EXHIBIT 10.9
AMENDMENT NO. 4 TO REVOLVING CREDIT AGREEMENT
This Amendment No. 4 to Revolving Credit Agreement (the "Amendment No. 4")
is made and entered into effective as of, but not necessarily on, the 27th day
of February, 2002, by and among GAINSCO, Inc. ("GAINSCO"), GAINSCO Service Corp.
("GSC") (GSC and GAINSCO being sometimes referred to herein collectively as the
"Borrowers"), the Subsidiary Pledgors (as such term is hereinafter defined), and
Bank One, NA (the "Lender")
WITNESSETH:
WHEREAS, the Borrowers and the Lender entered into that certain Revolving
Credit Agreement, dated as of November 13, 1998, as amended by that certain
First Amendment to Revolving Credit Agreement, dated as of October 4, 1999
("Amendment No. 1"), as further amended by that certain Amendment No. 2 to
Revolving Credit Agreement, dated as of March 23, 2001 ("Amendment No. 2"), as
further amended by that certain Amendment No. 3 to Revolving Credit Agreement,
dated as of November 13, 2001 ("Amendment No. 3"), and as supplemented by a
consent dated December 14, 1999, a consent dated April, 13, 2000, a waiver dated
October 30, 2000, and a consent dated August 31, 2001, (such Revolving Credit
Agreement, as heretofore amended, modified and supplemented, being referred to
herein as the "Credit Agreement").
WHEREAS, certain of the direct or indirect subsidiaries of the Borrowers
have (i) heretofore executed and delivered Security Agreements and/or other
collateral documents pursuant to which such subsidiaries have granted liens,
security interests or other encumbrances, in favor of the Lender, covering
certain of their respective properties, as security for the obligations,
indebtedness and liabilities of the Borrowers under or in connection with the
Credit Agreement and/or the other Loan Documents, and/or (ii) guaranteed certain
of the obligations, indebtedness and liabilities of the Borrowers under or in
connection with the Credit Agreement and/or the other Loan Documents (such
subsidiaries being signatory parties hereto and being collectively referred to
herein as the "Subsidiary Pledgors").
WHEREAS, the Borrowers, the Subsidiary Pledgors and the Lender have agreed
to further amend the Credit Agreement on the terms and conditions set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and agreed, the parties hereto
hereby agree as follows:
1. Definitions. Unless otherwise specifically defined herein, the terms used in
this Amendment No. 4 shall have the respective meanings ascribed to such terms
in the Credit Agreement.
2. Amendments to Credit Agreement.
2.1 Section 1.1 of the Credit Agreement is hereby amended by adding or
restating (as the case may be) the following defined terms, which terms shall
also have the meanings given below when used in this Amendment No. 4:
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"Amendment No. 4" shall mean that certain Amendment No. 4 to
Revolving Credit Agreement dated as of February 27, 2002 between the
Borrowers, the Subsidiary Pledgors, and the Lender.
"Amendment No. 4 Closing Date" shall mean the date of the
Amendment No. 4 or such later date as may be agreed to in writing by
the Lender and the Borrowers.
"Amendments" shall mean, collectively, the Amendment No. 1, the
Amendment No. 2, the Amendment No. 3 and this Amendment No. 4.
"Applicable Margin" means an interest margin of 1.75 % in respect
of Base Rate Borrowings.
"Contract Rate" means, with respect to all Borrowings, the Base
Rate plus the Applicable Margin.
"Notification Event" shall mean the occurrence and/or existence
of any of the following events or circumstances:
(a) the sale, assignment, exchange, lease or other disposition by
either of the Borrowers or any of the other Companies of any of their
respective accounts receivable, properties, rights, assets, or
business, whether now owned or hereafter acquired, if the occurrence
of such event requires a mandatory prepayment of the unpaid Principal
Debt pursuant to the terms of the Credit Agreement and/or the other
Loan Documents; or
(b) (i) the formation of any Subsidiary by either of the
Borrowers or any of the other Companies, or (ii) the acquisition by
either of the Borrowers or any of the other Companies of all or
substantially all of (x) the assets of any Person or any division or
business Unit of any Person, or (y) the stock of any class of any
other Person; or
(c) the dissolution or liquidation of either of the Borrowers or
any of the other Companies, the participation by either of the
Borrowers or any of the other Companies in any merger or
consolidation, the acquisition, through purchase, lease or otherwise,
by either of the Borrowers or any of the other Companies of all or
substantially all of-the assets or Stock of any Person, or the sale,
transfer, lease or other disposition by either of the Borrowers or any
of the other Companies of all or any substantial part of its property
or assets or business; or
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(d) the issuance by GAINSCO of any capital stock or other equity
security; or
(e) any Investment by Borrowers or any of their Subsidiaries
(other than Insurance Subsidiaries) other than (i) Investments in
Subsidiaries which were in existence on March 15, 2001; (ii) Cash
Equivalent Investments and Investments in money market mutual funds;
and (iii) additional Investments by GAINSCO in GAIC and GSC in an
aggregate amount not to exceed $5,000,000 after March 23, 2001, so
long as such Investments are either (A) contributions to capital not
evidenced or represented by additional securities or (B) evidenced by
securities which are pledged to Lender; provided, that the use by GSC
of proceeds of any such Investment made therein of up to $1,000,000
(less any Investment made pursuant to subsection (f)(iv) of this
definition) to make an Investment in GCMIC to the extent required to
maintain the minimum statutory surplus in GCMIC required by applicable
law shall not constitute a Notification Event; or
(f) any Investment by an Insurance Subsidiary other than (i)
Investments permitted under the insurance laws of the domiciliary
state of such Insurance Subsidiary; (ii) existing Investments in
Subsidiaries and other Investments in existence on March 23, 2001;
(iii) advances to employees and third parties not to exceed $100,000
in the aggregate at any time outstanding; and (iv) additional
Investments in wholly-owned Insurance Subsidiaries in an aggregate
amount not to exceed $1,000,000 after March 23, 2001 (less any
Investment made in such period pursuant to the proviso to subsection
(e)(ii) of this definition).
"Property Subject to GMSP Put" shall mean the interest(s) of
GAINSCO in (i) GNA Investments I, L.P., a Texas limited partnership,
and (ii) certain loans, in the aggregate principal amount of
approximately $2,100,000, heretofore made by GAINSCO, Inc., as a
lender or as a loan participant, to Hispanic Television Network, Inc.
("HTVN"), as borrower, and warrants to purchase HTVN common stock
acquired by GAINSCO, Inc. in connection with such loans.
"Subsidiary Pledgors" shall mean Agents Processing Systems, Inc.,
Risk Retention Administrators, Inc., General Agents Premium Finance
Company, MGA Premium Finance Company, National Specialty Lines, Inc.,
DLT Insurance Adjusters, Inc., Lalande Financial Group, Inc. and MGA
Agency, Inc., together with any and all other or additional direct or
indirect subsidiaries of the Borrowers that may, from time to time,
(i) execute and deliver Security Agreements and/or other collateral
documents
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pursuant to which such subsidiaries grant hens, security interests or
other encumbrances, in favor of the Lender, covering certain of their
respective properties, as security for the obligations, indebtedness
and liabilities of the Borrowers under or in connection with the
Credit Agreement and/or the other Loan Documents, and/or (ii)
guarantee certain of the obligations, indebtedness and liabilities of
the Borrowers under or in connection with the Credit Agreement and/or
the other Loan Documents.
2.2 Section 2.5 of the Credit Agreement is hereby amended to read in its
entirety as follows:
2.5 Interest and Principal Payments
"(a) Interest Payments. Accrued interest on the Principal Debt
shall be due and payable on the last day of each March, June,
September, and December during the term hereof, with a final scheduled
interest payment on all Borrowings on the Maturity Date.
(b) Principal Payments. The unpaid Principal Debt shall be due
and payable in installments as follows: (i) $6,100,000 on Xxxxx 0,
0000, (xx) an amount equal to fifty percent (50%) of any and all
Dividends (whether ordinary, extraordinary or otherwise) received by
either Borrower or any Subsidiary Pledgor, or any of them, after March
2, 2002 from GAIC, which payment shall be made within two (2) Business
Days after receipt by the applicable Borrower or Subsidiary Pledgor of
each applicable Dividend; provided, however, that the amount of such
payment attributable to ordinary dividends paid by GAIC during
calendar year 2003 shall not exceed $2,350,000, and (iii) the
remainder of the unpaid Principal Debt shall be due and payable in
full on the Maturity Date. The foregoing principal payments shall be
made in addition to, and without regard to, any other or additional
payments and/or prepayment required to be made hereunder or under any
of the other Loan Documents, including, without limitation, any
mandatory prepayment(s) required to be made pursuant to subsection (d)
of this Section 2.5; provided, however, that no prepayment shall be
required under Section 2.5(d) in respect of any proceeds from any
Property Subject to GMSP Put.
(c) Optional Prepayments. Borrowers shall have the right, from
time-to-time, to prepay the unpaid Principal Debt, in whole or in
part, without premium or penalty, upon the payment of accrued interest
on the amount prepaid to and including the date of payment; provided,
however, that partial prepayments of principal
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shall be in an amount equal to $100,000.00 or a greater integral multiple
of $50,000.00 (or, if less, the unpaid Principal Debt).
"(d) Mandatory Prepayments. In addition to any other or additional
payments and/or prepayments that may be required hereunder or under any of
the other Loan Documents, Borrowers shall prepay the Principal Debt within
two Business Days following the issuance of any equity securities (other
than pursuant to options heretofore granted to any employee or director of
GAINSCO or any of the Subsidiaries and other than equity securities issued
to GAINSCO or a Subsidiary) and the receipt of Available Proceeds therefrom
by GAINSCO or any Subsidiary after March 23, 2001 or the sale or other
disposition by GAINSCO or any Subsidiary (other than an Insurance
Subsidiary) of any of its assets in an amount equal to 50% of the Available
Proceeds attributable to any such issuance or disposition, as applicable.
Notwithstanding the foregoing, Borrowers shall not be required to prepay
the Principal Debt in respect of dispositions (i) of Investments by GAINSCO
and its Subsidiaries in the ordinary course of business to the extent that
the proceeds thereof are reinvested in Investments retained by the Company
that owned the Investment so disposed of, (ii) of obsolete equipment in the
ordinary course of business to the extent that the proceeds thereof are
used to purchase replacement items within 90 days, (iii) of other items to
the extent that the aggregate Available Proceeds therefrom do not exceed
$250,000 in any calendar year, or (iv) to GMSP of the Property Subject to
GMSP Put. Additionally, the following shall not be considered to be sales
or dispositions of assets by GAINSCO or any Subsidiary for purposes of this
Section 2.5(d): (v) the conversion to cash of portfolio securities, issued
by a Person other than any of the Companies, by GAINSCO or any Subsidiary,
(w) the declaration, making and/or payment of dividends by any Subsidiary
to GAINSCO (whether made directly to GAINSCO or through one or more
Subsidiaries), (x) transfers of cash between and among GAINSCO and the
Subsidiaries that are not Insurance Subsidiaries, made in the ordinary
course of business of both the transferee and the transferor, (y) transfers
of cash between and among GAINSCO and the Subsidiaries (including the
Insurance Subsidiaries), made in the ordinary course of business of both
the transferee and the transferor, to the extent that such transfer
consists solely of the distribution to an Insurance Subsidiary of insurance
premiums and/or commissions attributable to insurance premiums previously
remitted to the transferor by, or for the account of, the applicable
insurance policyholder(s), or (z) transfers of cash between and among
GAINSCO and the Subsidiaries (including the Insurance Subsidiaries), made
in the ordinary course of business of both the transferee and the
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transferor, to the extent that such transfer consists solely of the payment
by the transferor of payroll amounts or other costs and expenses
attributable to Insurance Subsidiaries and the amounts thereof, in the
aggregate, have previously been funded, or will substantially
contemporaneously with such transfer be reimbursed to the transferor, by
the applicable Insurance Subsidiary(ies)."
