EXHIBIT 10.6
[Execution Copy]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Security Agreement"), dated as of July
31, 2002, among THE XXXXXXXX COMPANIES, INC., a Delaware corporation (the
"Company"), and each of the Subsidiaries which is a signatory hereto or which
subsequently becomes a party hereto in accordance with the terms hereof
(together, with the Company, the "Grantors"), in favor of CITIBANK, N.A., as
collateral trustee ("Collateral Trustee") for the benefit of the holders of the
Secured Obligations (as defined in Section 1.1 below).
PRELIMINARY STATEMENTS
A. The Company and/or its Subsidiaries have entered into multiple
financing transactions with groups of lenders and financial institutions
(collectively, referred to herein as the "Financial Institutions"). Such
financing transactions are governed by the credit and security documents more
fully described in Schedule III hereto (such documents being collectively
referred to herein, as the same may be amended and modified from time to time,
as the "Credit Documents"). "Borrowers" as used herein shall mean the borrowers
under any one or more of the Credit Documents.
B. The Company, several of its Subsidiaries and Citibank, N.A., as
collateral trustee have entered into a Collateral Trust Agreement dated as of
July 31, 2002 (the "Collateral Trust Agreement"), which provides for collateral
to be held by Citibank, N.A., as collateral trustee for the benefit of the
Financial Institutions.
C. It is a condition to certain transactions under the Credit
Documents, that each of the Grantors shall have executed and delivered this
Security Agreement.
D. The Company is the principal financing entity for all capital
requirements of its Subsidiaries, and from time to time the Company has made
capital contributions and advances to its Subsidiaries, including all Grantors
other than the Company. Other than the Company each of the Grantors is a wholly
owned Subsidiary of the Company and will derive substantial direct or indirect
benefit from the transactions contemplated by the Credit Documents.
AGREEMENT
Therefore, in order to induce the Financial Institutions to enter into
and/or continue certain financing transactions described in the Credit
Documents, each of the Grantors hereby agrees with Collateral Trustee for its
benefit and the ratable benefit of the Collateral Trustee and the other
Financial Institutions as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms shall have the meanings
specified below, and capitalized terms used in this Security Agreement but not
defined herein shall have the meanings set forth for such terms in the Credit
Agreement dated as of July 31, 2002 (the "New Credit Agreement"), among Company
and the Financial Institutions named therein.
"Account" or "Accounts" means "accounts" as that term is defined in the
UCC.
"Applicable Law" or "Applicable Laws" means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders and approvals
of each Governmental Authority having jurisdiction over the Grantors, the
Collateral Trustee, the Financial Institutions, the Collateral or the Credit
Documents, in each case, as amended, and any judicial or administrative
interpretation thereof, including any judicial order, consent, decree or
judgment applicable to the Grantors, the Collateral Trustee, the Financial
Institutions, the Collateral or the Credit Documents.
"Chattel Paper" means "chattel paper" as that term is defined in the
UCC and any Electronic Chattel Paper and Tangible Chattel Paper owned by any one
or more of the Grantors.
"Collateral" has the meaning set forth in Section 2.1 of this Security
Agreement.
"Contract" or "Contracts" means all contracts to which any one or more
of the Grantors now is, or hereafter will be, bound, or a party, beneficiary or
assignee (other than rights evidenced by Chattel Paper, Documents or
Instruments), all Insurance Contracts, and all exhibits, schedules and other
attachments to such contracts, as the same may be amended, supplemented or
otherwise modified or replaced from time to time.
"Contract Documents" means all Instruments, Chattel Paper, letters of
credit, bonds, guarantees or similar documents evidencing, representing, arising
from or existing in respect of, relating to, securing or otherwise supporting
the payment of, the Contract Rights.
"Contract Rights" has the meaning set forth in Section 5.1 of this
Security Agreement.
"Document" or "Documents" means any "document" as that term is defined
in the UCC, including, without limitation, a xxxx of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods, and also any
other document which in the regular course of business or financing is treated
as adequately evidencing that the person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers.
"Electronic Chattel Paper" means "electronic chattel paper" as that
term is defined in the UCC.
"Equipment" means any equipment now or hereafter owned or leased by any
of the Grantors, or in which any Grantor holds or acquires any other right,
title or interest, constituting "equipment" under the UCC, including without
limitation all field lines and drilling equipment,
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purification equipment, liquefaction equipment, vaporizing equipment, and all
other machinery, tools, office equipment, furniture, furnishings, fixtures,
vehicles, motor vehicles, and any manuals, instructions, blueprints, computer
software (including software that is imbedded in and part of the equipment) and
similar items which relate to the above, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located
together with all improvements thereon and all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Event of Default" means any default or event of default, however
denominated, under any Credit Document.
"Fixture" or "Fixtures" means any fixture or fixtures now or hereafter
owned or leased by any of the Grantors, or in which any of the Grantors holds or
acquires any other right, title or interest, constituting "fixtures" under the
UCC, including without limitation all pipe which is part of a pipeline system
owned by any of the Grantors, and any and all additions, substitutions and
replacements of any of the foregoing, wherever located together with all
improvements thereon and all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"General Intangible" or "General Intangibles" means all general
intangibles now or hereafter owned by any of the Grantors, or in which any of
the Grantors holds or acquires any other right, title or interest, constituting
"general intangibles" or "payment intangibles" under the UCC, including, but not
limited to, all trademarks, trademark applications, trademark registrations,
trade names, fictitious business names, business names, company names, business
identifiers, prints, labels, trade styles and service marks (whether or not
registered), trade dress, including logos and/or designs, copyrights, patents,
patent applications, goodwill of such entity's or its affiliate's business
symbolized by any of the foregoing, trade secrets, license rights, license
agreements, permits, franchises, and any rights to tax refunds to which any of
the Grantors is now or hereafter may be entitled.
"Governmental Authority" shall mean any government, department,
ministry, commission, board, bureau, agency, regulatory authority,
instrumentality of any government (central, federal, state, municipal or local),
judicial, legislative or administrative body, domestic or foreign, having
jurisdiction over the matter or matters in question.
"Governmental Requirements" means all judgments, orders, writs,
injunctions, decrees, awards, laws, ordinances, statutes, regulations, rules,
franchises, permits, certificates, licenses, authorizations and the like and any
other requirements of any government or any commission, board, court, agency,
instrumentality or political subdivision thereof.
"Instrument" mean an "instrument" as that term is defined in the UCC,
including, without limitation, any Negotiable Instrument, or any other writing
which evidences a right to the payment of money and is not itself a security
agreement or lease and is of a type which is in the ordinary course of business
transferred by delivery with any necessary endorsement or assignment (other than
Instruments constituting Chattel Paper).
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"Insurance Contracts" means all contracts and policies of insurance and
re-insurance maintained or required to be maintained by or on behalf of any of
the Grantors under the Credit Documents.
