Exhibit 4.19
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SECOND AMENDED AND RESTATED SECURITY AGREEMENT
dated as of May 21, 1999
between
LSP ENERGY LIMITED PARTNERSHIP
and
THE BANK OF NEW YORK,
as Collateral Agent
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TABLE OF CONTENTS
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RECITALS
AGREEMENT
ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1.1. Definitions .....................................................2
1.2. Principles of Construction.........................................6
ARTICLE II ASSIGNMENT AND GRANT OF SECURITY INTEREST
2.1. Assignment and Grant of Security Interest..........................7
2.2. Security Interest Absolute.........................................8
2.3. Power of Attorney..................................................9
2.4. Inspection and Verification.......................................12
ARTICLE III GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Title and Authority...............................................12
3.2. Validity, Perfection and Priority of Lien.........................12
3.3. No Liens; Other Financing Statements..............................13
3.4. Chief Executive Office; Name; Records.............................14
3.5. Additional Statements and Schedules...............................14
3.6. Further Actions...................................................15
ARTICLE IV SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
4.1. Maintenance of Insurance; Protection of Security Interest.........15
4.2. Location of Inventory and Equipment...............................15
ARTICLE V SPECIAL PROVISIONS CONCERNING RECEIVABLES, CONTRACTS AND
INSTRUMENTS
5.1. Additional Representations and Warranties.........................15
5.2. Maintenance of Records; Legending of Records......................16
5.3. Modification of Terms; No Payment to Grantor......................16
5.4. Collection ....................................................17
5.5. Direction to Account Debtors; Grantor Bound.......................17
5.6. Instruments ....................................................17
ARTICLE VI SPECIAL PROVISIONS CONCERNING CONTRACTS
6.1. Security Interest in Contract Rights..............................18
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6.2. Further Protection................................................18
6.3. Liabilities Under Receivables and Contracts.......................19
6.4. Remedies ....................................................19
ARTICLE VII DUTY OF CARE OF COLLATERAL AGENT
7.1. Collateral Agent's Duties; Reasonable Care........................20
ARTICLE VIII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
8.1. Remedies; Obtaining the Collateral upon Default...................20
8.2. Remedies; Disposition of the Collateral...........................22
8.3. Waiver ....................................................22
8.4. Application of Proceeds; Grantor Liable for Deficiency............24
8.5. No Waiver; Remedies Cumulative....................................24
8.6. Discontinuance of Proceedings.....................................25
ARTICLE IX MISCELLANEOUS
9.1. Notices ....................................................25
9.2. Amendment ....................................................25
9.3. Successors and Assigns............................................26
9.4. Survival ....................................................26
9.5. Headings Descriptive..............................................26
9.6. Severability ....................................................26
9.7. Grantor's Duties..................................................26
9.8. Termination; Release..............................................26
9.9. Reinstatement ....................................................27
9.10. Counterparts ....................................................27
9.11 Governing Law ....................................................27
9.12 Consent to Jurisdiction...........................................27
9.13 Waiver of Jury Trial..............................................28
9.14. Authority of Collateral Agent....................................28
9.15. Indemnities and Expenses. .......................................28
9.16. Entire Agreement.................................................29
9.17. Independent Security.............................................29
9.18. Third Party Beneficiaries........................................29
9.19 Limitation of Liability...........................................29
Schedule I - Filing Offices
Schedule II - Instruments
Schedule III - Copyrights
Schedule IV - Patents
Schedule V - Trademarks
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Schedule VI - Chief Executive Office and Principal Place of Business
Schedule 4.2 - Locations of Collateral
SECOND AMENDED AND RESTATED
PARTNERSHIP SECURITY AGREEMENT
SECOND AMENDED AND RESTATED PARTNERSHIP SECU RITY AGREEMENT,
dated as of May 21, 1999 (this "AGREEMENT"), made by LSP ENERGY LIMITED
PARTNERSHIP, a Delaware limited partnership (the "GRANTOR"), in favor of THE
BANK OF NEW YORK, as collateral agent (together with its successors in such
capacity, the "COLLATERAL AGENT") for the benefit of the Senior Secured Parties
pursuant to the Second Amended and Restated Collateral Agency Agreement, dated
as of May 21, 1999 (the "COLLATERAL AGENCY AGREEMENT"), among (as of the date
hereof) the Grantor, LSP Batesville Funding Corporation (the "FUNDING
CORPORATION"), the Trustee, the VEPCO L/C Agent, the Collateral Agent, the
Intercreditor Agent and the Administrative Agent.
RECITALS
WHEREAS, the Grantor was formed for the purpose of developing,
financing, constructing, owning and operating an approximately 837 MW (net)
NATURAL GAS-FIRED COMBINED-CYCLE ELECTRIC GENERATION FACILITY LOCATED IN
BATESVILLE, Mississippi (the "PROJECT");
WHEREAS, pursuant to the Tranche A Facility Credit Agreement,
dated as of August 28, 1998 (the "INITIAL CREDIT AGREEMENT"), among the Grantor,
the banks and other financial institutions party thereto (the "INITIAL BANKS")
and Credit Suisse First Boston as agent for the Initial Banks, the Initial Banks
agreed to provide loans (the "INITIAL LOANS") to the Grantor to finance a
portion of the development, construction and start-up of the Project;
WHEREAS, in connection with the execution of the Initial
Credit Agreement and the related financing documents, and as a condition
precedent to the Banks providing the Loans to the Grantor, the Grantor executed
the Security Agree ment, dated as of August 28, 1998 (the "INITIAL PARTNERSHIP
SECURITY AGREEMENT"), in favor of IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company as
collateral agent;
WHEREAS, pursuant to the Amended and Restated Bank Facility
Credit Agreement, dated as of December 15, 1998 (the "SUPPLEMENTAL CREDIT
AGREEMENT"), among the Grantor, the banks and other financial institutions party
thereto (the "SUPPLEMENTAL BANKS") and Credit Suisse First Boston as agent for
the Supplemental Banks, (1) the Grantor, the Supplemental Banks and Credit
Suisse First Boston amended and restated the Initial Credit Agreement in its
entirety and (2) the Supplemental Banks agreed to provide loans (the
"SUPPLEMENTAL LOANS") to the
Grantor to finance a portion of the development, construction and start-up of
the Project;
WHEREAS, in connection with the execution of the Supplemental
Credit Agreement and the relating financing documents, and as a condition
precedent to the Supplemental Banks providing the Supplemental Loans to the
Grantor, the Pledgor and Credit Suisse First Boston, as collateral agent,
executed the Amended and Restated Security Agreement, dated as of December 15,
1998 (the " SUPPLEMEN TAL PARTNERSHIP SECURITY AGREEMENT"), pursuant to which
the Initial Partnership Security Agreement was amended and restated in its
entirety;
WHEREAS, the Grantor and the Funding Corporation have deter
mined to issue (1) $150,000,000 aggregate principal amount of their 7.164%
Series A Senior Secured Bonds due January 15, 2014 (the "SERIES A BONDS") and
(2) $176,000,000 aggregate principal amount of their 8.160% Series B Senior
Secured Bonds due July 15, 2025 (the "SERIES B BONDS" and, together with the
Series A Bonds, the "BONDS") pursuant to the Trust Indenture, dated as of the
date hereof (the "INDENTURE"), among the Grantor, the Funding Corporation and
The Bank of New York, as trustee (the "TRUSTEE");
WHEREAS, the Grantor and the Funding Corporation will use the
proceeds of the Bonds to (i) repay in full the Indebtedness outstanding under
the Supplemental Credit Agreement and (ii) pay the remaining Project Costs; and
WHEREAS, in connection with the issuance and sale of the Bonds
and the execution of the related Financing Documents, the Pledgor and the
Collateral Agent desire to amend and restate the Supplemental Partnership
Security Agreement in its entirety.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Supplemental Partnership Security Agreement is hereby amended
and restated in its entirety as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1. DEFINITIONS.