2.3 The Credit Agreement is hereby amended so as to provide that, from and
after the Amendment No. 4 Closing Date, the Borrowers shall not be entitled to
any Eurodollar Borrowing and all Borrowings shall thereafter be Base Rate
Borrowings.
2.4 Section 7.8 of the Credit Agreement is hereby amended to read in its
entirety as follows:
7.8 Limitation on Sale of Properties. Borrowers shall not, and shall
not permit any of the other Companies to sell, assign, exchange, lease, or
otherwise dispose of any of its properties, rights, assets, or business,
whether now owned or hereafter acquired except in the ordinary course of
business; provided, that Borrowers and the other Companies may sell,
assign, or otherwise dispose of their respective accounts receivable,
properties, rights, assets and businesses if, and to the extent that, (i)
such sale, assignment, or other disposition is made to an unaffiliated
third party in a bona fide arms-length transaction; (ii) the applicable
Borrower or other Company(ies) involved therein receives, substantially
contemporaneously with the closing of the applicable transaction, cash
consideration in an amount at least equal to eighty percent (80%) of the
aggregate fair market value of the total consideration to be received by
such party(ies) in connection therewith; and (iii) if such sale, assignment
or other disposition is made by either of the Borrowers or any of the other
Companies other than an Insurance Subsidiary, such sale, assignment or
other disposition is of a type that invokes the mandatory prepayment
provisions of Section 2.5(d) herein and the Borrowers, in fact, make the
mandatory prepayment of the unpaid Principal Debt required by Section 2.5
(d) hereof in connection with such sale, assignment or other disposition;
and provided, further, that the requirements of subsection (ii) shall not
apply with respect to the sale, assignment, exchange, lease or other
disposition by any Insurance Subsidiary of any properties, rights, assets
or business, whether now owned or hereafter acquired, of such Insurance
Subsidiary.
2.5 Section 7.11 of the Credit Agreement is hereby amended to read in its
entirety as follows:
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7.11 Receivables Policy. Borrowers shall not, and shall not permit any
of the other Companies to, make any material change in its credit and
collection policy, which change would materially impair the collectibility
of its receivables, or rescind, cancel, or modify any receivable, except in
the ordinary course of business.
2.6 The Credit Agreement is hereby amended by deleting Section 7.5
Limitation on Investments, Section 7.9 Acquisitions, Section 7.10 Liquidation,
Mergers, Consolidations, and Dispositions of Substantial Assets, Section 7.15
Minimum Consolidated Net Worth, Section 7.16 Fixed Charges Coverage Ratio,
Section 7.18 Risk-Based Capital Ratio, Section 7.20 Capital Expenditures, and
Section 7.22 Amount Recoverable from Reinsurers thereof in their entirety.
2.7 Section 7.14 of the Credit Agreement is hereby amended to read in its
entirety as follows:
7.14 Sale and Leaseback. Borrowers shall not, and shall not permit any
of the other Companies to, enter into any arrangement with any Person
pursuant to with any Company will lease, as lessee, any property which it
owned as of the date hereof and which it sold, transferred, or otherwise
disposed of to such other Person, except that GAIC may sell its premises at
000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000 and lease back, as lessee,
said premises, provided that such sale and such lease back satisfy the
following requirements: (i) GAIC is the only Company that is liable, in
whole or in part, with respect to such lease of such premises, (ii) such
lease of such premises is for a term (inclusive of any and all extensions)
of not more than eighteen (18) months, and (iii) such lease of such
premises is at a lease rate, and contains other terms and conditions, that
are commercially reasonable under the circumstances for such premises at
the time such lease is entered into by GAIC. A sale of such premises by
GAIC in accordance with the foregoing requirements shall not be subject to
the mandatory prepayment provisions of Section 2.5(d) hereof.
2.8 Section 7.19 of the Credit Agreement is hereby amended to read in its
entirety as follows:
7.19 Minimum Statutory Surplus. Borrowers shall not permit the
Statutory Surplus of GAIC to be less than the following amounts as of the
last day of the following periods:
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Applicable Minimum Statutory
Applicable Period Surplus
----------------- ----------------------------
any fiscal quarter of GAIC ended $ 72,000,000
on or before December 31, 2000
any fiscal quarter of GAIC ended $ 44,000,000
after December 31, 2000, but on or
before December 31, 2001
any fiscal quarter of GAIC ending An amount equal to the lesser of
after December 31, 2001, but on or (i) $20,000,000, and (ii) five (5)
before December 31, 2002 times the amount of the unpaid
Principal Debt as of the last day of
the applicable fiscal quarter
any fiscal quarter of GAIC ending An amount equal to three (3) times
after December 31, 2002 the amount of the unpaid Principal
Debt as of the last day of the
applicable fiscal quarter
As used in the foregoing table, the "amount of the unpaid Principal Debt as
of the last day of the applicable fiscal quarter" shall be calculated to take
into account, retroactively any prepayments in respect of the outstanding
Principal Debt made after the last day of the applicable fiscal quarter but on
or before the thirtieth (30th) day following the last day of such applicable
fiscal quarter.
2.9 Section 7.23 of the Credit Agreement is hereby amended to read in its
entirety as follows:
7.23 Issuance of Capital Stock. None of the Subsidiaries may issue any
capital stock or other equity security except for issuances that are either
(i) on terms and conditions acceptable to the Lender or (ii) made pursuant
to a stock dividend or stock split in which all of the newly issued
securities are immediately delivered to Lender to be held pursuant to the
applicable Collateral Documents.
2.10 The Credit Agreement is hereby amended so as to provide that,
notwithstanding anything to the contrary contained in the Credit Agreement
and/or the other Loan Documents, but expressly provided that no Event of Default
and/or Potential Default then exists under the Credit Agreement and/or any of
the other Loan Documents, upon the acquisition by GMSP of the Property Subject
to GMSP Put, the Lender shall, at the cost and expense of the Borrowers, release
any and all Liens that the Lender may hold with respect to such property and
deliver such release to GMSP, and the Borrowers shall not be obligated to make
any additional mandatory prepayment on the Obligation from the proceeds received
by the Borrowers in connection
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therewith. Lender hereby consents to the disposition by GAINSCO of the Property
Subject GMSP Put to GMSP for consideration of approximately $2,000,000.
2.11 The Credit Agreement is hereby amended to add the following new
Section 6.18:
"Section 6.18 Notification Events. In addition to the other
disclosure, reporting and other covenants and agreements contained therein,
the Borrowers and the Subsidiary Pledgors hereby covenant and agree to
furnish the Lender with reasonable advance notice, in writing, of the
contemplated occurrence or existence of any and all Notification Events,
which notice shall contain a sufficiently detailed description of the
applicable Notification Event, and shall be delivered to the Lender in
sufficient time prior to the consummation of any such Notification Event
(but, in any event, promptly after the execution and delivery of any
definitive agreement with respect thereto), to permit the Lender to
evaluate the applicable Notification Event and to prepare supplemental
collateral documentation, to the extent deemed necessary or appropriate by
the Lender, in order to grant, create, perfect, maintain, continue or
otherwise effectuate and/or evidence a perfected, first priority (subject
only to Permitted Liens) Lien, in favor of the Lender, in, to and covering
all assets of the Borrowers, the Subsidiary Pledgors and/or any other or
additional Subsidiary(ies) that may be created as part of such Notification
Event or otherwise and to obtain a guaranty of the Obligation by any such
other or additional Subsidiary(ies), in each case except to the extent that
any such Subsidiary is precluded by applicable Legal Requirements from
granting such a Lien and/or guaranteeing such Obligation. Additionally,
except to the extent that any Subsidiary is precluded by applicable Legal
Requirements from doing so, substantially contemporaneously with the
consummation of any Notification Event, the Borrowers and the Subsidiary
Pledgors shall, and shall cause any and all other or additional
Subsidiaries to, execute and deliver to the Lender all guarantees, security
agreements, financing statements, collateral assignments, deeds of trust,
guaranties, lien instruments and other collateral documentation which the
Lender may reasonably require in order to guarantee the Obligation and to
grant, create, perfect, maintain, continue or otherwise effectuate and/or
evidence a perfected, first priority (subject only to Permitted Liens)
Lien, in favor of the Lender, in, to and covering all assets of such
entities. The terms, provisions and forms of such documents shall be such
as are reasonably acceptable to the Lender; provided, however, that such
documents shall not seek to give to Lender any control or offset rights in
any cash accounts of any Borrower or Subsidiary. The Borrowers and the
Subsidiary Pledgors further acknowledge and agree that the failure of
GAINSCO and/or any Subsidiary to fully
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comply in a timely manner with the covenants and agreements of such parties
contained herein shall immediately, and without any necessity for notice
from the Lender or otherwise and without any cure or grace period (all of
which are hereby expressly waived by the Borrowers and the Subsidiary
Pledgors), constitute an Event of Default under the Credit Agreement and
the other Loan Documents."
3. Liens and Security Interests. In order to induce the Lender to enter
into this Amendment No. 4 and in order to secure the payment of the Indebtedness
and the performance of the Obligation, the Borrowers and each of the Subsidiary
Pledgors hereby grant to the Lender a first lien and security interest upon all
Collateral and all other property presently securing all or any portion of the
Obligation. Except to the extent that any Subsidiary is precluded by applicable
Legal Requirements from doing so, GAINSCO and each Subsidiary which is not an
Insurance Subsidiary shall, on or before March 31, 2002, execute and deliver to
the Lender Restated Pledge Agreements substantially in the form of Exhibit A
hereto (including all schedules and deliveries required thereby), Restated
Security Agreements in substantially the form of Exhibit B (including all
schedules and deliveries required thereby), Officer's Certificates substantially
in the form of Exhibit C hereto (including all attachments required thereby) and
all financing statements, collateral assignments, deeds of trust, stock powers,
guaranties, lien instruments and other collateral documentation which the Lender
may reasonably require in order to grant, create, perfect, maintain, continue or
otherwise effectuate and/or evidence a perfected, first priority (subject only
to Permitted Liens) Lien, in favor of the Lender, in, to and covering all assets
of such entities. The terms, provisions and forms of such documents shall be
such as are reasonably acceptable to the Lender; provided, however, that such
documents shall not seek to give to Lender any control or offset rights in any
cash accounts of any Borrower or Subsidiary. The Borrowers and the Subsidiary
Pledgors further acknowledge and agree that the failure of GAINSCO and/or any
Subsidiary to fully comply in a timely mariner with the covenants and agreements
of such parties contained herein shall immediately, and without any necessity
for notice from the Lender or otherwise and without any cure or grace period
(all of which are hereby expressly waived by the Borrowers and the Subsidiary
Pledgors), constitute an Event of Default under the Credit Agreement and the
other Loan Documents. With respect to the Property Subject to GMSP Put, the
foregoing provisions of this Section 3 are expressly subject to the release
provisions of Section 2.10 hereof.