"Inventory" shall mean all of the inventory of any of the Grantors, or
in which any of the Grantors holds or acquires any right, title or interest, of
every type or description, now owned or hereafter acquired and wherever located,
whether raw, in process or finished, and all materials usable in processing the
same and all documents of title covering any inventory, including, without
limitation, work in process, materials used or consumed in any of the Grantors'
business, now owned or hereafter acquired or manufactured by any of the Grantors
and held for sale in the ordinary course of its business, all present and future
substitutions therefore, parts and accessories thereof and all additions
thereto, all Proceeds thereof and products of such inventory in any form
whatsoever, and any other item constituting "inventory" under the UCC.
"Inventory Records" shall mean all books, records and other property
and General Intangibles at any time relating to Inventory.
"Investment Property" means "investment property" as that term is
defined in the UCC, including, without limitation, all securities (whether
certificated or uncertificated), security entitlements, securities accounts,
commodity contracts, and commodity accounts.
"Lien" or "Liens" means any mortgage, deed of trust, pledge,
assessment, security interest, adverse claim, levy, charge, option, right of
first refusal, charge, debenture, indenture, easement, right-of-way,
restriction, encroachment, license, lease, security agreement, or other
encumbrance of any kind and other restrictions or limitations on the use or
ownership of personal property or irregularities in title thereto.
"Negotiable Instrument" means a "negotiable instrument" as that term is
defined in the UCC.
"Permitted Liens" means those certain Liens described on Schedule III
to the New Credit Agreement.
"Proceeds" means "proceeds" as that term is defined in the UCC, and
includes, but is not limited to, all proceeds of any or all of the Collateral,
including without limitation (a) any and all proceeds of, and all claims for,
any insurance, indemnity, warranty or guaranty payable from time to time with
respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any person acting under
color of governmental authority), (c) all proceeds received or receivable when
any or all of the Collateral is sold, exchanged or otherwise disposed, whether
voluntarily, involuntarily, in foreclosure or otherwise, and (d) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Receivables" means all Accounts and all of any of the Grantors' rights
to payment for goods sold or leased, services performed, or otherwise, whether
now in existence or arising from time to time hereafter, including, without
limitation, rights arising under any of the Contracts or
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evidenced by an account, note, contract, security agreement, Chattel Paper, or
other evidence of indebtedness or security, together with all of the right,
title and interest of any of the Grantors in and to (a) all security pledged,
assigned, hypothecated or granted to or held by any of the Grantors to secure
the foregoing, (b) all of any of the Grantors' right, title and interest in and
to any goods or services, the sale of which gave rise thereto, (c) all
guarantees, endorsements and indemnifications on, or of, any of the foregoing,
(d) all powers of attorney granted to any of the Grantors for the execution of
any evidence of indebtedness or security or other writing in connection
therewith, (e) all books, correspondence, credit files, records, ledger cards,
invoices, and other papers relating thereto, including without limitation all
similar information stored on a magnetic medium or other similar storage device
and other papers and documents in the possession or under the control of any of
the Grantors or any computer bureau from time to time acting for any of the
Grantors, (f) all evidences of the filing of financing statements and other
statements granted to any of the Grantors and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other registration
officers, (g) all credit information, reports and memoranda relating thereto,
and (h) all other writings related in any way to the foregoing.
"Secured Obligations" shall mean the Guaranteed Obligations and Bonds
(as such term is defined in the Collateral Trust Agreement).
"Secured Party" means, collectively, Collateral Trustee and the
Financial Institutions.
"Security Agreement" shall mean this Security Agreement, as the same
may be modified, supplemented or amended from time to time in accordance with
its terms.
"Tangible Chattel Paper" means "tangible chattel paper" as that term is
defined in the UCC.
"Titled Vehicles" means vehicles in which a security interest can not
be perfected by filing a financing statement under the UCC.
"UCC" shall mean the Uniform Commercial Code in effect in the State of
New York, as amended from time to time.
ARTICLE II
SECURITY INTERESTS
Section 2.1 Pledge, Assignment and Grant of Security Interests. As
collateral security for the prompt and complete payment and performance when due
of all Secured Obligations, each Grantor, severally, hereby assigns and pledges
to Collateral Trustee for the benefit of the Financial Institutions and hereby
grants to the Collateral Trustee for the benefit of the Financial Institutions a
lien on and continuing security interest in all of such Grantor's right, title
and interest in, to and under (all items described in this Section 2.1, whether
now owned or hereafter acquired by such Grantor and wherever located and whether
now existing or hereafter arising, collectively, the "Collateral"):
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(a) all Contracts, all Contract Rights, all Contract Documents and each
and every document granting security to any of the Grantors under
any such Contract, and any Instrument related to or arising because
of any such Contract;
(b) all Receivables;
(c) all Investment Property;
(d) all General Intangibles;
(e) all Chattel Paper;
(f) all Documents;
(g) all Equipment;
(h) all Inventory;
(i) all Fixtures;
(j) all amounts from time to time held in any checking, savings,
deposit or other account of any of the Grantors, all monies,
proceeds or sums due or to become due therefrom or thereon and all
documents (including, but not limited to passbooks, certificates
and receipts) evidencing all funds and investments held in such
accounts;
(k) all Governmental Requirements now or hereafter held by any of the
Grantors (except that any Governmental Requirement which would by
its terms or under Applicable Law become void, voidable, terminable
or revocable by being subjected to the Lien of this Security
Agreement or in which a Lien is not permitted to be granted under
Applicable Law, is hereby excluded from such Lien to the extent
necessary so as to avoid such voidness, voidability, terminability
or revocability);
(l) all rights to receive a payment under any hedging agreement in
connection with a termination thereof;
(m) without limiting the generality of the foregoing, all other
personal property, goods, Instruments, credits, claims, demands and
assets of any of the Grantors whether now existing or hereafter
acquired from time to time;
(n) any and all additions, accessions and improvements to, all
substitutions and replacements for and all products and Proceeds of
or derived from all of the foregoing items described above in this
Section 2.1; and
(o) any and all Proceeds of any of the foregoing.
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Section 2.2 After-Acquired Property. The security interest pledged,
assigned and granted to Collateral Trustee pursuant to this Security Agreement
is intended to extend to all Collateral of the kind that is the subject of this
Security Agreement which any of the Grantors may acquire at any time during the
continuation of this Security Agreement, irrespective of whether such Collateral
is in transit or in any of the Grantors' or Collateral Trustee's or any other
Person's constructive, actual, or exclusive occupancy or possession.
Section 2.3 Obligations Independent. The obligations of each Grantor
under this Security Agreement are independent of the obligations of the
Borrowers, any other Grantor, or any other Person, and a separate action or
actions may be brought and prosecuted against any one or more of the Grantors to
enforce this Security Agreement, irrespective of whether any action is brought
against the Borrowers, any other Grantor, or any other Person or whether the
Borrowers, the Grantors, or any other Person is joined in any such action or
actions.
