Exhibit 99.4
GENERAL SECURITY AGREEMENT
This General Security Agreement (this "AGREEMENT") is made this
18th day of October, 2001 by The New Power Company, a Delaware corporation (the
"GRANTOR"), in favor of Enron North America Corp., a Delaware corporation, Enron
Energy Services, Inc., a Delaware corporation and Enron Power Marketing, Inc., a
Delaware corporation (each, a "SECURED PARTY" and collectively, the "SECURED
PARTIES").
RECITALS
Grantor and the Secured Parties have previously entered into that
certain Master Cross-Product Netting, Setoff, and Security Agreement dated as of
March 14, 2001 (as heretofore amended by a First Amendment and a Second
Amendment and as hereafter amended and in effect from time to time, the "MASTER
NETTING AGREEMENT") and certain Underlying Master Agreements (as each has been
heretofore modified, amended or restated).
Xxxxx Xxxxx 00, 0000, Xxxxxxx and the Secured Parties have continued
to enter into new transactions under the Underlying Master Agreements and to
provide security margin payments in accordance with the new requirements in the
Master Netting Agreement which amended the separate collateral requirements
under each Underlying Master Agreement.
In accordance with the terms of the Master Netting Agreement,
Grantor has posted $109,300,000 of collateral in the form of cash to the Secured
Parties in order to satisfy Grantor's margin payment requirements to the Secured
Parties.
Pursuant to a letter dated September 26, 2001, the Secured Parties
have requested Grantor to provide an additional $15,000,000 in collateral to the
Secured Parties.
Grantor and the Secured Parties have discussed how to enable Grantor
to provide such collateral to the Secured Parties and to otherwise meet its
obligations.
The Secured Parties, have agreed to permit Grantor, for a limited
time, to provide collateral in a form other than cash under the Master Netting
Agreement in order to provide such additional collateral to the Secured Parties
and to provide cash liquidity to Grantor, all on the terms and conditions
provided for in that certain Second Amendment to Master Cross-Product Netting,
Setoff, and Security Agreement dated as of date even herewith (the "SECOND
AMENDMENT").
Pursuant to the Second Amendment, certain of the modified collateral
requirements of the Grantor to the Secured Parties have been incorporated in
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Secured Parties to permit the substitution of collateral other than
as currently provided for in the Master Netting Agreement so that Grantor may
(i) satisfy its margin payments described above and (ii) have cash liquidity
available, the Grantor hereby agrees as follows:
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SECTION 1. DEFINED TERMS AND RELATED MATTERS.
(a) The capitalized terms used herein which are defined in the
Master Netting Agreement and not otherwise defined herein shall have the
meanings specified in the Master Netting Agreement.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement.
(c) Unless otherwise defined herein, the terms defined in Articles 8
and 9 of the Uniform Commercial Code as enacted in the State of New York
(the "CODE") are used herein as therein defined.
(d) The following terms used in this Agreement are defined as
follows:
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative
thereto.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, governmental authority or other entity.
"SUBSIDIARY" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated
with those of the parent in the parent's consolidated financial statements
if such financial statements were prepared in accordance with GAAP as of
such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than
50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise controlled,
by the parent or one or more subsidiaries of the parent or by the parent
and one or more subsidiaries of the parent.