4. Representations, Warranties, Covenants and Agreements. In order to
induce the Lender to enter into this Amendment No. 4, the Borrowers and each of
the Subsidiary Pledgors hereby represent, warrant, covenant and agree to and
with the Lender as follows:
(a) The Borrowers and each of the Subsidiary Pledgors have the power
and authority to enter into and perform this Amendment No. 4 and all
documents and actions required or contemplated hereunder to which they are
parties; all actions necessary or appropriate for the execution and
performance of this Amendment No. 4 and all documents and actions required
or contemplated hereby have been taken; and the Credit Agreement, as
amended hereby, and the other Loan Documents constitute the legal, valid,
and binding obligations of the Borrowers and the Subsidiary Pledgors, as
applicable, enforceable in accordance with their respective terms.
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(b) After giving effect to this Amendment Xx. 0, xxxx of the Borrowers
or any of the Subsidiary Pledgors are in default under or violating any
provisions of their respective Articles or Certificates of Incorporation or
Bylaws (or other organizational and/or internal governance documentation),
and none of the Borrowers or any of the Subsidiary Pledgors are in default
under or violating any material provisions of any indenture, mortgage, hen,
agreement, contract, deed, lease, loan or credit agreement, note, order,
judgment, decree, or other instrument or restriction of any kind or
character to which any one or more of them is a party or by which anyone or
more of them is bound, or to which any of their respective assets are
subject, which default would have a material adverse effect on the ability
of any of the Borrowers and/or Subsidiary Pledgors to perform their
respective obligations hereunder, thereunder, or under any of the other
Loan Documents; and neither the execution and delivery of this Amendment
No. 4 nor compliance with the terms, conditions, and provisions hereof will
conflict with or result in the breach of, or constitute a default under,
any of the foregoing.
(c) After giving effect to this Amendment No. 4, neither any Event of
Default nor any Potential Default exists under, or in connection with, the
Credit Agreement or any of the other Loan Documents.
(d) Each representation and warranty contained in the Credit Agreement
and the Amendments is true and correct as of the date of this Amendment No.
4 except as previously disclosed to the Lender in writing.
(e) Each financial statement of the Companies heretofore furnished to
the Lender pursuant to Section 6.1 of the Credit Agreement was prepared in
accordance with the provisions of Section 6.1 of the Credit Agreement.
Except as heretofore disclosed to the Lender in writing, since the date of
the last such financial statement there has been no materially adverse
change in the financial condition or business prospects of the Companies.
(f) None of the Articles or Certificates of Incorporation or by-laws
(or other organizational and/or internal governance documentation) of any
of the Companies have been modified, rescinded or revoked since November
13, 1998, except as heretofore disclosed to the Lender in writing or as set
forth in certificates delivered to the Lender on the Amendment No. 4
Closing Date, and the same are currently in full force and effect, except
as aforesaid.
(g) The Subsidiary Pledgors constitute all of the Subsidiaries (other
than Insurance Subsidiaries). Each of the Insurance Subsidiaries is
prohibited by applicable Legal Requirement from guaranteeing the
Obligation, or any portion thereof, and/or encumbering any of its
respective assets as security for the Obligation, or any portion thereof.
5. RELEASE. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN CONSIDERATION
OF THE LENDER'S EXECUTION OF THIS AMENDMENT NO. 4, EACH OF THE BORROWERS AND
EACH OF THE SUBSIDIARY PLEDGORS, IN EACH CASE ON BEHALF OF ITSELF AND EACH OF
THEIR SUCCESSORS AND
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ASSIGNS (COLLECTIVELY, THE "RELEASORS"), DOES HEREBY FOREVER RELEASE, DISCHARGE
AND ACQUIT THE LENDER AND EACH OF ITS PARENT, SUBSIDIARIES AND AFFILIATE
CORPORATIONS OR PARTNERSHIPS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
PARTNERS, TRUSTEES, SHAREHOLDERS, AGENTS, ATTORNEYS AND EMPLOYEES, AND THEIR
RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS (COLLECTIVELY, THE "RELEASEES") OF AND
FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, RESPONSIBILITIES, DISPUTES,
CAUSES OF ACTION (WHETHER AT LAW OR EQUITY), INDEBTEDNESS AND OBLIGATIONS
(COLLECTIVELY, "CLAIMS"), OF EVERY TYPE, KIND, NATURE, DESCRIPTION OR CHARACTER;
INCLUDING, WITHOUT LIMITATION, ANY SO-CALLED "LENDER LIABILITY" CLAIMS OR
DEFENSES, AND IRRESPECTIVE OF HOW, WHY OR BY REASON OF WHAT FACTS, WHETHER SUCH
CLAIMS HAVE HERETOFORE ARISEN, ARE NOW EXISTING OR HEREAFTER ARISE, OR WHICH
COULD, MIGHT, OR MAY BE CLAIMED TO EXIST, OF WHATEVER KIND OR NAME, WHETHER
KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, LIQUIDATED OR UNLIQUIDATED, EACH AS
THOUGH FULLY SET FORTH HEREIN AT LENGTH, WHICH IN ANY WAY ARISE OUT OF, ARE
CONNECTED WITH OR IN ANY WAY RELATE TO ACTIONS OR OMISSIONS WHICH OCCURRED ON OR
PRIOR TO THE DATE HEREOF WITH RESPECT TO ANY OF THE RELEASORS, THE OBLIGATION,
THIS AMENDMENT NO. 4, THE CREDIT AGREEMENT, ANY LOAN DOCUMENT OR ANY THIRD
PARTIES LIABLE IN WHOLE OR IN PART FOR THE OBLIGATION. EACH OF THE RELEASORS
FURTHER AGREES TO INDEMNIFY THE RELEASEES AND HOLD EACH OF THE RELEASEES
HARMLESS FROM AND AGAINST ANY AND ALL SUCH CLAIMS WHICH MIGHT BE BROUGHT AGAINST
ANY OF THE RELEASEES ON BEHALF OF ANY PERSON OR ENTITY, INCLUDING, WITHOUT
LIMITATION, OFFICERS, DIRECTORS, AGENTS, TRUSTEES, CREDITORS OR SHAREHOLDERS OF
ANY OF THE RELEASORS. FOR PURPOSES OF THE RELEASE CONTAINED IN THIS PARAGRAPH,
ANY REFERENCE TO ANY RELEASOR SHALL MEAN AND INCLUDE, AS APPLICABLE, SUCH
PERSON'S OR PERSONS' SUCCESSORS AND ASSIGNS, INCLUDING, WITHOUT LIMITATION, ANY
RECEIVER, TRUSTEE OR DEBTOR-IN-POSSESSION, ACTING ON BEHALF OF SUCH PARTIES.
6. Conditions Precedent. The effectiveness of this Amendment No. 4 is subject to
the satisfaction of the following conditions precedent:
(a) Deliveries. The Lender shall have received all of the following
(with respect to each such document, instrument or agreement to be
delivered hereunder, same shall be dated the Amendment No. 4 Closing Date,
unless otherwise indicated herein) in form and substance acceptable to the
Lender:
(i) Amendment No. 4. The Borrowers and each of the Subsidiary
Pledgors shall have executed and delivered to the Lender this
Amendment No. 4.
12
(ii) Notice of Final Agreement. The Borrowers and each of the
Subsidiary Pledgors shall have executed and delivered to the Lender a
Notice of Final Agreement in form and substance acceptable to the
Lender.
(iii) Side Letter Regarding Treasury Management. Each of the
Borrowers, each of the Subsidiary Pledgors and each of the other
Companies shall have executed and delivered a letter agreement with
the Lender relating to the termination of the treasury management
services and functions currently being performed by the Lender and/or
certain Affiliates of the Lender for such Companies.
(iv) Attorneys' Fees and Expenses. The costs and expenses of the
Lender's legal counsel shall have been paid in full by the Borrowers.
(v) Additional Information. The Lender shall have received such
additional approvals, information, agreements and/or documents as the
Lender may reasonably request.
(b) No Default. No Event of Default or Default shall be continuing.
(c) Representations and Warranties. All of the representations and
warranties contained in Section 5 of the Credit Agreement, as amended by
the Amendments, and in the other Loan Documents shall be true and correct
on and as of the date of this Amendment No. 4 with the same force and
effect as if such representations and warranties had been made on and as of
such date, except as modified hereby.
7. Further Assurances. The Companies will execute and deliver such writings and
take such other actions as the Lender may reasonably request from time to time
to carry out the intent of the Credit Agreement, this Amendment No. 4 and the
other Loan Documents and to perfect or give Xxxxxx assurances of any right
granted or provided for therein or herein.
8. Ratification, Etc. The terms and provisions set forth in this Amendment No. 4
shall modify and supersede all inconsistent terms and provisions set forth in
the Credit Agreement and the other Loan Documents and, except as expressly
modified and superseded by this Amendment No. 4, the terms and provisions of the
Credit Agreement and all other Loan Documents are ratified and confirmed and
shall continue in Rill force and effect. The Borrowers, the Subsidiary Pledgors
and the Lender agree that the Credit Agreement and the other Loan Documents, as
amended hereby, shall continue to be legal, valid, binding and enforceable in
accordance with their respective terms.
9. Survival. All representations and warranties made in this Amendment No. 4 or
any other Loan Document, including any Loan Document furnished in connection
with this Amendment No. 4, shall survive the execution and delivery of this
Amendment No. 4 and the other Loan Documents, and no investigation by the Lender
or any closing shall affect the representations and warranties or the right of
the Lender to rely upon them.
13
10. Amended References. Each of the Loan Documents, including the Credit
Agreement and any and all other agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Credit Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Credit Agreement shall mean a reference
to the Credit Agreement as amended by the Amendments.
11. No Invalidity. Any provision of this Amendment No. 4 held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment No. 4 and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
12. Performance. This Amendment No. 4 and all other Loan Documents executed
pursuant hereto shall be deemed to have been made and to be performable in
Dallas, Dallas County, Texas.
13. Counterparts, Etc. To facilitate execution, this Amendment No. 4 may be
executed in any number of counterparts as may be convenient or necessary, and it
shall not be necessary that the signatures of all parties hereto be contained on
anyone counterpart hereof Additionally, the parties hereto hereby agree that,
for purposes of facilitating the execution of this Amendment No. 4, (a) the
signature pages taken from separate individually executed counterparts of this
Amendment No. 4 may be combined to form multiple fully executed counterparts and
(b) a facsimile transmission shall be deemed to be an original signature. All
executed counterparts of this Amendment No. 4, shall be deemed to be originals,
but all such counterparts taken together or collectively, as the case may be,
shall constitute one and the same agreement.
THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THE
AMENDMENTS, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
14
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
4 effective as of the date first above written.
BORROWERS: GAINSCO, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
GAINSCO SERVICE CORP.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name:
Title:
15
SUBSIDIARY PLEDGORS: AGENTS PROCESSING SYSTEMS, INC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
RISK RETENTION ADMINISTRATORS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
GENERAL AGENTS PREMIUM FINANCE COMPANY
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
MGA PREMIUM FINANCE COMPANY
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
NATIONAL SPECIALTY LINES, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
16
DLT INSURANCE ADJUSTERS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
LALANDE FINANCIAL GROUP, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Name:
Title:
MGA AGENCY, INC.
By: /s/ Xxxxxxx Xxx
----------------------------
Name:
Title:
LENDER: BANK ONE, NA
By: /s/ C. Xxxxxx Xxxxxx
----------------------------
C. Xxxxxx Xxxxxx
First Vice President
17
RESTATED SECURITY AGREEMENT
THIS RESTATED SECURITY AGREEMENT ("Agreement") is made as of February 27,
2002, by *[GAINSCO ENTITY]*, a ______________ ("Debtor"), in favor of BANK ONE,
NA ("Bank"). Debtor hereby agrees with Bank as follows:
I. (a) Definitions. As used in this Agreement, the following terms shall have
the meanings indicated below:
"Accession" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to an
accession (as defined in the UCC), and (whether or not included in that
definition), a good that is physically united with another good in such a manner
that the identity of the original good is not lost.
"Account" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to an
account (as defined in the UCC), and (whether or not included in such
definition), a right to payment of a monetary obligation, whether or not earned
by performance for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of, and for service rendered or to be rendered,
and all right, title, and interest in any returned property, together with all
rights, titles, securities, and guarantees with respect thereto, including any
rights to stoppage in transit, replevin, reclamation, and resales, and all
related Liens whether voluntary or involuntary.
"Account Debtor" means any Person who is or who may become obligated under,
with respect to or on account of an Account, Chattel Paper or General
Intangible.
"Chattel Paper" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to
chattel paper (as defined in the UCC), and (whether or not included in such
definition), a Record or Records that evidence both a monetary obligation and a
security interest in specific Goods, a security interest in specific Goods and
Software used in the Goods, or a lease of specific Goods.
"Collateral" means the entire right, title and interest of Debtor in and to
all property of Debtor (whether now or hereafter existing, owned, arising or
acquired), including but not limited to (a) Accounts, (b) Accessions, (c)
Chattel Paper, (d) Commercial Tort Claims, including but not limited to the
specific Commercial Tort Claims described on Schedule 8, (e) Commodity Accounts,
(f) Commodity Contracts, (g) Deposit Accounts, (h) Documents, (i) Equipment, (j)
Financial Assets, (k) Fixtures, (l) General Intangibles, (m) Goods, (n)
Instruments, (o) Intellectual Property, (p) Inventory, (q) Investment Property,
(r) Letters of Credit, (s) Letter-of-Credit Rights, (t) Payment Intangibles, (u)
Permits, (v) Securities, (w) Securities Accounts, (x) Securities Entitlements,
(y) Software, (z) Supporting Obligations, (aa) cash and cash accounts, and (ab)
Proceeds.
"Commercial Tort Claim" means all right, title, and interest of Debtor
(in each case whether now or hereafter existing, owned, arising, or acquired) in
and to a commercial tort claim (as defined in the UCC), and (whether or not
included in such definition), all claims arising in tort with respect to which
the claimant (a) is an organization, or (b) an individual and the claim
RESTATED SECURITY AGREEMENT - Page 1
(i) arose in the course of the claimant's business or profession, and (ii) does
not include damages arising out of personal injury to or the death of an
individual.
"Commodity Account" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to a
commodity account (as defined in the UCC), and (whether or not included in such
definition), an account maintained by a Commodity Intermediary in which a
Commodity Contract is carried for a Commodity Customer.
"Commodity Contract" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to a commodity futures contract, an option on a commodity futures contract, a
commodity option, or any other contract if the contract or option is (a) traded
on or subject to the rules of a board of trade that has been designated as a
contract market for such a contract pursuant to the federal commodities laws, or
(b) traded on a foreign commodity board of trade, exchange, or market, and is
carried on the books of a Commodity Intermediary for a Commodity Customer.
"Commodity Customer" means a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a Person that is registered as a futures
commission merchant under the federal commodities laws or (b) a Person that in
the ordinary course of its business provides clearance or settlement services
for a board of trade that has been designated as a contract market pursuant to
federal commodities laws.
"Copyright License" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to
any written agreement, now or hereafter in effect, granting any right to any
third party under any Copyright now or hereafter owned by Debtor or which Debtor
otherwise has the right to license, or granting any right to Debtor under any
Copyright now or hereafter owned by any third party, and all rights of Debtor
under any such agreement.
"Copyrights" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to (a)
all copyright rights in any work subject to the copyright laws of any
Governmental Authority, whether as author, assignee, transferee, or otherwise,
(b) all registrations and applications for registration of any such copyright in
any Governmental Authority, including registrations, recordings, supplemental
registrations, and pending applications for registration in any jurisdiction,
and (c) all rights to use and/or sell any of the foregoing.
"Credit Agreement" means the Revolving Credit Agreement dated as of
November 13, 1998, by and among [GAINSCO, Inc.], *[GAINSCO Service
Corp.]*[Debtor]*, and Bank One, Texas, National Association, together with all
amendments and restatements.
"Deposit Account" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to a
deposit account (as defined in the
RESTATED SECURITY AGREEMENT - Page 2
UCC), and (whether or not included in such definition), a demand, time, savings,
passbook, or similar account maintained at a bank (as defined in the UCC).
"Document" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to a
document (as defined in the UCC), and (whether or not included in such
definition), a document of title, xxxx of lading, dock warrant, dock receipt,
warehouse receipt, or order for the delivery of Goods.
"Electronic Chattel Paper" means all right, title, and interest of Debtor
(in each case whether now or hereafter existing, owned, arising, or acquired) in
and to electronic chattel paper (as defined in the UCC), and (whether or not
included in such definition), chattel paper evidenced by a Record or Records
consisting of information stored in electronic medium.
"Entitlement Holder" means a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the UCC, such Person is the Entitlement Holder.
"Equipment" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to
equipment (as defined in the UCC), and (whether or not included in such
definition), all Goods other than Inventory, or consumer goods, and all
improvements, accessions, or appurtenances thereto. The term Equipment shall
include Fixtures.
"Event of Default" means (a) a "Potential Default" or an "Event of Default"
as defined in the Credit Agreement, or (b) a Rejection.
"Excluded Property" means (a) Deposit Accounts of Debtor, and (b) Cash
Equivalent Investments and Investments in money market mutual funds of Debtor.
"Financial Asset" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to a
financial asset (as defined in the UCC), and (whether or not included in such
definition), (a) a Security, (b) an obligation of a Person or a share,
participation or other interest in a Person or in property or an enterprise of a
Person, that is, or is of a type, dealt in or traded on financial markets or
that is recognized in any area in which it is issued or dealt in as a medium for
investment, or (c) any property that is held by a Securities Intermediary for
another Person in a Securities Account if the Securities Intermediary has
expressly agreed with the other Person that the property is to be treated as a
financial asset under Article 8 of the Uniform Commercial Code. As the context
requires, "Financial Asset" means either the interest itself or the means by
which a Person's claim to it is evidenced, including a certificated or
uncertificated Security, a certificate representing a Security, or a Security
Entitlement.
"Fixtures" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to
fixtures (as defined in the UCC), and (whether or not included in such
definition), all Goods that have become so related to particular
RESTATED SECURITY AGREEMENT - Page 3
real property that an interest in them arises under the real property law of the
state in which the real property is situated.
"General Intangible" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to a general intangible (as defined in the UCC), and (whether or not included in
such definition), all personal property, including things in action, other than
Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents,
Goods, Instruments, Investment Property, Letter-of-Credit Rights, Letters of
Credit, money, and oil, gas or other minerals before extraction.
"Goods" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to goods
(as defined in the UCC), and (whether or not included in such definition), all
things that are movable when a security interest attaches.
"Indebtedness" means all indebtedness, obligations and liabilities of
Borrower and each Obligated Party to Secured Party of any kind or character, now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several or joint and
several, including without limitation all indebtedness, obligations and
liabilities of Borrower and each Obligated Party to Secured Party now existing
or hereafter arising by note, draft, acceptance, guaranty, endorsement, letter
of credit, assignment, purchase, overdraft, discount, indemnity agreement or
otherwise, (ii) all accrued but unpaid interest on any of the indebtedness
described in (i) above, (iii) all obligations of Borrower and each Obligated
Party to Secured Party under any documents evidencing, securing, governing
and/or pertaining to all or any part of the indebtedness described in (i) and
(ii) above, (iv) all costs and expenses incurred by Secured Party in connection
with the collection and administration of all or any part of the indebtedness
and obligations described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral securing all or any part of
such indebtedness and obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions, modifications and
rearrangements of the indebtedness and obligations described in (i), (ii), (iii)
and (iv) above. Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Indebtedness and
would be owed by Debtor or any Obligated Party under any Loan Document, but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding under any Debtor Law involving
Debtor, any Obligated Party or any other Person (including all such amounts
which would become due or would be secured but for the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding of Debtor, any Obligated Party or any other Person under any Debtor
Law).
"Instrument" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to an
instrument (as defined in the UCC), and (whether or not included in such
definition), a negotiable instrument or any other writing that evidences a right
to the payment of a monetary obligation, is not itself a security agreement or
lease, and is of a type that in ordinary course of business is transferred by
delivery with any necessary indorsement or assignment.
RESTATED SECURITY AGREEMENT - Page 4
"Intellectual Property" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to all intellectual and similar property of every kind and nature, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, Trade Secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, Software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
"Inventory" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to
inventory (as defined in the UCC), and (whether or not included in such
definition) Goods, that (a) are leased by a Person as lessor, (b) are held by a
Person for sale or lease or to be furnished under a contract of service, (c) are
furnished by a Person under a contract of service, or (d) consist of raw
materials, work in process, or materials used or consumed in a business,
including packaging materials, scrap material, manufacturing supplies and spare
parts, and all such Goods that have been returned to or repossessed by or on
behalf of such Person.
"Investment Property" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to investment property (as defined in the UCC), and (whether or not included in
such definition), a Security (whether certificated or uncertificated), a
Security Entitlement, Securities Account, Commodity Contract, and Commodity
Account.
"Letter of Credit" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to a
letter of credit (as defined in the UCC).
"Letter-of-Credit Right" means all right, title, and interest of Debtor
(in each case whether now or hereafter existing, owned, arising, or acquired) in
and to a letter-of-credit right (as defined in the UCC), and (whether or not
included in such definition), (a) a right to payment or performance under a
Letter of Credit, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance, and (b) the right of a beneficiary to
demand payment or performance under a Letter of Credit.
"License" means any Patent License, Trademark License, Copyright License,
or other similar license or sublicense.
