EXHIBIT 4.2
EXECUTION VERSION
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "Pledge Agreement") is entered
into as of March 29, 2006, by and among EACH OF THE UNDERSIGNED, whether as an
original signatory hereto or as an Additional Grantor (as defined below) (the
"Grantors") and JPMORGAN CHASE BANK, N.A., a national banking association
("Agent"), as administrative agent for the Secured Parties (as defined below).
PRELIMINARY STATEMENT
WHEREAS, Gasco Energy, Inc., as Borrower ("Borrower"), certain
subsidiaries of Borrower, as Guarantors, the Lenders party thereto and JPMorgan
Chase Bank, N.A., as the Administrative Agent for the Lenders ("Agent") are
parties to that certain Credit Agreement dated as of March 29, 2006 (as amended
or modified and in effect from time to time, the "Credit Agreement"), pursuant
to which the Lenders have agreed to make a revolving credit facility available
to Borrower;
WHEREAS, in order to secure the obligations under the Credit Agreement,
each Grantor has agreed, among other things, to grant liens on and security
interests in the Collateral (as defined below) to Agent for the benefit of the
Secured Parties, and, in furtherance of the foregoing, has agreed to execute and
deliver this Pledge Agreement to Agent.
ACCORDINGLY, each Grantor and Agent, on behalf of the Secured Parties,
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Terms Defined in Credit Agreement. All capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement.
1.2. Terms Defined in Texas Uniform Commercial Code. Terms defined in
the Texas UCC which are not otherwise defined in this Pledge Agreement are used
herein as defined in the Texas UCC.
1.3. Definitions of Certain Terms Used Herein. As used in this Pledge
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:
"Additional Grantors" shall have the meaning set forth in Section 4.6.
"Article" means a numbered article of this Pledge Agreement, unless
another document is specifically referenced.
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"Collateral" means all of the Pledged Securities, Intercompany Debt and
General Intangibles in which each Grantor now has or hereafter acquires any
right or interest, and the proceeds (including Stock Rights), insurance proceeds
and products thereof, together with all books and records, customer lists,
credit files, computer files, programs, printouts and other computer materials
and records related thereto.
"Control" shall have the meaning set forth in Article 8 or, if
applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Texas
UCC.
"Default" means an event described in Section 5.1.
"Exhibit" refers to a specific exhibit to this Pledge Agreement, unless
another document is specifically referenced.
"General Intangibles" means general intangibles as defined in Article 9
of the Texas UCC including Intercompany Debt (to the extent it constitutes a
general intangible), partnership interests and ownership interests in any
limited liability company.
"Intercompany Debt" means Indebtedness owed by any Grantor to any other
Grantor.
"Investment Property" shall have the meaning set forth in Article 9 of
the Texas UCC.
"Payment Intangibles" shall have the meaning set forth in Article 9 of
the Texas UCC.
"Pledged Securities" means all Investment Property and Securities
described on Schedule 1 attached hereto and all Investment Property and
Securities described in any Pledge Amendment hereafter executed and delivered by
any Grantor pursuant to Section 4.5 of this Pledge Agreement.
"Section" means a numbered section of this Pledge Agreement, unless
another document is specifically referenced.
"Secured Parties" means Agent, the Lenders and the Lender
Counterparties and shall include Lenders and Lender Counterparties to the extent
that any Obligations owing to such Persons were incurred while such Persons were
Lenders or Lender Counterparties.
"Security" has the meaning set forth in Article 8 of the Texas UCC.
"Stock Rights" means any securities, dividends or other distributions
and any other right or property which any Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any securities or other ownership interests in a
corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and
any right to receive earnings, in which any Grantor now has or hereafter
acquires any right, issued by an issuer of such securities.