Section 2.4 Obligations Absolute. Each Grantor agrees, severally, that
it will perform its obligations hereunder strictly in accordance with the terms
of this Security Agreement regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any of the Financial Institutions with respect thereto. The liability
of each of the Grantors under this Security Agreement shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of any Credit Document;
(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
liabilities, or any other amendment or waiver of or any consent to
departure from any Credit Document, including, without limitation,
any increase in the Secured Obligations or any other liabilities
resulting from the extension of additional credit or otherwise;
(c) any liquidation, dissolution or termination of existence of, or
other change in, any Borrower or any other Person;
(d) any bankruptcy, insolvency, receivership or other proceeding
involving any Borrower, any one or more of the Grantors, or any
other Person or any defense that may arise in connection with or as
a result of any such bankruptcy, insolvency, receivership or other
proceeding or otherwise;
(e) any taking, exchange, release or non-perfection of any Collateral,
or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations or any other liabilities;
(f) any manner of application of Collateral, or proceeds thereof or of
collections on account of any guaranty, to all or any of the
Secured Obligations or any other liabilities, or any manner of sale
or other disposition of any Collateral for all or any of the
Secured Obligations or any other liabilities or of any other assets
of any Borrower, any one or more of the Grantors, or any other
Person; or
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(g) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Borrower, any one or more of
the Grantors, a surety or any other Person.
Section 2.5 Security for Obligations. The security interests and other
rights granted pursuant to this Security Agreement secure, and the Collateral is
security for, the prompt performance and payment in full in cash when due,
whether at stated maturity, by acceleration or otherwise of the Secured
Obligations. Notwithstanding that the balance of the Secured Obligations may at
certain times be zero and that no Letters of Credit may at certain times be
outstanding, the Liens granted hereunder to the Collateral Trustee shall remain
in full force and effect at all times and with the same priority until the
payment in full in cash of the Secured Obligations, the termination of the
commitments, however described, under the Credit Documents, the repayment of all
obligations due with respect to the bonds and the expiration or termination of
all outstanding letters of credit provided under the Credit Documents (all such
commitments, repayment obligations and outstanding letters of credit are
referred to herein as the "Credit Document Commitments").
Section 2.6 Grantors Remain Liable. Notwithstanding any other
provisions of this Security Agreement to the contrary, (a) each Grantor shall
remain severally liable to perform any and all obligations imposed on such
Grantor under the Credit Documents or with respect to the Collateral and to
perform any and all duties and obligations thereunder to the same extent as if
this Security Agreement had not been executed, (b) the exercise by Collateral
Trustee of any of its rights hereunder shall not release any of the Grantors
from any of its duties or obligations under the Credit Documents and (c) neither
Collateral Trustee nor any of the other Financial Institutions shall have any
obligation or liability under the Credit Documents by reason of this Security
Agreement, nor shall Collateral Trustee or any Financial Institution be
obligated to perform any of the obligations or duties of any of the Grantors
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
Section 2.7 Power of Attorney. Each Grantor hereby constitutes and
appoints Collateral Trustee as such Grantor's attorney-in-fact, at all of
Grantors' cost and expense, for which each Grantor shall be severally liable, to
exercise, in Collateral Trustee's discretion after the occurrence and during the
continuance of an Event of Default, all or any of the following powers, which,
being coupled with an interest, shall be irrevocable until all of the Secured
Obligations have been paid in full and all Credit Document Commitments have been
terminated:
(a) to obtain and adjust insurance under insurance policies naming any
of the Grantors as an insured party;
(b) to receive, take, endorse, sign, assign, deliver and collect, all
in Collateral Trustee's name or any Grantor's name, any and all
checks, notes, drafts, and other documents or instruments relating
to the Collateral;
(c) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due
under or in connection with the Collateral;
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(d) to receive, open and dispose of all mail addressed to any of the
Grantors with respect to the Collateral which comes into the
possession of Collateral Trustee and to notify postal authorities
to change the address for delivery thereof to such address as
Collateral Trustee designates, with a copy of such notice to the
affected Grantor;
(e) to request from account debtors of any of the Grantors, in the
affected Grantor's name or Collateral Trustee's name or that of
Collateral Trustee's designee, information concerning the
Receivables and the amounts owing thereon;
(f) to transmit to account debtors indebted on Receivables notice of
Collateral Trustee's interest therein;
(g) to notify account debtors indebted on Receivables to make payment
directly to Collateral Trustee; and
(h) to take or bring, in any Grantor's name or Collateral Trustee's
name, all steps, actions, suits or proceedings deemed by Collateral
Trustee necessary or desirable to enforce or effect collection of
any of the Collateral or otherwise to enforce compliance with the
terms and conditions of any Contract or the rights of Collateral
Trustee with respect to any of the Collateral.
Section 2.8 Waiver. Each of the Grantors hereby waives promptness,
diligence, notice of acceptance and any other notice (except notices expressly
required to be given to the Grantors under this Security Agreement) with respect
to any of the Secured Obligations and this Security Agreement and any
requirement that Collateral Trustee or any Financial Institution protect,
secure, perfect or insure any security interest or other Lien or any property
subject thereto or exhaust any right to take any action against any one or more
of the Grantors or any other Person or any of the Collateral.
Section 2.9 Subrogation and Other Rights to Repayment. Each of the
Grantors hereby irrevocably waives any and all rights to which it may be
entitled (by operation of law or otherwise) by performing its obligations under
this Security Agreement (i) to be subrogated to the rights of the Financial
Institutions against any Borrowers or any of the other Grantors or (ii) to
receive any payment, in the nature of contribution or for any other reason, from
any Borrower or from any of the Grantors. If any amount shall be paid to any of
the Grantors on account of such subrogation rights or any of the Grantors
receives any such payment referred to in clause (ii) above, such Grantor agrees
to hold such amount or such payment, as the case may be, in trust for the
benefit of the Secured Party, and such Grantor agrees to forthwith pay such
amount or such payment, as the case may be, to the Collateral Trustee to be
credited against and applied upon the Secured Obligations, whether matured or
unmatured, in such order as may be determined by the Collateral Trustee.
Section 2.10 Limitation on Grant. Secured Party and each of the
Grantors other than Borrower hereby acknowledge that the security interests
granted pursuant to this agreements and the obligations more fully described
herein are subject in all cases to the limitations more fully set out in Section
2.2 of Collateral Trust Agreement.
