement of which time is an element. All
terms not defined herein or in the Indenture shall have the meaning set forth in
the applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 18.11. Continuing Security Interest; Transfer. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until the payment in full of all
the Secured Obligations and all the fees and expenses owing to the Collateral
Agent and the Trustee, (ii) be binding upon each Sponsor Pledgor, its successors
and assigns, and (iii) inure, together with the rights and remedies of the
Collateral Agent and the Trustee hereunder, to the benefit of the Collateral
Agent, the Trustee the Holders of Bonds and their respective successors,
transferees and assigns.
Section 18.12. Reinstatement. This Agreement shall continue to
be effective or be reinstated if at any time any amount received by the
Collateral Agent, the Trustee or any Holder of Bonds in respect of the Secured
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent, the Trustee or any Holder of Bonds upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any Sponsor Pledgor or
upon the appointment of any receiver, intervenor, conservator, trustee or
similar official for any Sponsor Pledgor or any substantial part of its assets,
or otherwise, all as though such payments had not been made.
Section 18.13. Survival of Provisions. All representations,
warranties and covenants of each Sponsor Pledgor contained herein shall survive
the execution and delivery of this Agreement, and shall terminate only upon the
full and final payment and performance by the Company of the Secured
Obligations.
Section 18.14. Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the
Collateral Agent by the terms hereof, together with such powers as are
reasonably incident thereto. The Collateral Agent may perform any of
its duties hereunder or in connection with the Pledged Collateral by or
through agents or employees and shall be entitled to retain counsel and
to act in reliance upon the advice of counsel concerning all such
matters. Neither the Collateral Agent nor any director, officer,
employee, attorney or agent of the Collateral Agent shall be
responsible for the validity, effectiveness or sufficiency hereof or of
any document or security furnished pursuant hereto. The Collateral
Agent shall be without liability for acting in good faith at the
written direction of a majority in interest of the Holders of the Bonds
and in reliance thereon. The Collateral Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on
any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper
person or persons and shall be without liability for any actions it or
they take or omit to take in good faith that the Collateral Agent
15
reasonably believes to be authorized or within its powers. The Sponsor
Pledgors agree to indemnify and hold harmless the Collateral Agent, the
Holders of Bonds and any other Person from and against any and all
costs, expenses (including the reasonable fees and disbursements of
counsel (including, the allocated costs of inside counsel)), claims and
liabilities incurred by the Collateral Agent, the Holders of Bonds or
such Person hereunder, unless such claim or liability shall be due to
willful misconduct or gross negligence on the part of the Collateral
Agent, the Holders of Bonds or such Person.
(b) Each Sponsor Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent
and the Holders of Bonds, be governed by the Indenture and by such
other agreements with respect thereto as may exist from time to time
among them, but, as between the Collateral Agent and the Sponsor
Pledgors, the Collateral Agent shall be conclusively presumed to be
acting as agent for the Holders of Bonds with full and valid authority
so to act or refrain from acting, and the Sponsor Pledgors shall not be
obligated or entitled to make any inquiry respecting such authority.
Section 18.15. Resignation or Removal of the Collateral Agent.
Until such time as the Secured Obligations shall have been paid in full, the
Collateral Agent may at any time, by giving written notice to the Sponsor
Pledgors and Holders of Bonds, resign and be discharged of the responsibilities
hereby created, such resignation to become effective upon (i) the appointment of
a successor Collateral Agent and (ii) the acceptance of such appointment by such
successor Collateral Agent. As promptly as practicable after the giving of any
such notice, the Holders of Bonds by vote of a majority in interest thereof,
shall appoint a successor Collateral Agent. If no successor Collateral Agent
shall be appointed and shall have accepted such appointment within 90 days after
the Collateral Agent gives the aforesaid notice of resignation, the Collateral
Agent may apply to any court of competent jurisdiction to appoint a successor
Collateral Agent to act until such time, if any, as a successor shall have been
appointed as provided in this Section 18.15. Any successor so appointed by such
court shall immediately and without further act be superseded by any successor
Collateral Agent appointed by the Holders of Bonds, as provided in this Section
18.15. Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Pledged Collateral
and all instruments of transfer or assignment) held by it pursuant to the terms
hereof. The Collateral Agent that has resigned shall be entitled to fees, costs
and expenses to the extent incurred or arising, or relating to events occurring,
before its resignation or removal.
Section 18.16. Release; Termination of Agreement.
16
(a) Subject to the provisions of Section 18.12 hereof, this
Agreement shall terminate (i) upon full and final payment and
performance of the Secured Obligations (and upon receipt by the
Collateral Agent of the Company's written certification that all such
Secured Obligations have been satisfied) and payment in full of all
fees and expenses owing by the Sponsor Pledgors to the Collateral Agent
or (ii) on the day after the first anniversary of the Legal Defeasance
of all of the Secured Obligations pursuant to Section 8.02 of the
Indenture (other than those surviving Secured Obligations specified
therein). At such time, the Collateral Agent shall, at the request of
the Sponsor Pledgors, reassign and redeliver to the Sponsor Pledgors
all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Collateral Agent in accordance
with the terms hereof. Such reassignment and redelivery shall be
without warranty by or recourse to the Collateral Agent, except as to
the absence of any prior assignments by the Collateral Agent of its
interest in the Pledged Collateral, and shall be at the expense of the
Sponsor Pledgors.
