PLEDGE AGREEMENT Dated as of September 2, 2005 between CROSSPOINT ENERGY, LLC and D. B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.
Dated
as of September 2, 2005
between
CROSSPOINT
ENERGY, LLC
and
X.
X. XXXXX SPECIAL OPPORTUNITIES FUND, L.P.
TABLE
OF CONTENTS
|
ARTICLE
I
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||
|
DEFINITIONS;
TERMS GENERALLY
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|
Section
1.01
|
Definitions
|
1
|
|
Section
1.02
|
Terms
Generally; Rules of Construction
|
3
|
|
ARTICLE
II
|
||
|
GRANT
OF SECURITY INTEREST
|
||
|
Section
2.01
|
Grant
of Security Interest
|
4
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|
Section
2.02
|
Transfer
of Pledged Securities
|
4
|
|
Section
2.03
|
Authorization
to File Financing Statements
|
5
|
|
ARTICLE
III
|
||
|
Section
3.01
|
Pledged
Securities; Title; No Other Liens; Etc
|
5
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|
Section
3.02
|
Perfected
First Priority Liens
|
5
|
|
Section
3.03
|
Solvency
|
6
|
|
Section
3.04
|
Debtor
Information
|
6
|
|
Section
3.05
|
No
Other Property
|
6
|
|
Section
3.06
|
Organization
|
6
|
|
Section
3.07
|
Authority;
Enforceability
|
6
|
|
Section
3.08
|
Approvals;
No Conflicts
|
6
|
|
ARTICLE
IV
|
||
|
Section
4.01
|
Maintenance
of Perfected Security Interest; Further Documentation
|
7
|
|
Section
4.02
|
Delivery
of Documents and Information Related to Collateral
|
7
|
|
Section
4.03
|
Further
Assurances
|
7
|
|
ARTICLE
V
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||
|
NEGATIVE
COVENANTS
|
||
|
Section
5.01
|
Restrictions
on Sales and other Dispositions
|
8
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|
Section
5.02
|
Negative
Pledge
|
8
|
|
Section
5.03
|
Impairment
of Security Interest
|
8
|
|
Section
5.04
|
Acquisitions;
Loans; Debt; Guarantees
|
9
|
|
Section
5.05
|
Nature
of Business; Mergers, Etc
|
9
|
|
Section
5.06
|
Debtor’s
Legal Status
|
9
|
|
ARTICLE
VI
|
||
|
EVENTS
OF DEFAULT
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||
|
Section
6.01
|
Events
of Default
|
9
|
i
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ARTICLE
VII
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|
Section
7.01
|
Rights
and Remedies
|
10
|
|
Section
7.02
|
Pledged
Securities
|
11
|
|
Section
7.03
|
Private
Sales of Pledged Securities
|
13
|
|
Section
7.04
|
Setoff
|
13
|
|
Section
7.05
|
Notification
to Account Debtors and Other Persons Obligated on
Collateral
|
14
|
|
Section
7.06
|
Standards
for Exercising Rights and Remedies
|
14
|
|
Section
7.07
|
No
Retention in Satisfaction
|
15
|
|
Section
7.08
|
Performance
by Secured Party
|
15
|
|
Section
7.09
|
Secured
Party’s Appointment as Attorney-in-Fact, Etc
|
15
|
|
Section
7.10
|
Waiver
|
17
|
|
Section
7.11
|
No
Release
|
18
|
|
Section
7.12
|
Duty
of Secured Party
|
19
|
|
Section
7.13
|
Payment
of Expenses, INDEMNITIES,
Etc
|
20
|
|
Section
7.14
|
Overdue
Amounts
|
20
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|
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ARTICLE
VIII
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|
MISCELLANEOUS
|
||
|
Section
8.01
|
Notices
|
20
|
|
Section
8.02
|
Amendments
|
21
|
|
Section
8.03
|
No
Waiver
|
21
|
|
Section
8.04
|
Remedies
Cumulative: Non-Exclusive; Etc
|
21
|
|
Section
8.05
|
Successors
and Assigns
|
21
|
|
Section
8.06
|
Severability
|
22
|
|
Section
8.07
|
Survival;
Revival; Restatement
|
22
|
|
Section
8.08
|
Counterparts
|
22
|
|
Section
8.09
|
Acknowledgments
|
22
|
|
SECTION
8.10
|
GOVERNING
LAW; CONSENT TO JURISDICTION
|
23
|
|
Section
8.11
|
ENTIRE
AGREEMENT
|
24
|
|
Section
8.12
|
Relation
to Other Security Instruments
|
24
|
|
Section
8.13
|
Authority
of Secured Party
|
24
|
|
Section
8.14
|
Interest
Rate Limitation
|
25
|
Exhibit
A
- Description
of Pledged Securities
ii
This
PLEDGE
AGREEMENT,
dated
as of September 2, 2005, is between Crosspoint Energy, LLC, a Texas limited
liability company (the “Debtor”),
and
X. X. Xxxxx Special Opportunities Fund, L.P., as administrative agent (in such
capacity, together with its successors and assigns in such capacity, the
“Secured
Party”)
for
the lenders (the “Lenders”)
from
time to time parties to the Credit Agreement dated of even date herewith (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”),
among
Crosspoint Energy Holdings, LLC, a Texas limited liability company (the
“Borrower”),
the
Lenders and the Secured Party.
WHEREAS,
the
Borrower has requested that the Lenders provide certain loans to and extensions
of credit on behalf of the Borrower;
WHEREAS,
the
Lenders have agreed to make such loans and extensions of credit subject to
the
terms of the Credit Agreement;
WHEREAS,
the
Debtor is the a member of the Borrower and will receive direct and indirect
benefits from the loans and extensions of credit under the Credit Agreement;
and
WHEREAS,
it is a
condition precedent to the obligations of the Lenders to make their respective
loans and extensions of credit under the Credit Agreement that the Debtor
execute and deliver this Agreement;
NOW,
THEREFORE,
in
consideration of the premises herein and to induce the Lenders to enter into
the
Credit Agreement and to make their respective loans and extensions of credit
thereunder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS;
TERMS GENERALLY
Section
1.01 Definitions.
As used
herein:
(a) terms
defined above have the meanings given such terms above;
(b) unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
have the meanings given to them in the Credit Agreement;
(c) unless
otherwise defined herein, terms defined in the Uniform Commercial Code (as
defined herein) and used herein have the same meanings herein as specified
therein; provided, however, that if a term is defined in Article 9 of the
Uniform Commercial Code differently than in another Article of the Uniform
Commercial Code, then such term has the meaning specified in Article 9;
and
1
(d) the
following terms have the following meanings:
“Agreement”
means
this Pledge Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
“Collateral”
has
the
meaning given such term in Section
2.01.
“Obligations”
means
the collective reference to the payment and performance when due of all
indebtedness, liabilities, obligations and undertakings of the Obligors
(including, without limitation, all Indebtedness) of every kind or description
arising out of or outstanding under, advanced or issued pursuant, or evidenced
by, the Secured Documents, including, without limitation, the unpaid principal
of and interest on the Loans and all other obligations and liabilities of the
Obligors (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to
any Obligor, whether or not a claim for post-filing or post-petition interest
is
allowed in such proceeding) to the Secured Creditors, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, arising out of or outstanding under, advanced or issued
pursuant, or evidenced by, the Secured Documents, and whether on account of
principal, interest, premium, reimbursement obligations, payments in respect
of
an early termination date, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all costs, fees and disbursements of counsel
to
the Secured Creditors that are required to be paid by the Obligors pursuant
to
the terms of any Secured Documents).
“Obligors”
means
the collective reference to the Debtor, the Borrower and the Debtor’s
Subsidiaries.
“Pledged
Securities”
means:
(a) the Equity Interests described or referred to in Exhibit
A;
(b) the
certificates or instruments, if any, representing such Equity Interests; (c)
all
dividends (cash, Equity Interests or otherwise), cash, instruments, rights
to
subscribe, purchase or sell and all other rights and Property from time to
time
received, receivable or otherwise distributed in respect of or in exchange
for
any or all of such Equity Interests; (d) all replacements, additions to and
substitutions for any of the Property referred to in this definition, including,
without limitation, claims against third parties; (e) the proceeds (including
proceeds of proceeds), interest, profits, benefits, distributions, premiums
and
other income of or on any of the Property referred to in this definition; (f)
all security entitlements in respect of any Property referred to in this
definition and (g) all books and records relating to any of the Property
referred to in this definition.