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ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to such representations, warranties and covenants as are made by the
Borrowers and any one or more of the Grantors under the Credit Documents, which
representations, warranties and covenants are hereby deemed made and
incorporated into this Security Agreement each as though set forth in its
entirety herein, each Grantor, represents, warrants and covenants, as of the
date hereof and as of the date of each extension of credit under any of the
Credit Documents, as follows:
Section 3.1 Security Documents. This Security Agreement, together with
(a) the filing of financing statements in the offices set forth on Schedule II
to this Security Agreement and (b) the delivery to Collateral Trustee or a third
party custodian of any Collateral in which a security interest is perfected by
possession, (although no such Collateral exists as of the date of this Security
Agreement other than the securities being pledged pursuant to the terms of the
Pledge Agreement dated as of even date herewith), is sufficient to create in
favor of Collateral Trustee for the benefit of the Collateral Trustee and the
Financial Institutions, as security for the payment and performance of the
Secured Obligations, a valid and enforceable perfected security interest in and
on all of the Collateral, to the extent that a security interest can be created
under (i) the laws which govern the creation of security interests hereunder or
(ii) any other Applicable Law, in favor of Collateral Trustee, and except with
respect to Titled Vehicles, superior to and prior to all Liens other than
Permitted Liens, except as such enforceability may be limited by (x) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws from
time to time in effect that affect creditors' rights generally or (y) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
Section 3.2 No Liens. Each grantor shall defend the Collateral against
all Liens, other than Permitted Liens, and demands of all Persons (other than
the Secured Party) at any time claiming the same or any interest therein.
Section 3.3 Chief Executive Office; Name; Records. Each Grantor's
principal place of business and its chief executive office is located at the
address indicated in Schedule I to this Security Agreement. The originals of all
Contracts, Contract Documents and documents evidencing Receivables of any of the
Grantors, and the only original books of accounts and records concerning the
Collateral are, and will continue to be, kept at the affected Grantor's address
at set forth in Schedule I to this Security Agreement or at such new location
for such principal place of business and chief executive office as such Grantor
may establish in accordance with the last sentence of this Section 3.3. None of
the Grantors shall establish a new location for its principal place of business
or change its name or its state of organization or carry on any business under
any name other than its current name until it has given to Collateral Trustee
not less than 30 days' prior written notice of its intention to do so, clearly
describing such new location or specifying such new name, as the case may be,
and providing such other information in connection therewith as Collateral
Trustee may reasonably request. Each Grantor's state of organization and exact
legal name, as reflected in its Certificate of Incorporation or other original
organization document approved by the Governmental Authority
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charged with approving such documents and authorizing and authenticating the
existence of entities in the applicable jurisdiction, is set forth in Schedule I
to this Security Agreement.
Section 3.4 Financing Statements and Registrations. Each Grantor agrees
to sign and deliver to Collateral Trustee such financing statements or
registrations, in form suitable to reflect the security interests granted
hereunder, as Collateral Trustee reasonably determines are necessary or
desirable to establish and maintain a valid, enforceable, perfected (except with
respect to Titled Vehicles) security interest in the Collateral all in
accordance with the laws which govern perfection of the security interests
hereunder. Each Grantor will pay any applicable filing fees and related
expenses. Each Grantor authorizes Collateral Trustee to file in such
jurisdictions as determined by Collateral Trustee any such financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the signature of each Grantor where permitted by
Applicable Law. Upon the request of any of the Grantors, Collateral Trustee
shall promptly deliver, or cause to be delivered, to such Grantor, at Grantor's
expense, copies of any such statements or amendments.
Section 3.5 Delivery and Pledge of Collateral. Each Grantor shall
deliver and pledge to Collateral Trustee any and all Investment Property,
Instruments, Documents, Contract Documents or other Collateral or documents
evidencing the Collateral (in each case to the extent a security interest
therein may be perfected by possession), indorsed and/or accompanied by such
instruments of assignment and transfer and consents as Collateral Trustee may
request, all in such form and substance as Collateral Trustee may request in
order to perfect the security interests granted by this Security Agreement in
any Collateral, at the expense of such Grantor.
Section 3.6 Control of Investment Property. Each Grantor shall take any
and all actions reasonably requested by Collateral Trustee to ensure that
Collateral Trustee has a first priority security interest in and "control"
(within the meaning of Section 8-106 of the UCC) of Collateral constituting
Investment Property and deposit accounts (as defined in the UCC).
Section 3.7 Taxes. Each Grantor will pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including without limitation, claims for labor, materials and
supplies) against any of the Collateral including, without limitation, the
Equipment and Inventory, provided, however, that such Grantor shall not be
required to pay or discharge any such tax, assessment, charge or claim that is
being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against its other
creditors.
Section 3.8 Insurance. Grantors shall maintain or cause to be
maintained, at all times during the term of this Security Agreement, property
damage insurance covering the Collateral as required pursuant to the terms of
the Credit Documents.
Section 3.9 No Encumbrances. Each Grantor agrees that it will not
create, assume, incur or suffer to exist, or permit any of its Subsidiaries to
create, assume, incur or suffer to exist, any Lien on or in respect of any of
its property, whether now owned or hereafter acquired, or assign or otherwise
convey, or permit any such Subsidiary to assign or otherwise convey, any right
to receive income, in each case to secure or provide for the payment of any
Debt, trade
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payable or other obligation or liability of any Person; provided, however, that
notwithstanding the foregoing, the Grantors or any of their Subsidiaries may
create, incur, assume or suffer to exist the Permitted Liens.
Section 3.10 Additional Indebtedness. Each Grantor agrees that it will
not create, assume, incur or suffer to exist, or permit any of its Subsidiaries
to create, assume, incur or suffer to exist, any Debt other than Debt permitted
under the Credit Documents.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING RECEIVABLES, CONTRACTS,
INSTRUMENTS AND ACCOUNTS
Section 4.1 Maintenance of Records. Each Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of its
Receivables, including, but not limited to, records of all payments received and
all credits granted thereon, and each Grantor will make the same available to
Collateral Trustee, for inspection at any time as Collateral Trustee may
request. Each Grantor shall, at its own cost and expense, deliver all tangible
evidence of its Receivables (including, without limitation, all documents
evidencing the Receivables) and books and records that Collateral Trustee may
request to Collateral Trustee or to its representatives (copies of which
evidence and books and records may be retained by such Grantor) at such times as
Collateral Trustee may reasonably request. Upon Collateral Trustee's reasonable
request each Grantor shall legend in form and substance reasonably satisfactory
to Collateral Trustee, the Receivables and Contracts and Contract Documents, as
well as books, records and documents of such Grantor evidencing or pertaining to
the Receivables, with an appropriate reference to the fact that such items of
Collateral have been assigned to Collateral Trustee as security and that
Collateral Trustee has a security interest therein.
Section 4.2 Payments Under Contracts and Receivables.
(a) Notice to Grantors under Contracts. Each Grantor further agrees and
confirms that, upon the request of Collateral Trustee, it will
notify each party to any Contracts of the assignment thereof to
Collateral Trustee, instruct each of them that all payments due or
to become due and all amounts payable to such Grantor under such
Contracts shall, until the Secured Obligations are paid in full and
the Credit Document Commitments have been terminated, be made to
Collateral Trustee, and, if requested by Collateral Trustee and
reasonably feasible, obtain a written consent and acknowledgement
from them in form and substance reasonably acceptable to Collateral
Trustee. Unless notified to the contrary by Collateral Trustee,
each Grantor shall, at its own cost and expense, enforce collection
of any amounts payable under the Contracts.