(b) Each Sponsor Pledgor agrees that it will not, except as
permitted by the Indenture, sell or dispose of, or grant any option or
warrant with respect to, any of the Pledged Collateral.
Section 18.17. Final Expression. This Agreement, together with
any other agreement executed in connection herewith, is intended by the parties
as a final expression of their Agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof.
Section 18.18. GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL; WAIVER OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
SPONSOR PLEDGORS, THE COLLATERAL AGENT AND THE HOLDERS OF BONDS IN CONNECTION
WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, EACH OF THE SPONSOR PLEDGORS, THE COLLATERAL AGENT AND THE HOLDERS
OF BONDS AGREE THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, BUT EACH OF THE SPONSOR PLEDGORS, THE COLLATERAL AGENT AND THE
17
HOLDERS OF BONDS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH SPONSOR PLEDGOR
WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT CONSIDERING THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iii) EACH SPONSOR PLEDGOR AGREES THAT THE COLLATERAL AGENT
SHALL, IN ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF BONDS, HAVE
THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST SUCH
SPONSOR PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED
IN GOOD FAITH TO ENABLE THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL
AGENT. EACH SPONSOR PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON
SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
COLLATERAL AGENT. EACH SPONSOR PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iv) EACH OF THE SPONSOR PLEDGORS, THE COLLATERAL AGENT AND
THE HOLDERS OF BONDS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) EACH SPONSOR PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS 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, TO SUCH SPONSOR PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION 13.02 OF
THE INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER
SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT OR ANY HOLDER OF BONDS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY SPONSOR
PLEDGOR IN ANY OTHER JURISDICTION.
18
(vii) EACH SPONSOR PLEDGOR HEREBY AGREES THAT NEITHER THE
COLLATERAL AGENT NOR ANY HOLDER OF BONDS SHALL HAVE ANY LIABILITY TO SUCH
SPONSOR PLEDGOR (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES
SUFFERED BY SUCH SPONSOR PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED
BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A
COURT THAT IS BINDING ON THE COLLATERAL AGENT OR SUCH HOLDER OF BONDS, AS THE
CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART
OF THE COLLATERAL AGENT OR SUCH HOLDER OF BONDS, AS THE CASE MAY BE,
CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(viii) EACH SPONSOR PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND
HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER
OF BONDS OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO
REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. EACH SPONSOR PLEDGOR
WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY
HOLDER OF BONDS IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN
POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE COLLATERAL AGENT OR ANY HOLDER OF BONDS, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION
THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN SUCH SPONSOR PLEDGOR,
THE COLLATERAL AGENT AND THE HOLDERS OF BONDS.
Section 18.19. TIA Provision. In the event that the TIA
applies to this Agreement, the provisions required by the TIA shall be deemed to
be included herein and shall supersede any provision hereof which may conflict
with the TIA.
Section 18.20. Acknowledgments. Each Sponsor Pledgor hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement;
(b) neither the Collateral Agent nor any Holder of Bonds has
any fiduciary relationship to such Sponsor Pledgor, and the
relationship between the Collateral Agent and the Holders of Bonds, on
the one hand, and such Sponsor Pledgor, on the other hand, is solely
that of a secured party and a creditor; and
(c) no joint venture exists among the Holders of Bonds or
among any Sponsor Pledgor and the Holders of Bonds.
[Signature Page Follows]
19
IN WITNESS WHEREOF, the Sponsor Pledgors and the Collateral
Agent have each caused this Agreement to be duly executed and delivered as of
the date first above written.
SPONSOR PLEDGORS:
ESI Northeast Energy GP, Inc.,
a Florida corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ESI Northeast Energy LP, Inc.,
a Florida corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Tractebel Northeast Generation GP, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Tractebel Associates Northeast LP, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
ESI Northeast Energy Acquisition Funding, Inc.,
a Florida corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Tractebel Power, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
COLLATERAL AGENT:
State Street Bank and Trust Company,
as Collateral Agent
By: /s/ Chi C. Ma
-----------------------------
Name: Chi C. Ma
Title: Assistant Vice President
Execution Copy
SCHEDULE I
PLEDGED COLLATERAL
Number of
Shareholders of Pledged Shares Share Certificate Percentage
the Company of the Company Number Outstanding
---------------- -------------- ------ -----------
ESI Funding 10 1 50%
Tractebel 10 2 50%
---
100%
Interest* in
Owners of NE LP NE LP
--------------- -----
ESI LP 49%
ESI GP 1%
Tractebel LP 49%
Tractebel GP 1%
---
100%
----------
* As defined in the NE LP Partnership Agreement.
A-1