SECTION 2. GRANT OF SECURITY INTEREST. In order to satisfy Grantor's
margin payments under the Master Netting Agreement, Grantor hereby assigns and
pledges to the Secured Parties, and hereby grants to the Secured Parties a
security interest in and an assignment of all of Grantor's right, title and
interest in and to its property described in
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subsections (a) through (c) of this Section 2 (the "COLLATERAL"), whether now
owned or hereafter acquired, and any rights, remedies or claims with respect to
any thereof and any proceeds of any thereof:
(a) All presently existing or hereafter acquired or created
accounts, accounts receivable, contract rights, notes, drafts,
acceptances, chattel paper, letters of credit and writings evidencing a
monetary obligation or a security interest in goods (including, without
limitation, electricity or natural gas), all rights to receive the payment
of money or other considerations under present or future contracts
(including, without limitation, all rights to receive payments under
presently existing or hereafter acquired or created letters of credit) or
by virtue of merchandise sold, services rendered, loans and advances made
or other considerations given, whether or not earned by performance and
whether or not evidenced by or set forth in or arising out of any present
or future chattel paper, note, draft, acceptance, writing, bond, insurance
policy, instrument, document or general intangible (to the extent that one
or more of the Enron Parties is the counterparty under such arrangement
that is a general intangible), and all extensions and renewals of any
thereof, all rights under or arising out of present or future contracts,
agreements or general intangibles, including all rights and payments under
licensing agreements or arrangements (to the extent that one or more of
the Enron Parties is the counterparty under such arrangement that is a
general intangible), franchises, or permits, all right, title and interest
in merchandise which gave rise to any or all of the foregoing, including
all goods, electricity, or natural gas, all claims or causes of action now
existing or hereafter arising in connection with or under any agreement or
document or by operation of law or otherwise, all collateral security of
any kind (including real property mortgages) given by any person with
respect to any of the foregoing, including in any event, all accounts,
instruments and chattel paper within the meaning of the Uniform Commercial
Code in effect in any applicable jurisdiction, other than any other
agreement, contract or instrument to which Grantor is a party (by
operation of law or otherwise) (excluding any proceeds received by Grantor
therefrom or accounts receivable with respect thereto) (i) which according
to its terms is not expressly assignable or under which the grant of a
security interest therein by Grantor hereunder would be expressly
prohibited or would cause a breach or default thereof and (ii) for which
consent to the transactions contemplated hereunder has not been obtained
by Grantor (any and all of the foregoing being the "RECEIVABLES");
(b) All right, title and interest of Grantor in and to all of its
inventory in all of its forms, wherever located, now or hereafter existing
and whether acquired by purchase, merger or otherwise and all raw
materials (including without limitation any and all natural gas in
storage, in pipelines, and any contracts for gas storage) and work in
process therefor, including in any event all inventory within the meaning
of the Uniform Commercial Code in effect in any applicable jurisdiction,
goods in which Grantor has an interest in mass or a joint or other
interest or right of any kind and goods which are returned to or
repossessed by Grantor, and all accessions thereto and products thereof
(collectively, the "INVENTORY");
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(c) The proceeds, in cash or otherwise, of the Collateral described
in the foregoing clauses (a) and (b) (whether or not such contracts,
agreements or instruments are assignable hereunder) (including, without
limitation, the proceeds of any sale or other disposition of such
Collateral and all insurance proceeds of any kind paid at any time in
connection with such Collateral), all liens (whether possessory,
contractual, statutory or otherwise) with respect to such Collateral, and
all rights, remedies and claims (whether in the nature of indemnities,
warranties, guaranties or otherwise) of Grantor with respect to such
Collateral, including without limitation, the right of Grantor to bring
suit to enforce its rights with respect to such Collateral, in any case
whether now existing or hereafter at any time or from time to time
arising.
The inclusion of proceeds in this Agreement does not authorize Grantor to sell,
dispose of or otherwise use the Collateral in any manner not specifically
authorized hereby.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures the
prompt and complete (a) payment of all obligations of Grantor to the Secured
Parties now or hereafter existing under the Master Netting Agreement and each of
the Underlying Master Agreements; and (b) performance and observance by Grantor
of all covenants and conditions contained in the Master Netting Agreement and
each of the Underlying Master Agreements (all such obligations, covenants and
conditions described in the foregoing clauses (a) and (b), as applicable,
whether for principal, interest, fees, expenses or otherwise, being hereinafter
collectively referred to as the "OBLIGATIONS").
SECTION 4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (a) Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed; (b) the exercise by any Secured Party of any of
the rights hereunder shall not release Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral; and
(c) no Secured Party shall have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement, nor shall
any Secured Party be obligated to perform any of the obligations or duties of
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES; COVENANTS. Grantor hereby
represents, warrants and covenants as follows:
(a) The principal place of business and chief executive office of
the Grantor is located at its address shown on SCHEDULE I. Grantor will
give the Secured Parties thirty (30) days prior written notice of any
change of the address of its principal place of business or chief
executive office listed on SCHEDULE I.
(b) All records concerning Grantor's Receivables and all originals
of all Chattel Paper which evidence Receivables are and will remain
located at Grantor's offices set forth on SCHEDULE I.