(b) Non-Payment to Collateral Trustee. Until the Secured Obligations
are paid in full and all Credit Document Commitments have been
terminated, if any of the Grantors shall receive directly from any
party to the Contracts or from any account debtor or other obligor
under any Receivable any payments under the Contracts or the
Receivables, such Grantor shall receive (and hereby
-12-
acknowledges that it is receiving) such payments in trust for the
benefit of the Secured Party, shall segregate such payments from
other funds of such Grantor, and shall forthwith transmit and
deliver such payments to the Collateral Trustee in the same form as
so received (with any necessary endorsement) for application to the
Secured Obligations.
Section 4.3 Direction to Account Parties, Contracting Parties, etc.
Each Grantor agrees that, upon the occurrence and during the continuation of an
Event of Default, such Grantor shall be bound by any collection, compromise,
forgiveness, extension or other action taken by Collateral Trustee with respect
to the Receivables and the Contracts. Upon the occurrence and during the
continuation of an Event of Default, without notice to or assent from any of the
Grantors, Collateral Trustee may apply any or all amounts then or thereafter
deposited with it to the Secured Obligations. The costs and expenses (including
reasonable attorneys' fees) of collection, whether incurred by any of the
Grantors or Collateral Trustee, shall be borne by the Grantors.
ARTICLE V
SPECIAL PROVISIONS CONCERNING CONTRACTS
Section 5.1 Security Interest in Contract Rights. Each Grantor's grant,
pursuant to Section 2.1 of this Security Agreement, to the Secured Party of a
security interest in and on all of the right, title and interest in and to each
and all of the Contracts, the Contract Documents and the contract rights
thereunder owned by such Grantor, includes, but is not limited to:
(a) all (i) of such Grantor's rights to payment under any Contract or
Contract Document and (ii) payments due and to become due to such
Grantor under any Contract or Contract Document, in each case
whether as contractual obligations, damages or otherwise;
(b) all of such Grantor's claims, rights, powers, or privileges and
remedies under any Contract or Contract Document; and
(c) all of such Grantor's rights under any Contract or Contract
Document to make determinations, to exercise any election
(including, but not limited to, election of remedies) or option or
to give or receive any notice, consent, waiver or approval together
with full power and authority with respect to any Contract or
Contract Document to demand, receive, enforce or collect any of the
foregoing rights or any property which is the subject of any
Contract or Contract Document, to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any
action which, in the opinion of Collateral Trustee, may be
necessary or advisable in connection with any of the foregoing (all
of the foregoing in this Section 5.1, the "Contract Rights").
Section 5.2 Contract Right Remedies. Upon the occurrence and during the
continuation of an Event of Default (but not prior to such time), Collateral
Trustee may enforce all remedies, rights, powers and privileges of any one or
more of the Grantors under any or all of
-13-
the Contracts and Contract Documents and/or substitute itself or any nominee or
trustee in lieu of such Grantor or Grantors as party to any of the Contracts and
Contract Documents and may notify the obligor of any Contract Right (each of the
Grantors hereby agreeing to immediately deliver any such notice at the request
of Collateral Trustee) that all payments and performance under the relevant
Contract or Contract Document shall be made or rendered to Collateral Trustee or
such other Person as Collateral Trustee may designate in writing, with a copy to
the affected Grantor and to the applicable Borrower.
ARTICLE VI
REMEDIES
Section 6.1 Remedies; Obtaining the Collateral Upon Default. Upon the
occurrence and during the continuation of an Event of Default, Collateral
Trustee shall have all the rights and remedies of a secured party under the laws
which govern the creation, perfection or enforcement of security interests
hereunder to enforce this Security Agreement and the security interests
contained herein, and, in addition, Collateral Trustee may, upon the occurrence
and during the continuation of an Event of Default, in addition to its other
rights and remedies hereunder, including without limitation under Section 6.2
hereof, do any of the following to the extent permitted by Applicable Law:
(a) personally, or by trustees or attorneys, immediately take
possession of the Collateral or any part thereof, from any one or
more of the Grantors or any other Person who then has possession of
any part thereof with or without notice or process of any
Applicable Law, and for that purpose may enter upon any one or more
of the Grantors' premises where any of the Collateral is located
and remove the same and use in connection with such removal any and
all services, supplies, aids and other facilities of any one or
more of the Grantors;
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation constituting the Collateral to make any payment
required by the terms of such instrument, agreement or obligation
directly to Collateral Trustee;
(c) take possession of the Collateral or any part thereof, by directing
any one or more of the Grantors in writing to deliver the same to
Collateral Trustee at any place or places designated by Collateral
Trustee, in which event the applicable Grantor shall at its own
expense:
(i) forthwith cause the same to be moved to the place or places
so designated by Collateral Trustee and there be delivered to
Collateral Trustee;
(ii) store and keep any Collateral so delivered to Collateral
Trustee at such place or places pending further action by
Collateral Trustee as provided in Section 6.2 of this
Security Agreement; and
(iii) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain same in good
condition.
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To the extent permitted by Applicable Law, each Grantor's obligation to deliver
the Collateral is of the essence of this Security Agreement and, accordingly,
upon application to a court of equity having jurisdiction, Collateral Trustee
shall be entitled to obtain a decree requiring specific performance by any one
or more of the Grantors of said obligations.
Section 6.2 Disposition of the Collateral. Any Collateral of which
Collateral Trustee has taken possession under or pursuant to Section 6.1 of this
Security Agreement and any other Collateral, whether or not so possessed by
Collateral Trustee, may, upon the occurrence and during the continuation of an
Event of Default, to the extent permitted by Applicable Law (including, without
limitation, the rules and regulations of the FERC), be sold, leased or otherwise
disposed of under one or more contracts or as an entirety, and without the
necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as Collateral Trustee may, in compliance with any requirements of
Applicable Law, determine to be commercially reasonable. Any such disposition
shall be made upon not less than ten (10) days' written notice to the applicable
Grantor specifying the time such disposition is to be made and, if such
disposition shall be a public sale, specifying the place of such sale. Any such
sale may be adjourned by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by Collateral
Trustee or after any overhaul or repair which Collateral Trustee shall determine
to be commercially reasonable. To the extent permitted by Applicable Law,
Collateral Trustee or any Secured Party may itself bid for and become the
purchaser of the Collateral or any item thereof offered for sale at a public
auction without accountability to any of the Grantors (except to the extent of
any surplus money received as provided in the Credit Documents).
Section 6.3 Waiver.