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(a) For all purposes of this Agreement, capitalized terms used
but not otherwise defined herein shall have the meanings set forth in the
Indenture.
(b) The following terms shall have the following respective
meanings unless the context otherwise requires. Commercial terms used but not
defined herein or in the Indenture shall have the meanings specified for such
terms in the UCC as in effect in the State of New York.
"CHATTEL PAPER" shall mean "chattel paper" as such term is
defined in the UCC as in effect in any relevant jurisdiction.
"COLLATERAL" shall have the meaning specified in SECTION
2.1(A).
"CONTRACT RIGHTS" shall have the meaning specified in SECTION
6.1.
"CONTRACTS" shall mean all contracts to which the Grantor now
is, or hereafter will be, bound, or a party, beneficiary or assignee, including,
without limitation, all of the Transaction Documents (to the extent the Grantor
is a party thereto or has rights thereunder), including all exhibits, schedules
and appendices thereto, and all other instruments, agreements and documents
executed and delivered with respect to such contracts, and all revenues,
rentals, Proceeds and other sums of money due and to become due from any of the
foregoing, as the same may be modified, supplemented or amended from time to
time in accordance with their respective terms.
"COPYRIGHTS" shall mean all of the following now owned or
hereafter acquired by the Grantor: (a) all copyright rights in any work subject
to the copyright laws of the United States, whether as author, assignee,
transferee or otherwise; and (b) all registrations and applications for
registration of any such copyright rights in the United States, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office, including, without
limitation, those listed on SCHEDULE III.
"DOCUMENTS" shall mean "documents" as such term is defined in
the UCC as in effect in any relevant jurisdiction.
"DEFAULT" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"EQUIPMENT" shall mean all "equipment" (as such term is
defined in
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the UCC as in effect in any relevant jurisdiction), now or hereafter owned or
leased by the Grantor and, in any event, shall include, but shall not be limited
to, all equipment used in connection with the Project or the Site, all
machinery, manufactur ing equipment, data processing equipment, computers,
tools, office equipment, appliances, furniture, furnishings, fixtures, spare
parts, vehicles, motor vehicles, and any manuals, instructions, blueprints,
computer software and similar items which relate to the above, and any and all
additions to, substitutions for 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" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"FINANCING STATEMENTS" shall mean all financing statements, record
ings, filings or other instruments of registration necessary and appropriate to
perfect a security interest or lien by filing in any appropriate filing or
recording office in accor dance with the UCC as enacted in any and all relevant
jurisdictions or any other relevant applicable law.
"FINANCIAL ASSETS" shall mean "financial assets" as such term is
defined in the UCC as in effect in any relevant jurisdiction.
"FIXTURES" shall mean "fixtures" as such term is defined in the UCC as
in effect in any relevant jurisdiction and in any event shall include all goods
now or hereafter attached to, placed on or incorporated in the Site.
"GENERAL INTANGIBLES" shall mean all "general intangibles" (as such
term is defined in the UCC as in effect in any relevant jurisdiction) now or
hereafter owned by the Grantor and shall include, but not be limited to, all
Trademarks, trademark applications, trademark registrations, tradenames,
fictitious business names, business names, company names, business identifiers,
prints, labels, trade styles and service marks (whether or not registered),
including logos and/or designs, Copyrights, Patents, patent applications,
goodwill of the Grantor's business symbol ized by any of the foregoing, trade
secrets, license rights, license agreements, permits, franchises and any rights
to tax refunds to which the Grantor is now or hereafter may be entitled.
"GOODS" shall mean "goods" as such term is defined in the UCC as in
effect in any relevant jurisdiction.
"INSTRUMENTS" shall mean "instruments" as such term is defined in the
UCC as in effect in any relevant jurisdiction.
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"INSURANCE POLICIES" shall mean all insurance policies to which the
Grantor now is, or hereafter will be, a party, including, without limitation,
all insurance policies required pursuant to this Agreement and the other
Financing Documents.
"INSURANCE PROCEEDS" shall mean all amounts and proceeds of any kind
(including interest, if any, thereon) paid or payable pursuant to any Insurance
Policy.
"INTELLECTUAL PROPERTY" shall mean, collectively, Copyrights, Patents
and Trademarks.
"INVENTORY" shall mean all of the inventory of the Grantor of every
type or description, including all "inventory" as such term is defined in the
UCC as in effect in any relevant jurisdiction, now owned or hereafter acquired
and wherever located, whether raw, in process or finished, 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
the Grantor's businesses, now owned or hereafter acquired or manufactured by the
Grantor and held for sale in the ordinary course of its business, all present
and future substitutions therefor, parts and accesso ▇▇▇▇ thereof and all
additions thereto, and all proceeds thereof and products of such inventory in
any form whatsoever.
"INVENTORY RECORDS" shall mean all books, records and other property
and General Intangibles at any time relating to the Inventory.
"INVESTMENT PROPERTY" shall mean "investment property" as such term is
defined in the UCC as in effect in any relevant jurisdiction.
"PATENTS" shall mean all of the following now owned or hereafter
acquired by the Grantor: (a) all letters patent of the United States, all
registrations and recordings thereof, and all applications for letters patent of
the United States, including registrations, recordings and pending applications
in the United States Patent and Trademark Office, including, without limitation,
those listed on SCHEDULE IV; and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"PROCEEDS" shall mean "proceeds" as such term is defined in the UCC as
in effect in any relevant jurisdiction or under other relevant law and, in any
event, shall include, but shall not be limited to, (i) any and all proceeds of
any insurance,
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indemnity, warranty or guaranty payable to the Collateral Agent or the Grantor
from time to time, and claims for insurance, indemnity, warranty or guaranty
effected or held for the benefit of the Grantor with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Grantor 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) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"RECEIVABLES" shall mean any "account" as such term is defined in the
UCC as in effect in any relevant jurisdiction and in any event shall include,
but not be limited to, all of the Grantor's rights to payment for goods
(including, without limitation, electricity) sold or leased, or services
performed, by the Grantor, whether now in existence or arising from time to time
hereafter, including, without limitation, rights evidenced by an account, note,
contract, contract rights (including any and all rights to liquidated damage
payments), security agreement, chattel paper or other evidence of indebtedness
or security, together with (i) all security pledged, assigned, hypothecated or
granted to or held by the Grantor to secure the foregoing, (ii) all guarantees,
warranties, endorsements, indemnifications or collateral on, or of, any of the
foregoing, (iii) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection therewith, (iv) 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 the Grantor or any computer
bureau from time to time acting for the Grantor, (v) all evidences of the filing
of Financing Statements and other statements 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, (vi) all credit information, reports and memoranda relating thereto,
and (vii) all other writings related in any way to the foregoing.
