SECURITY AGREEMENT
(Partnership Interests)
Between
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Agent
February 14, 1997
SECURITY AGREEMENT
(Partnership Interests)
THIS SECURITY AGREEMENT (this "Agreement") is made as of February 14, 1997,
between XXXXXX XXXXXX ENERGY PARTNERS, L.P., a Delaware limited partnership with
principal offices at 0000 XxXxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000
("Pledgor"); and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking
association with offices at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, as Agent ("Secured Party") for itself and the Lenders which are parties
to the Credit Agreement referred to below.
RECITALS
A. On even date herewith, Xxxxxx Xxxxxx Operating L.P. "B", a Delaware
limited partnership (the "Borrower"), the Lenders and Secured Party are
executing a Credit Agreement (such agreement, as may from time to time be
amended or supplemented, being hereinafter called the "Credit Agreement")
pursuant to which, upon the terms and conditions stated therein, the Lenders
agree to make loans and extensions of credit to Pledgor.
B. The Lenders have conditioned their respective obligations under the
Credit Agreement upon the execution and delivery by Pledgor of this Agreement,
and Pledgor has agreed to enter into this Agreement.
C. Therefore, in order to comply with the terms and conditions of the
Credit Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
ARTICLE 1
SECURITY INTEREST
Section 1.01 Pledge. Pledgor hereby pledges, assigns and grants to Secured
Party a security interest in and right of set-off against the assets referred to
in Section 1.02 (the "Collateral") to secure the prompt payment and performance
of the "Obligations" (as defined in Section 2.02) and the performance by Pledgor
of this Agreement.
Section 1.02 Collateral. The Collateral consists of
the following types or items of property:
(a) All of Pledgor's rights, whether now owned or hereafter acquired,
in (i) limited partner interests in the Borrower, (ii) the Partnership
Agreement, (iii) Pledgor's share of profits, income, distributions and
surplus from the Borrower as a limited partner, (iv) specific properties of
the Borrower upon dissolution or otherwise as a limited partner and (v) any
and all other rights, titles and interests of every kind and character of
Pledgor in and to the Borrower as a limited partner.
(b) all proceeds, replacements, additions to and substitutions for any
of the property referred to in this Section 1.02 and claims against third
parties.
It is expressly contemplated that additional securities or other property may
from time to time be pledged, assigned or granted to Secured Party as additional
security for the Obligations, and the term "Collateral" as used herein shall be
deemed for all purposes hereof to include all such additional securities and
property, together with all other property of the types described above related
thereto.
ARTICLE 2
DEFINITIONS
Section 2.01 Terms Defined Above or in the Credit Agreement. As used in
this Agreement, the terms defined above shall have the meanings respectively
assigned to them. Other capitalized terms which are defined in the Credit
Agreement but which are not defined herein shall have the same meanings as
defined in the Credit Agreement.
Section 2.02 Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings, unless the context otherwise requires:
"Agreement" means this Security Agreement, as the same may from time to
time be amended or supplemented.
"Code" means the Uniform Commercial Code as presently in effect in the
State of Texas, Business and Commerce Code, Chapters 1 through 9. Unless
otherwise indicated by the context herein, all uncapitalized terms which
are defined in the Code shall have their respective meanings as used in
Chapters 8 and 9 of the Code.
"Event of Default" means any event specified in
Section 6.01.
