PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of February 12, 2008, is
entered into by and among MORTGAGE ASSISTANCE CORP., a Texas corporation
("Pledgor"), CSSF MASTER FUND, LP, a Texas limited partnership ("CSSF"), and LBL
PARTNERS, LTD., a Texas limited partnership ("LBL" and together with CSSF, the
"Secured Parties"), with reference to the following:
WHEREAS, Secured Parties have extended credit (the "Loans") to Pledgor, as
evidenced by those certain Promissory Notes, each of even date herewith,
executed by Pledgor and payable to the order of each Secured Party in the
aggregate original principal amount of Three Hundred Thousand and No/100 U.S.
Dollars ($300,000.00) each (the "Notes"); and
WHEREAS, to induce Secured Parties to make the Loans to Pledgor, Pledgor
has agreed to pledge, grant, transfer, and assign to Secured Parties a security
interest in the Collateral (as hereinafter defined) to secure the Secured
Obligations (as hereinafter defined), as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto agree as follows:
1. Definitions and Construction.
(a) Definitions.
------------
As used in this Agreement:
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"Business Day" means any day that is not a Saturday, Sunday, or other day
on which commercial banks in Dallas, Texas are closed.
"Code" means the Uniform Commercial Code as in effect in the State of Texas
from time to time.
"Collateral" shall mean the Pledged Interests, whether now owned or
hereafter acquired, now existing or hereafter arising and wherever located.
"Equity Interests" means all of the Membership Interests or other equity
interests owned, directly or indirectly, by Pledgor in (a) MAC/Crescent No. 1,
LLC, a Texas limited liability company, (b) MAC/Crescent No. 2, LLC, a Texas
limited liability company, and/or (c) any other Person formed by Pledgor and HBK
Fund MS LLC (or any affiliate thereof) for the same or similar purpose as that
of the Persons described in (a) and (b) above.
"Event of Default" shall have the meaning ascribed thereto in Section 22
hereof.
1
"Governmental Authority" shall mean the government of the United States of
America or any other nation, any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Holder" and "Holders" shall have the meanings ascribed thereto in Section
3 of this Agreement.
"Issuer" shall mean any Person identified or described in (a), (b) or (c)
of the definition of Equity Interests above.
"Lien" shall mean any lien, mortgage, pledge, assignment (including any
assignment of rights to receive payments of money), security interest, charge,
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, or any agreement to give
any security interest).
"Loan Documents" shall mean this Agreement, the Notes and all other
agreements, instruments, or other documents entered into or executed in
connection with the Loans, in each case, as amended, restated, or otherwise
modified from time to time.
"Person" shall mean any individual, corporation, trust, business trust,
joint venture, joint stock company, association, company, limited liability
company, partnership, Governmental Authority or other entity of whatever nature.
"Pledged Interests" shall mean: (a) all of the Equity Interests owned by
Pledgor; and (b) the certificates or instruments representing such Equity
Interests.
"Secured Obligations" shall mean all liabilities, obligations, or
undertakings owing by Pledgor to Secured Parties of any kind or description
arising out of or outstanding under, advanced or issued pursuant to, or
evidenced by the Loan Documents.
"Secured Parties" shall have the meaning ascribed thereto in the preamble
to this Agreement, together with their successors or assigns.
"Secured Party" shall mean either one of the Secured Parties, together with
its successors or assigns.
"Securities Act" shall have the meaning ascribed thereto in Section 9(c) of
this Agreement.
(b) Construction.
-------------
(i) Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular and to the singular
include the plural, the part includes the whole, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms in this Agreement refer to this
2
Agreement as a whole and not exclusively to any particular provision of this
Agreement. Article, section, subsection, exhibit, and schedule references are to
this Agreement unless otherwise specified. All of the exhibits or schedules
attached to this Agreement shall be deemed incorporated herein by reference. Any
reference to any of the following documents includes any and all alterations,
amendments, restatements, extensions, modifications, renewals, or supplements
thereto or thereof, as applicable: this Agreement or any of the other Loan
Documents.
(ii) Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against Secured Parties or Pledgor,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all of the parties and their respective counsel
and shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of the parties
hereto.
(iii) In the event of any direct conflict between the express
terms and provisions of this Agreement and of the other Loan Documents, the
terms and provisions of the other Loan Documents shall control.
2. Pledge.
As security for the prompt payment and performance of the Secured
Obligations in full by Pledgor when due under the Loan Documents, Pledgor hereby
pledges, grants, transfers, and assigns to Secured Parties, and each of them, a
security interest in all of Pledgor's right, title, and interest in and to the
Collateral.