"SECURITY ENTITLEMENT" shall have the meaning assigned to that term
under the UCC as in effect in any relevant jurisdiction.
"SECURITY INTEREST" shall have the meaning specified in SECTION 2.1.
"TRADEMARKS" shall mean all of the following now owned or hereafter
acquired by the Grantor: (i) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all
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registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office, any
State of the United States or any political subdivi sion thereof, and all
extensions or renewals thereof, including, without limitation, those listed on
SCHEDULE V; (ii) all goodwill associated therewith or symbolized thereby; and
(iii) all other assets, rights and interests that uniquely reflect or embody
such goodwill.
SECTION 1.2. PRINCIPLES OF CONSTRUCTION. Except as otherwise expressly
provided herein, the principles of construction set forth in the Indenture shall
apply to this Agreement.
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTEREST
SECTION 2.1. ASSIGNMENT AND GRANT OF SECURITY INTEREST. (a) As security
for the prompt and complete payment and performance when due of all of the
Senior Secured Obligations, the Grantor hereby grants to the Collateral Agent,
for itself and for the ratable benefit of the other Senior Secured Parties, a
continuing security interest of first priority (the "SECURITY INTEREST") in the
Grantor's right, title and interest in, to and under the following, in each
case, whether now owned or existing or hereafter acquired, arising or created,
and wherever located: (i) all Receivables; (ii) all Documents; (iii) all
Equipment; (iv) all General Intangibles; (v) all Inventory; (vi) all cash
collateral accounts established with respect to the Grantor, and all checking,
savings, deposit or other accounts of the Grantor, including, without
limitation, the Accounts (other than the Aquila PPA Reserve Account, the Panola
County Account and the Distribution Account) and any successor accounts thereto,
and all property on deposit therein or credited thereto, including, without
limitation, all Investment Property, Security Entitlements, Financial Assets,
securi ties, instruments or cash on deposit therein or credited thereto and all
Security Entitlements with respect thereto; (vii) all Contracts and Contract
Rights, including, without limitation, all Contract Rights under the Project
Documents; (viii) all cash, accounts, deposits, securities and insurance
policies now or at any time hereafter in the possession or under control of the
Grantor or its bailees and any interest therein; (ix) all Insurance Policies and
all Insurance Proceeds and Loss Proceeds; (x) all Governmental Approvals,
PROVIDED that any Governmental Approval which by its
terms or by operation of law would become void, voidable, terminable or
revocable (or would constitute a breach or default thereunder or under
applicable law) if mortgaged, pledged or assigned hereunder or if a security
interest therein were granted hereunder are expressly excepted and excluded from
the Lien and the terms of this Agreement to the extent, and only to the extent,
necessary so as to avoid such
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voidness, voidability, terminability or revocability or breach or default; (xi)
all Fixtures, including, without limitation, those now or hereafter attached to,
placed on or incorporated in the Site; (xii) all natural gas, fuel oil,
electricity and related products; (xiii) without limiting the generality of the
foregoing, all other personal property, Goods, Instruments, Chattel Paper,
credits, claims, demands, assets, books and records, customer lists, ledger
cards, credit files, print-outs and other materials and records pertaining to
any of the foregoing, of the Grantor, whether now existing or hereafter acquired
from time to time and whether or not of a type which may be subject to a
security interest under the UCC as in effect in the State of New York; and (xiv)
any and all additions and accessions to any of the foregoing, all improve ments
thereto, all substitutions and replacements therefor and all products and
Proceeds thereof (all of the above collectively, the "COLLATERAL").
(b) The security interest granted to the Collateral Agent
pursuant to this Agreement extends to all Collateral of the kind which is the
subject of this Agreement which the Grantor may acquire at any time during the
continuation of this Agreement, whether such Collateral is in transit or in the
Grantor's, the Collateral Agent's, any other Senior Secured Party's or any other
Person's constructive, actual or exclusive occupancy or possession until the
release thereof pursuant to SECTION 9.8.
(c) The assignments and security interests under this
Agreement granted to the Collateral Agent shall not relieve the Grantor from the
performance of any term, covenant, condition or agreement on the Grantor's part
to be performed or observed under or in respect of any of the Collateral pledged
by it hereunder or from any liability to any Person under or in respect of any
of such Collateral or impose any obligation on the Collateral Agent to perform
or observe any such term, covenant, condition or agreement on the Grantor's part
to be so performed or observed or impose any liability on the Collateral Agent
for any act or omission on the part of the Grantor or for any breach of any
representation or warranty on the part of the Grantor contained in this
Agreement or any other Transaction Document, or in respect of the Collateral
pledged by it hereunder or made in connection herewith or therewith. The
obligations of the Grantor contained in this paragraph shall survive the
termination of this Agreement and the discharge of the Grantor's other
obligations hereunder.
(d) This Agreement shall create a continuing security interest
in the Collateral until the release thereof pursuant to SECTION 9.8.
SECTION 2.2. SECURITY INTEREST ABSOLUTE. The parties hereto
shall not challenge or question in any proceeding the validity or enforceability
of this Agreement as a whole or any term or provision contained herein or the
validity of any Lien or Financing Statement in favor of the Collateral Agent.
All rights of the Collateral Agent and the other Senior Secured Parties and all
security interests hereunder shall, to the fullest extent permitted by law, be
absolute and unconditional
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irrespective of:
(a) any invalidity, irregularity or unenforceability of any
Financ ing Document or any other agreement or instrument relating thereto, or
any amend ment, change or modification of any of the Financing Documents;
(b) any impairment, modification, change, exchange, release or
subordination of or limitation on, any liability to, or stay of actions or lien
enforce ment proceedings against, the Grantor, its property or its estate in
bankruptcy resulting from any bankruptcy, arrangement, readjustment,
composition, liquidation, rehabilitation or similar proceeding against or
otherwise involving or affecting the Grantor;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Senior Secured Obligations, or any other
amend ment or waiver of or any consent to any departure from, any Financing
Document;
(d) any change in the time, order or method of attachment or
perfection of Liens or the filing or recording of Financing Statements or other
security documents and irrespective of anything contained in any filing or
agreement to which the Collateral Agent or any other Senior Secured Party may
now or hereaf ter be a party;
(e) 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 Senior Secured Obligations; or
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Grantor or a third party pledgor,
except as otherwise provided herein.