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(c) All of the Inventory is located at the places specified in
SCHEDULE II. Grantor will give the Secured Parties thirty (30) days prior
written notice of any change of the location of the Inventory listed on
SCHEDULE II.
(d) Grantor is the lawful owner of good and marketable title to the
Collateral free and clear of any lien other than statutory liens imposed
without the consent of the Grantor and customary arrangements with
regulated utilities in respect of routine charges for billing and
collection services, and has the right and authority to grant a security
interest in the Collateral.
(e) This Agreement is, and all other documents and instruments
executed in connection herewith, when delivered will be, legal, valid and
binding obligations of Grantor in accordance with their respective terms,
except as enforceability may be (i) limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and (ii) subject to the effect of general principles of
equity.
(f) Upon the making of all filings and the taking of all other
actions necessary to perfect the security interests created hereby, this
Agreement will create a valid first priority security interest in the
Collateral securing the payment of the Obligations, subject to existing
statutory liens imposed without the consent of the Grantor and to
customary encumbrances in favor of regulated utilities for routine charges
for billing and collection services.
(g) Grantor will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or any
substantial part of its assets, or all or substantially all of the stock
of any of its Subsidiaries (in each case, whether now owned or here-after
acquired), or liquidate or dissolve, except that, if at the time thereof
and immediately after giving effect thereto no Default shall have occurred
and be continuing (i) any Subsidiary may merge into Grantor in a
transaction in which Grantor is the surviving corporation, (ii) any
Subsidiary may merge into any other Subsidiary in a transaction in which
the surviving entity is a Subsidiary, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to Grantor or to
another Subsidiary and (iv) any Subsidiary may liquidate or dissolve if
Grantor determines in good faith that such liquidation or dissolution is
in the best interests of Grantor and is not materially disadvantageous to
the Secured Parties.
(h) Grantor will not, and will not permit any of its Subsidiaries
to, (i) sell, encumber or otherwise transfer any of its Receivables except
in the ordinary course of its business as currently conducted pursuant to
existing electric and gas distribution contracts with regulated utilities
in respect of billing and collection services that may be styled as a sale
of Receivables but which create a Receivable to Grantor from such utility,
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(ii) sell, encumber or otherwise transfer any of its property or assets
other than its Inventory sold in the ordinary course of NewPower's
business, and other than for encumbrances to regulated utilities for
routine charges for billing and collection services (including the sale of
Receivables pursuant to (i) above), or (iii) sell, lease or otherwise
transfer to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of
its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to Grantor or such
Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties, or (b) transactions between or among Grantor and its wholly
owned Subsidiaries not involving any other Affiliate.
(i) Grantor will not pledge, encumber, hypothecate or grant a
security interest in any cash or assets owned by Grantor other than in
favor of the Secured Parties or as otherwise permitted under the Master
Netting Agreement as amended.
SECTION 6. FURTHER ASSURANCES.
(a) The Grantor authorizes the Secured Parties to file financing
statements (including without limitation Form UCC-1 or Form UCC-3, as the
case may be) and such other security documents to be executed by Grantor
in such offices and locations as are necessary in the opinion of the
Secured Parties to perfect the security interests granted herein. Grantor
further agrees that from time to time and at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and
documents, provide all further information and reports, and take all
further action that may be reasonably necessary, or that the Secured
Parties may reasonably request, in order to perfect and protect any
security interests renewed and extended or granted or purported to be
granted hereby or to enable the Secured Parties to exercise and enforce
their rights and remedies hereunder with respect to any of the Collateral.
(b) Grantor authorizes the Secured Parties to file a carbon,
photographic or other reproduction of this Agreement as a financing
statement or to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without
the signature of Grantor where permitted by law.
(c) Grantor will cause to be paid prior to delinquency all taxes,
charges, liens and assessments heretofore or hereafter levied or assessed
against the Collateral, or any part thereof, or against the Secured
Parties for or on account of the indebtedness secured hereby or the
interest created by this Agreement, and will furnish Secured Parties with
receipts or other satisfactory evidence showing payment of such taxes and
assessments at least ten (10) days prior to the applicable default date
therefor.