3. Delivery and Registration of Collateral.
(a) All certificates or instruments representing or evidencing
the Pledged Interests shall be promptly delivered by Pledgor to Secured Parties
or their designee pursuant hereto at a location designated by Secured Parties
and shall be held by or on behalf of Secured Parties pursuant hereto, and shall
be in suitable form for transfer by delivery, or shall be accompanied by a duly
executed instrument of transfer or assignment in blank, in form and substance
reasonably satisfactory to Secured Parties, regardless of whether such
certificate constitutes a "certificated security" for purposes of the Code.
(b) Upon the occurrence and during the continuance of an Event of
Default, Secured Parties shall have the right, at any time in their discretion
and without notice to Pledgor, to transfer to or to register on the books of any
Issuer (or of any other Person maintaining records with respect to the
Collateral) in the name of Secured Parties or any of their nominees any or all
of the Collateral. In addition, Secured Parties shall have the right at any time
to exchange certificates or instruments representing or evidencing Collateral
for certificates or instruments of smaller or larger denominations.
(c) If, at any time and from time to time, any Collateral
(including any certificate or instrument representing or evidencing any
Collateral) is in the possession of a Person other than Secured Parties or
Pledgor (a "Holder"), then Pledgor shall immediately, at Secured Parties'
option, either cause such Collateral to be delivered into Secured Parties'
possession, or cause such Holder to enter into a control agreement, in form and
3
substance satisfactory to Secured Parties, and take all other steps deemed
necessary by Secured Parties to perfect the security interest of Secured Parties
in such Collateral, all pursuant to Sections 9-106 & 9-313 of the Code or other
applicable law governing the perfection of Secured Parties' security interest in
the Collateral in the possession of such Holder.
(d) Any and all Collateral (including dividends, interest, and
other cash distributions) at any time received or held by Pledgor shall be so
received or held in trust for Secured Parties, shall be segregated from other
funds and property of Pledgor and shall be forthwith delivered to Secured
Parties in the same form as so received or held, with any necessary
indorsements; provided that cash dividends or distributions received by Pledgor,
may be retained by Pledgor in accordance with Section 4 and used in the ordinary
course of Pledgor's business.
(e) If at any time, and from time to time, any Collateral
consists of an uncertificated security or a security in book entry form, then
Pledgor shall immediately cause such Collateral to be registered or entered, as
the case may be, in the name of Secured Parties, or otherwise cause Secured
Parties' security interest thereon to be perfected in accordance with applicable
law.
(f) In the event that any Collateral which are not securities
(for purposes of the Code) on the date hereof become treated as securities for
purposes of the Code, the Pledgor shall promptly take all steps necessary or
advisable to establish Secured Parties' "control" of such Collateral, as
applicable.
4. Voting Rights and Dividends and Distributions.
(a) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise or refrain from exercising any
and all voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of the Loan
Documents and shall be entitled to receive and retain any cash dividends or
distributions paid or distributed in respect of the Collateral; provided,
Pledgor shall not exercise or refrain from exercising any such right to the
extent such exercise or refrain would violate the Loan Documents.
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of Pledgor to exercise or refrain from exercising the voting
and other consensual rights or receive and retain cash dividends or
distributions that it would otherwise be entitled to exercise, refrain from
exercising or receive and retain, as applicable pursuant to Section 4(a), shall
cease, and all such rights shall thereupon become vested in Secured Parties, who
shall thereupon have the sole right to exercise such voting or other consensual
rights and to receive and retain such cash dividends and distributions. Pledgor
shall execute and deliver (or cause to be executed and delivered) to Secured
Parties all such proxies and other instruments as Secured Parties may reasonably
request for the purpose of enabling Secured Parties to exercise the voting and
other rights which they are entitled to exercise and to receive the dividends
and distributions that they are entitled to receive and retain pursuant to the
preceding sentence.
5. Representations and Warranties.
Pledgor represents, warrants, and covenants as follows:
4
(a) Pledgor has taken all steps it deems necessary or appropriate
to be informed on a continuing basis of changes or potential changes affecting
the Collateral (including rights of conversion and exchange, rights to
subscribe, payment of dividends or distributions, reorganizations or
recapitalization, tender offers and voting and registration rights), and Pledgor
agrees that Secured Parties shall not have any responsibility or liability for
informing Pledgor of any such changes or potential changes or for taking any
action or omitting to take any action with respect thereto.
(b) Pledgor is a corporation, duly formed, validly existing and
in good standing under the laws of the State of Texas. The address of Pledgor's
principal place of business is: 0000 X. Xxxxxxxxxxx Xxxx, Xxxxx 0000X, Xxxxxx,
Xxxxx 00000.