SECTION 2.3. POWER OF ATTORNEY. (a) The Grantor hereby
irrevocably constitutes and appoints the Collateral Agent, on behalf of itself
and the other Senior Secured Parties, or any Person, officer or agent thereof
whom the Collateral Agent may designate, as the Grantor's true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Grantor and in the name of the Grantor or in its own name, at the
Grantor's cost and expense, to exercise all or any of the following powers,
which, being coupled with an interest, shall be irrevocable until the Senior
Secured Obligations have been indefeasibly paid in full in cash or cash
equivalents and all commitments of the Senior Secured Parties under
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the Financing Documents have been terminated:
(i) to receive, take, endorse, sign, assign and
deliver, all in the Collateral Agent's name or the Grantor's name, any
and all checks, notes, drafts and other documents or instruments
relating to the Collateral;
(ii) to receive, open and dispose of all mail
addressed to the Grantor and to notify postal authorities to change the
address for delivery thereof to such address as the Collateral Agent
designates;
(iii) to request from account debtors of the Grantor,
in the Grantor's name or in the name of the Collateral Agent or the
Collateral Agent's designee, information concerning the Receivables and
the amounts owing thereon;
(iv) to transmit to account debtors indebted on
Receivables notice of the Collateral Agent's interest therein;
(v) to notify account debtors indebted on Receivables
to make payment directly to the Collateral Agent;
(vi) to take or bring, in the Grantor's name or in
the Collateral Agent's name on behalf of the Senior Secured Parties,
all steps, actions, suits or proceedings deemed by the Collateral Agent
to be necessary or desirable to enforce or effect collection of the
Receivables;
(vii) to the fullest extent permitted by law, to
prepare, sign and file any Financing Statements or file this Agreement
in the name of the Grantor as debtor;
(viii) if the Grantor shall have failed to do so in a
timely manner, to take or cause to be taken all actions necessary to
perform or comply, or cause performance or compliance with, the
covenants of the Grantor contained in any Financing Document;
(ix) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assign ments, verifications, notices and other
documents in connection with any of the Collateral;
(x) to defend any suit, action or proceeding brought
against the Grantor with respect to any Collateral;
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(xi) to settle, compromise or adjust any suit, action
or pro ceeding described in the preceding clause (x) and, in connection
therewith, to give such discharges or releases as the Collateral Agent,
acting upon direc tions from (x) the Intercreditor Agent acting
pursuant to the Intercreditor Agreement or (y) the Senior Secured
Parties acting pursuant to SECTION 7.15 of the Intercreditor Agreement,
or as otherwise expressly provided herein, may deem appropriate;
(xii) generally, to sell or transfer and make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent was the absolute
owner thereof for all purposes, and to do, at the Collateral Agent's
option and the Grantor's expense, at any time, or from time to time,
all reasonable acts and things which the Collateral Agent, acting upon
directions from (x) the Intercreditor Agent acting pursuant to the
Intercreditor Agreement or (y) the Senior Secured Parties acting
pursuant to SECTION 7.15 of the Intercreditor Agree ment, or as
otherwise expressly provided herein, deems necessary to protect,
preserve or realize upon the Collateral and the Liens of the Collateral
Agent thereon;
(xiii) to execute, in connection with any
foreclosure, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral;
(xiv) to exercise the Grantor's rights under any
Contract in accordance with SECTION 6.1; and
(xv) to exercise any and all other rights, remedies,
powers and privileges of the Grantor with respect to the Collateral;
PROVIDED, HOWEVER, that the Collateral Agent shall not exercise its powers under
clauses (i), (ii), (iii), (iv), (vi), (viii), (ix), (x), (xi), (xii), (xiii),
(xiv) or (xv) unless an Event of Default has occurred and is continuing.
(b) The Grantor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. The Grantor hereby
acknowledges and agrees that in acting pursuant to this power-of-attorney the
Collateral Agent shall be acting in its own interest and in the interest of the
other Senior Secured Parties and the Grantor acknowledges and agrees that the
Collateral Agent and the other Senior Secured Parties shall have no fiduciary
duties to the Grantor and the Grantor hereby waives any claims to the rights of
a beneficiary of a fiduciary relationship hereunder.
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SECTION 2.4. INSPECTION AND VERIFICATION. The Collateral Agent
and such Persons as the Collateral Agent may reasonably designate shall have the
right, no more often than once each year, unless an Event of Default has
occurred and is continuing, and, if an Event of Default has occurred and is
continuing, at any reasonable time or times, in each case upon ten (10) days'
notice and at the Grantor's own cost and expense, to inspect the Collateral, all
records related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantor's affairs with the appropriate officers of the Grantor and its
independent accountants and to verify under reasonable proce dures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of Receivables or Collateral
in the possession of any third party, by contacting account debtors or the third
party possessing such Collateral for the purpose of making such a verification.
The Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any other Senior Secured Party.
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Grantor hereby represents, warrants and covenants to the
Collat eral Agent and the other Senior Secured Parties, which representations,
warranties and covenants shall survive execution and delivery of this Agreement
and the making and repayment of the Senior Secured Obligations, as follows:
SECTION 3.1. TITLE AND AUTHORITY. The Grantor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any Person other than any consent or approval that has been obtained and is
in full force and effect.
SECTION 3.2. VALIDITY, PERFECTION AND PRIORITY OF LIEN.
(a) This Agreement creates in favor of the Collateral Agent,
for itself and for the ratable benefit of the other Senior Secured Parties, a
legal, valid and enforceable security interest in the Collateral and the
proceeds thereof owned by the Grantor, and when Financing Statements in
appropriate form are filed by the Grantor in the offices specified on SCHEDULE I
hereto, the Lien created under this Agreement will constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Grantor
in such Collateral and the proceeds thereof, in each case prior
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and superior in right to any other Person.
(b) (i) Fully executed Financing Statements or other
appropriate filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in SCHEDULE I, which are all
the filings, recordings and registra tions that are necessary to publish notice
of and protect the validity of and to estab lish a valid and perfected security
interest in favor of the Collateral Agent (for the benefit of itself and for the
ratable benefit of the Senior Secured Parties) in respect of all Collateral
(other than Fixtures appurtenant to the Site) in which the Security Interest may
be perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements and except
that recordation of the Security Interest in the United States Patent and
Trademark Office may be necessary with respect to Collateral consisting of
Patents and Trademarks and recordation of the Security Interest, in addition to
registration of any unregistered copyrights, in the United States Copyright
Office may be necessary with respect to Collateral consist ing of Copyrights.
The Grantor will pay any applicable filing fees and related expenses. The
Grantor hereby irrevocably authorizes the Collateral Agent to file any such
Financing Statements without its signature as the debtor.
(ii) The Instruments listed on SCHEDULE II hereto, which, as
of the date hereof, constitute all instruments of the Grantor, and all other
Chattel Paper have been stamped to indicate the Security Interest of the
Collateral Agent for itself and the ratable benefit of the Senior Secured
Parties hereunder.
SECTION 3.3. NO LIENS; OTHER FINANCING STATEMENTS. (a) Except
for the Lien granted to the Collateral Agent for itself and the ratable benefit
of the Senior Secured Parties hereunder and other Permitted Liens, and, further,
except for the interest in and control over the Accounts (other than the Aquila
PPA Reserve Account, the Panola County Account and the Distribution Account) of
and by the Collateral Agent and the Administrative Agent as provided in the
Common Agree ment and the Securities Account Control Agreement, and the interest
in and control over the Indenture Funds of and by the Trustee and the Securities
Intermediary as provided in the Indenture, the Grantor owns and will continue to
own valid and marketable title in and to each item of the Collateral (other than
Collateral that it is entitled to dispose of pursuant to SECTION 5.1(G) of the
Indenture) free and clear of any and all Liens and the Grantor shall defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Collateral Agent or any other
Senior Secured Party.