(a) EXCEPT AS OTHERWISE PROVIDED IN THIS SECURITY AGREEMENT, EACH
GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OR JUDICIAL HEARING IN CONNECTION WITH COLLATERAL TRUSTEE'S
TAKING POSSESSION OR COLLATERAL TRUSTEE'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT WHICH ANY OF THE GRANTORS WOULD OTHERWISE HAVE UNDER ANY
APPLICABLE LAW, AND EACH GRANTOR, FOR ITSELF AND ALL WHO MAY CLAIM
UNDER IT, HEREBY FURTHER WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW:
(i) all damages occasioned by such taking of possession of any
Collateral;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of
Collateral Trustee's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any
Applicable Law in order
-15-
to prevent or delay the enforcement of this Security
Agreement or the absolute sale of the Collateral or any
portion thereof.
(b) Without limiting the generality of the foregoing and to the extent
permitted by Applicable Law, during the continuation of an Event of
Default, each Grantor hereby: (i) authorizes Collateral Trustee, in
its sole discretion and without notice to or demand upon any of the
Grantors and without otherwise affecting the obligations applicable
hereunder from time to time, to take and hold other collateral (in
addition to the Collateral) for payment of any Secured Obligations,
or any part thereof, and to exchange, enforce or release such other
collateral or any part thereof, and to accept and hold any
endorsement or guarantee of payment of the Secured Obligations or
any part thereof, and to release or substitute any endorser or
guarantor or any other Person granting security for or in any way
obligated upon any Secured Obligations, or any part thereof; and
(ii) waives and releases any and all right to require Collateral
Trustee to collect any of the Secured Obligations from any specific
item or items of Collateral or from any other party liable as
guarantor or in any other manner in respect of any of the Secured
Obligations or from any collateral (other than the Collateral) for
any of the Secured Obligations.
(c) To the extent permitted by Applicable Law, any sale of, or the
grant of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of any of the
Grantors therein and thereto.
Section 6.4 Application of Proceeds. The proceeds of any sale of, or
other realization upon, all or any part of the Collateral shall be applied by
Collateral Trustee to the Secured Obligations in the manner determined by
Collateral Trustee in its sole discretion.
Section 6.5 Remedies Cumulative; No Waiver. Each and every right, power
and remedy hereby specifically given to Collateral Trustee shall be in addition
to every other right, power and remedy specifically given under this Security
Agreement, under any other Security Document or now or hereafter existing at law
or in equity, or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time or simultaneously and as often and in such order as may be deemed expedient
by Collateral Trustee. All such rights, powers and remedies shall be cumulative,
and the exercise or the partial exercise of one shall not be deemed a waiver of
the right to exercise of any other. No delay or omission of Collateral Trustee
in the exercise of any of its rights, remedies, powers and privileges hereunder
or partial or single exercise thereof and no renewal or extension of any of the
Secured Obligations, shall impair any such right, remedy, power or privilege or
shall constitute a waiver thereof.
Section 6.6 Discontinuance of Proceedings. In case Collateral Trustee
shall have instituted any proceeding to enforce any right, power or remedy under
this Security Agreement by foreclosure, sale, entry, or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to Collateral Trustee, then, in every such case,
each of the Grantors, Collateral Trustee and each holder of any of the Secured
-16-
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral, subject to the security interest created under
this Security Agreement, and all rights, remedies and powers of Collateral
Trustee shall continue as if no such proceeding had been instituted.
ARTICLE VII
CONCERNING COLLATERAL TRUSTEE
Section 7.1 Collateral Trustee's Rights. The provisions of Article 5 of
the Collateral Trust Agreement shall inure to the benefit of Collateral Trustee
in respect of this Security Agreement and shall be binding upon the parties
hereto.
Section 7.2 Action by Nominees. Notwithstanding anything to the
contrary in this Security Agreement, any and all of the rights, powers and
remedies of Collateral Trustee under this Security Agreement may be exercised by
any nominee(s) of the Financial Institutions or any other agent, person, trustee
or nominee acting on behalf of the Secured Party, and Collateral Trustee may
assign or delegate all or any part of its rights and obligations under this
Security Agreement any one or more agent(s), person(s), trustee(s) or other
nominee(s).
Section 7.3 Limitation on Duty of Collateral Trustee in Respect of
Collateral. Collateral Trustee shall have no duty as to any Collateral in its
possession or control other than for its gross negligence or willful misconduct
or in the possession or control of any agent or bailee or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto. Collateral Trustee shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee or other agent or bailee selected by Collateral
Trustee, unless Collateral Trustee was grossly negligent in the selection
thereof. Collateral Trustee may, without notice to any of the Grantors except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Collateral or in any other deposit account.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications hereunder
shall be given in accordance with the terms of Section 6.4 of the Collateral
Trust Agreement.
Section 8.2 Amendment. Any amendment or waiver to this Security
Agreement or any provision hereof shall only be effective to the extent such
amendment or waiver (a) complies with all requirements of an amendment to the
Collateral Trust Agreement including those requirements set forth in Section 6.2
of the Collateral Trust Agreement and (b) is executed by the Persons that would
be required to execute a like amendment of the Collateral Trust Agreement.
Furthermore, all amendments and waivers to this Security Agreement will be
subject to the
-17-
limitations and restrictions applicable to amendments and waivers of the
Collateral Trust Agreement.
Section 8.3 Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of the Grantors, Collateral Trustee and
the Financial Institutions and their respective successors and assigns.
Section 8.4 Survival. All agreements, statements, representations and
warranties made by the Grantors herein or in any certificate or other instrument
delivered by the Grantors or on the behalf of the Grantors under this Security
Agreement shall be considered to have been relied upon by Collateral Trustee and
the Financial Institutions and shall survive the execution and delivery of this
Security Agreement and the other Credit Documents regardless of any
investigation made by Collateral Trustee or any other Secured Party or on their
behalf.
Section 8.5 Headings Descriptive. The headings of the various articles,
sections and paragraphs of this Security Agreement are for convenience of
reference only, do not constitute a part hereof and shall not affect the meaning
or construction of any provision hereof.
Section 8.6 Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and without affecting the validity or enforceability
of any provision in any other jurisdiction.
Section 8.7 Governing Law. This Security Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 8.8 Waiver of Jury Trial. THE GRANTORS, THE COLLATERAL TRUSTEE,
AND THE FINANCIAL INSTITUTIONS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.9 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL TRUSTEE, THE FINANCIAL
INSTITUTIONS OR THE GRANTORS IN CONNECTION HEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE COLLATERAL TRUSTEE'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GRANTOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED IN SECTION 6.4 OF THE COLLATERAL TRUST AGREEMENT. EACH GRANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT
-18-
TO ITSELF OR ITS PROPERTY, EACH GRANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
SECURITY AGREEMENT.
Section 8.10 Collateral Trustee May Perform. If any one or more of the
Grantors fails to perform any agreement contained herein, Collateral Trustee may
itself perform, or cause the performance of, such agreement, and the expenses of
Collateral Trustee incurred in connection therewith shall be payable by such
Grantor.
