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Exhibit 7.7
COLLATERAL PLEDGE AGREEMENT
THIS COLLATERAL PLEDGE AGREEMENT dated as of July 13, 1998, is by and
between Xxx Global Energy Fund, L.P. ("Pledgor") and Xxxxx X. Xxx ("Pledgee").
R E C I T A L S:
A. Pledgor is indebted to Pledgee in the amount of $644,287.50 pursuant
to a Stock Purchase Agreement between the parties hereto and a Promissory Note
(the "Note").
B. Pledgee has requested security to secure the payment of the Note.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Security Interest and Pledge
As collateral security for the prompt payment of the Note, when due
Pledgor hereby pledges and grants to Pledgee a first priority security interest
in all of its right, title and interest in and to 190,900 shares of common stock
of Toreador Royalty Corporation, all dividends and other property now or
hereafter received in exchange for any or all of such shares and all proceeds of
any of the foregoing (such property being hereinafter sometimes called the
"Collateral").
ARTICLE II
Representations and Warranties
Pledgor represents and warrants to Pledgee that:
Section 2.01. Title. Pledgor owns, legally and beneficially, the
Collateral free and clear of any lien, security interest or other pledge.
Section 2.02 Authority. Pledgor has the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this Agreement, and
the execution and delivery of this Agreement by Pledgor does not and will not
conflict with, or result in the breach of, the provisions of any law, rule,
regulation, judgment, writ, injunction, order or decree applicable to Pledgor.
ARTICLE III
Affirmative and Negative Covenants
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Pledgor covenants and agrees with Pledgee that:
Section 3.01. Encumbrances. Pledgor shall not create, permit, or suffer
to exist, and shall defend the Collateral against, any lien, security interest,
or other encumbrance on the Collateral except the pledge and security interest
or Pledgee hereunder, and shall defend Pledgee's rights in the Collateral and
Pledgee's security interest in the Collateral against the claims of all persons
and entities.
Section 3.02. Sale of Collateral. Pledgor shall not sell, assign, or
otherwise dispose of the Collateral or any part thereof without the prior
written consent of Pledgee.
Section 3.03. Adjustments. If Pledgor shall become entitled to receive
or shall receive any shares, whether as an addition to, in substitution of, or
in exchange for the Collateral or otherwise, Pledgor agrees to accept the same
as Pledgee's agent and to hold the same in trust for Pledgee, and to deliver the
same forthwith to Pledgee in the form received, with the appropriate endorsement
of Pledgor, when necessary and/or appropriate to be held by Pledgee as
additional Collateral for the Note, subject to the terms hereof.
Section 3.04. Further Assurances. At any time and from time to time,
upon the request of Pledgee, and at the sole expense of Pledgor, Pledgor shall
promptly execute and deliver all such further instruments and documents and take
such further action as Pledgee may deem necessary or desirable to preserve and
perfect his security interest in the Collateral and carry out the provisions and
purposes of this Agreement, including, without limitation, the execution and
filing of such financing statements as Pledgee may require. A carbon,
photographic, or other reproduction of this Agreement or of any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement and may be filed as a financing statement.
Section 3.05. Notification. Pledgor shall promptly notify Pledgee of
(i) any lien, security interest, encumbrance, or claim made or threatened
against the Collateral, (ii) any material change in the Collateral, including,
without limitation, any material decrease in the value of the Collateral, and
(iii) the occurrence or existence of any Event of Default (hereinafter defined)
or the occurrence or existence of any condition or event that, with the giving
of notice or lapse of time or both, would be an Event of Default.
ARTICLE IV
Rights of Pledgee and Pledgor
Section 4.01. Pledgee's Duty of Care. Pledgee shall have no
responsibility for or obligation or duty with respect to all or any part of the
Collateral. Pledgee shall be deemed to have exercised reasonable care in the
custody of the Collateral if Pledgee takes reasonable action to safeguard the
Collateral.
Section 4.02. Assignment by Pledgee. Pledgee may assign the Note and
any portion thereof and/or the Collateral and any portion thereof, without the
consent of Pledgor.
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ARTICLE V
Default
Section 5.01. Events of Default. As used herein, the term "Event of
Default" means the occurrence of any of the following:
(a) the breach by Pledgor of any covenant or obligation of
Pledgor hereunder; or
(b) the occurrence of an Event of Default under the Note.
Section 5.02. Rights and Remedies; Deficiency. If an Event of Default
shall have occurred and be continuing, Pledgee may from time to time in his
discretion, without limitation and without notice, exercise in respect of the
Collateral, in addition to any other rights and remedies provided for herein or
otherwise available to him, all the rights and remedies of a secured party on
default under the Uniform Commercial Code (whether or not the Uniform Commercial
Code applies to the affected Collateral). In the event that the proceeds of any
sale, collection or realization of or upon Collateral by Pledgee are
insufficient to pay the Note and any other amounts to which Pledgee is legally
entitled, Pledgor shall be liable for the deficiency, together with interest
thereon as provided in the Note or (if no interest is so provided) at such other
rate as shall be fixed by applicable law, together with the costs of collection
and the reasonable fees of any attorneys employed by Pledgee to collect such
deficiency.