"Obligations" means:
(a) any and all indebtedness, obligations and liabilities of the
Borrower pursuant to the Credit Agreement, including without limitation,
the unpaid principal of and interest on the Notes, including without
limitation, interest accruing subsequent to the filing of a petition or
other action concerning bankruptcy or other similar proceeding;
(b) any additional loans made by the Lenders to
the Borrower;
(c) payment of and performance of any and all present or future
obligations of the Borrower according to the terms of any present or future
interest or currency rate swap, rate cap, rate floor, rate collar, exchange
transaction, forward rate agreement or other exchange or rate protection
agreements or any option with
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respect to any such transaction now existing or
hereafter entered into between the Borrower and any
of the Lenders;
(d) payment of and performance of any and all present or future
obligations of the Borrower according to the terms of any present or future
swap agreements, cap, floor, collar, exchange transaction, forward
agreement or other exchange or protection agreements relating to crude oil,
natural gas or other hydrocarbons or any option with respect to any such
transaction now existing or hereafter entered into between the Borrower and
any of the Lenders;
(e) all reimbursement obligations for drawn or undrawn portions under
any letter of credit now outstanding or hereafter issued under the Credit
Agreement, including without limitation, the Support Letter of Credit and
the Replacement Letter of Credit and any letters of credit issued in
replacement thereof and all principal and interest on the Replacement Term
Note and the Support Term Note, including without limitation, interest
accruing subsequent to the filing of a petition or other action concerning
bankruptcy or other similar proceeding;
(f) any and all other indebtedness, obligations and liabilities of any
kind of the Borrower to the Lenders, now or hereafter existing, arising
directly between the Borrower and the Lenders or acquired outright, as a
participation, conditionally or as collateral security from another by the
Lenders, absolute or contingent, joint and/or several, secured or
unsecured, due or not due, arising by operation of law or otherwise, or
direct or indirect, including indebtedness, obligations and liabilities to
the Lenders of the Borrower as a member of any partnership, syndicate,
association or other group, and whether incurred by the Borrower as
principal, surety, endorser, guarantor, accommodation party or otherwise;
(g) any and indebtedness, obligations and liabilities of Pledgor
pursuant to that certain Guaranty Agreement dated of even date herewith in
favor of Secured Party guaranteeing the indebtedness, obligations and
liabilities of the Borrower under the Credit Agreement; and
(h) all renewals, rearrangements, increases, extensions for any period,
amendments or supplement in whole or in part of the Notes or any documents
evidencing the above.
The Obligations shall also include all interest, charges, expenses,
attorneys' or other fees and any other sums payable to or incurred by
Secured Party and the Lenders in connection with the execution,
administration or enforcement of Secured Party's or any of the Lenders'
rights and remedies hereunder or any other agreement with the Borrower.
"Obligor" means any other Person, other than Pledgor, liable (whether
directly or indirectly, primarily or secondarily) for the payment or
performance of any of the Obligations whether as maker, co-maker, endorser,
guarantor, accommodation party, general partner or otherwise.
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"Partnership Agreement" shall mean the Amended and Restated Agreement
of Limited Partnership of the Borrower dated September 30, 1993, together
with all amendments, modifications and supplements thereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Agreement, Pledgor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:
Section 3.01 Ownership of Collateral; Encumbrances. Pledgor is the legal
and beneficial owner of the Collateral free and clear of any adverse claim,
lien, security interest, option or other charge or encumbrance except for the
security interest created by this Agreement, and Pledgor has full right, power
and authority to pledge, assign and grant a security interest in the Collateral
to Secured Party. Pledgor owns a 99% limited partner interest in the Borrower.
Pledgor's limited partner interest in the Borrower is not represented by a
certificate.
Section 3.02 No Required Consent. No authorization, consent, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for (i) the due execution, delivery and performance
by Pledgor of this Agreement, (ii) the grant by Pledgor of the security interest
granted by this Agreement, (iii) the perfection of such security interest or
(iv) the exercise by Secured Party of its rights and remedies under this
Agreement.
Section 3.03 First Priority Security Interest. The grant of the security
interest in the Collateral pursuant to this Agreement creates a valid and
perfected first priority security interest in the Collateral, enforceable
against Pledgor and all third parties and securing payment of the Obligations.
Section 3.04 Partnership. The Partnership Agreement is in full force and
effect and constitutes a binding obligation upon the parties thereto; there have
been no amendments or modifications to any of such Partnership Agreement that
would detrimentally affect Pledgor's interest in the Borrower in any material
respect. Pledgor has complied in all material respects with its obligations
under the Partnership Agreement.
Section 3.04 Collateral. All statements or other information provided by
Pledgor to Secured Party or any Lender describing or with respect to the
Collateral is or (in the case of subsequently furnished information) will be
when provided correct and complete in all material respects. The delivery at any
time by Pledgor to Secured Party of additional Collateral or of additional
descriptions of Collateral shall constitute a representation and warranty by
Pledgor to Secured Party hereunder that the representations and warranties of
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this Article 3 are correct insofar as they would pertain to such Collateral or
the descriptions thereof.