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(b) Other than Financing Statements filed in connection
herewith and Financing Statements filed in respect of the Supplemental
Partnership Security Agreement (releases of which have been delivered to the
Collateral Agent), there is no Financing Statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Collateral. The Grantor will
not execute or authorize any Financing Statement (or similar statement or
instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral to be filed in any public office, except Financing
Statements filed or to be filed in respect of and covering the security
interests granted hereby to the Collateral Agent by the Grantor.
SECTION 3.4. CHIEF EXECUTIVE OFFICE; NAME; RECORDS. (a) The
chief executive office and principal place of business of the Grantor is located
at the address set forth on SCHEDULE VI. The originals of all documents
evidencing all Contracts and Receivables of the Grantor, and the only original
books of account and records concerning the Collateral are, and will continue to
be, kept at, and controlled and directed (including, without limitation, for
general accounting purposes) from, the chief executive office of the Grantor as
set forth on SCHEDULE VI, or at such new location for such chief executive
office as the Grantor may establish in accordance with SECTION 3.4(B).
(b) The Grantor shall not establish a new location for its
chief executive office or change its name or the name under which it presently
conducts its business unless (i) it has given to the Collateral Agent not less
than sixty (60) days' prior written notice of its intention so to do, clearly
describing such new location or specifying such new name, as the case may be,
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, and (ii) with respect to such new location or such
new name, as the case may be, the Grantor shall have taken all action to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
SECTION 3.5. ADDITIONAL STATEMENTS AND SCHEDULES. The Grantor
shall execute and deliver to the Collateral Agent, from time to time, for its
conve nience in maintaining a record of the Collateral, such written statements
and sched ules as is necessary or as the Collateral Agent may reasonably
require, designating, identifying or describing the Collateral.
SECTION 3.6. FURTHER ACTIONS. The Grantor will, at its own ex
pense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such lists, descriptions and designations of
its Collateral,
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warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, convey ances, Financing Statements, transfer endorsements, powers
of attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the Security Interest hereby granted by the Grantor, which is
necessary or as the Collateral Agent deems reasonably appropriate or advisable
to perfect, preserve or protect its security interest in the Collateral within
thirty (30) days after any request by the Collateral Agent or such earlier date
as may be required by applicable law or necessary to preserve or protect the
security interests in the Collateral granted by the Grantor pursuant to this
Agree ment, including the payment of any fees and taxes required in connection
with the execution and delivery of this Agreement, the granting of the Lien
created hereby and the filing of any Financing Statements or other documents in
connection herewith.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
SECTION 4.1. MAINTENANCE OF INSURANCE; PROTECTION OF SECURITY
INTEREST. The Grantor shall carry with respect to the Collateral and its use
such insurance as shall be required under the Transaction Documents.
SECTION 4.2. LOCATION OF INVENTORY AND EQUIPMENT. All
Inventory and Equipment owned on the date hereof by the Grantor is located at
one of the locations shown on SCHEDULE 4.2 (other than Equipment undergoing
repairs). The Grantor agrees that all Inventory and Equipment now held or
subsequently acquired by it shall be kept at (or shall be in transport to) one
of the locations on SCHEDULE 4.2.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
RECEIVABLES, CONTRACTS AND INSTRUMENTS
SECTION 5.1. DIRECTION TO ACCOUNT DEBTORS; GRANTOR BOUND. (a)
The Grantor agrees that the Collateral Agent may (i) directly notify the account
debtors or obligors with respect to any Receivables and/or under any Project
Docu ments to make payments with respect thereto directly to the Revenue
Account, and (ii) from and after the occurrence of an Event of Default, directly
notify the account debtors or obligors with respect to any Receivables and/or
under any Project Docu ments to make payments with respect thereto directly to
the Collateral Agent.
(b) Upon the occurrence and during the continuance of an Event
of Default, the Grantor agrees to be bound by any collection, compromise,
forgiveness, extension or other action taken by the Collateral Agent with
respect to the
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Receivables and/or the Project Documents. The reasonable costs and expenses
(including reasonable attorneys' fees) of collection, whether incurred by the
Grantor, the Collateral Agent or any other Senior Secured Party, shall be borne
by the Grantor.
ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS
SECTION 6.1. SECURITY INTEREST IN CONTRACT RIGHTS. The
Grantor's grant, pursuant to SECTION 2.1, to the Collateral Agent of a security
interest in all of its right, title and interest in and to each and all of the
Contracts and the contract rights thereunder, includes, but is not limited to:
(i) all (A) rights to payment under any Contract and (B)
payments due and to become due under any Contract, in each case whether
as contractual obligations, damages or otherwise;
(ii) all of its claims, rights, powers, privileges and
remedies under any Contract; and
(iii) all of its rights under any Contract to make determina
tions, to exercise any election (including, without limitation,
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 to demand, receive, enforce or collect any of
the foregoing rights or any property the subject of any of the
Contracts, to enforce or execute any checks or other instruments or
orders, to file any claims and to take any action in connection with
any of the foregoing (the Contracts, together with all of the foregoing
in this SECTION 6.1, the "CONTRACT RIGHTS");
PROVIDED, HOWEVER, that, unless an Event of Default shall have occurred and be
continuing, notwithstanding anything else herein to the contrary, the Grantor
may, subject to the terms and provisions of the Financing Documents, exclusively
exercise all of its rights, powers, privileges and remedies under the Contracts.
SECTION 6.2. FURTHER PROTECTION. The Grantor shall defend the
title to the Contract Rights against the claims and demands of any Person other
than the Collateral Agent and the Senior Secured Parties, and hereby grants the
Collateral Agent full power and authority, upon the occurrence and during the
continuance of an Event of Default, to take all actions as the Collateral Agent,
acting upon directions from (x) the Intercreditor Agent acting pursuant to the
Intercreditor Agreement or (y)
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the Senior Secured Parties acting pursuant to SECTION 7.15 of the Intercreditor
Agreement, or as otherwise expressly provided herein, reasonably deems necessary
or advisable to effectuate the provisions set forth in this sentence.
SECTION 6.3. LIABILITIES UNDER RECEIVABLES AND CONTRACTS. Any
thing herein to the contrary notwithstanding (including, without limitation, the
grant of any rights to the Collateral Agent), the Grantor shall remain liable
under each of the Receivables and Contracts to observe and perform all the
conditions and obliga tions to be observed and performed by it thereunder and
under or with respect to the Collateral, all in accordance with the terms of any
agreement giving rise to each such Receivable, Contract or procurement of
Collateral. Neither the Collateral Agent nor any other Senior Secured Party
shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) or Contract or with respect to the Collateral by reason of
or arising out of this Agreement or the receipt by the Collat eral Agent of any
payment relating to such Receivable, Contract or Collateral pursuant hereto, nor
shall the Collateral Agent or any other Senior Secured Party be obligated in any
manner to perform any of the obligations of the Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Receivable (or any agreement giving rise
thereto) or under any Contract, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.