“Property”
means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, cash, securities,
accounts and contract rights.
“Secured
Creditors”
means
the collective reference to the Secured Party, the Lenders and the Lenders
and
Affiliates of the Lenders that are parties to Secured Swap
Agreements.
2
“Secured
Documents”
means
the collective reference to the Credit Agreement, the other Loan Documents,
each
Secured Swap Agreement and any other document made, delivered or given in
connection with any of the foregoing.
“Secured
Swap Agreement”
means
any swap agreement, cap, floor, collar, forward agreement or other exchange
or
protection agreements relating to crude oil, natural gas or other hydrocarbons
or interest rates or currencies between the Borrower or any Affiliate of the
Borrower and any Lender or any Affiliate (as defined in the Credit Agreement)
of
any Lender while such Person (or, in the case of an Affiliate of a Lender,
the
Person affiliated therewith) is a Lender, including any such agreement between
such Persons in existence prior to the date hereof. For the avoidance of doubt,
an agreement ceases to be a Secured Swap Agreement if the Person that is the
counterparty to the Borrower or a Subsidiary of the Borrower under such
agreement ceases to be a Lender under the Credit Agreement (or, in the case
of
an Affiliate of a Lender, the Person affiliated therewith ceases to be a Lender
under the Credit Agreement).
“Uniform
Commercial Code”
means
the Uniform Commercial Code as from time to time in effect in the State of
Texas; provided, however, that, in the event that, by reason of mandatory
provisions of law, any of the attachment, perfection or priority of the Secured
Party’s security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of Texas,
the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection, the effect thereof or priority and for purposes
of definitions related to such provisions.
Section
1.02 Terms
Generally; Rules of Construction.
The
definitions of terms herein shall apply equally to the singular and plural
forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise:
i)
any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to
any
restrictions on such amendments, supplements or modifications set forth herein
or in the Secured Documents); ii)
any
reference herein to any law shall be construed as referring to such law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time; iii)
any
reference herein to any Person shall be construed to include such Person’s
successors and assigns (subject to the restrictions contained herein);
iv)
the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof; v)
with
respect to the determination of any time period, the word “from” means “from and
including” and the word “to” means “to and including” and vi)
any
reference herein to Articles, Sections or Exhibits shall be construed to refer
to Articles and Sections of, or Exhibits to, this Agreement. No provision of
this Agreement or any other Secured Document shall be interpreted or construed
against any Person solely because such Person or its legal representative
drafted such provision. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance
with
any other covenant, and where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such
Person. Whenever pursuant to this Agreement, the Secured Party exercises any
right given to it to approve or disapprove, or any arrangement or term is to
be
satisfactory to the Secured Party, the decision of the Secured Party to approve
or disapprove or to decide whether arrangements or terms are satisfactory or
unsatisfactory shall (except as otherwise specifically herein provided) be
in
the sole discretion of the Secured Party and shall be final and
conclusive.
3
ARTICLE
II
GRANT
OF SECURITY INTEREST
Section
2.01 Grant
of Security Interest.
As
collateral security for the prompt and complete payment and performance when
due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations, the Debtor hereby pledges, assigns and transfers to the Secured
Party, and hereby grants to the Secured Party, a first priority continuing
security interest in, lien on and right of setoff against, all of the following
Property, wherever located, whether now owned or at any time hereafter acquired
by the Debtor or in which the Debtor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Collateral”):
(a) the
Pledged Securities;
(b) all
books
and records pertaining to the Pledged Securities; and
(c) to
the
extent not otherwise included, all proceeds and products of any and all of
the
foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing.
Section
2.02 Transfer
of Pledged Securities.
All
certificates or instruments representing or evidencing the Pledged Securities,
if any, shall be delivered to and held pursuant hereto by the Secured Party
or a
Person designated by the Secured Party and shall be duly endorsed in blank
and
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, and accompanied by
any
required transfer tax stamps to effect the pledge of the Pledged Securities
to
the Secured Party. Notwithstanding the preceding sentence, at the Secured
Party’s discretion and at the Debtor’s sole cost and expense, all Pledged
Securities must be delivered or transferred in such manner as to permit the
Secured Party to have “control” of the Pledged Securities under Section 8.106
and Section 9.106 of the Uniform Commercial Code and to be a “protected
purchaser” to the extent of the Debtor’s security interest as provided in
Section 8.303 of the Uniform Commercial Code (if the Secured Party otherwise
qualifies as a protected purchaser). During the continuance of an Event of
Default, the Secured Party shall have the right, at any time in its discretion
and without notice, to transfer to or to register in the name of the Secured
Party or any of its nominees any or all of the Pledged Securities. In addition,
during the continuance of an Event of Default, the Secured Party shall have
the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Securities for certificates or instruments of smaller or
larger denominations.
4
Section
2.03 Authorization
to File Financing Statements.
The
Debtor hereby irrevocably authorizes the Secured Party at any time and from
time
to time to file in any filing office in any relevant jurisdiction any financing
statements and amendments thereto indicating the Collateral in such form as
may
be required by the Secured Party (including any information required by part
5
of Article 9 of the Uniform Commercial Code). The Debtor agrees to furnish
any
information requested by the Secured Party for such purposes promptly upon
the
Secured Party’s request. The Debtor also ratifies its authorization for the
Secured Party to have filed in any relevant jurisdiction any like initial
financing statements or amendments thereto if filed prior to the date
hereof.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
The
Debtor hereby unconditionally represents and warrants to the Secured Party,
as
of the date hereof and at all times during the terms of this Agreement, as
follows:
Section
3.01 Pledged
Securities; Title; No Other Liens; Etc.
The
Debtor is a member of the Borrower and the Pledged Securities pledged by the
Debtor hereunder constitute that percentage of all of the issued and outstanding
membership interest of any class of Equity Interests of the Borrower as set
forth on Exhibit
A.
Except
for the security interest granted to the Secured Party pursuant to this
Agreement, the Debtor is the record and beneficial owner of, and has good title
to, the Pledged Securities free and clear of any and all Liens, options,
warrants, puts, calls or other rights of third Persons, and restrictions or
options in favor of, or claims of, any other Person, and has full right and
authority to pledge the Pledged Securities for the purposes and upon the terms
set out herein and the power to transfer the Pledged Securities, free and clear
of any Lien. The performance by the Debtor of its obligations hereunder will
not
result in the creation of any security interest or lien on any Collateral other
than the security interest and lien granted hereunder. No financing statement
or
other public notice with respect to all or any part of the Collateral is on
file
or of record in any public office, except such as have been filed in favor
of
the Secured Party pursuant to this Agreement. All of the Pledged Securities
have
been duly and validly issued and are fully paid and nonassessable, and all
documentary, stamp or other taxes or fees owing in connection with the issuance,
transfer and/or pledge thereof hereunder have been paid. No dispute, right
of
setoff, counterclaim or defense exists with respect to all or any part of the
Pledged Securities. There are no restrictions on transfer (that have not been
waived or otherwise consented to) in any limited liability company agreement,
partnership agreement, regulations, stockholders’ agreement or other agreement
or document governing the Pledged Securities or any other agreement relating
thereto which would limit or restrict vii)
the
grant of a security interest in the Pledged Securities; viii)
the
perfection of such security interest or ix)
the
exercise of remedies in respect of such perfected security interest in the
Pledged Securities; in each case, as contemplated by this Agreement. Upon the
exercise of remedies in respect of the Pledged Securities, a transferee or
assignee of the Pledged Securities, shall become a member of the
Debtor.
Section
3.02 Perfected
First Priority Liens.
The
security interests granted pursuant to this Agreement x)
upon the
proper filing of a financing statement describing the Collateral and the
delivery of the Pledged Securities consisting of certificated securities, if
any, to the Secured Party, properly endorsed for transfer in blank, shall
constitute valid perfected security interests in all of the Collateral in favor
of the Secured Party as collateral security for
the
Obligations, enforceable in accordance with the terms hereof against all
creditors of the Debtor and any Persons purporting to purchase any Collateral
from the Debtor and xi)
are
prior to all other Liens on the Collateral.