(c) To the knowledge of Pledgor, all information herein or
hereafter supplied to Secured Parties by or on behalf of Pledgor in writing with
respect to the Collateral is, or in the case of information hereafter supplied
will be, accurate and complete in all material respects.
(d) Pledgor is and will be the sole legal and beneficial owner of
the Collateral (including the Pledged Interests and all other Collateral
acquired by Pledgor after the date hereof) free and clear of any adverse claim,
Lien, or other right, title, or interest of any party, other than the Liens in
favor of Secured Parties.
(e) This Agreement, and the delivery to Secured Parties of the
Pledged Interests representing Collateral (or the control agreements referred to
in Section 3 of this Agreement), creates a valid, perfected, and first priority
security interest in one hundred percent (100%) of the Pledged Interests in
favor of Secured Parties securing payment of the Secured Obligations, and all
actions necessary to achieve such perfection have been duly taken.
(f) The Pledged Interests have been duly authorized and validly
issued and are fully paid and nonassessable.
6. Further Assurances.
(a) Pledgor hereby authorizes each Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral. A carbon, photographic, or other reproduction
of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
(b) Pledgor will furnish to Secured Parties, upon the request of
either Secured Party: (i) a certificate executed by Pledgor, and dated as of the
date of delivery to Secured Parties, itemizing in such detail as Secured Parties
may request, the Collateral which, as of the date of such certificate, has been
delivered to Secured Parties by Pledgor pursuant to the provisions of this
Agreement; and (ii) such statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Parties may request.
7. Covenants of Pledgor.
5
Pledgor shall:
(a) Perform each and every covenant in the Loan Documents
applicable to Pledgor;
(b) Not change its principal place of business without giving
Secured Parties at least thirty (30) days prior written notice thereof;
(c) Upon receipt by Pledgor of any material notice, report, or
other communication from any Issuer or any Holder relating to all or any part of
the Collateral, deliver such notice, report or other communication to Secured
Parties as soon as possible, but in no event later than five (5) business days
following the receipt thereof by Pledgor.
8. Secured Parties as Pledgor's Attorney-in-Fact.
Pledgor hereby irrevocably appoints each Secured Party as Pledgor's limited
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Secured Parties or otherwise, from time to time at Secured
Parties' discretion, to take any action and to execute any instrument that
Secured Parties may reasonably deem necessary or advisable to accomplish the
specific purposes of this Agreement, including: (i) upon the occurrence and
during the continuance of an Event of Default, to receive, indorse, and collect
all instruments made payable to Pledgor representing any dividend, interest
payment or other distribution in respect of the Collateral or any part thereof
to the extent permitted hereunder and to give full discharge for the same and to
execute and file governmental notifications and reporting forms; (ii) to enter
into any control agreements either Secured Party deems necessary pursuant to
Section 3 of this Agreement; or (iii) to arrange for the transfer of the
Collateral on the books of any Issuer or any other Person to the name of Secured
Parties or to the name of Secured Parties' nominee.
9. Remedies upon Default.
Upon the occurrence and during the continuance of an Event of Default:
(a) Secured Parties may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to them, all the rights and remedies of a secured party on default under the
Code (irrespective of whether the Code applies to the affected items of
Collateral), and Secured Parties may also without notice (except as specified
below) sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of either Secured
Party's offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Secured Parties may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. To the maximum extent
permitted by applicable law, either Secured Party may be the purchaser of any or
all of the Collateral at any such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply all or
any part of the Secured Obligations as a credit on account of the purchase price
of any Collateral payable at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights
of redemption, stay, or appraisal that it now has or may at any time in the
6
future have under any rule of law or statute now existing or hereafter enacted.
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) calendar days notice to Pledgor of the time and place of any
public sale or the time after which a private sale is to be made shall
constitute reasonable notification. Secured Parties shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Secured Parties may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the maximum extent permitted by law, Pledgor hereby waives any claims against
Secured Parties arising because the price at which any Collateral may have been
sold at such a private sale was less than the price that might have been
obtained at a public sale, even if either Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree.
(b) Pledgor hereby agrees that any sale or other disposition of
the Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, or other financial institutions in the city and
state where either Secured Party is located in disposing of property similar to
the Collateral shall be deemed to be commercially reasonable.
