PLEDGE AND COLLATERAL AGENCY AGREEMENT
Execution
Version
THIS
PLEDGE AND COLLATERAL AGENCY AGREEMENT (this “Agreement”), is entered into as of
this 26th day of
August, 2010, by and among Colombia Clean Power & Fuels, Inc., a Nevada
corporation (“Colombia”), Colombia CPF LLC, Delaware limited liability company
(“CPF,” and together with Colombia, the “Pledgors”), and Law Debenture Trust
Company of New York, a New York banking corporation, as collateral agent (the
“Collateral Agent”).
RECITALS:
WHEREAS,
as of the date hereof, Colombia and CPF, own 99% and 1%, respectively, of the
outstanding membership interest of Energia Andina Santander Resources
Coӧperative U.A., a cooperative formed under the laws of the Netherlands
(“Energia”);
WHEREAS,
Colombia intends to issue from time to time up to $2,500,000 aggregate principal
amount of its 10% secured convertible promissory notes due June 30, 2012 (the
“Notes”);
WHEREAS,
the purchasers of the Notes (the “Noteholders”) have required, as a condition to
purchasing the Notes, among others, and in order to secure the payment in full
of the principal and interest due on the Notes and those additional obligations
of the Pledgors set forth in this Agreement (collectively, the “Liabilities”),
that the Pledgors execute and deliver this Agreement and the Pledge Agreement
(as defined below) to the Collateral Agent;
WHEREAS,
in order to secure the full payment of all Liabilities, the Pledgors have
agreed to grant to the Collateral Agent, for the benefit of the
Noteholders, a security interest in their membership interests of Energia and
certain related assets; and
WHEREAS,
each of the Pledgors will benefit from the sale of the Notes, and has agreed to
execute and deliver this Agreement and the Pledge Agreement to the Collateral
Agent.
NOW,
THEREFORE, for and in consideration of the foregoing and of any other financial
accommodations or extensions of monies heretofore, now or hereafter made to or
for the benefit of the Pledgors and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. Unless otherwise
specified in this Agreement, the capitalized terms in this Agreement shall have
the meanings set forth in the Notes.
“Enforcement Event” means the receipt
by the Collateral Agent of a written notice from Noteholders holding a majority
in aggregate principal amount of the Notes notifying the Collateral Agent that
an Event of Default, as defined in the Notes (an “Event of Default”), has
occurred and is continuing, which Enforcement Event shall continue until the
Collateral Agent is notified in writing by Noteholders holding a majority in
aggregate principal amount of the Notes that such Event of Default has been
cured or properly waived by such Noteholders.
2. Pledge
Agreement. (a) To
secure the prompt and complete payment, observance and performance of all of the
Liabilities, the Pledgors shall execute and deliver to the Collateral Agent a
pledge deed among the Pledgors and the Collateral Agent in the form annexed to
this Agreement as Exhibit A (the “Pledge Agreement”), which pledges and assigns
to the Collateral Agent, and grants to the Collateral Agent for the benefit of
the Noteholders, a security interest (“Security Interest”) in all of Pledgors’
right, title and interest in and to the Security Assets (as defined in the
Pledge Agreement) (collectively, “Pledged Collateral”). The Pledgors
agree to take such steps as may be required under applicable law or as the
Collateral Agent, acting at the direction of the Noteholders holding a majority
in aggregate principal amount of the Notes, may from time to time require to
perfect and maintain the Collateral Agent’s first priority security interest in
the Pledged Collateral under applicable law, including without limitation taking
all actions required of the Pledgors under the Pledge Agreement. The
Pledge Agreement secures, and the Pledged Collateral is collateral security for,
the payment and performance in full when due, whether at stated maturity, by
acceleration or otherwise of all Liabilities now or hereafter
existing.
(b) The
Pledgors authorize and direct the Collateral Agent to enter into the Pledge
Agreement and each Pledgor hereby acknowledges and agrees that in the
performance of its duties and obligations under the Pledge Agreement, the
Collateral Agent shall have all of the right, benefits, protections, indemnities
and immunities afforded to it under this Agreement.