5
Section
3.03 Solvency.
The
Debtor xii)
is not
insolvent as of the date hereof and will not be rendered insolvent as a result
of this Agreement; xiii)
is not
engaged in business or a transaction, or about to engage in a business or a
transaction, for which any Property remaining with it constitute unreasonably
small capital and xiv)
does not
intend to incur, or believe it will incur, debt that will be beyond its ability
to pay as such debt matures.
Section
3.04 Debtor
Information.
The
Debtor’s jurisdiction of formation is Texas; the name of the Debtor as listed in
the public records of its jurisdiction of formation is Crosspoint Energy, LLC
and the organizational identification number of the Debtor in its jurisdiction
of formation is 800409283. The Debtor’s principal place of business and chief
executive offices are located at the following address 0000 Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000. The Debtor has not used any other name or trade
name since September 1, 1999.
Section
3.05 No
Other Property.
The
Debtor owns no Property other that the Pledged Securities pledged hereunder
and
such interests derived from such Pledged Securities.
Section
3.06 Organization.
The
Debtor is duly formed, validly existing and in good standing under the laws
of
the State of Texas, has all requisite limited liability company power and
authority, and has all material governmental licenses, authorizations, consents
and approvals necessary, to own its assets and to carry on its business as
now
conducted, and is qualified to do business in, and is in good standing in,
every
jurisdiction where such qualification is required.
Section
3.07 Authority;
Enforceability.
The
execution, delivery and performance of this Agreement are within the Debtor’s
power and authority. Each Loan Document to which the Debtor is a party has
been
duly executed and delivered by the Debtor and constitutes a legal, valid and
binding obligation of the Debtor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
Section
3.08 Approvals;
No Conflicts.
The
execution, delivery and performance of this Agreement by the Debtor xv)
does not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other third Person, nor is any
such
consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document to which the Debtor is a party
or the consummation of the transactions contemplated thereby, except such as
have been obtained or made and are in full force and effect other than the
recording and filing of the financing statements as required by this Agreement,
xvi)
will not
violate any applicable law or regulation or any order of any Governmental
Authority, xvii)
will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Debtor or the Debtor’s Properties, or give rise to a
right thereunder to require any payment to be made by the Debtor and
xviii)
will not
result in the creation or imposition of any Lien on any Property of the Debtor
(other than the Liens created by the Loan Documents).
6
ARTICLE
IV
AFFIRMATIVE
COVENANTS
The
Debtor hereby unconditionally covenants and agrees with the Secured Party,
until
the entire Obligations shall have been paid in full as follows:
Section
4.01 Maintenance
of Perfected Security Interest; Further Documentation.
(a) The
Debtor shall maintain the security interest and lien created by this Agreement
as a perfected security interest and lien having at least the priority described
in Section
3.02;
(b) The
Debtor shall promptly give notice to the Secured Party of, and shall defend
against, any suit, action, proceeding or lien that involves the Collateral
or
that could adversely affect the security interest and lien granted by it
hereunder, and the Debtor shall defend the security interest and lien created
by
this Agreement against the claims and demands of all Persons whomsoever;
and
(c) The
Debtor will furnish to the Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may request,
all
in reasonable detail.
Section
4.02 Delivery
of Documents and Information Related to Collateral
.
Upon
receipt by the Debtor of any material notice, report, or other communication
from the Borrower relating to all or any part of the Collateral (including
any
such notice, report or other communication given by Debtor), the Debtor shall
deliver such notice, report or other communication to the Secured Party as
soon
as possible, but in no event later than three (3) days following the receipt
or
delivery thereof by the Debtor.
Section
4.03 Further
Assurances.
At any
time and from time to time, upon the request of the Secured Party, and at the
sole expense of the Debtor, the Debtor will promptly and duly give, execute,
deliver, indorse, file or record any and all financing statements, continuation
statements, amendments, notices (including, without limitation, notifications
to
financial institutions and any other Person), contracts, agreements,
assignments, certificates, or other instruments, obtain any and all governmental
or third party approvals and consents, perform or cause to be performed any
and
all further acts and provide such further assurances as may be necessary,
desirable, advisable or proper, in the Secured Party’s opinion, to carry out
more effectively the purposes and intents of this Agreement or to create,
perfect, establish the priority of, or to preserve the validity, perfection
or
priority of, the security interest granted by this Agreement, or to enable
the
Secured Party to enforce its rights, remedies, powers and privileges under
the
Secured Documents or with respect to such security interest or to otherwise
obtain or preserve the full benefits of this Agreement and the other Secured
Documents and the rights, powers and privileges therein granted. Without
limiting the obligations of the Debtor under this Section
4.03
or under
any other provision of this Agreement, upon the request of the Secured Party,
the Debtor shall take or cause to be taken all actions requested by the Secured
Party to: xix)
correct
any defect, error, or omission which may be discovered in the contents of the
Secured Documents or in the execution or acknowledgment thereof; xx)
cause
the Secured Party to have “control” (within the meaning of Sections 8.106, 9.104
and 9.106 of the Uniform Commercial Code) over any deposit accounts or
investment property, including, without limitation, executing and delivering
any
agreements, in form and substance satisfactory to the Secured Party, with
securities intermediaries, issuers or other Persons in order to establish
“control”; xxi)
with
respect to any certificated or uncertificated securities cause the Secured
Party
to be a “protected purchaser” (as defined in Section 8.303 of the Uniform
Commercial Code); xxii)
comply
with any provision of any statute, regulation or treaty of the United States
as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of the Secured Party to
enforce, the Secured Party’s security interest hereunder; xxiii)
obtain
governmental and other third party waivers, consents and approvals in form
and
substance satisfactory to the Secured Party, including, without limitation,
any
consent of any Person obligated on the Collateral and xxiv)
take all
actions under any earlier versions of the Uniform Commercial Code or under
any
other law, as reasonably determined by the Secured Party to be applicable in
any
relevant Uniform Commercial Code or other jurisdiction. This Section
4.03
and the
obligations imposed on the Debtor by this Section
4.03
shall be
interpreted as broadly as possible in favor of the Secured Party in order to
effectuate the purpose and intent of this Agreement.
7
ARTICLE
V
NEGATIVE
COVENANTS
Section
5.01 Restrictions
on Sales and other Dispositions.
The
Debtor shall not sell, assign, convey, transfer, redeem, exchange, substitute,
replace or otherwise dispose of or abandon all or any part of the Collateral
without the prior written consent of the Secured Party.
Section
5.02 Negative
Pledge.
Except
pursuant to this Agreement, the Debtor will not xxv)
create,
incur or permit to exist any lien or security interest in, or option in favor
of, or any claim of any Person with respect to, the Collateral or any part
thereof or upon any income therefrom or any proceeds thereon without the prior
written consent of the Secured Party or xxvi)
enter
into any agreement or undertaking restricting the right or ability of the Debtor
or the Secured Party to sell, assign or transfer any of the
Collateral.
Section
5.03 Impairment
of Security Interest.
The
Debtor will not take or fail to take any action which would in any manner impair
the enforceability or priority of the Secured Party’s security interest in any
Collateral, impair the Collateral or the rights, remedies, powers and privileges
conferred on the Secured Party or any other Secured Creditor pursuant to this
Agreement or by operation of law or otherwise. Without limitation of the
foregoing sentence, no vote shall be cast, consent given or right exercised
or
other action taken by the Debtor that would impair the Collateral, be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document or, without the prior
consent of the Secured Party and the Lenders, enable or permit the Debtor or
the
Borrower to issue any Equity Interest or to issue any other securities
convertible into or granting the right to purchase or exchange for any Equity
Interest of the Debtor or the Borrower other than as permitted by the Credit
Agreement.
8
Section
5.04 Acquisitions;
Loans; Debt; Guarantees .
The
Debtor will not xxvii)
acquire
(whether for cash, Property, services or securities or otherwise) any Property
from any Person, xxviii)
make any
loan or extension of credit to any other Person, xxix)
incur,
create, assume or suffer to exist any Debt (as defined in the Credit Agreement)
other than Debt arising in its capacity as the sole member of the Borrower,
or
xxx)
enter
into any guarantee of, or other contingent obligation with respect to, any
debt,
obligation or other liability of any other Person.