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"Texas UCC" means the Uniform Commercial Code as in effect in the State
of Texas, as the same may be amended, modified or supplemented.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
GRANT OF SECURITY INTEREST
Each Grantor hereby pledges, assigns and grants to Agent, on behalf of
and for the ratable benefit of the Secured Parties, a security interest in all
of such Grantor's right, title and interest in and to the Collateral to secure
the prompt and complete payment and performance of the Obligations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants to Agent and the Secured Parties
that:
3.1. Title, Authorization, Validity and Enforceability. Such Grantor
has good and valid rights in or the power to transfer the Collateral and title
to the Collateral with respect to which it has purported to grant a security
interest hereunder, free and clear of all Liens, and has full power and
authority to grant to Agent the security interest in such Collateral pursuant
hereto. The execution and delivery by such Grantor of this Pledge Agreement has
been duly authorized by proper corporate, partnership or limited liability
proceedings, and this Pledge Agreement constitutes a legal, valid and binding
obligation of such Grantor and creates a security interest which is enforceable
against such Grantor in all now owned and hereafter acquired Collateral.
3.2. Conflicting Laws and Contracts. Neither the execution and delivery
by such Grantor of this Pledge Agreement, nor compliance with the terms and
provisions hereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Grantor, (ii) the
Organizational Documents of such Grantor, or (iii) the provisions of any
indenture, instrument or agreement to which such Grantor is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the property of such Grantor pursuant to the
terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been made or obtained by such Grantor, is required to be obtained by
such Grantor in connection with the execution and delivery of this Pledge
Agreement or the legality, validity, binding effect or enforceability of this
Pledge Agreement.
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3.3. Type and Jurisdiction of Organization. Such Grantor is a
corporation, partnership or limited liability company duly and properly
incorporated or organized, as the case may be, validly existing and (to the
extent such concept applies to such entity) in good standing under the laws of
its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction wherein failure to have
such authorization may result in a Material Adverse Effect. Such Grantor is not
now nor has it ever been incorporated or organized as any other type of entity
or under the laws of any other jurisdiction.
3.4. Principal Location. Such Grantor's mailing address and the
location of its place of business (if it has only one) or its chief executive
office (if it has more than one place of business), is disclosed in Exhibit "A".
During the preceding five-year period, such Grantor has no other places of
business except those set forth in Exhibit "A".
3.5. No Other Names. During the preceding five-year period, such
Grantor has not conducted business under any name except those set forth in
Exhibit "B". Each Grantor's name, as first set forth above, is the exact name as
it appears in such Grantor's Organizational Documents, as amended, as filed with
such Grantor's jurisdiction of organization.
3.6. No Default. No Default exists.
3.7. No Financing Statements. No financing statement describing all or
any portion of the Collateral which has not lapsed or been terminated naming
such Grantor as debtor has been filed in any jurisdiction except for the
financing statements naming Agent on behalf of the Secured Parties as the
secured party.
3.8. Federal Employer Identification Number. Such Grantor's Federal
employer identification number are set forth on Exhibit "C".
3.9. State Organization Number. Such Grantor's state organization
number is set forth on Exhibit "D".
3.10. Pledged Securities and Other Investment Property. Schedule I sets
forth a complete and accurate list of the Securities and other Investment
Property delivered to Agent, for the benefit of the Secured Parties. Such
Grantor is the direct and beneficial owner of each Security and other type of
Investment Property listed on Schedule I, free and clear of any Liens, except
for the security interest granted to Agent for the benefit of the Secured
Parties hereunder. Each Grantor further represents and warrants that (i) all
such Securities or other types of Investment Property which are shares of stock
in a corporation or ownership interests in a partnership or limited liability
company have been (to the extent such concepts are relevant with respect to such
Security or other type of Investment Property) duly and validly issued, are
fully paid and non-assessable and (ii) with respect to any certificates
delivered to Agent representing an ownership interest in a partnership or
limited liability company, either such certificates are Securities as defined in
Article 8 of the Uniform Commercial Code of the applicable jurisdiction as a
result of actions by the issuer or otherwise, or, if such certificates are not
Securities, such Grantor has so informed Agent so that Agent may take steps to
perfect its security interest therein as a General Intangible.
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3.11 Due Authorization of Pledged Securities. All of the Pledged
Securities have been duly authorized and validly issued and are fully paid and
non-assessable. The Pledged Securities constitute all of the issued and
outstanding Equity Interests of each of the direct Restricted Subsidiaries of
each Grantor and there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that is
now or hereafter convertible into, or that requires the issuance or sale of, any
Pledged Securities.