ARTICLE VI
Miscellaneous
Section 6.01. Expenses; Indemnification. Pledgor hereby indemnifies
Pledgee and holds him harmless against, any and all losses, liabilities, claims,
damages, penalties, judgments, costs, and expenses (including attorneys' fees)
to which he become subject which directly or indirectly arise from or relate to
(i) the negotiation, execution, delivery, performance, administration, or
enforcement of this Agreement, (ii) any of the transactions contemplated by this
Agreement, or (iii) any breach by Pledgor of any representation, warranty,
covenant, or other agreement contained in this Agreement WHETHER OR NOT SUCH
CLAIMS, LOSSES AND LIABILITIES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR
PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED BY OR ARISE
OUT OF PLEDGEE'S OWN NEGLIGENCE, except to the extent such claims, losses or
liabilities are proximately caused by Pledgee's individual gross negligence or
willful misconduct.
Section 6.02. No Waiver; Cumulative Remedies. No failure on the part of
Pledgee to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
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The rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section 6.03. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Pledgor and Pledgee and their respective heirs,
successors, and assigns, except that Pledgor and its heirs, successors and
assigns may not assign any rights or obligations under this Agreement without
the prior written consent of the Pledgee.
Section 6.04. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE AND
THE STOCK PURCHASE AGREEMENT DATED OF EVEN DATE HEREWITH BETWEEN PLEDGOR AND
PLEDGEE (THE "STOCK PURCHASE AGREEMENT") EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
The provisions of this Agreement may be amended or waived only by an instrument
in writing signed by the parties hereto.
Section 6.05. Notices. All notices and other communications provided
for in this Agreement shall be given in writing and be personally delivered or
sent to the intended recipient by prepaid registered or certified mail, return
receipt requested, at the address set forth in the Stock Purchase Agreement.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given, if personally delivered, on the date personally
delivered, or, if mailed, on the third business day following the date on which
it is deposited in the United States mail.
Section 6.06. Applicable Law; Venue; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas and the applicable laws of the United States of America. This Agreement
has been entered into in Dallas County, Texas, and it shall be performable for
all purposes in Dallas County, Texas. Any action or proceeding against Pledgor
under or in connection with this Agreement or any other instrument or agreement
securing, evidencing, or relating to the Note may be brought in any state or
federal court in Dallas County, Texas. Pledgor hereby irrevocably (i) submits to
the nonexclusive jurisdiction of such courts, and (ii) waives any objection it
may now or thereafter have as to the venue of any such action or proceedings
brought in such court or that such court is an inconvenient forum. Pledgor
agrees that service of process upon it may be made by certified or registered
mail, return receipt requested, at its address specified or determined in
accordance with the provisions of Section 6.05 of this Agreement. Nothing in
this Agreement or any other instrument or agreement securing, evidencing, or
relating to the Note or any part thereof shall affect the right of Pledgee to
serve process in any other manner permitted by law. Any action or proceeding by
Pledgor against Pledgee may also be brought in a court located in Dallas County,
Texas.
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Section 6.07. Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 6.08. Survival. All representations and warranties made in this
Agreement shall survive the execution and delivery of this Agreement, and no
investigation by Pledgee shall affect the representations and warranties of
Pledgor herein or the right of Pledgee to reply upon them.
Section 6.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 6.10. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 6.11. Construction. Pledgor and Pledgee acknowledge that each
has had the right to the benefit of legal counsel of its or his own choice and
has been afforded an opportunity to review this Agreement with legal counsel, if
any, and that this Agreement shall be construed as if jointly drafted by Pledgor
and Pledgee.
Section 6.12. Term of Security Agreement. The security interest hereby
granted and all the terms and provisions hereof shall be deemed a continuing
security agreement and shall continue in full force and effect, and all the
terms and provisions hereof shall remain effective as between the parties, until
such time as the Note has been fully paid. Once the note has been paid in full
(including interest) this Agreement shall terminate and be of no further force
and effect and Pledgee shall forthwith deliver the Collateral fully endorsed or
with executed stock powers attached to Pledgor.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.
PLEDGOR:
XXX GLOBAL ENERGY FUND, L.P.
By: Gralee Partners, L.P., its general partner
By: Gralee Capital Corp., its general
partner
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G. Xxxxxx Xxxxxx, III, President
PLEDGEE:
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Xxxxx X. Xxx