Section 8.11 Termination; Release. When all of the Secured Obligations
have been satisfied or irrevocably paid in full and all Credit Document
Commitments have expired or are terminated, this Security Agreement shall
terminate (except as provided in Section 8.12 of this Security Agreement), and
Collateral Trustee, at the expense of the Grantors, will promptly execute and
deliver to each of the Grantors the proper instruments acknowledging the
termination of this Security Agreement, and will duly assign, transfer and
deliver to any one or more of the Grantors (without recourse and without any
representation or warranty of any kind) such of the Collateral as may be in the
possession of Collateral Trustee and has not theretofore been sold or otherwise
applied or released pursuant to this Security Agreement, and shall take such
other action, at the Grantors' expense, as the Grantors may reasonably request
to effectuate the foregoing.
Section 8.12 Reinstatement. This Security Agreement shall continue to
be effective or be reinstated, as the case may be, if at any time any amount
received by Collateral Trustee in respect of the Secured Obligations is
rescinded or must otherwise be restored or returned by any Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or any one or more of the Grantors, or upon the appointment of any
intervenor or conservator of, or trustee or similar official for, any one or
more of the Grantors or any substantial part of its assets, or otherwise, all as
though such payments had not been made.
Section 8.13 Counterparts. This Security 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. Delivery of an executed counterpart of a signature page to this
Security Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Security Agreement.
Section 8.14 No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Grantors, the Collateral
Trustee and the Secured Party, and no Person (other than the parties hereto and
the Secured Party) shall have any rights hereunder.
Section 8.15 Information. Each Grantor will furnish to Collateral
Trustee from time to time statements and schedules further identifying and
describing the Collateral of such Grantor and such other reports in connection
with such Collateral as Collateral Trustee may request, all in reasonable
detail.
Section 8.16 Incorporated Definitions. All defined terms that are
incorporated from other agreements into this Security Agreement by reference
shall have the meanings assigned to
-19-
such terms as of the date hereof, but shall not be modified by any subsequent
amendment or modification that takes place after the date hereof unless
consented to by the parties hereto.
Section 8.17 Indemnity. Each Grantor shall pay on demand to Collateral
Trustee the amount of any and all reasonable expenses, including without
limitation the reasonable fees and expenses of its counsel and of any experts
and agents, that Collateral Trustee may incur in connection with (i) the
administration of this Security Agreement, (ii) the custody, preservation, use
or operation of, or the sale of, collection from or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of
Collateral Trustee or the other Financial Institutions hereunder or (iv) the
failure by any one or more of the Grantors to perform or observe any of the
provisions hereof.
Schedule I State of Organization and Addresses of Grantors
Schedule II Required Financing Statement Filings
Schedule III Credit Documents
-20-
[SIGNATURE PAGES FOR
SECURITY AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
CITIBANK, N.A., AS COLLATERAL TRUSTEE
By: /s/ J. Xxxxxxxxxxx Xxxxx
----------------------------------
Name:
----------------------------------
Title: Vice President
---------------------------------
SECURITY AGREEMENT EXECUTED BY THE FOLLOWING XXXXXXXX ENTITIES:
Black Marlin Pipeline Company
Gas Supply, L.L.C.
Xxxxxx Pipeline Company
Mapco, Inc.
MAPL Investments, Inc.
Memphis Generation, L.L.C.
North Padre Island Spindown, Inc.
The Xxxxxxxx Companies, Inc.
WFS Enterprises, Inc.
WFS-Liquids Company
WFS-NGL Pipeline Company Inc.
WFS-Offshore Gathering Company
Xxxxxxxx Alaska Air Cargo Properties, L.L.C.
Xxxxxxxx Alaska Petroleum, Inc.
Xxxxxxxx Alaska Pipeline Company, L.L.C.
Xxxxxxxx Bio-Energy, L.L.C.
Xxxxxxxx Energy Services, L.L.C.
Xxxxxxxx Ethanol Services, Inc.
Xxxxxxxx Express, Inc. [AK]
Xxxxxxxx Express, Inc. [DE]
Xxxxxxxx Field Services Company
Xxxxxxxx Field Services Group, Inc.
Xxxxxxxx Field Services-Gulf Coast Company, X.X.
Xxxxxxxx Gas Processing-Wamsutter Company
Xxxxxxxx Gas Processing Company
Xxxxxxxx Generating Memphis, LLC
Xxxxxxxx Generation Company - Xxxxxxxx
Xxxxxxxx Memphis Terminal, Inc.
Xxxxxxxx Merchant Services Company, Inc.
Xxxxxxxx Mid-South Pipelines, LLC
Xxxxxxxx Midstream Natural Gas Liquids, Inc.
Xxxxxxxx Natural Gas Liquids, Inc.
Xxxxxxxx Olefins Feedstock Pipelines, L.L.C.
Xxxxxxxx Olefins, L.L.C.
Xxxxxxxx Petroleum Pipeline Systems, Inc.
Xxxxxxxx Refining & Marketing, L.L.C.
Worthington Generation, L.L.C.
SCHEDULE I
TO
SECURITY AGREEMENT
STATE OF ORGANIZATION AND ADDRESSES OF GRANTORS
Entity Principle Address State of
Incorporation
--------------------------------------------- --------------------------------------------- -------------------
(a) Black Marlin Pipeline Company Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 TX
--------------------------------------------- --------------------------------------------- -------------------
(b) Gas Supply, L.L.C. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(c) Xxxxxx Pipeline Company Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(d) Mapco, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(e) MAPL Investments, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(f) Memphis Generation, L.L.C. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(g) North Padre Island Spindown, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(h) The Xxxxxxxx Companies, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(i) WFS Enterprises, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(j) WFS-Liquids Company Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(k) WFS-NGL Pipeline Company, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(l) WFS-Offshore Gathering Company Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(m) Xxxxxxxx Alaska Air Cargo Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 AK
Properties, L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(n) Xxxxxxxx Alaska Petroleum, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 AK
-1-
Entity Principle Address State of
Incorporation
--------------------------------------------- --------------------------------------------- -------------------
(o) Xxxxxxxx Alaska Pipeline Company, Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(p) Xxxxxxxx Bio-Energy, L.L.C. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(q) Xxxxxxxx Energy Services, L.L.C. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(r) Xxxxxxxx Ethanol Services, Inc. 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(s) Xxxxxxxx Express, Inc. (AK) Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 AK
--------------------------------------------- --------------------------------------------- -------------------
(t) Xxxxxxxx Express, Inc. (DE) Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(u) Xxxxxxxx Field Services Company X.X. Xxx 0000, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(v) Xxxxxxxx Field Services Group, Inc. X.X. Xxx 0000, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(w) Xxxxxxxx Field Services-Gulf Coast 0000 Xxxx Xxx Xxxxxxxxx, Xxxxxxx, XX 00000 DE
Company, L.P.