3. Representations
and Warranties. Each Pledgor
represents and warrants as follows:
(a) The
Pledgors are the sole, direct, legal and beneficial owners of the Pledged
Collateral, free and clear of all liens, claims, pledges, security interests and
other encumbrances (collectively, “Liens”) of any kind whatsoever (other than
those in favor of the Collateral Agent) and no security agreement, financing
statement or other public notice with respect to all or any part of the Pledged
Collateral is on file or of record in any public office other than in favor of
the Collateral Agent;
(b) Each
Pledgor has the full power and authority to enter into this Agreement and the
Pledge Agreement and to perform its obligations hereunder and
thereunder;
(c) Each
Pledgor has the right to pledge and grant a security interest in all or any part
of the Pledged Collateral;
(d) The
execution and delivery by the Pledgor of this Agreement and the Pledge
Agreement, the performance by the Pledgors of their obligations hereunder and
thereunder, including, but not limited to, the pledge by the Pledgors of the
Pledged Collateral pursuant to the Pledge Agreement, will not: (i) violate
the provisions of any material law applicable to either Pledgor;
(ii) result in a breach of or constitute a default under any material
agreement, instrument, order or decree to which either Pledgor is a party or by
which its assets or property is bound; or (iii) result in or create any
Lien under any agreement, instrument, order or decree binding upon either
Pledgor or any of its properties (other than the Lien created by the Pledge
Agreement);
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(e) There
are no restrictions, other than those contemplated in the Pledge Agreement, upon
any of the rights associated with, or the transfer of, any of the Pledged
Collateral;
(f) Each
Pledgor has the right to otherwise transfer all or any part of the Pledged
Collateral free of any Lien;
(g) The
delivery to the Collateral Agent of the Pledge Agreement create a valid and
perfected security interest in the Pledged Collateral, securing the payment of
the Liabilities;
(h) Each
of this Agreement and the Pledge Agreement constitutes the legal, valid and
binding obligation of each Pledgor enforceable against each Pledgor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally and except as enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity);
(i) No
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either: (i) for
the pledge by the Pledgors of the Pledged Collateral pursuant to the Pledge
Agreement or for the execution, delivery or performance of this Agreement or the
Pledge Agreement by the Pledgors or (ii) for the exercise by the Collateral
Agent of the rights provided for in the Pledge Agreement or the remedies in
respect of the Pledged Collateral pursuant to the Pledge Agreement or as may be
required in connection with any disposition of all or any part of the Pledged
Collateral under any laws affecting the offering and sale of securities
generally; and
(j) There
is no action, suit, investigation or proceeding by or before any governmental
authority or arbitral tribunal now pending or, to the best knowledge of either
Pledgor, threatened against either Pledgor (i) which questions the validity
or legality of or seeks damages in connection with this Agreement or the Pledge
Agreement or (ii) which could result in a material adverse effect on either
Pledgor’s ability to perform its obligations under this Agreement or the Pledge
Agreement.
4. Covenants. The Pledgors
covenant that:
(a) Further
Assurances. At any time and from time to time, at the expense
of the Pledgors, the Pledgors shall promptly execute and deliver, or cause to be
executed and delivered, all assignments, instruments, powers, proxies and
documents and take all further action, that may be necessary or desirable, or
that Noteholders holding a majority in aggregate principal amount of the Notes
may request, in order to perfect and protect any security interest granted or
purported to be granted by the Pledge Agreement or to enable the Collateral
Agent to exercise and enforce its rights and remedies under the Pledge Agreement
with respect to any Pledged Collateral and to carry out the provisions and
purposes hereof or thereof.
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(b) Third Party
Claims. The Pledgors shall defend the Collateral Agent’s
right, title and interest in and to the Pledged Collateral pledged by the
Pledgors under the Pledge Agreement against claims and demands of any
Person.
(c) No Sale or Transfer of
Collateral; No Liens. The Pledgors agree that, except with the
Collateral Agent’s prior written consent, they will not (i) sell or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, or (ii) create or permit to exist any Lien upon or with respect
to any of the Pledged Collateral, except for the security interest granted under
the Pledge Agreement.