ARTICLE 4
COVENANTS AND AGREEMENTS
Pledgor will at all times comply with the covenants and agreements
contained in this Article 4, from the date hereof and for so long as any part of
the Obligations are outstanding.
Section 4.01 Sale, Disposition or Encumbrance of Collateral. Pledgor will
not in any way encumber any of the Collateral (or permit or suffer any of the
Collateral to be encumbered) or sell, pledge, assign, lend or otherwise dispose
of or transfer any of the Collateral to or in favor of any Person other than
Secured Party.
Section 4.02 Dividends or Distributions. So long as no Event of Default
shall have occurred and be continuing: Pledgor shall be entitled to receive and
retain any and all dividends or distributions and interest paid in respect of
the Collateral, provided, however, that any and all
(a) dividends, distributions and interest paid or payable other than in
cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for (including,
without limitation, any certificate or share purchased or exchanged in
connection with a tender offer or merger agreement), any Collateral,
(b) dividends and other distributions paid or payable in cash in
respect of any Collateral in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, or reclassification, and
(c) cash paid, payable or otherwise distributed
in respect of principal of, or in redemption of, or
in exchange for, any Collateral,
shall be, and shall be forthwith delivered to Secured Party to hold as,
Collateral and shall, if received by Pledgor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Secured Party as Collateral in the same
form as so received (with any necessary indorsement).
Section 4.03 Records and Information. Pledgor shall keep accurate and
complete records of the Collateral (including proceeds, payments, distributions,
income and profits). Secured Party may at any time have access to, examine,
audit, make extracts from and inspect without hindrance or delay Pledgor's
records, files and the Collateral. Pledgor will promptly provide written notice
to Secured Party of all information which in any way relates to or affects the
filing of any financing statement or other public notices or recordings, or the
delivery and possession of items of Collateral for the purpose of perfecting a
security
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interest in the Collateral. Pledgor will also promptly furnish such information
as Secured Party may from time to time reasonably request regarding (i) the
business, affairs or financial condition of Pledgor or (ii) the Collateral or
Secured Party's rights or remedies with respect thereto.
Section 4.04 Reimbursement of Expenses. Pledgor agrees to indemnify and
hold Secured Party and the Lenders harmless from and against and covenants to
defend Secured Party and the Lenders against any and all losses, damages,
claims, costs, penalties, liabilities and expenses, including, without
limitation, court costs and attorneys' fees, incurred because of, incident to,
or with respect to the Collateral (including, without limitation, any exercise
of rights or remedies in connection therewith except to the extent of Secured
Party's gross negligence or willful misconduct). All amounts for which Pledgor
is liable pursuant to this Section 4.04 shall be due and payable by Pledgor to
Secured Party upon demand. If Pledgor fails to make such payment upon demand (or
if demand is not made due to an injunction or stay arising from bankruptcy or
other proceedings) and Secured Party or any Lender pays such amount, the same
shall be due and payable by Pledgor to Secured Party, plus interest thereon from
the date of Secured Party's demand (or from the date of Secured Party's payment
if demand is not made due to such proceedings) at the Highest Lawful Rate.
Section 4.05 Further Assurances. Upon the request of Secured Party, Pledgor
shall (at Pledgor's expense) execute and deliver all such assignments,
certificates, instruments, securities, financing statements, notifications to
financial intermediaries, clearing corporations, issuers of securities or other
third parties or other documents and give further assurances and do all other
acts and things as Secured Party may reasonably request to perfect Secured
Party's interest in the Collateral or to protect, enforce or otherwise effect
Secured Party's rights and remedies hereunder.
Section 4.06 Voting and Other Consensual Rights. Except to the extent
otherwise provided in Section 6.07(d), Pledgor shall be entitled to exercise 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 this Agreement;
provided however, that Pledgor shall not exercise or refrain from exercising any
such right if such action would have a material adverse effect on the value of
the Collateral or any part thereof, and, provided, further, that upon request of
Secured Party at any time or from time to time, Pledgor shall give Secured Party
prompt written notice of the manner in which Pledgor has exercised, or the
reasons for refraining from exercising, any such right.