--------------------------------------------- --------------------------------------------- -------------------
(x) Xxxxxxxx Gas Processing Company X.X. Xxx 0000 Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(y) Xxxxxxxx Gas Processing -Wamsutter Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
Company
--------------------------------------------- --------------------------------------------- -------------------
(z) Xxxxxxxx Generating Memphis, LLC Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(aa) Xxxxxxxx Generation Company - Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 XX
Xxxxxxxx
--------------------------------------------- --------------------------------------------- -------------------
(bb) Xxxxxxxx Memphis Terminal, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
-2-
Entity Principle Address State of
Incorporation
--------------------------------------------- --------------------------------------------- -------------------
(cc) Xxxxxxxx Merchant Services Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
Company, Inc
--------------------------------------------- --------------------------------------------- -------------------
(dd) Xxxxxxxx Mid-South Pipelines, LLC Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(ee) Xxxxxxxx Midstream Natural Gas Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
Liquids, Inc.
--------------------------------------------- --------------------------------------------- -------------------
(ff) Xxxxxxxx Natural Gas Liquids, Inc. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(gg) Xxxxxxxx Olefins Feedstock Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
Pipelines, L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(hh) Xxxxxxxx Olefins, L.L.C. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
(ii) Xxxxxxxx Petroleum Pipeline Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
Systems, Inc.
--------------------------------------------- --------------------------------------------- -------------------
(jj) Xxxxxxxx Refining & Marketing, Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(kk) Worthington Generation, L.L.C. Xxx Xxxxxxxx Xxxxxx, Xxxxx, XX 00000 DE
--------------------------------------------- --------------------------------------------- -------------------
-3-
SCHEDULE II
TO
SECURITY AGREEMENT
REQUIRED FINANCING STATEMENT FILINGS
Entity UCC Central Filing Offices of the Secretary of
State for the Following States
------------------------------------------------------ --------------------------------------------------
(a) Black Marlin Pipeline Company TX
------------------------------------------------------ --------------------------------------------------
(b) Gas Supply, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
(c) Xxxxxx Pipeline Company DE
------------------------------------------------------ --------------------------------------------------
(d) Mapco, Inc. DE
------------------------------------------------------ --------------------------------------------------
(e) MAPL Investments, Inc. DE
------------------------------------------------------ --------------------------------------------------
(f) Memphis Generation, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
(g) North Padre Island Spindown, Inc. DE
------------------------------------------------------ --------------------------------------------------
(h) The Xxxxxxxx Companies, Inc. DE
------------------------------------------------------ --------------------------------------------------
(i) WFS Enterprises, Inc. DE
------------------------------------------------------ --------------------------------------------------
(j) WFS-Liquids Company DE
------------------------------------------------------ --------------------------------------------------
(k) WFS-NGL Pipeline Company, Inc. DE
------------------------------------------------------ --------------------------------------------------
(l) WFS-Offshore Gathering Company DE
------------------------------------------------------ --------------------------------------------------
(m) Xxxxxxxx Alaska Air Cargo Properties, L.L.C. AK
------------------------------------------------------ --------------------------------------------------
(n) Xxxxxxxx Alaska Petroleum, Inc. AK
------------------------------------------------------ --------------------------------------------------
(o) Xxxxxxxx Alaska Pipeline Company, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
(p) Xxxxxxxx Bio-Energy, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
-1-
Entity UCC Central Filing Offices of the Secretary of
State for the Following States
------------------------------------------------------ --------------------------------------------------
(q) Xxxxxxxx Energy Services, L.L.C DE
------------------------------------------------------ --------------------------------------------------
(r) Xxxxxxxx Ethanol Services, Inc. DE
------------------------------------------------------ --------------------------------------------------
(s) Xxxxxxxx Express, Inc. (AK) AK
------------------------------------------------------ --------------------------------------------------
(t) Xxxxxxxx Express, Inc. (DE) DE
------------------------------------------------------ --------------------------------------------------
(u) Xxxxxxxx Field Services Company DE
------------------------------------------------------ --------------------------------------------------
(v) Xxxxxxxx Field Services Group, Inc. DE
------------------------------------------------------ --------------------------------------------------
(w) Xxxxxxxx Field Services-Gulf Coast Company, DE
L.P.
------------------------------------------------------ --------------------------------------------------
(x) Xxxxxxxx Gas Processing Company DE
------------------------------------------------------ --------------------------------------------------
(y) Xxxxxxxx Gas Processing -Wamsutter Company DE
------------------------------------------------------ --------------------------------------------------
(z) Xxxxxxxx Generating Memphis, LLC DE
------------------------------------------------------ --------------------------------------------------
(aa) Xxxxxxxx Generation Company - Xxxxxxxx DE
------------------------------------------------------ --------------------------------------------------
(bb) Xxxxxxxx Memphis Terminal, Inc. DE
------------------------------------------------------ --------------------------------------------------
(cc) Xxxxxxxx Merchant Services Company, Inc DE
------------------------------------------------------ --------------------------------------------------
(dd) Xxxxxxxx Mid-South Pipelines, LLC DE
------------------------------------------------------ --------------------------------------------------
(ee) Xxxxxxxx Midstream Natural Gas Liquids, Inc. DE
------------------------------------------------------ --------------------------------------------------
-2-
Entity UCC Central Filing Offices of the Secretary of
State for the Following States
------------------------------------------------------ --------------------------------------------------
(ff) Xxxxxxxx Natural Gas Liquids, Inc. DE
------------------------------------------------------ --------------------------------------------------
(gg) Xxxxxxxx Olefins Feedstock Pipelines, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
(hh) Xxxxxxxx Olefins, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
(ii) Xxxxxxxx Petroleum Pipeline Systems, Inc. DE
------------------------------------------------------ --------------------------------------------------
(jj) Xxxxxxxx Refining & Marketing, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
(kk) Worthington Generation, L.L.C. DE
------------------------------------------------------ --------------------------------------------------
-3-
SCHEDULE III
TO
SECURITY AGREEMENT
CREDIT DOCUMENTS
1. That Credit Agreement dated as of July 31, 2002 (as amended, modified,
supplemented or restated from time to time), by and among the Company together
with Citicorp USA, Inc., as agent and collateral agent, Bank of America N. A. as
syndication agent, Citibank, N.A. and Bank of America N.A. as issuing bank,
Xxxxxxx Xxxxx Xxxxxx Inc. as L/C Arranger, and the banks named therein.
2. The Company; Northwest Pipeline Corporation, a Delaware corporation;
Transcontinental Gas Pipe Line Corporation, a Delaware corporation; and Texas
Gas Transmission Corporation, a Delaware corporation, as the borrowers, have
entered into a Credit Agreement dated July 25, 2000, as amended, together with
the banks named therein, and The Chase Manhattan Bank and Commerzbank AG as
co-syndication agents, and Credit Lyonnais
New York Branch as documentation
agent and Citibank, N.A., as agent, and Xxxxxxx Xxxxx Xxxxxx, as Arranger.
3 Indenture between MAPCO, Inc., as Issuer, and Bankers Trust Company, as
Trustee dated March 31, 1990.
4 Indenture between Transco Energy Company, as Issuer, and The Bank of
New York,
as Trustee, dated May 1, 1990.
All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing Credit
Documents.
-1-