"Obligated Party" means any party other than Borrower who secures,
guarantees and/or is otherwise obligated to pay all or any portion of the
Indebtedness.
"Patent License" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to
any written agreement, now or hereafter in effect, granting to any third party
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by Debtor or which Debtor otherwise has the right to license, is in
existence, or granting to Debtor any right to make, use or sell any invention on
RESTATED SECURITY AGREEMENT - Page 5
which a Patent, now or hereafter owned by any third party, is in existence, and
all rights of Debtor under any such agreement.
"Patents" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to (a)
all letters patent of any Governmental Authority, all registrations and
recordings thereof, and all applications for letters patent of any Governmental
Authority, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals, or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Payment Intangible" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to a payment intangible (as defined in the UCC), and (whether or not included in
such definition), a General Intangible under which the Account Debtor's
principal obligation is a monetary obligation.
"Permit" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to any
authorization, consent, approval, permit, license or exemption of, registration
or filing with, or report or notice to, any Governmental Authority, including
but not limited to any Governmental Authorization.
"Proceeds" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to
proceeds (as defined in the UCC), and (whether or not included in such
definition), (a) whatever is acquired upon the sale, lease, license, exchange,
or other disposition of collateral, (b) whatever is collected on, or distributed
on account of, collateral, (c) rights arising out of collateral, (d) claims
arising out of the loss, nonconformity, or interference with the use of, defects
or infringement of rights in, or damage to the collateral, (e) insurance payable
by reason of the loss or nonconformity of, defects or infringement of rights in,
or damage to the collateral, and (f) any and all other amounts from time to time
paid or payable under or in connection with any of the collateral.
"Record" means information that is inscribed on a tangible medium or that
is stored in an electronic or other medium and is retrievable in perceivable
form.
"Secured Party" means Bank, its successors and assigns, including without
limitation, any party to whom Bank, or its successors or assigns, may assign its
rights and interests under this Agreement.
"Security" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to any
obligations of an issuer or any shares, participation's or other interests in an
issuer or in property or an enterprise of an issuer which (a) are represented by
a certificate representing a security in bearer or registered form, or the
transfer of which may be registered upon books maintained for that purpose by or
on behalf of the issuer, (b) are one of a class or series or by its terms is
divisible into a class or series of shares, participation's, interests or
obligations, and (c)(i) are, or are of a type, dealt with or trade on securities
exchanges or securities markets or (ii) are a medium for investment and by their
terms expressly provide that they are a security governed by Article 8 of the
Uniform Commercial Code.
RESTATED SECURITY AGREEMENT - Page 6
"Securities Account" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to an account to which a Financial Asset is or may be credited in accordance
with an agreement under which the Person maintaining the account undertakes to
treat the Person for whom the account is maintained as entitled to exercise
rights that comprise the Financial Asset.
"Securities Intermediary" means (a) a clearing corporation, or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Security Entitlements" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to the rights and property interests as and of an Entitlement Holder with
respect to a Financial Asset.
"Software" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to
software (as defined in the UCC), and (whether or not included in such
definition), a computer program (including both source and object code) and any
supporting information provided in connection with a transaction relating to the
program.
"Supporting Obligation" means all right, title and interest of Debtor (in
each case whether now or hereafter existing, owned, arising or acquired) in and
to all supporting obligations (as defined in the UCC), and (whether or not
included in such definition), a Letter-of-Credit Right or secondary obligation
that supports the payment or performance of an Account, Chattel Paper, a
Document, a General Intangible, an Instrument, or Investment Property.
"Tangible Chattel Paper" means all right, title, and interest of Debtor (in
each case whether now or hereafter existing, owned, arising, or acquired) in and
to tangible chattel paper (as defined in the UCC), and (whether or not included
in such definition), chattel paper evidenced by a Record or Records consisting
of information that is inscribed on a tangible medium.
"Trade Secrets" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to
trade secrets, all know-how, inventions, processes, methods, information, data,
plans, blueprints, specifications, designs, drawings, engineering reports, test
reports, materials standards, processing standards and performance standards,
and all Software directly related thereto, and all Licenses or other agreements
to which Debtor is a party with respect to any of the foregoing.
"Trademark License" means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to
any written agreement, now or hereafter in effect, granting to any third party
any right to use any Trademark now or hereafter owned by Debtor or which Debtor
otherwise has the right to license, or granting to Debtor any right to use any
Trademark now or hereafter owned by any third party, and all rights of Debtor
under any such agreement.
RESTATED SECURITY AGREEMENT - Page 7
"Trademarks" means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to (a)
all trademarks, service marks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers, designs and general intangibles of like
nature, all registrations and recordings thereof, and all registration and
recording applications filed with any Governmental Authority in connection
therewith, and all extensions or renewals thereof, (b) all goodwill associated
therewith or symbolized thereby, (c) all other assets, rights and interests that
uniquely reflect or embody such goodwill, and (d) all rights to use and/or sell
any of the foregoing.
"UCC" means the Texas Business and Commerce Code, as in effect from time to
time in the State of Texas.
(b) Other Definitional Provisions. Capitalized terms not otherwise defined
herein have the meaning specified in the Credit Agreement, and, to the extent of
any conflict, terms as defined in the Credit Agreement shall control (provided,
that a more expansive or explanatory definition shall not be deemed a conflict).
(c) Construction. Unless otherwise expressly provided in this Agreement or
the context requires otherwise, (a) the singular shall include the plural, and
vice versa, (b) words of a gender include the other gender, (c) monetary
references are to Dollars, (d) time references are to Dallas time, (e)
references to "Articles," "Sections," "Exhibits," and "Schedules" are to the
Articles, Sections, Exhibits, and Schedules of and to this Agreement, (f)
headings used in this Agreement are for convenience only and shall not be used
in connection with the interpretation of any provision hereof, (g) references to
any Person include that Person's heirs, personal representatives, successors,
trustees, receivers, and permitted assigns, that Person as a debtor-in
possession, and any receiver, trustee, liquidator, conservator, custodian, or
similar party appointed for such Person or all or substantially all of its
assets, (h) references to any law include every amendment or restatement to it,
rule and regulation adopted under it, and successor or replacement for it, (i)
references to a particular Loan Document include each amendment or restatement
to it made in accordance with the Credit Agreement and such Loan Document, and
(j) the inclusion of Proceeds in the definition of "Collateral" shall not be
deemed a consent by Secured Party to any sale or other disposition of any
Collateral not otherwise specifically permitted by the terms of the Credit
Agreement or this Agreement. If any conflict exists between the provisions of
the Credit Agreement and this Agreement, the provisions of the Credit Agreement
shall control (provided, that the existence of provisions in this Agreement
which provisions or similar provisions are not contained in the Credit
Agreement, and a more expansive or explanatory provision in this Agreement than
in the Credit Agreement shall not be deemed a conflict). This Agreement is a
Loan Document.
II. Security Interest. As security for the Indebtedness, Debtor, for value
received, hereby assigns to and grants to Secured Party a continuing security
interest in the Collateral. Notwithstanding any provision of this Agreement or
any other Loan Document to the contrary, Secured Party shall not, either before
or after the occurrence of any Event of Default, seek control (as that term is
defined in the UCC) or setoff rights in any Excluded Property. The Debtor and
the Secured Party hereby expressly acknowledge and agree that the foregoing
limitation with respect to the Secured Party's rights to seek control or setoff
rights with respect to
RESTATED SECURITY AGREEMENT - Page 8
the Excluded Property shall (i) apply only to the Excluded Property, (ii) not
diminish or otherwise affect the exercise by Secured Party of any other or
additional rights and/or remedies to which the Secured Party may be entitled
under this Agreement, at law, in equity, or otherwise with respect to the
Excluded Property following the occurrence of an Event of Default; provided,
however, that, unless such Event of Default is based upon a monetary default
under the Credit Agreement or any of the other Loan Documents and/or a breach or
violation of Section 7.19 Minimum Statutory Surplus of the Credit Agreement,
Secured Party shall not exercise any of such other or additional rights and/or
remedies with respect to the Excluded Property unless the applicable Event of
Default has continued for ten (10) days following written notice thereof from
Secured Party to GAINSCO, Inc.
III. Representations and Warranties. Debtor represents and warrants the
following to Secured Party:
3.1 Debtor is duly organized, validly existing, and in good standing under
the laws of its jurisdiction of organization. Debtor has all power and authority
to own its properties and to carry on its business as now being conducted.
Debtor is duly qualified, in good standing, and authorized to do business in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization.
3.2 Debtor has all corporate power and has taken all necessary corporate
action to authorize it to execute and perform this Agreement and each other Loan
Document to which it is a party. This Agreement is the legal, valid, and binding
obligation of Debtor, enforceable in accordance with its terms, subject, to
enforcement of remedies, to the following qualifications: (a) equitable
principles generally, and (b) Debtor Laws (insofar as any such Debtor Law
relates to the bankruptcy, insolvency, or similar event of Debtor). *[Include in
Agreement of each Company other than Borrowers -- The transactions related to
the Loan Documents may reasonably be expected to benefit Debtor directly or
indirectly. Neither Secured Party nor any other Person has made any
representation, warranty, or statement to Debtor (other than as provided in the
Loan Documents) in order to induce Debtor to execute and perform this Agreement
or any other Loan Document to which Debtor is a party or Debtor or its property
is subject.]*
3.3 The execution, delivery, and performance by Debtor of each Loan
Document to which it is a party, and the consummation of the transactions
contemplated thereby, do not and will not (a) require any consent or approval
not already obtained, (b) violate any applicable Legal Requirement, (c) conflict
with, result in a breach of, or constitute a default under the Constituent
Documents of Debtor, or under any material Permit, indenture, agreement, or
other instrument, to which Debtor is a party or beneficiary of, or by which it
or its properties may be bound, or (d) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by Debtor, except Liens in favor of or for the benefit of
Secured Party. There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
3.4 This Agreement and the grant of the security interest pursuant to this
Agreement constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations, and (b)
subject to the filing of financing statements describing
RESTATED SECURITY AGREEMENT - Page 9
the Collateral, a perfected security interest in all Collateral in which a
security interest may be perfected by filing, recording, or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable Legal Requirement in such jurisdictions. The
security interest pursuant to this Agreement in the Collateral is and shall be
prior to any other Lien on any of the Collateral, other than Liens expressly
permitted to be prior to such security interest pursuant to the Credit
Agreement.
3.5 Debtor has good and indefeasible title to, or a valid leasehold
interest in, all of the Collateral free and clear of any Lien, except for Liens
expressly permitted pursuant to the Credit Agreement. Debtor has not granted a
security interest or other Lien in or made an assignment of any of the
Collateral (except for Liens expressly permitted by the Credit Agreement),
Debtor has neither entered into nor is it or any of its property subject to any
agreement limiting the ability of Debtor to xxxxx x Xxxx in any property of
Debtor, or the ability of Debtor to agree to grant or not xxxxx x Xxxx in any
property of Debtor. None of the Collateral is consigned Goods, subject to any
agreement of repurchase, or subject to any dispute, defense, or counterclaim. No
effective financing statement or other similar document used to perfect and
preserve a security interest or other Lien under the Legal Requirements of any
jurisdiction covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed (a) pursuant to this
Agreement or other Loan Document, or (b) relating to Liens expressly permitted
by the Credit Agreement. Debtor has not sold any interest in any of its
Accounts, Chattel Paper, promissory notes, or Payment Intangibles, or consigned
any of its Goods.