Section
5.05 Nature
of Business; Mergers, Etc.
The
Debtor will not engage in any business or undertaking other than acting as
the
sole member of the Borrower and the ownership of the Equity Interest in Dallas
Operating Corp. The Debtor will not merge into or with or consolidate with
any
other Person, or sell, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) any of its Property to any other Person. Except
as approved by the Secured Party in writing, the Debtor shall not xxxi)
issue
any additional Equity Interests in the Borrower or xxxii)
permit
the Borrower to issue any additional Equity Interests.
Section
5.06 Debtor’s
Legal Status.
Without
providing at least thirty (30) days prior written notice to the Secured Party,
the Debtor will not (a) change its name or its organizational identification
number, and (b) change its type of organization, jurisdiction of organization
or
other legal structure without the prior written consent of the Secured Party.
The Debtor will not change its principal office or chief executive office
without giving the Secured Party at least thirty (30) days prior written notice
thereof.
ARTICLE
VI
EVENTS
OF DEFAULT
Section
6.01 Events
of
Default.
One or
more of the following events or circumstances shall constitute an “Event of
Default” hereunder:
(a) an
“Event
of Default” under the Credit Agreement shall occur and be continuing;
or
(b) The
Debtor shall fail to pay any amount hereunder or under any other Secured
Document to which it is a party when and as the same shall become due and
payable; or
(c) any
representation or warranty made or deemed made by or on behalf of the Debtor
in
or in connection with any Secured Document or any amendment or modification
of
any Secured Document or waiver under such Secured Document, or in any report,
certificate, financial statement or other document furnished pursuant to or
in
connection with any Secured Document or any amendment or modification thereof
or
waiver thereunder, shall prove to have been incorrect when made or deemed made;
or
(d) The
Debtor shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clauses (a), (b)
and
(c) of this definition) or any other Secured Document, and such failure shall
continue unremedied for a period of 30 days after the earlier to occur of
(1)
notice
thereof from the Secured Party or (2)
the
Debtor otherwise becoming aware of such default; or
9
(e) The
Debtor shall (3)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect; (4)
consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in Section
6.01(f);
(5)
apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Debtor or for a
substantial part of its assets; (6)
file an
answer admitting the material allegations of a petition filed against it in
any
such proceeding; (7)
make a
general assignment for the benefit of creditors or (8)
take any
action for the purpose of effecting any of the foregoing; or
(f) an
involuntary proceeding shall be commenced or an involuntary petition shall
be
filed seeking (9)
liquidation, reorganization or other relief in respect of the Debtor or its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in
effect or (10)
the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Debtor or for a substantial part of its assets, and,
in
any such case, such proceeding or petition shall continue undismissed for three
days or an order or decree approving or ordering any of the foregoing shall
be
entered.
ARTICLE
VII
RIGHTS
AND REMEDIES
Section
7.01 Rights
and Remedies.
(a) Upon
the
occurrence and during the continuance of an Event of Default, the Secured Party
may exercise, in addition to all other rights and remedies granted to it in
the
Secured Documents and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party
under
the Uniform Commercial Code or any other applicable law or otherwise available
at law or equity. Without limiting the generality of the foregoing, the Secured
Party, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Debtor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Secured Party or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or
on
credit or for future delivery without assumption of any credit risk. The Secured
Party and any other Secured Creditor shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral, and
any
such Person purchasing at any such sale shall have the right to credit upon
the
amount of the bid made therefor, to the extent necessary to satisfy such bid,
the Obligations owing to such Person, or if such Person holds less than all
of
the Obligations, the pro rata part thereof owing to such Person, accounting
to
all other Persons not joining in such bid in cash for the portion of such bid
or
bids apportionable to such non-bidding Persons.
It
shall not be necessary that the Secured Party take possession of the Collateral
or any part thereof, prior to the time that any sale pursuant to the provisions
of this Section
7.01(a)
is
conducted, and it shall not be necessary that the Collateral or any part thereof
be present at the location of such sale. If applicable to any particular item
of
Collateral, the Debtor further agrees, at the Secured Party’s request, to
assemble the Collateral and make it available to the Secured Party at places
which the Secured Party shall reasonably select, whether at the Debtor’s
premises or elsewhere. Any such sale or transfer by the Secured Party either
to
itself, any other Secured Creditor or to any other Person shall be absolutely
free from any claim of right by the Debtor, including any equity or right of
redemption, stay or appraisal which the Debtor has or may have under any rule
of
law, regulation or statute now existing or hereafter adopted (and the Debtor
hereby waives any rights it may have in respect thereof). Upon any such sale
or
transfer, the Secured Party shall have the right to deliver, assign and transfer
to the purchaser or transferee thereof the Collateral so sold or transferred.
Any and all statements of fact or other recitals made in any xxxx of sale or
assignment or other instrument evidencing any foreclosure sale hereunder, the
nonpayment of the Obligations, the occurrence of any Event of Default, the
Secured Creditors having declared all or a portion of such Obligations to be
due
and payable, the notice of time, place, and terms of sale and of the Properties
to be sold having been duly given, or any other act or thing having been duly
done by the Secured Party, shall be taken as prima facie evidence of the truth
of the facts so stated and recited.
10
(b) The
Secured Party shall apply the net proceeds of any action taken by it pursuant
to
this Section
7.01(a)
or
elsewhere herein if so specified, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith or incidental to the
care, retaking, holding, preparing for sale, lease or other disposition, or
the
sale, lease or other disposition, of the Collateral, or in any way relating
to
the Collateral, the collection of the Obligations, or the enforcement of the
rights of the Secured Party hereunder and under the other Loan Documents,
including, without limitation, reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Obligations in accordance with Section
11.02 of the Credit Agreement. To the extent permitted by applicable law, the
Debtor waives all claims, damages and demands it may acquire against the Secured
Party or any other Secured Creditor arising out of the exercise by any them
of
any rights hereunder. If any notice of a proposed sale or other disposition
of
Collateral shall be required by law, then the Debtor hereby acknowledges and
agrees that ten (10) days prior written notice of such sale or disposition
shall
be reasonable notice. In addition, the Debtor waives any and all rights that
it
may have to a judicial hearing in advance of the enforcement of any of the
Secured Party’s rights and remedies hereunder, including, without limitation,
its right following an Event of Default to take immediate possession of the
Collateral and to exercise its rights and remedies with respect
thereto.
(c) In
the
event that the Secured Party elects not to sell the Collateral, the 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 Agreement shall
constitute disposition in a commercially reasonable manner.
(d) [Intentionally
left Blank.]
(e) The
Secured Party may appoint any Person as agent to perform any act or acts
necessary or incident to any sale or transfer of the Collateral.
11
Section
7.02 Pledged
Securities.
(a) Unless
an
Event of Default shall have occurred and be continuing and Secured Party shall
have given notice to the Debtor of the Secured Party’s intent to exercise its
corresponding rights pursuant to Section
7.02(b),
the
Debtor shall be permitted to receive all cash distributions paid in respect
of
the Pledged Securities paid in the normal course of business of the Borrower
and
to exercise all voting, consent and membership rights with respect to the
Pledged Securities.
(b) Upon
the
occurrence and during the continuance of an Event of Default, upon notice by
the
Secured Party of its intent to exercise such rights to the Debtor, (11)
the
Secured Party shall have the right to receive any and all cash distributions,
payments, Property or other Proceeds paid in respect of the Pledged Securities
and make application thereof to the Obligations; (12)
any or
all of the Pledged Securities shall be registered in the name of the Secured
Party or its nominee and (13)
the
Secured Party or its nominee may exercise i.ii.(A)
all
voting, consent, membership and other rights pertaining to such Pledged
Securities at any meeting of Members of the Borrower or otherwise and (B) any
and all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange
at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change
in
the organizational structure of the Borrower, or upon the exercise by the Debtor
or the Secured Party of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Secured Party may determine), all without liability except
to
account for Property actually received by it, but the Secured Party shall have
no duty to the Debtor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(c) In
order
to permit the Secured Party to exercise the voting and other consensual rights
that it may be entitled to exercise pursuant hereto and to receive all income
and other distributions that it may be entitled to receive hereunder,
(14)
the
Debtor shall promptly execute and deliver (or cause to be executed and
delivered) to the Secured Party all such proxies, dividend payment orders and
other instruments as the Secured Party may from time to time reasonably request
and (15)
without
limiting the effect of clause (i) above, the Debtor hereby grants to the Secured
Party an irrevocable proxy to vote all or any part of the Pledged Securities
and
to exercise all other rights, powers, privileges and remedies to which a holder
of the Pledged Securities would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case
may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Securities on the record books of the Borrower or the Debtor) by any other
Person (including the Debtor, Borrower or any officer or agent thereof), in
each
case upon the occurrence and during the continuance of an Event of Default
and
which proxy shall only terminate upon the payment in full in cash of all
Obligations and the termination of this Agreement.