(d) If the validity or priority of this Agreement or of any rights,
titles, security interests or other interests created or evidenced hereby
shall be attacked, endangered or questioned, or if any legal proceedings
are instituted with respect thereto, Grantor will give prompt written
notice thereof to Secured Parties and, at Grantor's own cost and
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expense, will diligently endeavor to cure any defect which may be
developed or claimed, and will take all necessary and proper steps for the
defense of such legal proceedings, and the Secured Parties (whether or not
named as a party to legal proceedings with respect thereto) are hereby
authorized and empowered to take such additional steps as in their
judgment and discretion may be necessary or proper for the defense of any
such legal proceedings or the protection of the validity or priority of
this Agreement and the rights, titles, security interests and other
interests created or evidenced hereby, and all expenses so incurred of
every kind and character shall be a demand obligation owing by Grantor to
Secured Parties.
(e) Grantor shall account fully and faithfully for and, if any
Secured Party would otherwise be entitled under the Master Netting
Agreement to and does so elect, shall promptly pay or turn over to such
Secured Party, the proceeds in whatever form received from disposition in
any manner of any of the Collateral, whether the indebtedness secured
hereby is mature or not, the order and method of application to be the
sole discretion of such Secured Party, except as otherwise specifically
authorized herein. Grantor shall at all times keep the Collateral and its
proceeds separate and distinct from other property of Grantor and shall
keep accurate and complete records of the Collateral and its proceeds.
(f) Grantor shall notify the Secured Parties promptly of (a) any
lien, security interest, encumbrance or claim made or asserted against any
of the Collateral other than customary arrangements with regulated
utilities in respect of routine charges for billing and collection
services; (b) any material change in the composition of the Collateral;
and (c) the occurrence of any other event that could have a material
adverse effect on the aggregate value of the Collateral or on the security
interests created hereunder.
SECTION 7. INSURANCE. Grantor shall at its own expense maintain
insurance with respect to the Collateral in such amounts, against such risks, in
such form and with such insurers as is consistent with persons engaged in the
same or similar lines of business.
SECTION 8. CONTINUOUS PERFECTION. Grantor will not change its name,
identity, tax identification number or structure in any manner which might make
any financing or continuation statement filed hereunder seriously misleading
within the meaning of Section 9-506 of the Uniform Commercial Code in effect in
any applicable jurisdiction (or any other then applicable provision of the
Uniform Commercial Code or any other provision of law in effect in any
applicable jurisdiction) unless Grantor shall have given the Secured Parties at
least thirty (30) days' prior written notice thereof and shall have taken all
action (or made arrangements to take such action substantially simultaneously
with such change if it is impossible to take such action in advance) necessary
or reasonably requested by the Secured Parties to amend such financing statement
or continuation statement so that it is not seriously misleading.
SECTION 9. TRANSFERS AND OTHER LIENS. Grantor shall not sell, assign
or otherwise dispose of any of the Collateral except in the ordinary course of
business or pursuant to customary arrangements with regulated utilities in
respects of billing and collection services
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(including billing and collection services that may be styled as a sale of
Receivables but which create a Receivable to Grantor from such utility), or
create or suffer to exist any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, upon or with respect
to any of the Collateral except in favor of the Secured Parties.
SECTION 10. SECURED PARTIES APPOINTED ATTORNEY-IN-FACT. Grantor
hereby irrevocably appoints each Secured Party as Grantor's attorney-in-fact,
effective upon any Default under the Master Netting Agreement, with full
authority in the place and stead of Grantor and in the name of Grantor, such
Secured Party or otherwise, from time to time in such Secured Party's
discretion, to take any action and to execute any instrument which such Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for amounts due and to become due under or
in respect of any of the Collateral,
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings which such Secured Party may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of such Secured Party.
SECTION 11. SECURED PARTIES MAY PERFORM. If Grantor fails to perform
any agreement contained herein, any or all of the Secured Parties may, but shall
not be obligated to, itself perform, or cause performance of, such agreement,
and the reasonable expenses of such Secured Parties incurred in connection
therewith shall be a demand obligation owing by Grantor to such Secured Parties.