(d) Subsequent Changes Affecting
Collateral. The Pledgors represent to the Collateral Agent
that they have made their own arrangements for keeping informed of changes or
potential changes affecting the Pledged Collateral (including, but not limited
to, rights to convert, rights to subscribe, payment of interest or other
distributions, reorganization or other exchanges, tender offers and voting
rights), and the Pledgors agree that the Collateral Agent shall have no
responsibility or liability for informing the Pledgors of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto.
5. Rights; Distributions;
Etc.
(a) So
long as no Event of Default, as defined in the Notes, shall have occurred and be
continuing:
(i) The
Pledgors shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the Pledge Agreement; provided, however, that the
Pledgors shall not exercise or shall refrain from exercising any such right such
action would have a material adverse effect on the value of the Pledged
Collateral or any part thereof;
(ii) The
Pledgors shall be entitled to receive and retain any and all distributions,
dividends and interest paid in respect of the Pledged Collateral;
and
(iii) The
Collateral Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgors all such proxies and other instruments as the
Pledgors may reasonably request for the purpose of enabling the Pledgors to
exercise the rights which they are entitled to exercise pursuant to paragraph
(i) above and to receive the distributions or interest payments which it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon
the occurrence and during the continuation of an Event of Default and upon the
giving of written notice to the Pledgors by Collateral Agent of its intention to
exercise its rights hereunder or under the Pledge Agreement:
(i) Unless
the Collateral Agent otherwise designates, all rights of the Pledgors to
exercise the voting and other consensual rights which they would otherwise be
entitled to exercise pursuant to Section 5(a) hereof
shall terminate and, subject to the terms of the Pledge Agreement, all such
rights shall thereupon become vested in the Collateral Agent;
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(ii) All
rights of the Pledgors to receive the distributions, dividends and interest
payments which it would otherwise receive and retain pursuant to Section 5(a) hereof
shall terminate, and thereupon become vested in the Collateral Agent;
and
(iii) All
distributions, dividends and interest payments which are received by the
Pledgors contrary to the provisions of this Section 5(a) shall be
received in trust for the benefit of the Collateral Agent, segregated from other
funds of the Pledgors and forthwith paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary
endorsement).
6. Collateral
Agent Appointed Attorney-in-Fact. The Pledgors
hereby appoint the Collateral Agent as the Pledgors’ attorney-in-fact with full
authority in the place and stead of the Pledgors and in the name of the Pledgors
or otherwise, from time to time to take any action and to execute any instrument
which the Noteholders holding a majority in aggregate principal amount of the
Notes shall direct in writing or as the Collateral Agent may deem necessary or
reasonably deem desirable to enforce the Collateral Agent’s rights and remedies
under this Agreement or the Pledge Agreement, including, without limitation, to
take any and all actions to perfect the security interests in the Pledged
Collateral, and to receive, endorse and collect all instruments made payable to
the Pledgors representing any distribution, dividend or interest payment in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same. This power of attorney created under this Section 6,
being coupled with an interest, shall be irrevocable for the term of this
Agreement and thereafter as long as any of the Liabilities shall be
outstanding.
7. Default.
(a)
Collateral
Agent’s Exercise of Rights and Remedies Upon an Enforcement Event.
Notwithstanding anything set forth herein to the contrary, it is hereby
expressly agreed that, on the occurrence and during the continuance of an
Enforcement Event, the Collateral Agent may exercise any of the rights and
remedies provided in this Agreement or the Pledge Agreement.
(b) Collateral Agent May
Perform. If the Pledgors fail to perform any agreement
contained herein or in the Pledge Agreement, the Collateral Agent may (upon the
written request of Noteholders holding a majority in aggregate principal amount
of the Notes) perform, or cause to be performed, such agreement, and the
expenses of the Collateral Agent incurred in connection therewith shall be
payable by the Pledgors pursuant to the provisions of Section 9
hereof.
8. Acquisition or Transfer of
Collateral upon Event of Default.