(c) Pledgor hereby acknowledges that the sale by Secured Parties
of any Collateral pursuant to the terms hereof in compliance with the Securities
Act of 1933 as now in effect or as hereafter amended, or any similar statute
hereafter adopted with similar purpose or effect (the "Securities Act"), as well
as applicable "Blue Sky" or other state securities laws, may require strict
limitations as to the manner in which Secured Parties or any subsequent
transferee of the Collateral may dispose thereof. Pledgor acknowledges and
agrees that in order to protect Secured Parties' interest it may be necessary to
sell the Collateral at a price less than the maximum price attainable if a sale
were delayed or were made in another manner, such as a public offering under the
Securities Act. Pledgor has no objection to sale in such a manner and agrees
that Secured Parties shall not have any obligation to obtain the maximum
possible price for the Collateral. Without limiting the generality of the
foregoing, Pledgor agrees that, upon the occurrence and during the continuation
of an Event of Default, Secured Parties may, subject to applicable law, from
time to time attempt to sell all or any part of the Collateral by a private
placement, restricting the bidders and prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, Secured Parties may solicit offers to buy the
Collateral or any part thereof for cash, from a limited number of investors
reasonably believed by Secured Parties to be institutional investors or other
accredited investors who might be interested in purchasing the Collateral. If
Secured Parties solicit such offers, then the acceptance by Secured Parties of
one of the offers shall be deemed to be a commercially reasonable method of
disposition of the Collateral.
(d) If Secured Parties shall determine to exercise their right to
sell all or any portion of the Collateral pursuant to this Section, Pledgor
agrees that, upon request of Secured Parties, Pledgor will, at its own expense:
(i) use its best efforts to execute and deliver, and cause
each Issuer and the equity holders thereof to execute and deliver, all such
instruments and documents, and to do or cause to be done all such other acts and
things, as may be reasonably necessary or, in the opinion of Secured Parties,
advisable to register such Collateral under the provisions of the Securities
7
Act, and to cause the registration statement relating thereto to become
effective and to remain effective for such period as prospectuses are required
by law to be furnished, and to make all amendments and supplements thereto and
to the related prospectuses which, in the opinion of Secured Parties, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(ii) execute and deliver, or cause the officers, directors
and general partners of each Issuer to execute and deliver, to any Person,
entity or Governmental Authority as Secured Parties may choose, any and all
documents and writings which, in Secured Parties' reasonable judgment, may be
necessary or appropriate for approval, or be required by, any regulatory
authority located in any city, county, state or country where Pledgor or any
Issuer engage in business, in order to transfer or to more effectively transfer
the Pledged Interests or otherwise enforce Secured Parties' rights hereunder;
and
(iii) do or cause to be done all such other acts and things
as may be reasonably necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Pledgor acknowledges that there is no adequate remedy at law for failure by
it to comply with the provisions of this Section and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
(e) PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY
LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE
TIME SECURED PARTIES DISPOSE OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN
THIS SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS
OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW
EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a)
OF THIS SECTION 9, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
10. Expenses.
Pledgor agrees to pay and reimburse Secured Parties upon demand for all
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) that Secured Parties may incur in connection with
(i) the custody, use or preservation of, or the sale of, collection from or
other realization upon, any of the Collateral, including the reasonable expenses
of re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, (ii) the exercise or enforcement of
any rights or remedies granted hereunder or under the other Loan Documents or
otherwise available to them (whether at law, in equity or otherwise) relating
solely to the Collateral, or (iii) the failure by Pledgor to perform or observe
any of the provisions hereof. The provisions of this Section shall survive the
execution and delivery of this Agreement, the repayment of any of the Secured
8
Obligations, the termination of the commitments of Secured Parties under the
Loan Documents and the termination of this Agreement or any other Loan Document.
11. Duties of Secured Parties.
The powers conferred on Secured Parties hereunder are solely to protect
their interests in the Collateral and shall not impose on them any duty to
exercise such powers. Except as provided in Section 9-207 of the Code, Secured
Parties shall not have any duty with respect to the Collateral or any
responsibility for taking any necessary steps to preserve rights against any
Persons with respect to any Collateral.
12. Choice of Law and Venue; Submission to Jurisdiction; Service of Process.
(a) THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS (WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF). Each
party hereto (i) hereby irrevocably submits to the exclusive jurisdiction of the
courts (both state and federal) located in Dallas County, Texas, for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that he
is not personally subject to the jurisdiction of any such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.
(b) NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
AFFECT THE RIGHT OF SECURED PARTIES TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY SECURED PARTIES OF ANY
JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS
AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
13. Amendments; etc.
No amendment or waiver of any provision of this Agreement nor consent to
any departure by Pledgor herefrom shall in any event be effective unless the
same shall be in writing and signed by Secured Parties, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of either Secured Party to
exercise, and no delay in exercising any right under this Agreement, any other
Loan Document, or otherwise with respect to any of the Secured Obligations,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right under this Agreement, any other Loan Document, or otherwise with
respect to any of the Secured Obligations preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided for in this
Agreement or otherwise with respect to any of the Secured Obligations are
cumulative and not exclusive of any remedies provided by law.