3.6 a. Schedule 1, Section (a) states the jurisdiction of organization,
type of entity, entity identification number issued by the appropriate authority
of the jurisdiction of Debtor's organization, and exact name of Debtor, as such
name appears in its currently effective organizational documents as filed with
the appropriate authority of the jurisdiction of Debtor's organization.
b. Schedule 1, Section (b) sets forth each other name Debtor has had in the
past five years, together with the date of the relevant change.
c. Except as set forth in Schedule 1, Section (c), Debtor has not changed
its identity or type of entity in any way within the past five years. Changes in
identity or type of entity include mergers, consolidations, acquisitions
(including both equity and asset acquisitions), and any change in the form,
nature, or jurisdiction of organization. Schedules 1 and 2 contain the
information required by Sections 3.6(b) and (c) as to each acquiree or
constituent party to a merger, consolidation, or acquisition.
d. Schedule 1, Section (d) states all other names (including trade,
assumed, and similar names) used by Debtor or any of its divisions or other
business units at any time during the past five years.
e. Schedule 1, Section (e) states the Federal Taxpayer Identification
Number of Debtor.
RESTATED SECURITY AGREEMENT - Page 10
3.7 a. The chief executive office of Debtor is located at the address
stated on Schedule 2, Section (a).
b. Schedule 2, Section (b) states all locations where Debtor maintains any
books or records relating to all Accounts (with each location at which Chattel
Paper, if any, is kept being indicated by an "*"). All Tangible Chattel Paper,
promissory notes, and other Instruments evidencing the Accounts have been
delivered and pledged to Secured Party duly endorsed and accompanied by such
duly executed instruments of transfer or assignment as are necessary for such
pledge, to be held as pledged collateral.
c. Schedule 2, Section (c) states all locations where Debtor maintains any
Equipment and Inventory.
d. Schedule 2, Section (d) states all the places of business of Debtor or
other locations of Collateral not identified in Schedule 2, Sections 2 (a), (b),
or (c).
e. Schedule 2, Section (e) states the names and addresses of all Persons
other than Debtor who have possession of any of the Collateral or other property
of Debtor.
f. Schedule 2, Section (f) is a complete and correct list of, as to any
property subject to a lease, license, or other right to use on which any
Collateral is located, the lease, license, or other agreement (and all
amendments thereto) pursuant to which Debtor has use of such property (complete
and correct copies of which have been provided to Secured Party), the lessor,
licensor, or other party pursuant to such agreement, the recording information
for such agreement, the description of such property sufficient for recording in
the real estate records of the jurisdiction in which such property is located,
and the name of the record owner of such property.
3.8 All Accounts have been originated by Debtor in the ordinary course of
business.
3.9 Schedule 3 is a complete and correct list of all the issued and
outstanding stock, partnership interests, limited liability company membership
interests, or other equity interest of each Person for which Debtor is the
record or beneficial owner of such stock, partnership interests, membership
interests or other equity interest.
3.10 a. Schedule 4, Section (a) is a complete and correct list of all
promissory notes and other evidence of indebtedness held by Debtor.
b. Schedule 4, Section (b) is (i) a complete and correct list of all
advances made by Debtor to any Subsidiary or made by any Subsidiary to Debtor or
to any other Subsidiary, which advances will be on and after the date hereof
evidenced by one or more notes pledged to Secured Party under the Pledge
Agreement and (ii) a true and correct list of all unpaid intercompany transfers
of goods sold and delivered by or to Debtor or any Subsidiary.
3.11 a. Schedule 5(a) is a complete and correct list of each state
registered Trademark, Patent and Copyright, and each state Trademark, Patent and
Copyright application in which Debtor has any interest (whether as owner,
licensee, or otherwise).
RESTATED SECURITY AGREEMENT - Page 11
b. Schedule 5(b) is a complete and correct list of each Patent in which
Debtor has any interest (whether as owner, licensee, or otherwise), including
the name of the registered owner, the nature of Debtor's interest, the Patent
registration number, the date of Patent issuance, and the country issuing the
Patent.
c. Schedule 5(c) is a complete and correct list of each Patent application
in which Debtor has any interest (whether as owner, licensee, or otherwise),
including the name of the Person applying to be the registered owner, the nature
of Debtor's interest, the Patent application number, the date of Patent filing,
and the country with which the Patent application was filed.
d. Schedule 5(d) is a complete and correct list of each Trademark in which
Debtor has any interest (whether as owner, licensee, or otherwise), including
the name of the registered owner, the nature of Debtor's interest, the
registered Trademark, the Trademark registration number, the international class
covered, the goods and services covered, the date of Trademark registration, and
the country registering the Trademark.
e. Schedule 5(e) is a complete and correct list of each Trademark
application in which Debtor has any interest (whether as owner, licensee, or
otherwise), including the name of the Person applying to be the registered
owner, the nature of Debtor's interest, the Trademark the subject of the
application, the Trademark application serial number, the international class
covered, the goods and services covered, the date of Trademark application
filing, and the country with which the Trademark application was filed.
f. Schedule 5(f) is a complete and correct list of each Copyright in which
Debtor has any interest (whether as owner, licensee, or otherwise), including
the name of the registered owner, the nature of Debtor's interest, the
registered Copyright, the date of Copyright issuance, and the country issuing
the Copyright.
g. Schedule 5(g) is a complete and correct list of each Copyright
application in which Debtor has any interest (whether as owner, licensee, or
otherwise), including the name of the Person applying to be the registered
owner, the nature of Debtor's interest, the Copyright the subject of the
application, the date of Copyright application filing, and the country with
which the Copyright application was filed.
h. Schedule 5(h) is a complete and correct list of all Trade Secrets in
which Debtor has any interest (whether as owner, licensee, or otherwise).
i. Schedule 5(i) is a complete and correct list of all allegations of use
under Section 1(c) or 1(d) of the Trademark Act (12 U.S.C. (S)1051, et seq.)
filed by Debtor
3.12 Schedule 6 is a complete and correct list of all Software (excluding
"mass market" Software (a) subject to a "shrink-wrap" or similar non-negotiable,
non-exclusive license agreement and (b) not material to the operations of Debtor
or used in processing material information of Debtor) in which Debtor has any
interest (whether as owner, licensee, or otherwise), including the name of the
licensor and the escrow agent under the applicable Software escrow agreement (if
any).
RESTATED SECURITY AGREEMENT - Page 12
3.13 Schedule 7 is a complete and correct list of all internet domain
names, the complete name of the registered owner, the related primary and
secondary IP addresses, and the domain registration provider for each domain
name and internet website in which Debtor has any interest, and the address
block for all IP addresses in which Debtor has any interest.
3.14 Debtor has exclusive possession and control of the Equipment,
Fixtures, and Inventory pledged by it hereunder.
3.15 Schedule 8 is a complete and correct list of all Commercial Tort
Claims in which Debtor has any interest, including the complete case name or
style, the case number, and the court or other tribunal in which the case is
pending.
3.16 Schedule 19 is a complete and correct list of all Letters of Credit in
which Debtor has any interest (other than solely as an applicant) and correctly
describes the bank which issued the Letter of Credit, and the Letter of Credit's
number, issue date, expiry, and face amount.
3.17 Except as set forth on Schedule 10, no consent of any other Person and
no authorization, approval or other action by, and no notice to or filing with,
any Governmental Authority is required (a) for the pledge by Debtor of the
Collateral pledged by it hereunder, for the grant by Debtor of the security
interest granted hereby, or for the execution, delivery, or performance of this
Agreement by Debtor, (b) for the perfection or maintenance of the pledge,
assignment, and security interest created hereby (including the first priority
nature of such pledge, assignment, and security interest) or (c) for the
enforcement of remedies by Secured Party.
3.18 Debtor possesses all Permits, including but not limited to, those
required for the operation of its business. Schedule 11 is a complete and
correct description of all of such Permits. All Permits of Debtor have been duly
authorized and obtained, and are in full force and effect, and Debtor is in
compliance in all respects with all provisions thereof. No Permit is the subject
of any pending or, to Debtor's best knowledge, threatened challenge or
revocation.
3.19 Schedule 12 is a complete and correct list of all insurance policies
owned by Debtor, or for which Debtor is a named insured, additional insured,
loss payee, or beneficiary.
3.20 Schedule 13 is a complete and correct list of all Commodity Accounts
in which Debtor has any interest, including the complete name and identification
number of the account, a description of the governing agreement, and the name
and street address of the Commodity Intermediary maintaining the account.
3.21 Schedule 14 is a complete and correct list of all Securities Accounts
(other than Securities Accounts that hold only Excluded Property) in which
Debtor has any interest, including the complete name and identification number
of the account, a description of the governing agreement, and the name and
street address of the Securities Intermediary maintaining the account.
3.22 Compliance with Environmental Laws. Except as disclosed in writing to
Secured Party: (a) Debtor is conducting Debtor's businesses in material
compliance with all applicable
RESTATED SECURITY AGREEMENT - Page 13
Legal Requirements, including without limitation, those pertaining to health or
environmental matters such as the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (collectively, together with any subsequent
amendments, hereinafter called "CERCLA"), the Resource Conservation and Recovery
Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste
Disposal Act Amendments of 1980, and the Hazardous Substance Waste Amendments of
1984 (collectively, together with any subsequent amendments, hereinafter called
"RCRA"), the Texas Water Code and the Texas Solid Waste Disposal Act; (b) none
of the operations of Debtor is the subject of a federal, state or local
investigation evaluating whether any material remedial action is needed to
respond to a release or disposal of any toxic or hazardous substance or solid
waste into the environment; (c) Debtor has not filed any notice under any
federal, state or local law indicating that Debtor is responsible for the
release into the environment, the disposal on any premises in which Debtor is
conducting its businesses or the improper storage, of any material amount of any
toxic or hazardous substance or solid waste or that any such toxic or hazardous
substance or solid waste has been released, disposed of or is improperly stored,
upon any premise on which Debtor is conducting its businesses; and (d) Debtor
otherwise does not have any known material contingent liability in connection
with the release into the environment, disposal or the improper storage, of any
such toxic or hazardous substance or solid waste. The terms "hazardous
substance" and "release", as used herein, shall have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal," as used herein, shall have
the meanings specified in RCRA; provided, however, that to the extent that the
laws of the State of Texas establish meanings for such terms which are broader
than that specified in either CERCLA or RCRA, such broader meanings shall apply.