(a) If
any Enforcement Event occurs and is continuing, the Collateral Agent shall have,
in addition to all other rights given by law or otherwise, all of the rights and
remedies with respect to the Pledged Collateral as are provided by the Pledge
Agreement and under applicable law. In addition, the Collateral Agent
shall, subject to the terms of the Pledge Agreement and applicable law, have all
the following rights:
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(i) The
Collateral Agent may, at its option, transfer or register the Pledged Collateral
or any part thereof into its own name or its nominee’s name, with or without any
indication that such Pledged Collateral is subject to the security interest
under the Pledge Agreement.
(ii) With
respect to any Pledged Collateral or any part thereof which shall then be in or
shall thereafter come into the possession or custody of the Collateral Agent or
which the Collateral Agent shall otherwise have the ability to transfer under
applicable law, the Collateral Agent may, without notice to the Pledgors except
as specified below, sell or cause the same to be sold at any broker’s board or
at public or private sale, in one or more sales or lots, at such price or prices
as the Collateral Agent may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk. The purchaser of any
or all of the Pledged Collateral so sold shall thereafter hold the same
absolutely, free from any claim, encumbrance or right of any kind
whatsoever.
(b) Unless
any of the Pledged Collateral threatens to decline speedily in value or is or
becomes of a type sold on a recognized market, Collateral Agent will give the
Pledgors reasonable notice of the time and place of any public sale thereof,
which at a minimum will be ten (10) days, or of the time after which any private
sale or other intended disposition is to be made.
(i) Any
sale of the Pledged Collateral conducted in conformity with reasonable
commercial practices of banks, insurance companies, commercial finance
companies, or other financial institutions disposing of property similar to the
Pledged Collateral shall be deemed to be commercially reasonable.
(ii) Any
requirements of reasonable notice shall be met if such notice is mailed to the
Pledgors as provided in Section 20 below, at
least ten (10) days before the time of the sale or disposition.
(iii) Any
other requirement of notice, demand or advertisement for sale is, to the extent
permitted by law, waived.
(c) The
Collateral Agent may, in its own name or in the name of a designee or nominee,
buy any of the Pledged Collateral at any public sale and, if permitted by
applicable law, at any private sale.
(d) All
expenses (including court costs and reasonable attorneys’ fees and expenses) of,
or incident to, the enforcement of any of the provisions hereof or of the Pledge
Agreement shall be recoverable from the proceeds of the sale or other
disposition of the Pledged Collateral.
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(e) No
enumeration of rights in this Section or elsewhere in this Agreement, the Pledge
Agreement or any other related document or other agreement shall be deemed in
any way to limit the rights of the Collateral Agent as described in this Section
8.
9. Expenses. The Pledgors
agree to pay upon demand to the Collateral Agent the amount of any and all
reasonable fees and expenses in accordance with Schedule A hereto, including the
fees and expenses of its counsel and of any experts and agents, which the
Collateral Agent may incur in connection with (i) the administration of this
Agreement or the Pledge Agreement, (ii) the custody or preservation of, or the
registration or sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) protecting, maintaining or preserving the Pledged
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, (iv) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder, or (v) the failure by the Pledgors to perform
or observe any of the provisions hereof.
10. Indemnification. The Pledgors,
jointly and severally, hereby agree to defend, protect, indemnify and hold
harmless the Collateral Agent and each of its officers, directors, employees and
agents (collectively called the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, reasonable costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for such Indemnitees incurred in connection with any action or
proceeding between either Pledgor and any Indemnitee or between any Indemnitee
and any third party or otherwise, with respect to any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall be
designated a party thereto), imposed on, incurred by, or asserted against such
Indemnitees (whether direct, indirect, economic, special, punitive, treble or
consequential and whether based on any federal, state, local or foreign laws or
other statutory regulations, including, without limitation, environmental,
securities and commercial laws and regulations, under common law or equitable
principles) in any manner relating to or arising out of this Agreement or the
Pledge Agreement, or any act, event or transaction or attendant thereto or
contemplated hereby or thereby, or any action or inaction by any Indemnitee
hereunder or thereunder or in connection herewith or therewith, (collectively,
the “Indemnified Matters”); provided, however, that the
Pledgors shall not have any obligation to any Indemnitee hereunder with respect
to Indemnified Matters resulting solely from the gross negligence or willful
misconduct of such Indemnitee. The covenants of the Pledgors
contained in this Section 10 shall survive the payment in full of all amounts
due and payable under this Agreement, the Pledge Agreement and the Notes and the
full satisfaction of all other Liabilities. Such indemnification
shall not be subject to any limitation as to amount.