ARTICLE IV
COVENANTS
From the date of this Pledge Agreement, and thereafter until this
Pledge Agreement is terminated:
4.1. General.
4.1.1. Inspection. Each Grantor will permit Agent or any
Lender, by its representatives and agents (i) to inspect the
Collateral, (ii) to examine and make copies of the records of such
Grantor relating to the Collateral and (iii) to discuss the Collateral
and the related records of such Grantor with, and to be advised as to
the same by, such Grantor's officers and employees, all at such
reasonable times and intervals as Agent or such Lender may determine,
and all at the Grantors' expense.
4.1.2. Taxes. Each Grantor will pay when due all Taxes,
assessments and governmental charges and levies upon the Collateral,
except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) such Grantor has set aside
on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
4.1.3. Records and Reports; Notification of Default. Each
Grantor will maintain complete and accurate books and records with
respect to the Collateral, and furnish Agent, with sufficient copies
for each of the Secured Parties, such reports relating to the
Collateral as Agent shall from time to time request. Each Grantor will
give prompt notice in writing to Agent and the Secured Parties of the
occurrence of any Default and of any other development, financial or
otherwise, which might materially and adversely affect the Collateral.
4.1.4. Financing Statements and Other Actions; Defense of
Title. Each Grantor hereby authorizes Agent to file, and if requested
will execute and deliver to Agent, all financing statements and other
documents and take such other actions as may from time to time be
requested by Agent in order to maintain a first perfected security
interest in and, if applicable, Control of, the Collateral. Each
Grantor will take any and all actions necessary to defend title to the
Collateral against all persons and to defend the security interest of
Agent in the Collateral and the priority thereof against any Lien not
expressly permitted hereunder.
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4.1.5. Disposition of Collateral. Except as otherwise
permitted under the Credit Agreement, none of the Grantors will sell,
lease or otherwise dispose of the Collateral.
4.1.6. Liens. None of the Grantors will create, incur, or
suffer to exist any Lien on the Collateral except the security interest
created by this Pledge Agreement and the Liens expressly permitted by
Section 7.02 of the Credit Agreement.
4.1.7. Change in Corporate Existence, Type or Jurisdiction of
Organization, Location, Name. Except as otherwise permitted under the
Credit Agreement, each Grantor will:
(a) preserve its existence as a corporation, partnership
or limited liability company and not, in one
transaction or a series of related transactions,
merge into or consolidate with any other entity, or
sell all or substantially all of its assets;
(b) not change its name or its state of organization; and
(c) not maintain its place of business (if it has only
one) or its chief executive office (if it has more
than one place of business) at a location other than
a location specified on Exhibit "A";
unless such Grantor shall have given Agent not less than 30 days' prior
written notice of such event or occurrence and Agent shall have either
(x) determined that such event or occurrence will not adversely affect
the validity, perfection or priority of Agent's security interest in
the Collateral, or (y) taken such steps (with the cooperation of such
Grantor to the extent necessary or advisable) as are necessary or
advisable to properly maintain the validity, perfection and priority of
Agent's security interest in the Collateral.
4.1.8. Other Financing Statements. None of the Grantors will
authorize the filing of any financing statement naming it as debtor
covering all or any portion of the Collateral, except as permitted by
Section 4.1.4.
4.2. Securities and Documents. Each Grantor will (i) deliver to Agent
immediately upon execution of this Pledge Agreement the originals of all
Securities constituting Collateral (if any then exist) accompanied by
appropriate stock powers executed in blank, (ii) hold in trust for Agent upon
receipt and immediately thereafter deliver to Agent any Securities constituting
Collateral, and (iii) upon Agent's request, after the occurrence and during the
continuance of a Default, deliver to Agent (and thereafter hold in trust for
Agent upon receipt and immediately deliver to Agent) (x) any Document evidencing
or constituting Collateral, (y) any dividends or distributions declared or paid,
in cash or property, upon any of the Pledged Securities or any of the
partnership interests or ownership interests in any limited liability company,
and (z) any payments received, in cash or property, with respect to any
Intercompany Debt.