12
(d) The
Debtor hereby authorizes and instructs the Borrower to (16)
comply
with any instruction received by it from the Secured Party in writing that
(A)
states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other
or
further instructions from the Debtor, and the Debtor agrees that the Borrower
shall be fully protected in so complying, and (17)
unless
otherwise expressly provided herein, pay any dividends or other payments with
respect to the Pledged Securities directly to the Secured Party.
(e) Upon
the
occurrence and during the continuance of an Event of Default, if the Borrower
is
the subject of bankruptcy, insolvency, receivership, custodianship or other
proceedings under the supervision of any governmental authority, then all rights
of the Debtor in respect thereof to exercise the voting and other consensual
rights which the Debtor would otherwise be entitled to exercise with respect
to
the Pledged Securities issued by the Borrower shall cease, and all such rights
shall thereupon become vested in the Secured Party who shall thereupon have
the
sole right to exercise such voting and other consensual rights, but the 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.
Section
7.03 Private
Sales of Pledged Securities.
(a) The
Debtor recognizes that the Secured Party may be unable to effect a public sale
of any or all the Pledged Securities, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise or may determine that a public sale is impracticable or not
commercially reasonable and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own account
for
investment and not with a view to the distribution or resale thereof. The Debtor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall
be
deemed to have been made in a commercially reasonable manner. The Secured Party
shall be under no obligation to delay a sale of any of the Pledged Securities
for the period of time necessary to permit the Debtor or the Borrower to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the Debtor or the Borrower would
agree
to do so.
(b) The
Debtor agrees to use its best efforts to do or cause to be done all such other
acts as may reasonably be necessary to make such sale or sales of all or any
portion of the Pledged Securities pursuant to this Section
7.03
valid
and binding and in compliance with any and all other applicable governmental
requirements. The Debtor further agrees that a breach of any of the covenants
contained in this Section
7.03
will
cause irreparable injury to the Secured Party that the Secured Party has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section
7.03
shall be
specifically enforceable against the Debtor, and the Debtor hereby waives and
agrees not to assert any defenses against an action for specific performance
of
such covenants except for a defense that no Event of Default has
occurred.
13
Section
7.04 Setoff.
Regardless of the adequacy of Collateral or any other security for the
Obligations, if an Event of Default shall have occurred and be continuing,
then
the Secured Party and the other Secured Creditors are hereby authorized at
any
time and from time to time, to the fullest extent permitted by law, to set
off
and apply any and all deposits or other sums at any time credited or held by
or
due from, and other obligations (of whatsoever kind) at any time owing by,
the
Secured Party or the Secured Creditors to or for the credit or the account
of
the Debtor against any of and all the obligations of the Debtor owed to the
Secured Party or the Secured Creditors now or hereafter existing under this
Agreement, irrespective of whether or not the Secured Party or any other Secured
Creditor shall have made any demand under this Agreement and although such
obligations may be unmatured.
Section
7.05 Notification
to Account Debtors and Other Persons Obligated on Collateral.
If an
Event of Default shall have occurred and be continuing, then the Debtor shall,
at the request and option of the Secured Party, notify account debtors and
other
Persons obligated on any of the Collateral of the security interest of the
Secured Party in any account, as-extracted collateral, chattel paper, general
intangible, instrument or other Collateral and that payment thereof is to be
made directly to the Secured Party or to any financial institution designated
by
the Secured Party as the Secured Party’s agent therefor, and the Secured Party
may itself, if an Event of Default shall have occurred and be continuing,
without notice to or demand upon the Debtor, so notify account debtors and
other
Persons obligated on Collateral. After the making of such a request or the
giving of any such notification, the Debtor shall hold any proceeds of
collection of accounts, as-extracted collateral, chattel paper, general
intangibles, instruments and other Collateral received by the Debtor as trustee
for the Secured Party without commingling the same with other funds of the
Debtor and shall turn the same over to the Secured Party in the identical form
received, together with any necessary endorsements or assignments. The Secured
Party shall apply the proceeds of collection of accounts, as-extracted
collateral, chattel paper, general intangibles, instruments and other Collateral
received by the Secured Party to the Obligations in accordance with Section
7.01(b),
such
proceeds to be immediately credited after final payment in cash or other
immediately available funds of the items giving rise to them.
Section
7.06 Standards
for Exercising Rights and Remedies.
To the
extent that applicable law imposes duties on the Secured Party to exercise
remedies in a commercially reasonable manner, the Debtor acknowledges and agrees
that it is not commercially unreasonable for the Secured Party: xxxiii)
to fail
to incur expenses reasonably deemed significant by the Secured Party to prepare
Collateral for disposition or otherwise to fail to complete raw material or
work
in process into finished goods or other finished products for disposition;
xxxiv)
to fail
to obtain third party consents for access to Collateral to be disposed of,
or to
obtain or, if not required by other law, to fail to obtain governmental or
third
party consents for the collection or disposition of Collateral to be collected
or disposed of; xxxv)
to fail
to exercise collection remedies against account debtors or other Persons
obligated on Collateral or to fail to remove liens or encumbrances on or any
adverse claims against Collateral; xxxvi)
to
exercise collection remedies against account debtors and other Persons obligated
on Collateral directly or through the use of collection agencies and other
collection specialists; xxxvii)
to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature;
xxxviii)
to
contact other Persons, whether or not in the same business as the Debtor, for
expressions of interest in acquiring all or any portion of the Collateral;
xxxix)
to hire
one or more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature; xl)
to
dispose of Collateral by utilizing Internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets; xli)
to
dispose of assets in wholesale rather than retail markets; xlii)
to
disclaim disposition warranties; xliii)
to
purchase insurance or credit enhancements to insure the Secured Party against
risks of loss, collection or disposition of Collateral or to provide to the
Secured Party a guaranteed return from the collection or disposition of
Collateral or xliv)
to the
extent deemed appropriate by the Secured Party, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist
the
Secured Party in the collection or disposition of any of the Collateral. The
Debtor acknowledges that the purpose of this Section
7.06
is to
provide non-exhaustive indications of what actions or omissions by the Secured
Party would fulfill the Secured Party’s duties under the Uniform Commercial Code
or other law or any other relevant jurisdiction in the Secured Party’s exercise
of remedies against the Collateral and that other actions or omissions by the
Secured Party shall not be deemed to fail to fulfill such duties solely on
account of not being indicated in this Section
7.06.
Without
limitation upon the foregoing, nothing contained in this Section
7.06
shall be
construed to grant any rights to the Debtor or to impose any duties on the
Secured Party that would not have been granted or imposed by this Agreement
or
by applicable law in the absence of this Section
7.06.
14
Section
7.07 No
Retention in Satisfaction.
Except
as may be expressly applicable pursuant to Section 9.620
of the
Uniform Commercial Code, no action taken or omission to act by the Secured
Party
or the Secured Creditors hereunder, including, without limitation, any exercise
of voting or consensual rights or any other action taken or inaction, 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 the Secured Party
and
the Secured Creditors shall have applied payments (including, without
limitation, collections from Collateral) towards the payment in full of the
Obligations.
Section
7.08 Performance
by Secured Party.
If the
Debtor fails to perform or comply with any of its agreements contained herein
within the applicable grace periods, the Secured Party, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement. In addition, in the Secured
Party’s discretion, if the Debtor fails to do so, the Secured Party may
discharge taxes and other encumbrances at any time levied or placed on any
of
the Collateral, maintain any of the Collateral, make repairs thereto and pay
any
necessary filing fees or insurance premiums. The Debtor agrees to reimburse
the
Secured Party on demand for all expenditures so made. The Secured Party shall
have no obligation to the Debtor to make any such expenditures, nor shall the
making thereof be construed as the waiver or cure of any Default or Event of
Default.