11.
Waivers.
(a) The
Pledgors hereby waive any requirement of diligence, presentment, demand of
payment, or notice with respect to the Liabilities, the benefit of any statutes
of limitation, and all demands whatsoever, and covenants that this Agreement
will not be discharged, except as otherwise expressly provided in this
Agreement.
(b) To
the extent permitted by law, the Pledgors shall remain bound and their
liabilities hereunder shall be unconditional, irrespective of:
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(i) the
validity or enforceability, avoidance or subordination of the
Liabilities,
(ii) the
election of any remedy by the Collateral Agent,
(iii) failure
by the Collateral Agent to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any of the Pledged
Collateral,
(iv) the
election by the Collateral Agent in any proceeding instituted under Chapter 11
of the Bankruptcy Code of the application of Section 1111(b)(2) of the
Bankruptcy Code,
(v) the
disallowance under Section 502 of the Bankruptcy Code of all or any portion of
the claims of the Collateral Agent for repayment of the
Liabilities,
(vi) the
absence of any attempt by, or on behalf of, the Collateral Agent to collect, or
take any other action to enforce, all or any part of the Liabilities from the
Pledgors or any other obligor or any other Person, or
(vii) any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
(c) EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT OR THE PLEDGE AGREEMENT, THE PLEDGORS
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND
JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR
THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE PLEDGED COLLATERAL, INCLUDING
ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND
ANY SUCH RIGHT WHICH THE PLEDGORS WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
ANY STATUTE OF THE UNITED STATES OR OF ANY STATE.
(d) The
Pledgors hereby further waive, to the fullest extent permitted by
law:
(i) all
other requirements as to the time, place and terms of sale or other requirements
with respect to the enforcement of the Collateral Agent’s rights
hereunder;
(ii) demand
of performance or other demand, notice of intent to demand or accelerate, notice
of acceleration presentment, protest, advertisement or notice of any kind to or
upon the Pledgors or any other person; and
(iii) all
rights of redemption, appraisal, valuation, diligence, stay, extension or
moratorium now or hereafter in force under any applicable law in order to
prevent or delay the enforcement of this Agreement or the Pledge Agreement or
the absolute sale of the Pledged Collateral or any portion
thereof. Each Pledgor hereby waives the benefit of all such laws, for
itself and all who may claim under it.
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12. Term. This Agreement
shall remain in full force and effect until all of the Liabilities shall have
been paid and satisfied in full and all commitments under the Notes shall have
been terminated.
13. Limitation
of Liability.
(a) Under
no circumstances shall the Collateral Agent and its directors, officers,
employees, attorneys and agents shall not be liable for special, indirect,
consequential, incidental or punitive damages hereunder, regardless of whether
advised of the possibility of such damages in advance and regardless of the
cause of action; and the Pledgors hereby waive, releases and agrees not to xxx
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor. The Collateral Agent shall
not be required to take any action hereunder that it believes, in its reasonable
judgment, would expose it to liability unless indemnification or other security
satisfactory to Collateral Agent shall have been provided to it. In
no event shall the Collateral Agent be responsible or liable for any failure or
delay in the performance of its obligations hereunder or under the Pledge
Agreement arising out of or caused by, directly or indirectly, forces beyond its
control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware)
services.
(b) When
the Collateral Agent incurs expenses or renders services after an Enforcement
Event, Event of Default or bankruptcy occurs, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar law.
(c) Collateral
Agent shall have a right of setoff against the Pledged Collateral for all fees,
costs and expenses past due and for any indemnity claims made by the Collateral
Agent hereunder.
14. Role Of The Collateral
Agent.
(a) No Fiduciary
Duties. Nothing in this Agreement or the Pledge Agreement
constitutes the Collateral Agent as a trustee or fiduciary of any other
person.