ARTICLE 5
RIGHTS, DUTIES AND POWERS OF SECURED PARTY
The following rights, duties and powers of Secured Party are applicable
irrespective of whether an Event of Default occurs and is continuing:
Section 5.01 Discharge Encumbrances. Secured Party
may, at its option, discharge any taxes, liens, security
interests or other encumbrances at any time levied or
placed on the
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Collateral. Pledgor agrees to reimburse Secured Party upon demand for any
payment so made, plus interest thereon from the date of Secured Party's demand
at the Highest Lawful Rate.
Section 5.02 Transfer of Collateral. Secured Party may transfer any or all
of the Obligations, and upon any such transfer Secured Party may transfer its
interest in any or all of the Collateral and shall be fully discharged
thereafter from all liability therefor. Any transferee of the Collateral shall
be vested with all rights, powers and remedies of Secured Party hereunder.
Section 5.03 Cumulative and Other Rights. The rights, powers and remedies
of Secured Party hereunder are in addition to all rights, powers and remedies
given by law or in equity. The exercise by Secured Party of any one or more of
the rights, powers and remedies herein shall not be construed as a waiver of any
other rights, powers and remedies, including, without limitation, any other
rights of set-off. If any of the Obligations are given in renewal, extension for
any period or rearrangement, or applied toward the payment of debt secured by
any lien, Secured Party shall be, and is hereby, subrogated to all the rights,
titles, interests and liens securing the debt so renewed, extended, rearranged
or paid.
Section 5.04 Disclaimer of Certain Duties.
(a) The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party or any Lender to exercise any such powers. To the extent permitted
by applicable law, Pledgor hereby agrees that Secured Party shall not be liable
for, nor shall the indebtedness evidenced by the Obligations be diminished by,
Secured Party's delay or failure to collect upon, foreclose, sell, take
possession of or otherwise obtain value for the Collateral.
(b) Secured Party shall be under no duty whatsoever to make or give any
presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or
to take any steps necessary to preserve any rights against any Obligor or other
Person. Pledgor waives any right of marshaling in respect of any and all
Collateral, and waives any right to require Secured Party or any Lender to
proceed against any Obligor or other Person, exhaust any Collateral or enforce
any other remedy which Secured Party or any Lender now has or may hereafter have
against any Obligor or other Person.
Section 5.05 Modification of Obligations; Other Security. To the extent
permitted by applicable law, Pledgor waives (i) any and all notice of
acceptance, creation, modification, rearrangement, renewal or extension for any
period of any instrument executed by any Obligor in connection with the
Obligations and (ii) any defense of any Obligor by reason of disability, lack of
authorization, cessation of the liability of any Obligor or for any other
reason. Pledgor authorizes Secured Party, without notice or demand and without
any reservation of rights against Pledgor and without affecting Pledgor's
liability hereunder or on the Obligations, from time to time to (x) take and
hold other property, other than the Collateral, as security for the Obligations,
and exchange, enforce, waive and release any or
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all of the Collateral, (y) apply the Collateral in the manner permitted by this
Agreement and (z) renew, extend for any period, accelerate, amend or modify,
supplement, enforce, compromise, settle, waive or release the obligations of any
Obligor or any instrument or agreement of such other Person with respect to any
or all of the Obligations or Collateral.
Section 5.06 Custody and Preservation of the Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral, it being understood and agreed, however, that neither
Secured Party nor any Lender shall have responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Collateral, whether or not Secured Party has or
is deemed to have knowledge of such matters, or (ii) taking any necessary steps
to preserve rights against Persons or entities with respect to any Collateral.
ARTICLE 6
EVENTS OF DEFAULT
Section 6.01 Events. It shall constitute an Event of Default under this
Agreement if an Event of Default occurs and is continuing under the Credit
Agreement.