Section
7.09 Secured
Party’s Appointment as Attorney-in-Fact, Etc.
(a) The
Debtor hereby irrevocably constitutes and appoints the Secured Party with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Debtor and in
the
name of the Debtor, or in the Secured Party’s own name, for the purpose of
carrying out the terms of this Agreement, to take any and all reasonably
appropriate action and to execute any and all documents and instruments which
may be reasonably necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, the Debtor
hereby gives the Secured Party the power and right, on behalf of the Debtor,
without notice to or assent by the Debtor, to do any or all of the
following:
15
(i) pay
or
discharge taxes and liens levied or placed on or threatened against the
Collateral;
(ii) execute,
in connection with any sale provided for herein, any endorsements, assignments
or other instruments of conveyance or transfer with respect to the Collateral;
and
(iii) (A)
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Secured Party or as the Secured Party shall direct; (B) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims
and
other amounts due or to become due at any time in respect of or arising out
of
any Collateral; (C) in the name of the Debtor or its own name, or otherwise,
take possession of and indorse and collect any check, draft, note, acceptance
or
other instrument for the payment of moneys due with respect to any Collateral
and commence and prosecute any suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (D) in
the
name of the Debtor or in its own name, exercise all rights, powers, privileges
and remedies to which the Debtor would be entitled as the owner of the
Collateral; (E) defend any suit, action or proceeding brought against the Debtor
with respect to any Collateral; (F) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Secured Party may deem appropriate; (G) arrange for the transfer
of the Collateral on the books of the issuer or any other Person to the name
of
the Secured Party or to the name of the Secured Party’s nominee; (H) file and
prosecute registration and transfer applications with the appropriate federal,
state, local or other agencies or authorities with respect to trademarks,
copyrights and patentable inventions and processes; (I) exercise voting rights
with respect to voting securities; (J) execute, deliver and record in connection
with any sale or other disposition of any Collateral, endorsements, assignments
or other instruments of conveyance or transfer with respect to such Collateral
and (K) generally, sell, transfer, pledge and make any agreement with respect
to
or otherwise deal with any of the Collateral as fully and completely as though
the Secured Party were the absolute owner thereof for all purposes, and do,
at
the Secured Party’s option and the Debtor’s expense, at any time, or from time
to time, all acts and things which the Secured Party deems necessary to protect,
preserve or realize upon the Collateral and the Secured Party’s security
interests therein and to effect the intent of this Agreement, all as fully
and
effectively as the Debtor might do.
(b) The
Debtor hereby ratifies all that said attorneys shall lawfully do or cause to
be
done by virtue and in compliance hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby
are
released.
(c) The
expenses of the Secured Party incurred in connection with actions undertaken
as
provided in this Section
7.09,
shall
be payable by the Debtor to the Secured Party on demand.
16
(D) THE
POWERS CONFERRED ON THE SECURED PARTY HEREUNDER ARE SOLELY TO PROTECT ITS
INTERESTS IN THE COLLATERAL AND SHALL NOT IMPOSE ANY DUTY UPON IT TO EXERCISE
ANY SUCH POWERS.
THE SECURED
PARTY SHALL BE ACCOUNTABLE ONLY FOR THE AMOUNTS THAT IT ACTUALLY RECEIVES AS
A
RESULT OF THE EXERCISE OF SUCH POWERS, AND NEITHER IT NOR ANY OF ITS EMPLOYEES
OR AGENTS SHALL BE RESPONSIBLE TO THE DEBTOR FOR ANY ACT OR FAILURE TO ACT
(INCLUDING FOR SUCH PERSON’S OWN ORDINARY NEGLIGENCE), EXCEPT FOR THE SECURED
PARTY’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Anything
in this Section
7.09
to the
contrary notwithstanding, the Secured Party agrees that it will not exercise
any
rights under the power of attorney provided for in this Section
7.09
unless
an Event of Default shall have occurred and be continuing.
Section
7.10 Waiver.
To the
fullest extent permitted by law, the Debtor hereby irrevocably and
unconditionally waives and releases: xlv)
all
benefits that might accrue to the Debtor by virtue of any present or future
moratorium law or other law exempting the Collateral from attachment, levy
or
sale on execution or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption or extension of time for
payment; xlvi)
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Debtor with respect to the Obligations or notice
of
the Secured Creditors’ intention to accelerate maturity of obligations or of the
Secured Creditors’ election to exercise or their actual exercise of any right,
remedy or recourse provided for hereunder or any other Secured Document and
any
other notice of any kind whatsoever; xlvii)
any
rights, legal and equitable, to a marshalling of assets or a sale in inverse
order of alienation (the Debtor acknowledges and agrees that in exercising
any
rights under or with respect to the Collateral, the Secured Party is under
no
obligation to marshal any Collateral; the Secured Party may, in its absolute
discretion, realize upon the Collateral in any order and in any manner it so
elects and may, in its absolute discretion, apply the proceeds of any or all
the
Collateral to the Obligations in any order and in any manner it so elects);
xlviii)
any
right to require the Secured Party to proceed against any other Person, exhaust
any Collateral or other security for the Obligations, or to have any other
Person liable on the Obligations joined with the Debtor in any suit arising
out
of the Obligations or this Agreement, or pursue any other remedy in the Secured
Party’s power; xlix)
until
all of the Obligations shall have been paid in full in cash, any right to
subrogation and the Debtor waives the right to enforce any remedy which the
Secured Party has or may hereafter have against any other Person liable on
the
Obligations, and waives any benefit of and any right to participate in any
other
security whatsoever now or hereafter held by the Secured Party; l)
any and
all legal rights which might otherwise require the Secured Party to enforce
its
rights by judicial process (it being understood that the Secured Party may
enforce its rights hereunder without prior judicial process or judicial
hearing); li)
and the
Debtor agrees not to assert any rights or privileges which it may acquire under
the Uniform Commercial Code, any analogous common law rights or privileges
or
any other applicable law; lii)
the
right to plead any and all statutes of limitation as a defense to any demand
secured by or made pursuant to this Agreement; liii)
all
claims, damages and demands it may acquire against the Secured Creditors arising
out of the exercise by them of any rights hereunder; liv)
any
notice of or proof of reliance by the Secured Party or any Person upon the
provision of collateral contemplated hereby or acceptance of the provision
of
collateral contemplated hereby; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the provision of collateral
contemplated hereby and no notice of creation of the Obligations or any
extension of credit already or hereafter contracted by or extended to the Debtor
or any other Person need be given to the Debtor; lv)
any and
all notice of the creation, accrual, modification, rearrangement, renewal or
extension for any period of any of the Obligations of any other Person liable
on
the Obligations from time to time and lvi)
any
defense arising by reason of any disability or other defense of any other Person
or by reason of the cessation from any cause whatsoever of the liability of
any
other Person. If any law referred to in this Agreement and now in force, of
which the Debtor or its successor or successors might take advantage despite
the
provisions hereof, shall hereafter be repealed or cease to be in force, such
law
shall thereafter be deemed not to constitute any part of the contract herein
contained or to preclude the operation or application of the provisions
hereof.
17
Section
7.11 No
Release.