14. Notices.
9
Unless otherwise specifically provided herein, all notices shall be in
writing addressed to the respective party as set forth below: and may be
personally served, or sent by overnight courier service or United States mail:
If to Pledgor: Mortgage Assistance Corp.
0000 X. Xxxxxxxxxxx Xxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to Secured Parties: CSSF Master Fund, LP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxx
Facsimile: (000) 000-0000
and
LBL Partners, Ltd.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: X.X. Xxxx, III
Facsimile: (000) 000-0000
Any notice given pursuant to this section shall be deemed to have been
given: (a) if delivered in person, when delivered; (b) if delivered by fax, on
the date of transmission if transmitted on a Business Day before 4:00 p.m. at
the place of receipt or, if not, on the next succeeding Business Day; (c) if
delivered by overnight courier, two (2) calendar days after delivery to such
courier properly addressed; or (d) if by United States mail, four (4) Business
Days after depositing in the United States mail, with postage prepaid and
properly addressed. Any party hereto may change the address or fax number at
which it is to receive notices hereunder by notice to the other party in writing
in the foregoing manner.
15. Continuing Security Interest.
This Agreement shall create a continuing security interest in the
Collateral and shall: (a) remain in full force and effect until the indefeasible
payment in full of the Secured Obligations, including the cash
collateralization, expiration, or cancellation of all Secured Obligations, if
any, consisting of letters of credit, and the full and final termination of any
commitment to extend any financial accommodations under the Loan Documents; (b)
be binding upon Pledgor and its successors and assigns; and (c) inure to the
benefit of Secured Parties and their respective successors, transferees, and
assigns. Upon the indefeasible payment and performance in full of the Secured
Obligations, including the cash collateralization, expiration, or cancellation
of all Secured Obligations, if any, consisting of letters of credit, and the
10
full and final termination of any commitment to extend any financial
accommodations under the Loan Documents, the security interests granted herein
shall automatically terminate and all rights to the Collateral shall revert to
Pledgor. Upon any such termination, Secured Parties will, at Pledgor's expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination. Such documents shall be prepared by
Pledgor and shall be in form and substance reasonably satisfactory to Secured
Parties.
16. Security Interest Absolute.
To the maximum extent permitted by law, all rights of Secured Parties, all
security interests hereunder, and all obligations of Pledgor hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any of the Secured
Obligations or any other agreement or instrument relating thereto, including any
of the Loan Documents;
(b) any change in the time, manner, or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from any of the Loan Documents, or
any other agreement or instrument relating thereto;
(c) any exchange, release, or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Secured Obligations; or
(d) any other circumstances that might otherwise constitute a
defense available to, or a discharge of, Pledgor.
17. Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
or be given any substantive effect.
18. 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.
19. Counterparts; Facsimile Execution.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
facsimile shall be equally as effective as delivery of an original executed
11
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by facsimile also shall deliver an original executed counterpart
of this Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, or binding effect hereof.
20. Waiver of Marshaling.
Each of Pledgor and each Secured Party acknowledges and agrees that in
exercising any rights under or with respect to the Collateral, Secured Parties:
(a) are under no obligation to marshal any Collateral; (b) may, in their
absolute discretion, realize upon the Collateral in any order and in any manner
they so elect; and (c) may, in their absolute discretion, apply the proceeds of
any or all of the Collateral to the Secured Obligations in any order and in any
manner they so elect. Pledgor and Secured Parties waive any right to require the
marshaling of any of the Collateral.
21. Waiver of Jury Trial.
PLEDGOR AND EACH SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. PLEDGOR AND EACH SECURED PARTY REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
22. Events of Default.
The happening of an Event of Default under the Notes shall be an "Event of
Default" hereunder.
[Remainder of page intentionally left blank; signature page to follow.]
12
IN WITNESS WHEREOF, Pledgor and Secured Parties have caused this
Agreement to be duly executed and delivered as of the date first written above.
PLEDGOR:
MORTGAGE ASSISTANCE CORP.
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, CEO & President
SECURED PARTIES:
LBL PARTNERS, LTD.
By: LBL Management Company, LLC,
its General Partner
By: /s/ X.X. Xxxx, III
X.X. Xxxx, III, Manager
CSSF MASTER FUND, LP
By: Crescent Special Situations Fund, LP,
its General Partner
By: CSSF Management Partners, LP,
its General Partner
By: CSSF, LLC, its General Partner
By: /s/ Xxx X. Xxxxx
Xxx X. Xxxxx, Manager