SECTION 6.4. REMEDIES. Upon the occurrence of any Event of
Default, the Collateral Agent shall have the rights set forth in ARTICLE IX,
and, acting upon directions from (x) the Intercreditor Agent acting pursuant to
the Intercreditor Agreement or (y) the Senior Secured Parties acting pursuant to
SECTION 7.15 of the Intercreditor Agreement, or as otherwise expressly provided
herein, may (i) enforce all remedies, rights, powers and privileges of the
Grantor under any or all of the Contracts, (ii) sell any or all of the Contract
Rights at public or private sale upon at least ten (10) days' prior written
notice and/or (iii) substitute itself or any nominee or trustee in lieu of the
Grantor as party to any of the Contracts and to notify the obligor of any
Contract Right (the Grantor hereby agreeing to deliver any such notice at the
request of the Collateral Agent) that all payments and performance under the
relevant Contract shall be made or rendered to the Collateral Agent or such
other Person as the Collateral Agent may designate.
ARTICLE VII
DUTY OF CARE OF COLLATERAL AGENT
SECTION 7.1. COLLATERAL AGENT'S DUTIES; REASONABLE CARE. (a)
The
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Collateral Agent shall have the duty to exercise reasonable care in the custody
and preservation of any Collateral in its possession, which duty shall be fully
satisfied if the Collateral Agent maintains safe custody of such Collateral in
accordance with customary banking standards.
(b) Except as hereinabove specifically set forth, the
Collateral Agent shall have no further obligation to ascertain the occurrence
of, or to notify the Grantor with respect to, any matters relating to any
Collateral and shall not be deemed to assume any such further obligation as a
result of the establishment by the Collateral Agent of any internal procedures
with respect to any Collateral in its possession, nor shall the Collateral Agent
be deemed to assume any other responsi bility for, or obligations or duty with
respect to, any Collateral, or its use, including, without limitation, any
obligation or duty to take any action to collect, preserve or protect its or the
Grantor's rights in the Collateral, but the same shall be at the sole risk and
responsibility of the Grantor at all times.
(c) The Grantor hereby releases the Collateral Agent and each
other Senior Secured Party from any claims, causes of action and demands at any
time arising out of or with respect to this Agreement, the Senior Secured
Obligations, the Collateral and its use and/or any actions taken or omitted to
be taken by the Collat eral Agent with respect thereto (except such claims,
causes of action and demands arising from the gross negligence or wilful
misconduct of the Collateral Agent).
ARTICLE VIII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
For the avoidance of doubt, the provisions of SECTION 8.1,
SECTION 8.2 and SECTION 8.4 shall apply only upon the occurrence and during the
continuance of an Event of Default.
SECTION 8.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT.
(a) Upon the occurrence and during the continuance of an Event of Default, the
Collat eral Agent, acting upon directions from (x) the Intercreditor Agent
acting pursuant to the Intercreditor Agreement or (y) the Senior Secured Parties
acting pursuant to SECTION 7.15 of the Intercreditor Agreement, or as otherwise
expressly provided herein, shall be entitled to exercise on behalf of itself and
the other Senior Secured Parties, all the rights and remedies of a secured party
under the UCC as in effect in any relevant jurisdiction and all rights now or
hereafter existing under all other applicable law to enforce this Agreement and
the security interests contained herein, and, in addition, subject to any
Applicable Laws then in effect, the Collateral
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Agent, acting upon directions from (x) the Intercreditor Agent acting pursuant
to the Intercreditor Agreement or (y) the Senior Secured Parties acting pursuant
to SECTION 7.15 of the Intercreditor Agreement, or as otherwise expressly
provided herein, may, in addition to its other rights and remedies hereunder,
including without limitation under SECTION 8.2 and SECTION 8.6, and also the
rights of the Collateral Agent and the other Senior Secured Parties under any of
the Transaction Documents, do any of the following to the fullest extent
permitted by applicable law:
(i) personally, or by agents, trustees or attorneys,
immediately take possession of the Collateral or any part thereof, from the
Grantor or any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon the
Grantor's premises or such other Person's 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 the Grantor;
(ii) instruct the obligor or obligors of any agreement,
instrument or other obligation (including, without limitation, the Receivables
and the Contracts) constituting the Collateral to make any payment required by
the terms of such instrument or agreement directly to the Collateral Agent; and
(iii) take possession of the Collateral or any part thereof,
by directing the Grantor in writing to turn over the same to the Collateral
Agent at the Site or, to the extent such Collateral may be moved, to deliver the
same to the Collateral Agent at any other place or places designated by the
Collateral Agent, in which event the Grantor shall, at its own expense, (A)
forthwith turn over the same to the Collateral Agent at one of the locations on
SCHEDULE 4.2 or cause the same to be moved to the place or places so designated
by the Collateral Agent and there delivered to the Collateral Agent, as the case
may be, (B) store and keep any Collateral so turned over or delivered to the
Collateral Agent at one of the locations shown on SCHEDULE 4.2 or at such place
or places pending further action by the Collateral Agent as provided in SECTION
8.2, and (C) 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 the Collateral in good condition.
(b) The Grantor's obligation to turn over or deliver the
Collateral as set forth above is of the essence of this Agreement and,
accordingly, upon application to a court of equity having jurisdiction, the
Collateral Agent shall be entitled to obtain a decree requiring specific
performance by the Grantor of said obligation.
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(c) When Collateral is in the Collateral Agent's possession,
(i) the Grantor shall pay (or reimburse the Collateral Agent on demand for) all
reasonable expenses (including the cost of any insurance and payment of taxes or
other charges) incurred in the custody, preservation, use or operation of the
Collateral, and the obligation to reimburse all such expenses shall be secured
hereby, and (ii) the risk of accidental loss or damage shall be on the Grantor
to the extent of any deficiency in any effective insurance coverage.
SECTION 8.2. REMEDIES; DISPOSITION OF THE COLLATERAL. Any
Collateral repossessed by the Collateral Agent under or pursuant to SECTION 8.1
and any other Collateral, whether or not so repossessed by the Collateral Agent,
may, to the extent permitted by any contract terms governing such Collateral and
to the fullest extent permitted by applicable law, be sold, leased or otherwise
disposed of under one or more contracts or as an entirety, whether by public or
private sale and without the necessity of gathering at the place of sale the
property to be sold, may be sold in such manner, at such time or times, at such
place or places and on such terms (whether cash or credit, and in the case of
credit, without assumption of future credit risk), in compliance with Applicable
Laws, as are commercially reasonable. If any Collateral is sold by the
Collateral Agent upon credit or for future delivery the Collateral Agent shall
not be liable for the failure of the purchaser to pay for the same and in such
event the Collateral Agent may resell the Collateral. In no event shall the
Grantor be credited with any part of the proceeds of sale of any Collateral
until payment thereof in cash or cash equivalents has actually been received by
the Collateral Agent. Any of the Collateral may be sold, leased or otherwise
disposed of, or options or contracts may be entered to do so, in the condition
in which the same existed when taken by the Collateral Agent or after any
overhaul or repair in a commercially reasonable manner. Any such disposition
shall be made upon not less than ten (10) days' written notice to the 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. To the extent permitted by applicable law, the Collateral Agent or
any other Senior Secured Party may itself bid for and become the buyer of the
Collateral or any item thereof offered for sale at a public auction without
accountability to the Grantor.