Neither
the Debtor nor any other Person hereafter obligated for payment of all or any
part of the Obligations shall be relieved of such obligation by reason of:
lvii)
the
failure of the Secured Party or any other Secured Creditor to comply with any
request of the Debtor or any other Person so obligated to foreclose the security
interest and lien of the Collateral or to enforce any provision hereunder or
under any other Secured Document; lviii)
the
release, regardless of consideration, of the Collateral or any portion thereof
or interest therein or the addition of any other Property to the Collateral
or
the release of any other collateral or credit support arrangement securing
the
Obligations; lix)
the
release, regardless of consideration, of any party liable, either directly
or
indirectly, for the Obligations or for any covenant herein or in any other
Secured Document; lx)
any
agreement or stipulation between any subsequent owner of the Collateral and
the
Secured Party or any other Secured Creditor extending, renewing, rearranging
or
in any other way modifying the terms of this Agreement without first having
obtained the consent of, given notice to or paid any consideration to the Debtor
or such other Person, and in such event the Debtor, all guarantors and all
such
other Persons shall continue to be liable to make payment according to the
terms
of any such extension or modification agreement unless expressly released and
discharged in writing by the Secured Party; or lxi)
by any
other act or occurrence save and except the complete payment of the Obligations
and the complete fulfillment of all obligations hereunder and under the Secured
Documents. The Debtor authorizes the Secured Party and each other Secured
Creditor, without notice or demand and without any reservation of rights against
the Debtor and without affecting the Debtor’s liability hereunder or on the
Obligations, and without impairing the security interest and lien and rights
of
the Secured Party or the other Secured Creditors hereunder, from time to time
to
(1)
take or
hold any other Property of any type from any other Person as security for the
Obligations, and exchange, enforce, waive and release any or all of such other
Property; (2)
apply
the Collateral or such other Property and direct the order or manner of sale
thereof as the Secured Party may in its discretion determine; (3)
renew,
extend for any period, accelerate, modify, compromise, settle or release any
of
the obligations of any other Person liable on the Obligations in respect to
any
or all of the Obligations or other security for the Obligations; (4)
waive,
enforce, modify, amend or supplement any of the provisions of any Secured
Document with any Person other than the Debtor and (5)
release
or substitute any other Person liable on the Obligations. The security interest
and lien and other security rights of the Secured Party hereunder shall not
be
impaired by any indulgence, moratorium or release granted by the Secured Party
including, but not limited to, any renewal, extension or modification which
the
Secured Creditors may grant with respect to any of the Obligations, or any
surrender, compromise, release, renewal, extension, exchange or substitution
which the Secured Creditors may grant in respect of the Collateral or any part
thereof or any interest therein, or any release or indulgence granted to any
endorser, guarantor or surety of any of the Obligations. To the maximum extent
permitted by law, all rights of the Secured Party and the other Secured
Creditors, all security interests hereunder, and all obligations of the Debtor
hereunder, shall be absolute and unconditional irrespective of: (A)i.
any lack
of validity or enforceability of any of the Obligations or any other agreement
or instrument relating thereto, including any of the Secured Documents; (B)
any
change in the time, manner or place of payment of, or in any other term of,
all
or any part of the Obligations, or any other amendment or waiver of or any
consent to any departure from any of the Secured Documents, or any other
agreement or instrument relating thereto; (C) any exchange, release, or
non-perfection of any other collateral, or any release or amendment or waiver
of
or consent to departure from any Secured Document or any guaranty for all or
any
of the Obligations or (D) any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Debtor. Each successor and assign
of the Debtor, including without limitation, a holder of a security interest
or
lien subordinate to the security interest and lien created hereby (without
implying that the Debtor has, except as expressly provided herein, a right
to
grant an interest in, or a subordinate a security interest or lien on, the
Collateral), by acceptance of its interest or lien agrees that it shall be
bound
by the waivers contained herein, as if it gave the waiver itself.
18
Section
7.12 Duty
of Secured Party.
The
Secured Party’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9.207
of
the Uniform Commercial Code or otherwise, shall be to deal with it in the same
manner as the Secured Party deals with similar Property for its own account
and
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. The Secured Party shall not be liable for failure to
demand, collect or realize upon any of the Collateral or for any delay in doing
so or shall be under any obligation to sell, otherwise dispose of, or collect
or
receive payments upon, any Collateral upon the request of the Debtor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. Anything herein to the contrary notwithstanding,
the Debtor shall remain obligated and liable under each contract or agreement
comprised in the Collateral to be observed or performed by the Debtor
thereunder. The Secured Party shall not have any obligation or liability under
any such contract or agreement by reason of or arising out of this Agreement
or
the receipt by the Secured Party of any payment relating to any of the
Collateral, nor shall the Secured Party be obligated in any manner to perform
any of the obligations of the Debtor under or pursuant to any such contract
or
agreement, to make inquiry as to the nature or sufficiency of any payment
received by the Secured Party in respect of the Collateral or as to the
sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled
at
any time or times. THE
POWERS CONFERRED ON THE SECURED PARTY ARE SOLELY TO PROTECT THE SECURED PARTY’S
INTERESTS IN THE COLLATERAL AND SHALL NOT IMPOSE ANY DUTY UPON THE SECURED
PARTY
TO EXERCISE ANY SUCH POWERS. THE SECURED PARTY SHALL BE ACCOUNTABLE ONLY FOR
AMOUNTS THAT IT ACTUALLY RECEIVES AS A RESULT OF THE EXERCISE OF SUCH POWERS,
AND IT SHALL NOT BE RESPONSIBLE TO THE DEBTOR FOR ANY ACT OR FAILURE TO ACT
HEREUNDER, EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
19
Section
7.13 Payment
of Expenses, INDEMNITIES,
Etc.
(a) The
Debtor agrees to pay or reimburse the Secured Party and each other Secured
Creditor for all out-of-pocket expenses incurred by such Person, including
the
fees, charges and disbursements of any counsel for such Person, in connection
with the enforcement or protection of its rights in connection with this
Agreement or any other Loan Document, including, without limitation, all costs
and expenses incurred in connection with (6)
the
custody, use or preservation of, or the sale of, collection from or other
realization upon, any of the Collateral, including the reasonable expenses
of
re-taking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral; (7)
the
exercise or enforcement of any rights or remedies granted hereunder or under
any
of the other document or agreement executed or delivered in connection herewith
or otherwise available to it (whether at law, in equity or otherwise) or
(8)
the
failure by the Debtor to perform or observe any of the provisions hereof or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents.
(b) The
Debtor agrees to pay, and to save the Secured Party and the Secured Creditors
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all Other Taxes which may be payable or determined
to
be payable with respect to any of the Collateral or in connection with any
of
the transactions contemplated by this Agreement.
(C) THE
DEBTOR AGREES TO PAY, AND TO INDEMNIFY AND SAVE THE SECURED PARTY AND THE
SECURED CREDITORS HARMLESS FROM, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE EXECUTION, DELIVERY,
ENFORCEMENT, PERFORMANCE AND ADMINISTRATION OF THIS AGREEMENT TO THE EXTENT
THE
BORROWER WOULD BE REQUIRED TO DO SO PURSUANT TO SECTION 13.03 OF THE CREDIT
AGREEMENT. THE LIABILITIES OF THE DEBTOR AS SET FORTH IN THIS
SECTION
7.13
SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE
OBLIGATIONS.
(d) All
amounts due under this Section
7.13
shall be
payable promptly after written demand therefor.
Section
7.14 Overdue
Amounts.
Until
paid, all amounts due and payable by the Debtor hereunder shall be a debt
secured by the Collateral and shall bear, whether before or after judgment,
interest from and including the due date to but excluding the date of payment
at
the Post Default Rate.
20
ARTICLE
VIII
MISCELLANEOUS
Section
8.01 Notices.
All
notices and other communications provided for herein shall be given in the
manner and subject to the terms of Section 13.01 of the Credit Agreement
(including provisions regarding a change of address or telecopy number of a
party). The address
and telecopy number for notices and communications with respect to the Debtor
is
as follows:
Crosspoint
Energy, LLC
0000
Xxxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxx, President
Telephone:
000.000.0000
Section
8.02 Amendments.
No
amendment, supplement or modification of this Agreement, and no waiver of any
provision of this Agreement or consent to any departure by the Debtor therefrom,
shall in any event be effective unless the same shall be effectuated in
accordance with Section 13.02(b) of the Credit Agreement, and then any such
waiver or consent shall be effective only in the specific instance and for
the
purpose for which given.
Section
8.03 No
Waiver.
No
failure on the part of the Secured Party or any other Secured Creditor to
exercise and no delay in exercising, and no course of dealing with respect
to,
any right, power or privilege, or any abandonment or discontinuance of steps
to
enforce such right, power or privilege, under this Agreement or any other
Secured Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement or any
other Secured Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
Section
8.04 Remedies
Cumulative: Non-Exclusive; Etc.