4.3. Uncertificated Securities and Certain Other Investment Property.
Each Grantor will permit Agent from time to time to cause the appropriate
issuers (and, if held with a securities intermediary, such securities
intermediary) of uncertificated securities or other types of Investment Property
not represented by certificates which are Pledged Securities to xxxx their books
and records with the numbers and face amounts of all such uncertificated
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securities or other types of Investment Property not represented by certificates
and all rollovers and replacements therefor to reflect the Lien of Agent granted
pursuant to this Pledge Agreement. Each Grantor will take any actions necessary
to cause (i) the issuers of uncertificated securities which are Collateral and
which are Securities and (ii) any financial intermediary which is the holder of
any Investment Property, to cause Agent to have and retain Control over such
Securities or other Investment Property. Without limiting the foregoing, each
Grantor will, with respect to Investment Property held with a financial
intermediary, cause such financial intermediary to enter into a control
agreement with Agent in form and substance satisfactory to Agent.
4.4. Stock and Other Ownership Interests.
4.4.1. Changes in Capital Structure of Issuers. Except as
otherwise permitted under the Credit Agreement, none of the Grantors
will (i) permit or suffer any issuer of privately held corporate
securities or other ownership interests in a corporation, partnership,
joint venture or limited liability company constituting Collateral to
dissolve, liquidate, retire any of its capital stock or other
Instruments or Securities evidencing ownership, reduce its capital or
merge or consolidate with any other entity, or (ii) vote any of the
Securities or other Investment Property in favor of any of the
foregoing.
4.4.2. Issuance of Additional Securities. None of the Grantors
will permit or suffer the issuer of privately held corporate securities
or other ownership interests in a corporation, partnership, joint
venture or limited liability company constituting Collateral to issue
any such securities or other ownership interests, any right to receive
the same or any right to receive earnings, except to such Grantor.
4.4.3. Registration of Pledged Securities and other Investment
Property. Each Grantor will permit any registerable Pledged Securities
or any partnership interest or ownership interest in any limited
liability company which become a Security to be registered in the name
of Agent or its nominee at any time after the occurrence and during the
continuance of a Default at the option of the Required Lenders.
4.4.4. Exercise of Rights in Pledged Securities and other
Investment Property. Each Grantor will permit Agent or its nominee at
any time after the occurrence and during the continuance of a Default,
without notice, to exercise all voting and corporate rights relating to
the Pledged Securities or any partnership interest or ownership
interest in any limited liability company, including, without
limitation, exchange, subscription or any other rights, privileges, or
options pertaining to any corporate securities or other ownership
interests or Investment Property in or of a corporation, partnership,
joint venture or limited liability company constituting Collateral and
the Stock Rights as if it were the absolute owner thereof.
4.5 Additional Shares. Each Grantor further agrees that it will, upon
obtaining any additional shares of stock, partnership interests, membership
interests or other securities required to be pledged hereunder as provided in
Section 4.4 or as provided in the Credit Agreement, promptly (and in any event
within five Business Days) deliver to Agent a Pledge Amendment, duly executed by
such Grantor, in substantially the form of Schedule II annexed hereto (a "Pledge
Amendment"), in respect of the additional certificates or instruments to be
pledged pursuant to this Pledge Agreement. Each Grantor hereby authorizes Agent
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to attach each Pledge Amendment to this Pledge Agreement and agrees that all
certificates or instruments listed on any Pledge Amendment delivered to Agent
shall for all purposes hereunder be considered Pledged Securities; provided that
the failure of such Grantor to execute a Pledge Amendment with respect to any
additional certificates or instruments pledged pursuant to this Pledge Agreement
shall not impair the security interest of Agent therein or otherwise adversely
affect the rights and remedies of Agent hereunder with respect thereto.
4.6 Additional Grantors. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Grantors
(each, an "Additional Grantor"), by executing a Counterpart Agreement. Upon
delivery of any such Counterpart Agreement to the Agent, notice of which is
hereby waived by Grantor, each Additional Grantor shall be a Grantor and shall
be as fully a party hereto as if Additional Grantor were an original signatory
hereto. Each Grantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Grantor hereunder, nor by any election of Agent not to cause any Subsidiary of
Borrower to become an Additional Grantor hereunder. This Pledge Agreement shall
be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
ARTICLE V
DEFAULT
5.1. The occurrence of any one or more of the following events shall
constitute a Default:
5.1.1. Any representation or warranty made by or on behalf of
any Grantor under or in connection with this Pledge Agreement shall be
materially false as of the date on which made.