SECTION 8.3. WAIVER. (a) EXCEPT AS OTHERWISE PRO VIDED IN THIS
AGREEMENT, THE GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OR JUDICIAL HEAR ING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING
POSSES SION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL IN
ACCORDANCE WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR
NOTICE AND
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HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE
GRANTOR WOULD OTHERWISE HAVE UNDER THE CONSTI TUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, AND THE GRANTOR HEREBY FURTHER WAIVES:
(i) all damages occasioned by such taking of
possession except any damages which are finally judicially determined
to have been the direct result of the Collateral Agent's gross
negligence or wilful misconduct;
(ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of
the Collateral Agent's and the other Senior Secured Parties' rights
hereunder;
(iii) demand of performance or other demand, notice
of intent to demand or accelerate, notice of acceleration, presentment,
protest, adver tisement or notice of any kind to or upon the Grantor or
any other Person; and
(iv) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force
under any applicable law in order to prevent or delay the enforcement
of this Agreement or the absolute sale of the Collateral or any portion
thereof, and the Grantor, for itself and all who may claim under it,
insofar as it may now or hereafter lawfully do so, hereby waives the
benefit of such laws.
(b) Without limiting the generality of the foregoing, the
Grantor hereby: (i) authorizes the Collateral Agent, without notice to or demand
upon the Grantor and without otherwise affecting the obligations of the Grantor
hereunder from time to time, to take and hold other collateral granted to it by
any other Person (in addition to the Collateral) for payment of any Senior
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 Senior 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 obli gated upon any Senior
Secured Obligations, or any part thereof; and (ii) waives and releases any and
all right to require the Collateral Agent or the other Senior Secured Parties to
collect any of the Senior 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 Senior Secured Obligations or from any collateral (other
than the Collateral) for any of the Senior Secured Obligations.
(c) Any sale of, or the grant of options to purchase, or any
other
21
realization upon, any Collateral shall, provided that it is done in accordance
with applicable law and this Agreement, operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Grantor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Grantor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under the Grantor.
SECTION 8.4. APPLICATION OF PROCEEDS; GRANTOR LIABLE FOR DEFI
CIENCY. Except as otherwise expressly provided herein or in the other Financing
Documents, following the occurrence of an Event of Default and the acceleration
of the maturity of the Senior Secured Obligations (whether automatically, by
declara tion or otherwise), the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant to this Agreement, and
any other cash at the time of such collection, sale or other realization held by
the Collateral Agent under this Agreement, shall be applied by the Collateral
Agent in accordance with ARTICLE IV of the Collateral Agency Agreement. For
avoidance of doubt, it is understood that the Grantor shall remain liable to the
extent of any deficiency between the amount of proceeds of the Collateral and
the aggregated amount of the Senior Secured Obliga tions in accordance with the
Financing Documents.
SECTION 8.5. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Collateral Agent or any other Senior Secured Party in
exercising any right, remedy, power or privilege hereunder and no course of
dealing between the Grantor and any other Senior Secured Party shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. A waiver by the
Collateral Agent or any other Senior Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or any other Senior Secured Party would
otherwise have on any future occasion. The rights and remedies herein expressly
provided are cumulative and may be exercised singly or concurrently and as often
and in such order as the Collateral Agent or any other Senior Secured Party
deems expedient and are not exclusive of any rights or reme dies which the
Collateral Agent or the other Senior Secured Parties would otherwise have
whether by agreement or now or hereafter existing under applicable law. No
notice to or demand on the Grantor in any case shall entitle the Grantor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Collateral Agent or the other Senior
Secured Parties to any other or future action in any circumstances without
notice or demand.
SECTION 8.6. DISCONTINUANCE OF PROCEEDINGS. In case the
Collateral
22
Agent or any other Senior Secured Party shall have instituted any proceeding to
enforce any right, power or remedy under this 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 the
Collateral Agent or such other Senior Secured Party, then, in every such case,
subject to the terms of any final non-appealable judgment rendered in any such
proceeding, the Grantor, the Collateral Agent, the other Senior Secured Parties
and each holder of any of the Senior Secured Obligations shall be restored to
their former positions and rights hereunder with respect to the Collateral,
subject to the Security Interest created under this Agree ment, and all rights,
remedies and powers of the Collateral Agent and the other Senior Secured Parties
shall continue as if no such proceeding had been instituted.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. NOTICES. Unless otherwise specifically herein
provided, all notices required or permitted under the terms and provisions
hereof shall be in writing and any such notice shall become effective if given
in accordance with the provisions of SECTION 1.4 of the Indenture.
SECTION 9.2. AMENDMENT. No waiver, amendment, modification or
termination of any provision of this Agreement, or consent to any departure by
the Grantor therefrom, shall in any event be effective without the prior written
consent of the Collateral Agent, acting upon directions from (x) the
Intercreditor Agent acting pursuant to the Intercreditor Agreement or (y) the
Senior Secured Parties acting pursuant to SECTION 7.15 of the Intercreditor
Agreement, or as otherwise expressly provided herein, and none of the Collateral
shall be released without the written consent of the Collateral Agent, acting
upon directions from (x) the Intercreditor Agent acting pursuant to the
Intercreditor Agreement or (y) the Senior Secured Parties acting pursuant to
SECTION 7.15 of the Intercreditor Agreement, or as other wise expressly provided
herein. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 9.3. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Grantor, the Collateral Agent and
the other Senior Secured Parties, all future holders of the Senior Secured
Obligations and their respective successors, transferees and assigns (to the
extent such successors, transferees and assigns are permitted under the
Financing Documents).
SECTION 9.4. SURVIVAL. All agreements, statements,
representations and warranties made by the Grantor herein or in any certificate
or other instrument delivered by the Grantor or on its behalf under this
Agreement shall be considered to
23
have been relied upon by the Collateral Agent and the other Senior Secured
Parties and shall survive the execution and delivery of this Agreement and the
other Financ ing Documents regardless of any investigation made by the
Collateral Agent or any other Senior Secured Party or made on their behalf.
SECTION 9.5. HEADINGS DESCRIPTIVE. The headings of the
several sections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 9.6. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.7. GRANTOR'S DUTIES. Anything herein contained to
the contrary notwithstanding, the Grantor shall remain liable to perform all of
its obligations under or with respect to the Collateral, and neither the
Collateral Agent nor any other Senior Secured Party shall have any obligations
or liabilities under or with respect to any Collateral by reason of or arising
out of this Agreement, nor shall the Collateral Agent or the other Senior
Secured Parties be required or obligated in any manner to perform or fulfill any
of the obligations of the Grantor under or with respect to any Collateral.
SECTION 9.8. TERMINATION; RELEASE. Upon the date at which all
of the Senior Secured Obligations have been indefeasibly paid in full in cash or
cash equivalents and all commitments of the Senior Secured Parties under the
Financing Documents have terminated, this Agreement shall terminate, and the
Collateral Agent, at the request, pursuant to instructions from, and at expense
of, the Grantor, will promptly execute and deliver to the Grantor the proper
instruments (including UCC termination statements on form UCC-3) acknowledging
the termination of this Agreement, and will duly assign, transfer and deliver to
the Grantor (without recourse and without any representation or warranty of any
kind) such of the Collat eral as may be in the possession of the Collateral
Agent and has not theretofore been disposed of or otherwise applied or released.