Section 6.02 Remedies. Upon the occurrence and during the continuance of
any Event of Default, Secured Party may take any or all of the following actions
without notice (except where expressly required below or in the Credit
Agreement) or demand to Pledgor:
(a) Declare all or part of the indebtedness pursuant to the Obligations
immediately due and payable and enforce payment of the same by the Borrower
or any Obligor.
(b) Sell, in one or more sales and in one or more parcels, or otherwise
dispose of any or all of the Collateral in any commercially reasonable
manner as Secured Party may elect, in a public or private transaction, at
any location as deemed reasonable by Secured Party either for cash or
credit or for future delivery at such price as Secured Party may deem fair,
and (unless prohibited by the Code, as adopted in any applicable
jurisdiction) Secured Party or any Lender may be the purchaser of any or
all Collateral so sold and may apply upon the purchase price therefor any
Obligations secured hereby. Any such sale or transfer by Secured Party
either to itself or to any other Person shall be absolutely free from any
claim of right by Pledgor, including any equity or right of redemption,
stay or appraisal which Pledgor has or may have under any rule of law,
regulation or statute now existing or hereafter adopted. Upon any such sale
or transfer, Secured Party shall have the right to deliver, assign and
transfer to the purchaser or transferee thereof the Collateral so sold or
transferred. If Secured Party deems it advisable to do so, it may restrict
the bidders or purchasers of any such sale or transfer to Persons or
entities who will represent and agree that they are purchasing the
Collateral for their own account and not with the view to the distribution
or resale of any of the Collateral. Secured Party
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may, at its discretion, provide for a public sale, and any such public sale
shall be held at such time or times within ordinary business hours and at
such place or places as Secured Party may fix in the notice of such sale.
Secured Party shall not be obligated to make any sale pursuant to any such
notice. Secured Party may, without notice or publication, adjourn any
public or private sale by announcement at any time and place fixed for such
sale, and such sale may be made at any time or place to which the same may
be so adjourned. In the event any sale or transfer hereunder is not
completed or is defective in the opinion of Secured Party, such sale or
transfer shall not exhaust the rights of Secured Party hereunder, and
Secured Party shall have the right to cause one or more subsequent sales or
transfers to be made hereunder. If only part of the Collateral is sold or
transferred such that the Obligations remain outstanding (in whole or in
part), Secured Party's rights and remedies hereunder shall not be
exhausted, waived or modified, and Secured Party is specifically empowered
to make one or more successive sales or transfers until all the Collateral
shall be sold or transferred and all the Obligations are paid. In the event
that Secured Party elects not to sell the Collateral, Secured Party retains
its rights to dispose of or utilize the Collateral or any part or parts
thereof in any manner authorized or permitted by law or in equity, and to
apply the proceeds of the same towards payment of the Obligations. Each and
every method of disposition of the Collateral described in this subsection
or in subsection (d) shall constitute disposition in a commercially
reasonable manner.
(c) Apply proceeds of the disposition of the Collateral to the
Obligations in any manner elected by Secured Party and permitted by the
Code or otherwise permitted by law or in equity. Such application may
include, without limitation, the reasonable attorneys' fees and legal
expenses incurred by Secured Party and the Lenders.
(d) Appoint any Person as agent to perform any act or acts necessary or
incident to any sale or transfer by Secured Party of the Collateral.
(e) Exercise all other rights and remedies
permitted by law or in equity.
Section 6.03 Attorney-in-Fact. Pledgor hereby irrevocably appoints Secured
Party as Pledgor's attorney-in-fact, with full authority in the place and stead
of Pledgor and in the name of Pledgor or otherwise, from time to time in Secured
Party's discretion upon the occurrence and during the continuance of an Event of
Default, but at Pledgor's cost and expense and without notice to Pledgor, to
take any action and to execute any assignment, certificate, financing statement,
stock power, notification, document or instrument which Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, to receive, endorse 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 and to give full discharge for the
same.
Section 6.04 Liability for Deficiency. If any sale or other disposition of
Collateral by Secured Party or any other action of Secured Party or any Lender
hereunder results in reduction of the Obligations, such action will not release
Pledgor from its liability to Secured
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Party and the Lenders for any unpaid Obligations, including costs, charges and
expenses incurred in the liquidation of Collateral, together with interest
thereon, and the same shall be immediately due and payable to Secured Party at
Secured Party's address set forth in the opening paragraph hereof.