5.1.2. The breach by any Grantor of any of the terms or
provisions of Article IV.
5.1.3. The breach by any Grantor (other than a breach which
constitutes a Default under Section 5.1.1 or 5.1.2) of any of the terms
or provisions of this Pledge Agreement which is not remedied within ten
(10) days after the giving of written notice to such Grantor by Agent.
5.1.4. Any of the Intercompany Debt shall be transferred or
otherwise disposed of to any person other than another Grantor, either
voluntarily or involuntarily.
5.1.5 Any of the Pledged Securities shall be lost, stolen,
damaged or destroyed unless such event occurs at a time when such
Pledged Security is in the custody of Agent.
5.1.6. The occurrence of any "Default" or "Event of Default"
under, and as defined in, the Credit Agreement.
5.1.7. Any partnership interests or ownership interests in a
limited liability company which are included within the Collateral
shall at any time constitute a Security or the issuer of any such
interests shall take any action to have such interests treated as a
Security unless (i) all certificates or other documents constituting
such Security have been delivered to Agent and such Security is
properly defined as such under Article 8 of the Uniform Commercial Code
of the applicable jurisdiction, whether as a result of actions by the
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issuer thereof or otherwise, or (ii) Agent has entered into a control
agreement with the issuer of such Security or with a securities
intermediary relating to such Security and such Security is defined as
such under Article 8 of the Uniform Commercial Code of the applicable
jurisdiction, whether as a result of actions by the issuer thereof or
otherwise.
5.2. Acceleration and Remedies. Upon the acceleration of the
obligations under the Credit Agreement, the Obligations shall immediately become
due and payable without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived, and Agent may exercise any or all of the
following rights and remedies:
5.2.1. Those rights and remedies provided in this Pledge
Agreement, the Credit Agreement, or any other Loan Document, provided
that this Section 5.2.1 shall not be understood to limit any rights or
remedies available to Agent and the Secured Parties prior to a Default.
5.2.2. Those rights and remedies available to a Agent under
the Texas UCC (whether or not the Texas UCC applies to the affected
Collateral) or under any other applicable law (including, without
limitation, any law governing the exercise of a bank's right of setoff
or bankers' lien) when a debtor is in default under a Pledge Agreement.
5.2.3. Without notice except as specifically provided in
Section 8.1 or elsewhere herein, sell, lease, assign, grant an option
or options to purchase or otherwise dispose of the Collateral or any
part thereof in one or more parcels at public or private sale, for
cash, on credit or for future delivery, and upon such other terms as
Agent may deem commercially reasonable.
Agent, on behalf of the Secured Parties, may comply with any applicable state or
federal law requirements in connection with a disposition of the Collateral and
compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
If, after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain obligations with respect to
Swap Agreements outstanding, the Agent, on behalf of the Secured Parties, may,
at the direction of the Lender Counterparties, exercise the remedies provided in
this Section 5.2 upon the occurrence of any event which would allow or require
the termination or acceleration of any obligations pursuant to the terms of the
agreement governing any Swap Agreement.
5.3. Debtor's Obligations Upon Default. Upon the request of Agent
after the occurrence of a Default, each Grantor will:
5.3.1. Assembly of Collateral. Assemble and make available to
Agent the Collateral and all records relating thereto at any place or
places specified by Agent.
5.3.2. Agent Access. Permit Agent, by Agent's representatives
and agents, to enter any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are
located, to take possession of all or any part of the Collateral and to
remove all or any part of the Collateral.
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ARTICLE VI
WAIVERS, AMENDMENTS AND REMEDIES
No delay or omission of Agent or any Lender to exercise any right or
remedy granted under this Pledge Agreement shall impair such right or remedy or
be construed to be a waiver of any Default or an acquiescence therein, and any
single or partial exercise of any such right or remedy shall not preclude any
other or further exercise thereof or the exercise of any other right or remedy.