(b) Rights and
Discretions.
(i) The
Collateral Agent may rely on:
A. any
representation, notice or document believed by it to be genuine, correct and
appropriately authorized; and
B. any
statement made by a director, authorized signatory or employee of any person
regarding any matters which may reasonably be assumed to be within his knowledge
or within his power to verify.
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(ii) The
Collateral Agent may assume (unless it has received notice of an Enforcement
Event) that no Event of Default has occurred.
(iii) The
Collateral Agent may engage and rely on the advice or services of any lawyers,
accountants, or other experts.
(iv) Notwithstanding
any other provision of this Agreement or the Pledge Agreement to the contrary,
the Collateral Agent is not obliged to do or omit to do anything if it would or
might in its reasonable opinion constitute a breach of any law or regulation or
a breach of a fiduciary duty or duty of confidentiality.
(c) Secured Parties’
Instructions. Notwithstanding anything herein or in the Pledge
Agreement to the contrary, the Collateral Agent shall (i) exercise any right,
power, authority or discretion vested in it as Collateral Agent only upon
receipt of and in accordance with written instructions given to it by the
Noteholder holding a majority in aggregate principal amount of the Notes (or, if
so instructed by the Noteholders holding a majority in aggregate principal
amount of the Notes, refrain from exercising any right, power, authority or
discretion vested in it as Collateral Agent) and (ii) not, without limitation to
any other limitation of Collateral Agent’s liability contained in this Agreement
or the Pledge Agreement, be liable for any act (or omission) if it acts (or
refrains from taking any action) in accordance with an instruction of the
Noteholders holding a majority in aggregate principal amount of the
Notes.
(d) Responsibility for
Documentation.
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The
Collateral Agent:
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(i) is
not responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by any Noteholder, the Pledgors,
or any other person given in or in connection with this Agreement or the Pledge
Agreement; and
(ii) is
not responsible for the legality, validity, effectiveness, perfection, adequacy
or enforceability of this Agreement or the Pledge Agreement, the Pledged
Collateral, or the Liabilities or any other agreement, arrangement or document
entered into, made or executed in anticipation of or in connection with this
Agreement or the Pledge Agreement.
(e)
Know Your
Customer. Nothing in this Agreement, the
Pledge Agreement or otherwise shall oblige the Collateral Agent to carry out any
“know your customer” or other checks in relation to any person on behalf of any
Pledgor or any Noteholder and each Pledgor confirms to the Collateral Agent that
it is solely responsible for any such checks it is required to carry out and
that it may not rely on any statement in relation to such checks made by the
Collateral Agent, if any.
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15. Limitation on Collateral
Agent’s Duties Regarding Collateral.
(a) General. The
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Pledged Collateral in its possession shall be to
hold the Pledged Collateral in accordance with the standards of care set forth
in this Agreement. The Collateral Agent shall not have any other duty
as to the Pledged Collateral in its possession or control or in the possession
or control of any agent or nominee of the Collateral Agent, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto.
(b) Collateral Agent’s
Duty. The Collateral Agent shall not be liable for any acts,
omissions, errors of judgment or mistakes of fact or law including, without
limitation, acts, omissions, errors or mistakes with respect to the Pledged
Collateral, except for those arising out of or in connection with the Collateral
Agent’s gross negligence or willful misconduct (as determined by the final
judgment of a court of competent jurisdiction). Without limiting the generality
of the foregoing, the Collateral Agent shall be under no obligation to take any
steps necessary to preserve rights in the Pledged Collateral against any other
parties but may do so at its option upon the written instructions of the
Noteholders holding a majority in aggregate principal amount of the Notes, and
all expenses incurred in connection therewith shall be for the account of
Pledgors, and shall be added to the Liabilities secured hereby. The
Pledgors shall promptly upon Collateral Agent’s demand, and in any event within
three (3) Business Days of such demand, reimburse Collateral Agent for any such
expenses. Notwithstanding anything to the contrary contained herein,
the Collateral Agent shall have no responsibility for the preparing, recording,
filing, re-recording, or re-filing of any financing statement, continuation
statement or other instrument in any public office.