Section 6.05 Reasonable Notice. If any applicable provision of any law
requires Secured Party or any Lender to give reasonable notice of any sale or
disposition or other action, Pledgor hereby agrees that ten days' prior written
notice shall constitute reasonable notice thereof. Such notice, in the case of
public sale, shall state the time and place fixed for such sale and, in the case
of private sale, the time after which such sale is to be made.
Section 6.06 Non-judicial Enforcement. Secured Party may enforce its rights
hereunder without prior judicial process or judicial hearing, and to the extent
permitted by law Pledgor expressly waives any and all legal rights which might
otherwise require Secured Party to enforce its rights by judicial process.
Section 6.07 Collateral. Upon the occurrence and
during the continuance of an Event of Default:
(a) All rights of Pledgor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant to Section 4.02 shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right to
receive and hold as Collateral such dividends and interest payments, but
Secured Party shall have no duty to receive and hold such dividends and
interest payments and shall not be responsible for any failure to do so or
delay in so doing.
(b) All dividends and interest payments which are received by Pledgor
contrary to the provisions of this Section 6.07 shall be received in trust
for the benefit of Secured Party, shall be segregated from other funds of
Pledgor and shall be forthwith paid over to Secured Party as Collateral in
the same form as so received (with any necessary indorsement).
(c) Secured Party may exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options
pertaining to any of the Collateral as if it were the absolute owner
thereof, including without limitation, the right to exchange at its
discretion, any and all of the Collateral upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any issuer of
such Collateral or upon the exercise by any such issuer or Secured Party of
any right, privilege or option pertaining to any of the Collateral, and in
connection therewith, to deposit and deliver any and all of the Collateral
with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it,
but Secured Party shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any failure
to do so or delay in so doing.
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(d) If the issuer of any Collateral is the subject of bankruptcy,
insolvency, receivership, custodianship or other proceedings under the
supervision of any court or governmental agency or instrumentality, then
all rights of Pledgor to exercise the voting and other consensual rights
which Pledgor would otherwise be entitled to exercise pursuant to Section
4.06 with respect to the Collateral issued by such issuer shall cease, and
all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights, but Secured Party shall have no duty to exercise any such voting or
other consensual rights and shall not be responsible for any failure to do
so or delay in so doing.
ARTICLE 7
MISCELLANEOUS PROVISIONS
Section 7.01 Notices. Any notice required or permitted to be given under or
in connection with this Agreement shall be given in accordance with the notice
provisions of the Credit Agreement.
Section 7.02 Amendments and Waivers. Secured Party's acceptance of partial
or delinquent payments or any forbearance, failure or delay by Secured Party in
exercising any right, power or remedy hereunder shall not be deemed a waiver of
any obligation of Pledgor or any Obligor, or of any right, power or remedy of
Secured Party; and no partial exercise of any right, power or remedy shall
preclude any other or further exercise thereof. Secured Party may remedy any
Event of Default hereunder or in connection with the Obligations without waiving
the Event of Default so remedied. Pledgor hereby agrees that if Secured Party
agrees to a waiver of any provision hereunder, or an exchange of or release of
the Collateral, or the addition or release of any Obligor or other Person, any
such action shall not constitute a waiver of any of Secured Party's other rights
or of Pledgor's obligations hereunder. This Agreement may be amended only by an
instrument in writing executed jointly by Pledgor and Secured Party and may be
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof.
Section 7.03 Copy as Financing Statement. A photocopy or other reproduction
of this Agreement may be delivered by Pledgor or Secured Party to any financial
intermediary or other third party for the purpose of transferring or perfecting
any or all of the Pledged Securities to Secured Party or its designee or
assignee.
Section 7.04 Possession of Collateral. Secured Party shall be deemed to
have possession of any Collateral in transit to it or set apart for it (or, in
either case, any of its agents, affiliates or correspondents).