IV. Covenants.
4.1 Further Assurances.
a. Debtor shall, with respect to any agreement or Permit containing any
restriction prohibiting Debtor from granting any security interest in such
agreement or Permit, use commercially reasonable best efforts to obtain all
necessary consents to or waivers of such restriction from any Person so as to
enable Debtor to effectively grant to Secured Party such security interest under
this Agreement.
b. Debtor will, from time to time and at Debtor's expense, promptly execute
and deliver all further instruments and documents (including supplements to all
schedules), execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
(in Secured Party's reasonable opinion), in order to perfect and preserve the
pledge, assignment, and security interest granted or purported to be granted
hereby, and take all further action, that may be necessary (in Secured Party's
reasonable opinion), in order to perfect and protect any pledge, assignment, or
security interest granted or purported to be granted hereby, and the priority
thereof, or to enable Secured Party to exercise and enforce Secured Party's
rights and remedies hereunder with respect to any Collateral.
c. In addition to such other information as shall be specifically provided
for herein, Debtor shall furnish to Secured Party such other information with
respect to the Collateral as Secured Party may request including, without
limitation, all documents and things in Debtor's
RESTATED SECURITY AGREEMENT - Page 14
possession, or subject to its demand for possession, related to the production,
sale, and lease by Debtor, or any Subsidiary of Debtor, licensee, or
subcontractor thereof, of products or services sold or leased by or under the
authority of Debtor, including by way of example, without limiting the interest
granted by this Agreement: (i) all lists and ancillary documents which identify
and describe any of Debtor's customers or advertisers, or those of its
Subsidiaries, licensees, or subcontractors for products sold or leased or
services rendered, including without limitation, statements and schedules
further identifying and describing the Collateral, such lists and ancillary
documents which contain each customer's full name and address, the identity of
the Person or Persons having the principal responsibility on each customer's
behalf for ordering products or services of the kind supplied by Debtor, the
credit, payment, discount, delivery, and other sale or lease terms applicable to
such customer, together with detailed information setting forth the total
purchases and leases and the patterns of such purchases and leases; (ii) all
product and service specification documents and production and quality of
services sold or leased; (iii) all documents which reveal the names and
addresses of all sources of supply, and all terms of purchase and delivery, for
all materials and components used in the production of products or provision of
services sold or leased; (iv) all documents constituting or concerning the then
current or proposed advertising and promotion by Debtor or its Subsidiaries,
licensees, or subcontractors of products or services sold or leased, including,
all documents which reveal the media used or to be used and the cost for all
such advertising conducted within the described period or planned for such
products or services; and (v) a description of all Software used in the
management of any of the foregoing. In connection with its enforcement of the
security interest, Secured Party may use such information or transfer it to any
assignee, licensee, or sublicensee permitted hereunder for such assignee's,
licensee's, or sublicensee's use.
d. Debtor authorizes Secured Party to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the authentication of Debtor where permitted by law. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. Debtor ratifies its execution and delivery of,
and the filing of, any financing statement describing any of the Collateral
which was filed prior to the date of this Agreement.
e. Debtor shall pay promptly when due all Taxes, assessments, and
governmental charges or levies imposed upon, and all claims (including claims
for labor, materials, and supplies) against, the Collateral except such Taxes as
are being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP.
f. Debtor will not, and will not permit any Person to, revise, modify,
amend, or restate the articles of incorporation of any corporation the stock or
other ownership interest in which is Collateral or the partnership, joint
venture, or other organizational document of any partnership or joint venture
any interest in which is Collateral or terminate, cancel, or dissolve any such
Person.
4.2 Place of Perfection; Records; Collection of Accounts, Chattel Paper and
Instruments.
RESTATED SECURITY AGREEMENT - Page 15
a. Debtor will not change the jurisdiction of its organization from the
jurisdiction specified in Schedule 1, Section (a) or its type of entity from the
type of entity specified in Schedule 1, Section (a). Debtor will not change its
name from the name specified in Schedule 1, Section (a) unless Secured Party has
received written notice from Debtor specifying the new name, such notice to be
received by Secured Party not less than 30 days prior to such change of name.
Debtor shall not change the location of its chief executive office to a location
other than the address specified in Section 2, Section (b), and the office where
it keeps its records concerning the Accounts, and the originals of all Chattel
Paper and Instruments, to a location other than the address specified in Section
2, Section (b) unless Secured Party has received written notice from Debtor
specifying the address of the new location of Pledgor's chief executive office
and the office where it keeps its records concerning the Accounts and the
originals of all Chattel Paper and Instruments, such notice to be received by
Secured Party not less than 30 days prior to such change of location. Debtor
will hold and preserve such records and Chattel Paper and Instruments and will
permit representatives of Secured Party at any time during normal business hours
to inspect and make abstracts from and copies of such records and Chattel Paper
and Instruments.
b. Except as otherwise provided in this Section 4.2(b), Debtor shall
collect in accordance with its customary business practices, at its own expense,
all amounts due or to become due Debtor under the Accounts, Chattel Paper, and
Instruments. In connection with such collections, Debtor may take such action as
Debtor or Secured Party may deem necessary or advisable to enforce collection of
the Accounts, Chattel Paper, and Instruments; provided, however, that Secured
Party shall have the right (if an Event of Default exists) (without notice to
Debtor) to notify the Account Debtors or obligors under any Accounts, Chattel
Paper, and Instruments of the assignment of such Accounts, Chattel Paper, and
Instruments to Secured Party and to direct such Account Debtors or obligors to
make payment of all amounts due or to become due to Debtor thereunder directly
to Secured Party and, at the expense of Debtor, to enforce collection of any
such Accounts, Chattel Paper, and Instruments, and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as Debtor might have done or as Secured Party deems appropriate. If an
Event of Default exists, all amounts and proceeds (including Instruments)
received by Debtor in respect of the Accounts, Chattel Paper, and Instruments
shall be received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds and property of Debtor and shall be forthwith paid
or delivered over to Secured Party in the same form as so received (with any
necessary indorsement) to be held as cash collateral and thereafter applied as
provided in the Credit Agreement.
4.3 Chattel Paper and Instruments. a. Upon written request by Secured
Party, Debtor will: (i) xxxx conspicuously each Tangible Chattel Paper and each
of its Records pertaining to the Collateral with the following legend:
THIS AGREEMENT IS SUBJECT TO THE SECURITY INTEREST AND LIEN IN FAVOR OF
BANK ONE, NA. ANY ASSIGNMENT OR SECURITY INTEREST GRANTED IN THIS AGREEMENT
VIOLATES THE RIGHTS OF BANK ONE, NA.
RESTATED SECURITY AGREEMENT - Page 16
or such other legend, in form and substance reasonably satisfactory to and as
specified by Secured Party, indicating that such Tangible Chattel Paper or
Collateral is subject to the pledge, assignment, and security interest granted
hereby; and (ii) if any Collateral shall be or be evidenced by a promissory note
or other Instrument or be Tangible Chattel Paper, deliver and pledge to Secured
Party hereunder such note, Instrument, or Chattel Paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Secured Party.
b. Upon written request of Secured Party, Debtor will take all actions
necessary to establish in Secured Party control (as that term is defined in the
UCC) with respect to all Electronic Chattel Paper.
4.4 Deposit Accounts, Commodity Accounts, Securities Accounts, and
Letter-of-Credit Rights. Debtor shall not establish or maintain any Commodity
Account not listed on Schedule 13 or Securities Account not listed on Schedule
14, unless Secured Party receives prior written notice thereof, Debtor executes
and delivers to Secured Party assignments of such account in such form as
Secured Party may request, and the Commodity Intermediary or Securities
Intermediary, as appropriate, in which such account will be maintained delivers
to Secured Party acknowledgments of the assignment of such account in form and
substance satisfactory to Secured Party to establish in Secured Party control
(as that term is defined in the UCC) with respect to such Commodity Account or
Securities Account. Upon written request by Secured Party, Debtor will take all
actions necessary to establish in Secured Party control (as that term is defined
in the UCC) with respect to each Letter-of-Credit Right.
4.5 Equipment, Fixtures, and Inventory.
a. Debtor shall keep its Equipment, Fixtures, and Inventory (other than
Inventory sold in the ordinary course of business) at the addresses specified in
Schedule 2 or, upon thirty days' prior written notice to Secured Party, at such
other places in such jurisdiction where all action required by Section 4.1 shall
have been taken with respect to the Equipment, Fixtures, and Inventory.
b. Debtor shall cause its Equipment and Fixtures necessary to Debtor's
operations to be maintained and preserved in the same condition, repair, and
working order as when new, ordinary wear and tear excepted, and shall forthwith,
or in the case of any loss or damage to any of the Equipment and Fixtures as
quickly as practicable after the occurrence thereof, make or cause to be made
all repairs, replacements, and other improvements in connection therewith which
are necessary or desirable to such end. Debtor shall promptly furnish to Secured
Party a statement respecting any loss or damage which singly or in the aggregate
equals or exceeds $100,000 to any of the Equipment and Fixtures. Debtor shall
promptly furnish to Secured Party a statement respecting any loss or damage
which singly or in the aggregate equals or exceeds $100,000 to any of the
Inventory.
4.6 Patents, Trademarks, and Copyrights.
a. Debtor shall ensure that fully executed security agreements in the form
of this Agreement and containing a description of all Collateral consisting of
Intellectual Property shall
RESTATED SECURITY AGREEMENT - Page 17
have been received and recorded by the United States Patent and Trademark Office
within three months after the execution of this Agreement with respect to United
States Patents and Trademarks and by the United States Copyright Office within
one month after the execution of this Agreement with respect to United States
registered Copyrights pursuant to 35 U.S.C. (S) 261, 15 U.S.C. (S) 1060 or 17
U.S.C. (S) 205, and otherwise as may be required pursuant to the Legal
Requirements of any other necessary jurisdiction, to protect the validity of and
to establish a legal, valid, and perfected security interest in favor of Secured
Party in respect of all Collateral consisting of Patents, Trademarks, and
Copyrights in which a security interest may be perfected by filing, recording,
or registration in the United States and its territories and possessions, or in
any other necessary jurisdiction, and no further or subsequent filing, refiling,
recording, rerecording, registration, or reregistration is necessary (other than
such actions as are necessary to perfect the security interest with respect to
any Collateral consisting of Patents, Trademarks, and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).
b. Debtor (either itself or through licensees or sublicensees) will not do
any act, or omit to do any act, whereby any Patent may become invalidated or
dedicated to the public, and shall continue to xxxx any products covered by a
Patent with the relevant patent number as necessary and sufficient to establish
and preserve its maximum rights under applicable Legal Requirements.
c. Debtor (either itself or through licensees or sublicensees) will, for
each Trademark, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of United States federal or foreign registration to the extent necessary and
sufficient to establish and preserve its maximum rights under applicable Legal
Requirements, and (iv) not use or permit the use of such Trademark in violation
of any third party rights.
d. Debtor (either itself or through licensees or sublicensees) will, for
each work covered by a Copyright, continue to publish, reproduce, display,
adopt, and distribute the work with appropriate copyright notice as necessary
and sufficient to establish and preserve its maximum rights under applicable
Legal Requirements.
e. Debtor shall notify Secured Party immediately if it knows or has reason
to know that any Patent, Trademark, or Copyright may become abandoned, lost, or
dedicated to the public, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United States
Copyright Office, or any Tribunal in any jurisdiction) regarding Debtor's
ownership of any Patent, Trademark, or Copyright, its right to register the
same, or to keep and maintain the same.
f. In no event shall Debtor, either itself or through any agent, employee,
licensee, or designee, file an application for any Patent, Trademark, or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office, or
any Tribunal in any jurisdiction, unless it promptly informs Secured Party, and,
upon request of Secured Party, executes and delivers any and all agreements,
instruments,
RESTATED SECURITY AGREEMENT - Page 18
documents, and papers as Secured Party may request to evidence Secured Party's
security interest in such Patent, Trademark, or Copyright, and Debtor hereby
appoints Secured Party as its attorney-in-fact to execute and file such writings
for the foregoing purposes.
g. Debtor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office, or any Tribunal in any jurisdiction, to maintain
and pursue each application relating to the Patents, Trademarks, and/or
Copyrights (and to obtain the relevant grant or registration), and to maintain
each issued Patent and each registration of the Trademarks and Copyrights,
including timely filings of applications for renewal, affidavits of use,
affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference,
and cancellation proceedings against third parties.
h. If Debtor has reason to believe that any Collateral consisting of a
Patent, Trademark, or Copyright has been or is about to be infringed,
misappropriated, or diluted by a third party, Debtor promptly shall notify
Secured Party and shall, if consistent with good business judgment, promptly xxx
for infringement, misappropriation, or dilution and to recover any and all
damages for such infringement, misappropriation, or dilution, and take such
other actions as are appropriate under the circumstances to protect such
Collateral.
i. If an Event of Default exists, Debtor shall use its best efforts to
obtain all requisite consents or approvals by the licensor of each Copyright
License, Patent License, or Trademark License to effect the assignment of all of
Debtor's right, title, and interest thereunder to Secured Party or its designee.