SECTION 12. THE SECURED PARTIES' DUTIES. The powers conferred on the
Secured Parties hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon the Secured Parties to exercise any such
powers. Except for the safe custody of any Collateral in their possession and
the accounting for amounts actually received by it hereunder, the Secured
Parties shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. Each Secured Party agrees to act as the agent and
bailee for each other Secured Party in respect of the Collateral and shall hold
any Collateral both as a Secured Party and as agent and bailee of each other
Secured Party.
SECTION 13. DEFAULT; REMEDIES UPON DEFAULT.
(a) Any one or more of the following shall constitute an "Event of
Default" under this Agreement:
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(i) Any Default shall have occurred under the Master Netting
Agreement; or
(ii) Any representation or warranty made or deemed made by or on
behalf of the Grantor in or in connection with this Agreement
or any amendment or modification hereof or waiver hereunder,
or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this
Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect in any material
respect when made or deemed made; or
(iii) The Grantor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any
amendment or modification hereof or waiver hereunder or in any
report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or
any amendment or modification hereof or waiver hereunder;
provided, however, that failure by Grantor to observe or
perform any such covenant, condition, or agreement contained
in Section 5(a) - (f) and Section 6 of this Agreement shall
not constitute an Event of Default until Grantor's failure has
continued for three Business Days after any officer of Grantor
receives knowledge thereof and has not been cured within that
time.
(b) If an Event of Default shall have occurred hereunder:
(i) Any or all of the Secured Parties may exercise in respect of
the 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 under the Code (whether
or not the Code applies to the affected Collateral), and also
may (i) require the Grantor to, and the Grantor hereby agrees
that it will at its expense and upon request of such Secured
Parties forthwith, assemble all or part of the Collateral as
directed by such Secured Parties and make it available to such
Secured Parties at a place to be designated by such Secured
Parties which is reasonably convenient to both parties and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at
public or private sale, at any of such Secured Parties'
offices or else where, for cash, on credit or for future
delivery, and upon such other terms as such Secured Parties
may deem commercially reasonable. The Grantor agrees that, to
the extent notice of sale shall be required by law, at least
ten days' notice to the Grantor 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. No Secured
Party shall be obligated to make any sale of Collateral
regardless of notice of sale having been given. Any or all of
the Secured Parties may adjourn any public or private sale
from time to time by announcement at the time and
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place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned.
(ii) Any cash held by any Secured Party as Collateral and all cash
proceeds received by any Secured Party in respect of any sale
of, collection from, or other realization upon all or any part
of the Collateral may, in the discretion of such Secured
Party, be held by such Secured Party as collateral for, and/or
then or at any time thereafter be applied in whole or in part
by the Secured Parties against, all or any part of the
Obligations in such order as the Secured Parties shall elect.
Any surplus of such cash or cash proceeds held by any Secured
Party and remaining after payment in full of all the
Obligations shall be paid over to the Grantor or to whomsoever
may be lawfully entitled to receive such surplus.
(iii) All remedies herein expressly provided for are cumulative of
any and all other remedies existing at law or in equity and
are cumulative of any and all other remedies provided for in
any other instrument securing the payment of the secured
indebtedness, or any part thereof, or otherwise benefiting the
Secured Parties, and the resort to any remedy provided for
hereunder or under any such other instrument or provided for
by law shall not prevent the concurrent or subsequent
employment of any other appropriate remedy or remedies.
SECTION 12. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Secured
Parties, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 13. ADDRESSES FOR NOTICES. Except as otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile or cable
communication) and mailed, telegraphed, transmitted, cabled or delivered, to
each party hereto at its address set forth in the Master Netting Agreement or at
such other address as shall be designated by such party in a written notice to
each other party. All such notices and other communications shall, when mailed,
telegraphed, telexed, transmitted or cabled, be effective when deposited in the
mails, delivered to the telegraph company, confirmed by telex answerback,
transmitted by telecopier or delivered to the cable company, respectively.
SECTION 14. SECURITY INTEREST ABSOLUTE. All rights of the Secured
Parties, all obligations of Grantor hereunder and the security interests
hereunder, shall, to the extent permitted by applicable law, be absolute and
unconditional, irrespective of:
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(a) any lack of validity or enforceability of the Master Netting
Agreement or any of the Underlying Master Agreements or any other
agreement or security document relating thereto or executed in connection
with or pursuant thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other amendment or
waiver of or any consent to any departure from the Master Netting
Agreement or any of the Underlying Master Agreements or any other
agreement or security document relating thereto or executed in connection
therewith;
(c) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Grantor, or any other person that
is a party to the Master Netting Agreement or any of the Underlying Master
Agreements in respect of the Obligations.