All
rights, remedies, and recourses of the Secured Party and the other Secured
Creditors granted in the this Agreement and the other Secured Documents and
any
other pledge of collateral, or otherwise available at law or equity:
(9)
shall be
cumulative and concurrent; (10)
may be
pursued separately, successively, or concurrently against the Debtor or others
obligated for payment of the Obligations, or against Collateral or any other
collateral, or any one or more of them, at the sole discretion of the Secured
Party or the Secured Creditors; (11)
may be
exercised as often as occasion therefor shall arise, it being agreed by the
Debtor that the exercise or failure to exercise or the beginning, or the
abandonment, or the delay of any of same, shall in no event be construed as
a
waiver or release thereof or of any other right, remedy, or recourse;
(12)
are
intended to be, and shall be, nonexclusive; (13)
shall
not be conditioned upon the Secured Party or any other Secured Creditor
exercising or pursuing any remedy in relation to the Collateral prior to the
Secured Party or any other Secured Creditor bringing suit to recover the
Obligations and (14)
in the
event the Secured Party or any other Secured Creditor elects to bring suit
on
the Obligations and obtains a judgment against the Debtor prior to the exercise
of any remedies in relation to the Collateral, all liens and security interests,
including the lien and security interest of this Agreement, shall remain in
full
force and effect and may be exercised at the Secured Party’s
option.
21
Section
8.05 Successors
and Assigns.
This
Agreement creates a continuing security interest in the Collateral and the
provisions of this Agreement shall be binding upon the Debtor and its successors
and permitted assigns and shall inure, together with all the rights and remedies
of the Secured Party hereunder, to the benefit of the Secured Party and the
Secured Creditors and their respective successors and assigns; provided that
the
Debtor may not assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Secured Party
and
the Lenders, and any such purported assignment, transfer or delegation shall
be
null and void.
Section
8.06 Severability.
Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision
in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section
8.07 Survival;
Revival; Restatement.
All
covenants, agreements, representations and warranties made by the Debtor herein
and in the certificates (including, without limitation, the Perfection
Certificate) or other instruments delivered in connection with or pursuant
to
this Agreement or any other Loan Document to which it is a party shall be
considered to have been relied upon by the Secured Party and the other Secured
Creditors and shall survive the execution and delivery of this Agreement and
the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Secured Party or any Secured
Creditor may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under the
Credit Agreement is outstanding and unpaid and so long as the Commitments have
not expired or terminated. The provisions of Section
7.13
shall
survive and remain in full force and effect regardless of the consummation
of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Commitments or the termination of this Agreement, any
other Loan Document or any provision hereof or thereof. To the extent that
any
payments on the Obligations or proceeds of any 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 and the Secured Party’s and the Secured
Creditors’ liens, security interests, rights, powers and remedies under this
Agreement and each other Loan Document shall continue in full force and effect.
In such event, each Loan Document shall be automatically reinstated and the
Debtor shall take such action as may be reasonably requested by the Secured
Party or the Secured Creditors to effect such reinstatement.
Section
8.08 Counterparts.
This
Agreement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute a single contract. In making proof
of
this Agreement, it shall not be necessary to produce or account for any
counterpart other than one signed by the party against which enforcement is
sought. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
22
Section
8.09 Acknowledgments.
The
Debtor hereby acknowledges that lxii)
it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Secured Documents to which it is a party; lxiii)
neither
the Secured Party nor any Secured Creditor has any fiduciary relationship with
or duty to the Debtor arising out of or in connection with this Agreement or
any
of the other Loan Documents, and the relationship between the Debtor, on the
one
hand, and the Secured Party and the Secured Creditors, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
lxiv)
no joint
venture is created hereby or by the other Loan Documents or otherwise exists
by
virtue of the transactions contemplated hereby among the Secured Creditors
or
among the Debtor and the Secured Creditors. Each of the parties hereto
specifically agrees that it has a duty to read this Agreement, the Security
Instruments and the other Loan Documents and agrees that it is charged with
notice and knowledge of the terms of this Agreement, the Security Instruments
and the other Loan Documents; that it has in fact read this Agreement, the
Security Instruments and the other Loan Documents and is fully informed and
has
full notice and knowledge of the terms, conditions and effects thereof; that
it
has been represented by independent legal counsel of its choice throughout
the
negotiations preceding its execution of this Agreement and the Security
Instruments; and has received the advice of its attorney in entering into this
Agreement and the Security Instruments; and that it recognizes that certain
of
the terms of this Agreement and the Security Instruments result in one party
assuming the liability inherent in some aspects of the transaction and relieving
the other party of its responsibility for such liability. EACH
PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE SECURITY
INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”
SECTION
8.10 GOVERNING
LAW; CONSENT TO JURISDICTION.
(a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK.
(b) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS LOCATED IN THE BOROUGH
OF MANHATTAN, NEW YORK, NEW YORK, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED
BY
LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
THIS
SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM
OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING
JURISDICTION.
23
(c) EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 13.01 OF THE CREDIT AGREEMENT (OR SUCH OTHER ADDRESS AS
IS
SPECIFIED PURSUANT TO SECTION 13.01 OF THE CREDIT AGREEMENT), AS APPLICABLE,
SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
OR
OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER
JURISDICTION.
(d) EACH
PARTY HEREBY (1)
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW,
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (2)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (3)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR
ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (4)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
Section
8.10.
Section
8.11 ENTIRE
AGREEMENT.
THIS
WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE
ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section
8.12 Relation
to Other Security Instruments.
The
provisions of this Agreement supplement the provisions of any real estate
mortgage or deed of trust, pledge agreement or other Security Instrument granted
by the Debtor to the Secured Party which secures the payment or performance
of
any of the Obligations. Nothing contained in any such real estate mortgage,
deed
of trust, pledge agreement or other Security Instrument shall derogate from
any
of the rights or remedies of the Secured Party hereunder.
24
Section
8.13 Authority
of Secured Party.
The
Debtor acknowledges that the rights and responsibilities of the Secured Party
under this Agreement with respect to any action taken by the Secured Party
or
the exercise or non-exercise by the Secured Party of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting
or
arising out of this Agreement shall, as between the Secured Party and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between
the
Secured Party and the Debtor, the Secured Party shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act
or
refrain from acting, and the Debtor shall be under no obligation, or
entitlement, to make any inquiry respecting such authority.
Section
8.14 Interest
Rate Limitation.
It is
the intention of the parties hereto that each party shall conform strictly
to
usury laws applicable to it. Accordingly, if the transactions contemplated
hereby would be usurious as to any party under laws applicable to it (including
the laws of the United States of America and the State of Texas or New York
or
any other jurisdiction whose laws may be mandatorily applicable to such party
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Secured Documents or
any
agreement entered into in connection with or as security for the Obligations,
it
is agreed as follows: (5)
the
aggregate of all consideration which constitutes interest under law applicable
to any party that is contracted for, taken, reserved, charged or received by
such party under any of the Secured Documents or agreements or otherwise in
connection with the Obligations shall under no circumstances exceed the maximum
amount allowed by such applicable law, and any excess shall be canceled
automatically and if theretofore paid shall be credited by such party on the
principal amount of the Obligations (or, to the extent that the principal amount
of the Obligations shall have been or would thereby be paid in full, refunded
by
such party); and (6)
in the
event that the maturity of the Obligations is accelerated by reason of an
election of the holder thereof resulting from any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest under law applicable to any
party may never include more than the maximum amount allowed by such applicable
law, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically by such party as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by such
party on the principal amount of the Obligations (or, to the extent that the
principal amount of the Obligations shall have been or would thereby be paid
in
full, refunded by such party).
[Remainder
of Page Intentionally Left Blank]
25
IN
WITNESS WHEREOF,
intending to be legally bound, the Debtor has caused this Agreement to be duly
executed as of the date first above written.
| CROSSPOINT ENERGY, LLC | ||
|
By:
|
||
|
Name:
|
Xxxxxx
X. Xxxxxxx
|
|
|
Title:
|
President
|
|
|
Address:
|
0000
Xxxxxxx Xxxxxxxxx
|
|
|
Xxxxx
000
|
||
|
Xxxxxx,
XX 00000
|
||
Signature
Page -
1
EXHIBIT
A
DESCRIPTION
OF PLEDGED SECURITIES
|
Owner
|
Issuer
|
Percentage
Owned
|
Percentage
Pledged
|
Class
of
Equity
Interests
|
|
Crosspoint
Energy, LLC
|
Crosspoint
Energy Holdings, LLC
|
100%
|
100%
|
Membership
Interest
|
Exhibit
A