(c) Additional Understandings
Regarding the Collateral Agent’s Duties. The Collateral Agent
undertakes to perform only such duties as are expressly set forth herein and no
duties shall be implied. The Collateral Agent shall have no liability under and
no duty to inquire as to the provisions of any agreement other than this
Agreement and the Pledge Agreement. The Collateral Agent may rely upon and shall
not be liable for acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Collateral Agent shall be under no duty to inquire into or investigate the
validity, accuracy or content of any such document. The Collateral Agent shall
not be liable for any action taken or omitted by it in good faith except to the
extent that a court of competent jurisdiction determines that the Collateral
Agent’s gross negligence or willful misconduct was the primary cause of any loss
to the parties hereto. The Collateral Agent may execute any of its powers and
perform any of its duties hereunder directly or through agents or attorneys (and
shall be liable only for the careful selection of any such agent or attorney)
and may consult with counsel, accountants and other skilled persons to be
selected and retained by it.
(i) The
Collateral Agent shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons. In the event that the Collateral Agent
shall be uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands from any party hereto or from any person or
entity other than the parties hereto, which, in its opinion, conflict with any
of the provisions of this Agreement, it shall be entitled to refrain from taking
any action and its sole obligation shall be to keep safely all property held in
escrow until it shall be directed otherwise in writing by all of the other
parties hereto or by a final order, judgment or decree of a court of competent
jurisdiction, notwithstanding that such order, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated, or found to
have been entered without jurisdiction.
11
(ii) The
Collateral Agent shall not be required to use its own funds in the performance
of any of its obligations or duties or the exercise of any of its rights or
powers, and shall not be required to take any action which, in the Collateral
Agent’s sole and absolute judgment, could involve it in expense or liability
unless furnished with security and indemnity which it deems, in its reasonable
discretion, to be satisfactory.
16. Resignation
of Collateral Agent. The Collateral Agent
may, at any time, effective upon 30 days prior written notice to Pledgors and
the Noteholders and the appointment of a successor Collateral Agent, terminate
its agreement to act as the Collateral Agent hereunder. Upon the effective
date of any such termination, the Collateral Agent shall promptly deliver the
Pledged Collateral then held by it or its agents to the successor
Collateral Agent and shall execute and deliver such notices, instructions
and assignments as may be reasonably necessary or desirable to transfer the
rights of the Collateral Agent with respect to the Pledged Collateral to
the successor Collateral Agent. Any successor Collateral Agent shall be a
bank or other financial institution or trust company designated by the
Pledgors.
17. Application
of Proceeds. Any cash held by
the Collateral Agent as Pledged Collateral and all cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Pledged Collateral shall, as soon as
reasonably practicable, be applied by the Collateral Agent first to its
outstanding fees and expenses and then to the payment of the Notes.
18. Discontinuation
of Proceedings. To the extent
permitted by applicable law, in case the Collateral Agent shall have instituted
any proceeding to enforce any right, power or remedy under the Pledge Agreement
by foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Agent, then and in every such case the Pledgors and the
Collateral Agent shall be returned to their former position and rights
thereunder with respect to the Pledged Collateral, and all rights, remedies and
powers of the Collateral Agent under the Pledge Agreement shall continue as if
no such proceeding had been instituted.
19. Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the Pledgors, the Collateral
Agent and the Noteholders, and their respective successors and permitted
assigns. The Pledgors’ successors and assigns shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for the
Pledgors.
20. Notices. Any notice
required or desired to be served, given or delivered hereunder shall be in
writing, and shall be deemed to have been validly served, given or delivered
(i) five (5) business days after deposit in the mails, with proper postage
prepaid, (ii) when properly transmitted if sent by facsimile with receipt
confirmed, (iii) one (1) business day after being deposited with a
reputable overnight courier with all charges prepaid, or (iv) when
delivered, if hand-delivered, by messenger, all of which shall be properly
addressed to the party to be notified and shall be addressed:
12
|
|
(a)
|
in
the case of the Pledgors:
|
Colombia
Clean Power & Fuels, Inc.