SECTION 15. CONTINUING SECURITY INTEREST. This Agreement creates a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the earlier of (i) payment in full of the Obligations, or
(ii) such time as the Replacement Collateral Period (as defined in the Second
Amendment) has expired and Grantor has posted the full amount of all margin
payments then required under the Master Netting Agreement in cash or other type
of collateral permitted under the Master Netting Agreement, whereupon this
Agreement shall terminate and be of no further force or effect (except for the
obligation to release liens contained herein) and the Secured Parties will, upon
reasonable request of Grantor, promptly file UCC-3 releases of the security
interests granted herein; (b) be binding upon Grantor, its successors and
assigns; and (c) inure to the benefit of and be enforceable by the Secured
Parties and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), the Secured Parties may assign or
otherwise transfer any of their rights under this Agreement to any other person
in connection with any assignment permitted under any of the Underlying Master
Agreements, and to the extent of such assignment or transfer such person shall
thereupon become vested with all the benefits in respect thereof granted herein
or otherwise to the Secured Parties. Upon payment in full of the Obligations, or
the earlier expiration of the Replacement Collateral Period (as defined in the
Second Amendment), subject to (x) any continuing rights of any of the Secured
Parties to the enforcement of the Second Amendment and (y) posting of the full
amount of all margin payments then required under the Master Netting Agreement
in cash or other type of collateral permitted under the Master Netting
Agreement, Grantor shall be entitled to the return, upon its request and at its
expense, of such of the Collateral as shall not have been sold or otherwise
applied pursuant to the terms hereof. The Secured Parties will cooperate with
Grantor to effectuate any release of the security interests granted herein at
any closing of a financing by Grantor to enable Grantor to post the full amount
of all margin payments then required under the Master Netting Agreement in cash
or other type of collateral permitted under the Master Netting Agreement.
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SECTION 16. WAIVER OF MARSHALLING. All rights of marshalling of
assets of Grantor, including any such right with respect to the Collateral, are
hereby waived by Grantor.
SECTION 17. LIMITATION BY LAW. All rights, remedies and powers
provided in this Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable, in
whole or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.
SECTION 18. SEVERABILITY. The invalidity of any one or more
covenants, phrases, clauses, sentences or paragraphs of this Agreement shall not
affect the remaining portions of this Agreement, or any part thereof, and in
case of any such invalidity, this Agreement shall be construed as if such
invalid covenants, phrases, clauses, sentences or paragraphs had not been
inserted.
SECTION 19. CAPTIONS. The captions in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Agreement.
SECTION 20. NO WAIVER; REMEDIES. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 21. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 22. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with the substantive law of the State of New York
(without reference to its choice of law doctrine) except with respect to the
perfection and priority of liens, which shall be governed by, and construed in
accordance with, the law specified by the applicable Uniform Commercial Code.
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by its respective officer thereunto duly authorized as of the
date first above written.
THE NEW POWER COMPANY
By: /s/ Xxxxxxx X Xxxxxx
------------------------------------
Name: Xxxxxxx X Xxxxxx
----------------------------------
Title: Managing Director and Chief
Financial Officer
---------------------------------
ENRON NORTH AMERICA CORP.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Managing Director
---------------------------------
ENRON ENERGY SERVICES, INC.
By: /s/ Xxxxx X. Delainey
------------------------------------
Name: Xxxxx X. Delainey
----------------------------------
Title: Chairman and Chief Executive
Officer
---------------------------------
ENRON POWER MARKETING, INC.
By: /s/ Xxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxx X. Xxxxxx, Xx.
----------------------------------
Title: Managing Director, Finance and
Treasurer
---------------------------------
13
SCHEDULE I
The New Power Company
Xxx Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
SCHEDULE II
STATES IN WHICH GRANTOR HAS INVENTORY
California
Georgia
Indiana
Maryland
Michigan
New Jersey
New York
Ohio
Pennsylvania
Texas
Virginia