No waiver, amendment or other variation of the terms, conditions or provisions
of this Pledge Agreement whatsoever shall be valid unless in writing signed by
Agent with the concurrence or at the direction of the Required Lenders and then
only to the extent in such writing specifically set forth. All rights and
remedies contained in this Pledge Agreement or by law afforded shall be
cumulative and all shall be available to Agent and the Secured Parties until the
Obligations have been paid in full.
ARTICLE VII
PROCEEDS
7.1. Application of Proceeds. The proceeds of the Collateral shall be
applied by Agent to payment of the Obligations in the order and manner
contemplated by the Loan Documents.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Notice of Disposition of Collateral; Condition of Collateral.
Each Grantor hereby waives notice of the time and place of any public sale or
the time after which any private sale or other disposition of all or any part of
the Collateral may be made. To the extent such notice may not be waived under
applicable law, any notice made shall be deemed reasonable if sent to a Grantor,
addressed as set forth in Article IX, at least ten days prior to (i) the date of
any such public sale or (ii) the time after which any such private sale or other
disposition may be made. Agent shall have no obligation to prepare the
Collateral for sale.
8.2. Agent Performance of Debtor Obligations. Without having any
obligation to do so, Agent may perform or pay any obligation which a Grantor has
agreed to perform or pay in this Pledge Agreement and such Grantor shall
reimburse Agent for any amounts paid by Agent pursuant to this Section 8.2. The
Grantors' obligations to reimburse Agent pursuant to the preceding sentence
shall be an Obligation payable on demand.
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8.3. Authorization for Agent to Take Certain Action. Each Grantor
irrevocably authorizes Agent at any time and from time to time in the sole
discretion of Agent and appoints Agent as its attorney in fact (i) to file
financing statements, amendments and continuations necessary or desirable in
Agent's sole discretion to perfect and to maintain the perfection and priority
of Agent's security interest in the Collateral, (ii) to indorse and collect any
cash proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Pledge Agreement or any financing statement with respect to
the Collateral as a financing statement and to file any other financing
statement or amendment of a financing statement (which does not add new
collateral or add a debtor) in such offices as Agent in its sole discretion
deems necessary or desirable to perfect and to maintain the perfection and
priority of Agent's security interest in the Collateral, (iv) to contact and
enter into one or more agreements with the issuers of uncertificated securities
which are Collateral and which are Securities or with financial intermediaries
holding other Investment Property as may be necessary or advisable to give Agent
Control over such Securities or other Investment Property, (v) to apply the
proceeds of any Collateral received by Agent to the Obligations as provided in
Article VII and (vi) to discharge past due taxes, assessments, charges, fees or
Liens on the Collateral (except for such Liens as are specifically permitted
hereunder), and Grantor agrees to reimburse Agent on demand for any payment made
or any expense incurred by Agent in connection therewith, provided that this
authorization shall not relieve any Grantor of any of its obligations under this
Pledge Agreement or under the Credit Agreement.
8.4. Specific Performance of Certain Covenants. Each Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.5, 4.1.6, 4.2, 5.3, or 8.5 will cause irreparable injury to Agent
and the Secured Parties, that Agent and Secured Parties have no adequate remedy
at law in respect of such breaches and therefore agrees, without limiting the
right of Agent or the Secured Parties to seek and obtain specific performance of
other obligations of Grantor contained in this Pledge Agreement, that the
covenants of such Grantor contained in the Sections referred to in this Section
8.4 shall be specifically enforceable against such Grantor.
8.5. Dispositions Not Authorized. Except as otherwise permitted under
the Credit Agreement, none of the Grantors is authorized to sell or otherwise
dispose of the Collateral and notwithstanding any course of dealing between any
Grantor and Agent or other conduct of Agent, no authorization to sell or
otherwise dispose of the Collateral shall be binding upon Agent or the Secured
Parties unless such authorization is in writing signed by Agent.
8.6 Benefit of Agreement. The terms and provisions of this Pledge
Agreement shall be binding upon and inure to the benefit of each Grantor, Agent
and the Secured Parties and their respective successors and assigns (including
all persons who become bound as a debtor to this Pledge Agreement), except that
none of the Grantors shall have the right to assign its rights or delegate its
obligations under this Pledge Agreement or any interest herein, without the
prior written consent of Agent.