0000 Xxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attention: Xxxxxx
X. Xxxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
with a
copy to:
Xxxxx
Xxxxxxx LLP
0 Xxxxx
Xxxxxx
Xxx Xxxx,
XX 00000-0000
Attention: Xxxx
X. Xxxxxxx, Esq.
Tel:
(000) 000-0000
Fax:
(000) 000-0000
|
|
(b)
|
in
the case of the Collateral Agent:
|
Law
Debenture Trust Company of New York
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxx
X. Xxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
21. Counterparts. This Agreement
may be executed in separate counterparts, each of which shall be an original and
all of which taken together shall constitute one and the same
instrument.
22. Section
Headings. The section
headings herein are for convenience of reference only, and shall not affect in
any way the interpretation of any of the provisions hereof.
23. Governing
Law; Submission to Jurisdiction; Forum Selection. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF
LAW).
IN ANY
ACTION OR PROCEEDING ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE PLEDGE
AGREEMENT OR ANY OF THE OBLIGATIONS (AS DEFINED HEREIN), THE PLEDGORS
IRREVOCABLY (A) CONSENT AND SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW
YORK, AND (B) WAIVE ANY OBJECTION WHICH SUCH PARTY MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY SUCH PROCEEDINGS BROUGHT IN ANY SUCH COURT, AND
(C) WAIVE ANY CLAIM THAT SUCH PROCEEDINGS HAVE BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND (D) FURTHER WAIVE THE RIGHT TO OBJECT WITH RESPECT
TO SUCH PROCEEDINGS THAT SUCH COURT DOES NOT HAVE ANY JURISDICTION OVER SUCH
PARTY. THIS FORUM SELECTION AGREEMENT APPLIES NO MATTER WHAT THE FORM
OF ACTION, WHETHER IN REM, IN PERSONAM, OR ANY OTHER, OR WHETHER BASED ON ANY
STATUTE, RULE, OR REGULATION, NOW EXISTING OR HEREAFTER
ENACTED.
13
EACH
PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE AT THE OPTION OF THE
COLLATERAL AGENT OR ANY NOTEHOLDERS BY ANY ONE OF THE FOLLOWING:
(A) DELIVERY IN PERSON, (B) BY COURIER, OR (C) CERTIFIED OR
REGISTERED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN
SECTION 20.
ANY
PROCESS SERVED BY MAIL SHALL BE COMPLETE ON THE DATE IT IS MAILED. ANY PROCESS
SERVED BY ANY OTHER MANNER AFOREMENTIONED SHALL BE COMPLETE ON THE DATE IT IS
DELIVERED. THE PLEDGORS CONSENT TO SERVICE OF PROCESS AS
AFORESAID. THE PLEDGORS ALSO WAIVE ANY DEFECT IN SERVICE CAUSED BY
ITS FAILURE TO NOTIFY THE COLLATERAL AGENT IN WRITING OF ANY CHANGE OF
ADDRESS.
NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR ANY NOTEHOLDER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR THE RIGHT OF THE
COLLATERAL AGENT OR ANY NOTEHOLDER TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
PLEDGORS OR ANY PLEDGORS’ PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
24. Waiver of
Jury Trial. Each party to
this Agreement hereby irrevocably waives trial by jury in any action or
proceeding with respect to this Agreement.
[Remainder
of page intentionally left blank; signature page follows]
14
IN
WITNESS WHEREOF, the Pledgors and the Collateral Agent have executed this
Agreement as of the date first set forth above.
|
LAW
DEBENTURE TRUST COMPANY OF NEW
YORK, as Collateral Agent
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||
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By:
|
/s/ Xxxxxxx X. Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx
|
||
|
Vice
President
|
||
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COLOMBIA
CLEAN POWER & FUELS, INC.,
as Pledgor
|
||
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By:
|
/s/ Xxxxxx X. Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx
|
||
|
President
and Chief Executive Officer
|
||
|
COLOMBIA
CPF LLC., as Pledgor
|
||
|
By:
|
/s/ Xxxxxx X. Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx
|
||
|
Chief
Executive Officer
|
||
Schedule
A to the Pledge and Collateral Agency Agreement:
Collateral Agent’s Fee
Schedule