SECTION 9.9. REINSTATEMENT. This Agreement shall continue to
be effective or be reinstated, as the case may be, if at any time any amount
received by the Collateral Agent or any other Senior Secured Party in respect of
the Senior Secured Obligations is rescinded or must otherwise be restored or
returned by the Collateral Agent or such other Senior Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Grantor or upon the
24
appointment of any intervenor or conservator of, or trustee or similar official
for, the Grantor or any substantial part of its assets, or upon the entry of an
order by a bankruptcy court avoiding payment of such amount, or otherwise, all
as though such payments had not been made.
SECTION 9.10. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which, taken together, shall constitute one
and the same instrument and any of the parties hereto may execute this Agreement
by signing any such counterpart.
SECTION 9.11 GOVERNING LAW. This Agreement shall be governed
by the laws of the State of New York of the United States of America and shall
for all purposes be governed by and construed in accordance with the laws of
such state without regard to the conflict of law rules thereof other than
Section 5-1401 of the New York General Obligations Law.
SECTION 9.12 CONSENT TO JURISDICTION. Any legal action or
proceed ing by or against the Grantor with respect to or arising out of this
Agreement may be brought in or removed to the courts of the State of New York,
in and for the County of New York, or of the United States of America for the
Southern District of New York. By execution and delivery of this Agreement, the
Grantor accepts, for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts for legal proceedings
arising out of or in connection with this Agreement and irrevocably consents to
the appointment of CT Corporation System, with offices on the date hereof at
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent to receive service of
process in New York, New York. If for any reason such agent shall cease to be
available to act as such, the Grantor agrees to appoint a new agent on the terms
and for the purposes of this provision. Nothing herein shall affect the right to
serve process in any other manner permitted by law or any right to bring legal
action or proceedings in any other competent jurisdiction, including judicial or
non-judicial foreclosure of real property interests which are part of the
Collateral. The Grantor further agrees that the aforesaid courts of the State of
New York and of the United States of America for the Southern District of New
York shall have exclusive jurisdiction with respect to any claim or counterclaim
of the Grantor based upon the assertion that the rate of interest charged by or
under this Agreement or under the other Financing Documents is usurious. The
Grantor hereby waives any right to stay or dismiss any action or proceeding
under or in connection with the Project, this Agreement or any other Transaction
Document brought before the foregoing courts on the basis of FORUM
NON-CONVENIENS or improper venue.
SECTION 9.13 WAIVER OF JURY TRIAL. EACH OF THE GRANTOR AND THE
COLLATERAL AGENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL
25
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE OTHER PARTIES HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT TO ENTER INTO
THIS AGREEMENT.
SECTION 9.14. AUTHORITY OF COLLATERAL AGENT. The Grantor ac
knowledges that the rights and responsibilities of the Collateral Agent under
this Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Senior
Secured Parties, be governed by this Agreement and the other Financing Documents
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Collateral Agent and the Grantor, the Collateral
Agent shall be conclusively pre sumed to be acting as agent for the Senior
Secured Parties with full and valid authority so to act or refrain from acting,
and the Grantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
SECTION 9.15. INDEMNITIES AND EXPENSES. The obligation of the
Grantor to pay the costs and expenses of, and to indemnify, defend and hold harm
less, the Collateral Agent and the other Senior Secured Parties under and in
connec tion with this Agreement shall be as provided in SECTION 7.15 of the
Intercreditor Agreement as in effect as of the date hereof. No amendment to such
SECTION 7.15 or termination of the Intercreditor Agreement shall affect the
provisions of this SECTION 9.15 unless such amendment or termination shall have
been consented to by the parties to this Agreement in accordance with the
provisions hereof and of the other Financing Documents.
SECTION 9.16. ENTIRE AGREEMENT. This Agreement, together with
any other agreement executed in connection herewith, is intended by the parties
as a final expression of their agreement as to the matters covered hereby and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
SECTION 9.17. INDEPENDENT SECURITY. The security provided for
in this Agreement shall be in addition to and shall be independent of every
other security which the Collateral Agent or the other Senior Secured Parties
may at any time hold for any of the Senior Secured Obligations hereby secured,
whether or not under the Senior Security Documents. The execution of any other
Senior Security Document shall not modify or supersede the security interest or
any rights or
26
obligations contained in this Agreement and shall not in any way affect, impair
or invalidate the effectiveness and validity of this Agreement or any term or
condition hereof. The Grantor hereby waives its right to plead or claim in any
court that the execution of any other Senior Security Document is a cause for
extinguishing, invalidating, impairing or modifying the effectiveness and
validity of this Agreement or any term or condition contained herein. The
Collateral Agent shall be at liberty to accept further security from the Grantor
or from any third party and/or release such security without notifying the
Grantor and without affecting in any way the obligations of the Grantor under
the Senior Security Documents or the other Financing Documents. The Collateral
Agent, upon directions from (x) the Intercreditor Agent acting pursuant to the
Intercreditor Agreement or (y) the Senior Secured Parties acting pursuant to
SECTION 7.15 of the Intercreditor Agreement, or as otherwise expressly provided
herein, shall determine if any security conferred upon the Collateral Agent and
the other Senior Secured Parties under the Senior Security Documents shall be
enforced by the Collateral Agent, as well as the sequence of securities to be so
enforced.
SECTION 9.18. THIRD PARTY BENEFICIARIES. The agreements of the parties
hereto are intended to benefit the Senior Secured Parties and their respective
successors and assigns.
SECTION 9.19 LIMITATION OF LIABILITY. The provisions of SECTION 14.1 of
the Indenture shall apply to this Agreement.
SECTION 9.20 COLLATERAL AGENCY AGREEMENT. The rights, benefits,
privileges and immunities given to the Collateral Agent and set forth in the
Collateral Agency Agreement are expressly incorporated herein by reference
thereto.
27
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amended and Restated Partnership Security Agreement to be duly executed and
delivered by their duly authorized officers as of the date first above written.
LSP ENERGY LIMITED PARTNERSHIP
By: LPS Energy, Inc.,
its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Secretary
THE BANK OF NEW YORK,
as Collateral Agent
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
Signature Page to Second Amended and Restated Partnership Security Agreement
Schedule I to
Second Amended and Restated Security Agreement
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Grantor's Filing Offices
------------------------
New Jersey Secretary of State
Mississippi Secretary of State
Panola County Local Filing Office
Schedule II to
Second Amended and Restated Security Agreement
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Instruments
-----------
None.
Schedule III to
Second Amended and Restated Security Agreement
----------------------------------------------
Copyrights
----------
None.
Schedule IV to
Second Amended and Restated Security Agreement
----------------------------------------------
Patents
-------
None.
Schedule V to
Second Amended and Restated Security Agreement
----------------------------------------------
Trademarks
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None.
Schedule VI to
Second Amended and Restated Security Agreement
----------------------------------------------
Grantor's Chief Executive Office and
Principal Place of Business
------------------------------------
Chief Executive Office:
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Principal Place of Business:
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Schedule 4.2 to
Second Amended and Restated Security Agreement
----------------------------------------------
Locations of Inventory and Equipment
------------------------------------
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