8.7. Survival of Representations. All representations and warranties of
each Grantor contained in this Pledge Agreement shall survive the execution and
delivery of this Pledge Agreement.
8.8. Taxes and Expenses. Any Taxes (including income taxes) payable or
ruled payable by any Federal or State authority in respect of this Pledge
Agreement shall be paid by Grantors, together with interest and penalties, if
any. Grantors shall reimburse Agent for any and all out-of-pocket expenses and
internal charges (including reasonable attorneys', auditors' and accountants'
fees and reasonable time charges of attorneys, paralegals, auditors and
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accountants who may be employees of Agent) paid or incurred by Agent in
connection with the preparation, execution, delivery, administration, collection
and enforcement of this Pledge Agreement and in the audit, analysis,
administration, collection, preservation or sale of the Collateral (including
the expenses and charges associated with any periodic or special audit of the
Collateral). Any and all costs and expenses incurred by Grantors in the
performance of actions required pursuant to the terms hereof shall be borne
solely by Grantors.
8.9. Headings. The title of and section headings in this Pledge
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Pledge Agreement.
8.10. Termination. This Pledge Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Obligations
outstanding) until (i) the Credit Agreement has terminated pursuant to its
express terms and (ii) all of the Obligations have been indefeasibly paid and
performed in full and no commitments of Agent or the Lenders which would give
rise to any Obligations are outstanding.
8.11. Entire Agreement. This Pledge Agreement embodies the entire
agreement and understanding between Grantors and Agent relating to the
Collateral and supersedes all prior agreements and understandings between
Grantors and Agent relating to the Collateral.
8.12. CHOICE OF LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
8.13. INDEMNITY. EACH GRANTOR HEREBY AGREES TO INDEMNIFY AGENT AND THE
SECURED PARTIES, AND THEIR RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS AND EMPLOYEES,
FROM AND AGAINST ANY AND ALL LIABILITIES, DAMAGES, PENALTIES, SUITS, COSTS, AND
EXPENSES OF ANY KIND AND NATURE (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF
LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT AGENT OR ANY LENDER IS A PARTY
THERETO) IMPOSED ON, INCURRED BY OR ASSERTED AGAINST AGENT OR THE SECURED
PARTIES, OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS AND EMPLOYEES, IN ANY
WAY RELATING TO OR ARISING OUT OF THIS PLEDGE AGREEMENT.
12
ARTICLE IX
NOTICES
9.1. Sending Notices. Any notice required or permitted to be given
under this Pledge Agreement shall be sent (and deemed received) in the manner
and to the addresses set forth in Section 11.01 of the Credit Agreement.
9.2. Change in Address for Notices. Agent, Lender or any Grantor may
change the address for service of notice upon it by a notice in writing to the
other parties.
(Signature Pages Follow)
13
IN WITNESS WHEREOF, Grantors and Agent have executed this Pledge
Agreement as of the date first above written.
GRANTORS:
GASCO ENERGY, INC.
By: /s/ X. Xxxx Xxxxx
------------------------------------------------
Name: X. Xxxx Grant
Title: Executive Vice President and Chief
Financial Officer
GASCO PRODUCTION COMPANY
By: /s/ X. Xxxx Xxxxx
----------------------------------------------
Name: X. Xxxx Grant
Title: Executive Vice President and Chief
Financial Officer
RIVERBEND GAS GATHERING, LLC
By: Gasco Energy, Inc.
Its Managing Member
By: /s/ X. Xxxx Xxxxx
-----------------------------------------------
Name: X. Xxxx Grant
Title: Executive Vice President and Chief
Financial Officer
MYTON OILFIELD RENTALS, LLC
By: Gasco Energy, Inc.
Its Managing Member
By: /s/ X. Xxxx Xxxxx
---------------------------------------------
Name: X. Xxxx Grant
Title: Executive Vice President and Chief
Financial Officer
14
AGENT:
JPMORGAN CHASE BANK, N.A.