Section 7.05 Redelivery of Collateral. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Pledgor such excess proceeds in a commercially
reasonable time; provided, however, that neither
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Secured Party nor any Lender shall have any liability for any interest, cost or
expense in connection with any delay in delivering such proceeds to Pledgor.
Section 7.06 Governing Law; Jurisdiction. This Agreement and the security
interest granted hereby shall be construed in accordance with and governed by
the laws of the State of Texas (except to the extent that the laws of any other
jurisdiction govern the perfection and priority of the security interests
granted hereby).
Section 7.07 Continuing Security Agreement.
(a) Except as may be expressly applicable pursuant to Section 9.505 of the
Code, no action taken or omission to act by Secured Party or the Lenders
hereunder, including, without limitation, any exercise of voting or consensual
rights pursuant to Section 4.07 or any other action taken or inaction pursuant
to Section 6.02, shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full satisfaction of the
Obligations, and the Obligations shall remain in full force and effect, until
Secured Party and the Lenders shall have applied payments (including, without
limitation, collections from Collateral) towards the Obligations in the full
amount then outstanding or until such subsequent time as is hereinafter provided
in subsection (b) below.
(b) To the extent that any payments on the Obligations or proceeds of the
Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received by
Secured Party or the Lenders, and Secured Party's and the Lenders' security
interests, rights, powers and remedies hereunder shall continue in full force
and effect. In such event, this Agreement shall be automatically reinstated if
it shall theretofore have been terminated pursuant to Section 7.08.
Section 7.08 Termination. The grant of a security interest hereunder and
all of Secured Party's and the Lenders' rights, powers and remedies in
connection therewith shall remain in full force and effect until Secured Party
has (i) retransferred and delivered all Collateral in its possession to Pledgor,
and (ii) executed a written release or termination statement and reassigned to
Pledgor without recourse or warranty any remaining Collateral and all rights
conveyed hereby. Upon the complete payment of the Obligations and the compliance
by Pledgor with all covenants and agreements hereof, Secured Party, at the
written request and expense of Pledgor, will release, reassign and transfer the
Collateral to Pledgor and declare this Agreement to be of no further force or
effect. Notwithstanding the foregoing, the reimbursement and indemnification
provisions of Section 4.04 and the provisions of subsection 7.07(b) shall
survive the termination of this Agreement.
Section 7.09 Counterparts, Effectiveness. This
Agreement may be executed in two or more counterparts.
Each counterpart is deemed an original, but all such
counterparts
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taken together constitute one and the same instrument. This Agreement becomes
effective upon the execution hereof by Pledgor and delivery of the same to
Secured Party or the Lenders, and it is not necessary for Secured Party or any
Lender to execute any acceptance hereof or otherwise signify or express its
acceptance hereof.
PLEDGOR: XXXXXX XXXXXX ENERGY PARTNERS, L.P.
By: Kinder Xxxxxx X.X., Inc.,
its General Partner
By:________________________________
Name: Xxxxxx X. Xxxx
Title: President
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FINANCING STATEMENT
This Financing Statement is presented to a filing officer for filing
pursuant to the Uniform Commercial Code.
1. The name and address of the Debtor is:
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
2. The name and address of the Secured Party is:
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, AS AGENT 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000
3. This Financing Statement covers the following
Collateral:
(a) All of Debtor's rights, whether now owned or hereafter acquired, in
(i) limited partner interests in Xxxxxx Xxxxxx Operating L.P."B" (the
"Partnership"), (ii) the the Amended and Restated Agreement of Limited
Partnership dated September 30, 1993 and all amendments thereto, (iii)
Debtor's share of profits, income, distributions and surplus from the
Partnership, (iv) specific properties of the Partnership upon dissolution
or otherwise and (v) any and all other rights, titles and interests of
every kind and character of Debtor in and to the Partnership.
(b) all proceeds, replacements, additions to and substitutions for any
of the property referred to in this Section 1.02 and claims against third
parties.
DEBTOR: XXXXXX XXXXXX ENERGY PARTNERS,
L.P.
By: Kinder Xxxxxx X. X., Inc.,
its General Partner
By:_______________________________
Name: Xxxxxx X. Xxxx
Title: President