By: /s/ J. Xxxxx Xxxxxx
---------------------------------
Name: J. Xxxxx Xxxxxx
Title: Vice President
JPMorgan Chase Bank, N.A.
Mail Code IL1-0010
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
JPMorgan Chase Bank, N.A.
0000 Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: J. Xxxxx Xxxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
15
EXHIBIT "A"
PLACE OF BUSINESS OR CHIEF EXECUTIVE OFFICE
Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:
Gasco Energy, Inc.
0 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Gasco Production Company
0 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Riverbend Gas Gathering, LLC
0 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Myton Oilfield Rentals, LLC
0 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
16
EXHIBIT "B"
OTHER NAMES
-------------------------------------- ----------------------------------------
GRANTOR OTHER NAMES
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
Gasco Energy, Inc None
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
Gasco Production Company Pannonian Energy, Inc.
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
Riverbend Gas Gathering, LLC None
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
Myton Oilfield Rentals, LLC None
-------------------------------------- ----------------------------------------
00
XXXXXXX "X"
XXXXXXX EMPLOYER IDENTIFICATION NUMBER
---------------------------------------- ---------------------------------------
GRANTOR FEDERAL EMPLOYER IDENTIFICATION NUMBER
---------------------------------------- --------------------------------------
---------------------------------------- --------------------------------------
Gasco Energy, Inc. 00-0000000
---------------------------------------- --------------------------------------
---------------------------------------- --------------------------------------
Gasco Production Company 00-0000000
---------------------------------------- --------------------------------------
---------------------------------------- --------------------------------------
Riverbend Gas Gathering, LLC 00-0000000
---------------------------------------- --------------------------------------
---------------------------------------- --------------------------------------
Myton Oilfield Rentals, LLC 00-0000000
---------------------------------------- --------------------------------------
18
EXHIBIT "D"
STATE ORGANIZATION NUMBERS
---------------------------------- -------------------------------------------
GRANTOR STATE ORGANIZATION NUMBER
---------------------------------- -------------------------------------------
---------------------------------- -------------------------------------------
Gasco Energy, Inc. Nevada -- Organization No. C8467-1997
---------------------------------- -------------------------------------------
---------------------------------- -------------------------------------------
Gasco Production Company Delaware - Organization No. 2899291
---------------------------------- -------------------------------------------
---------------------------------- -------------------------------------------
Riverbend Gas Gathering, LLC Nevada -- Organization No. LLC 4273-2004
---------------------------------- -------------------------------------------
---------------------------------- -------------------------------------------
Myton Oilfield Rentals, LLC Nevada -- Organization No. LLC 11258-2004
---------------------------------- -------------------------------------------
19
SCHEDULE I
List of Pledged Securities
A. STOCKS:
Issuer Certificate Number Number of Shares
Gasco Production Company Certificate No. 1073 registered in 7,925,000
the name of Gasco Energy, Inc.
B. OTHER SECURITIES OR OTHER INVESTMENT
PROPERTY (CERTIFICATED AND
UNCERTIFICATED):
Issuer Certificate Number Ownership Interest
Riverbend Gas Gathering, LLC Membership Certificate No. 001 100%
registered in the name of
Gasco Energy, Inc.
Myton Oilfield Rentals, LLC Membership Certificate No. 001 100%
registered in the name of
Gasco Energy, Inc.
20
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated [________________] is delivered pursuant
to Section 4.5 of the Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge and Security
Agreement dated as of March 29, 2006, by and among GASCO ENERGY, INC., and each
of the additional Grantors that become a party thereto and JPMORGAN CHASE BANK,
N.A., a national banking association ("Agent"), as administrative agent for the
Secured Parties (the "Pledge Agreement"; capitalized terms defined therein being
used herein as defined therein) and that the Pledged Securities listed on this
Pledge Amendment shall be deemed to be part of the Pledged Securities and shall
become part of the Collateral and shall secure all Obligations.
[ ]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
21
List of Additional Pledged Securities
A. STOCKS:
Issuer Certificate Number Number of Shares
B. OTHER SECURITIES OR OTHER INVESTMENT
PROPERTY (CERTIFICATED AND
UNCERTIFICATED):
Issuer Description of Collateral Ownership Interest
22