4.7 Rights to Dividends and Distributions. With respect to any
certificates, bonds, or other Instruments or Securities constituting a part of
the Collateral, and subject to applicable Legal Requirements, Secured Party
shall have authority if an Event of Default exists, without notice to Debtor,
either to have the same registered in Secured Party's name or in the name of a
nominee, and, with or without such registration, to demand of the issuer
thereof, and to receive and receipt for, any and all Dividends (including any
stock or similar dividend or distribution) payable in respect thereof, whether
they be ordinary or extraordinary. If Debtor shall become entitled to receive or
shall receive any interest in or certificate (including, without limitation, any
interest in or certificate representing a Dividend or a distribution in
connection with any reclassification, increase, or reduction of capital, or
issued in connection with any reorganization), or any option or rights arising
from or relating to any of the Collateral, whether as an addition to, in
substitution of, as a conversion of, or in exchange for any of the Collateral,
or otherwise, Debtor agrees to accept the same as Secured Party's agent and to
hold the same in trust on behalf of and for the benefit of Secured Party, and to
deliver the same immediately to Secured Party in the exact form received, with
appropriate undated stock or similar powers, duly executed in blank, to be held
by Secured Party, subject to the terms hereof, as Collateral. Unless an Event of
Default exists, Debtor shall be entitled to receive all cash Dividends paid in
respect of any of the Collateral (subject to the restrictions of any other Loan
Document including, but not limited to, the Credit Agreement). If (a) any
liquidation, dissolution, or reorganization of any Company results in or
constitutes an Event of Default under Credit Agreement Section 8.1(g) or (h), or
(b) an Event of Default exists, Secured Party shall be entitled to all Dividends
and to any sums paid upon or in respect of any Collateral in connection with any
such liquidation,
RESTATED SECURITY AGREEMENT - Page 19
dissolution, or reorganization, all of which shall be paid to Secured Party to
be held by it as additional collateral security for the Indebtedness and
application to the Indebtedness at the discretion of Secured Party. All
Dividends paid or distributed in respect of the Collateral which are received by
Debtor in violation of this Agreement shall, until paid or delivered to Secured
Party, be held by Debtor in trust as additional Collateral for the Indebtedness.
4.8 Right of Secured Party to Notify Issuers. If an Event of Default exists
and at such other times as Secured Party is entitled to receive Dividends and
other property in respect of or consisting of any Collateral which is or
represents an equity or ownership interest in any Person ("Securities
Collateral"), Secured Party may notify issuers of the Securities Collateral to
make payments of all Dividends directly to Secured Party and Secured Party may
take control of all proceeds of any Securities Collateral. Until Secured Party
elects to exercise such rights, if an Event of Default exists, Debtor, as agent
of Secured Party, shall collect and segregate all Dividends and other amounts
paid or distributed with respect to the Securities Collateral.
4.9 Non-Certification of Partnership and Limited Liability Company
Interests. Debtor shall not permit any limited partnership, general partnership,
or limited liability company interests pledged by it pursuant to this Agreement
or the Pledge Agreement to be evidenced by a certificate or any other
Instrument.
4.10 Insurance. Debtor shall, at its own expense, maintain insurance in
accordance with the terms set forth in the Credit Agreement and shall cause all
policies of insurance to (a) contain an endorsement or agreement by the insurer
that any loss shall be payable in accordance with the terms of such policy; (b)
be issued by carriers that are fully and properly licensed in each appropriate
state; (c) cause each insurance policy to (i) name Secured Party as an
"additional insured" if such policy is a liability policy, (ii) name Secured
Party as a "mortgagee" and "loss payee" and include a standard loss payable
endorsement in favor of Secured Party, in form satisfactory to Secured Party, if
such policy is a property insurance policy, (iii) provide that Secured Party
shall be notified in writing of any proposed amendment, reduction, non-renewal,
or cancellation at least thirty days prior to such amendment, reduction,
non-renewal, or cancellation and will have sufficient time to correct any
deficiencies justifying such proposed cancellation or material modification,
(iv) provide that all insurance proceeds for losses shall be payable to Secured
Party, as its interests may appear, regardless of any omission or breach by
Debtor, and (v) waive any right of subrogation of the insurers against Secured
Party and waive any right of the insurers to any setoff or counterclaim or any
other deduction, whether by attachment or otherwise, in respect of any liability
of Debtor; and (d) otherwise be in form and substance satisfactory to Secured
Party. Debtor shall not be required to obtain or maintain any endorsement in
favor of Secured Party with respect to any insurance policy providing coverage
for claims made against any director or officer of Debtor.
Debtor shall furnish Secured Party with an original copy of all policies of
required insurance. The required insurance may be provided through one or more
blanket policies carried by Debtor and covering more than one location, in which
event Debtor shall furnish Secured Party with a certificate of insurance for
each such policy setting forth the coverage, the limits of liability, the name
of the carrier, the policy number, and the expiration date and, if requested by
Secured Party, a certified copy of the blanket policy or policies. Debtor shall
also furnish or cause to be furnished to Secured Party (a) no later than fifteen
Business Days before the
RESTATED SECURITY AGREEMENT - Page 20
applicable renewal date a copy of all binders of coverage, on which binders are
indicated the terms of payment, deductibles, policy amounts, and other relevant
information, and (b) within ten Business Days after each such renewal date,
evidence of the payment of all premiums payable in connection with such renewal.
With respect to (a) policies of insurance existing on the date of this
Agreement, Debtor shall deliver to Secured Party complete copies of each such
policy not later than March 29, 2002, and (b) endorsements required by this
Section 4.10 to policies of insurance existing on the date of this Agreement,
Debtor shall deliver to Secured Party such endorsements not later than April 30,
2002.
Debtor grants and appoints Secured Party its attorney-in-fact to endorse
any check or draft that may be payable to Debtor in order to collect any
payments in respect of insurance, including any refunds of unearned premiums in
connection with any cancellation, adjustment, or termination of any policy of
insurance. Any such sums collected by Secured Party shall be credited, except to
the extent applied to the purchase by Secured Party of similar insurance, to any
amounts then owing on the Indebtedness in accordance with the Credit Agreement.
4.11 Transfers and Other Liens. Debtor shall not (a) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except as permitted under the Credit
Agreement, or (b) create or permit to exist any Lien, option, or other charge or
encumbrance upon or with respect to any of the Collateral, except for the
security interest under this Agreement (and except as permitted under the Credit
Agreement).
4.12 Secured Party Appointed Attorney-in-Fact. Debtor hereby irrevocably
appoints Secured Party Debtor's attorney-in-fact, with full authority in the
place and stead of Debtor and in the name of Debtor or otherwise to take any
action and to execute any instrument which Secured Party may deem necessary (in
Secured Party's reasonable discretion) to accomplish the purposes of this
Agreement, including, without limitation:
a. if an Event of Default exists, to obtain and adjust insurance required
to be paid to Secured Party pursuant to Section 4.10;
b. if an Event of Default exists, to ask, demand, collect, xxx for,
recover, compromise, receive, and give acquittance and receipts for moneys due
and to become due under or in connection with the Collateral;
c. to receive, indorse, and collect any drafts or other Instruments,
Documents, and Chattel Paper, in connection therewith; and
d. to file any claims or take any action or institute any proceedings which
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce compliance with the terms and conditions of
any Collateral or the rights of Secured Party with respect to any of the
Collateral. DEBTOR HEREBY IRREVOCABLY GRANTS (TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LEGAL REQUIREMENTS) TO SECURED PARTY DEBTOR'S PROXY (EXERCISABLE IF
AN EVENT OF DEFAULT EXISTS) TO VOTE ANY SECURITIES COLLATERAL AND APPOINTS
SECURED PARTY DEBTOR'S ATTORNEY-IN-FACT TO PERFORM ALL OBLIGATIONS OF DEBTOR
UNDER THIS AGREEMENT AND TO EXERCISE ALL OF SECURED
RESTATED SECURITY AGREEMENT - Page 21
PARTY'S RIGHTS HEREUNDER. THE PROXY AND EACH POWER OF ATTORNEY HEREIN GRANTED,
AND EACH STOCK POWER AND SIMILAR POWER NOW OR HEREAFTER GRANTED (INCLUDING ANY
EVIDENCED BY A SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE
IRREVOCABLE PRIOR TO FINAL PAYMENT IN FULL OF THE INDEBTEDNESS.
V. RIGHTS AND POWERS OF SECURED PARTY.
5.1 Secured Party May Perform. If Debtor fails to perform any agreement
contained herein, Secured Party may itself perform, or cause performance of,
such agreement, and the expenses of Secured Party incurred in connection
therewith shall be payable by Debtor under Article VI.
5.2 Secured Party's Duties. The powers conferred on Secured Party hereunder
are solely to protect Secured Party's interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any Collateral in its possession and the accounting for moneys actually
received by Secured Party hereunder, Secured Party shall not have any duty as to
any Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders, or other matters relative to any
Collateral, whether or not Secured Party has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any reasonable care in
the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property. Except as provided in this Section 5.2, Secured Party
shall not have any duty or liability to protect or preserve any Collateral or to
preserve rights pertaining thereto. Nothing contained in this Agreement shall be
construed as requiring or obligating Secured Party, and Secured Party shall not
be required or obligated, to (a) present or file any claim or notice or take any
action, with respect to any Collateral or in connection therewith or (b) notify
Debtor of any decline in the value of any Collateral.
5.3 Remedies. If an Event of Default exists:
a. Secured Party may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it or
any other Secured Party pursuant to any applicable Legal Requirement, all the
rights and remedies of a secured party on default under the Uniform Commercial
Code in effect in the State of Texas at that time (whether or not the Uniform
Commercial Code applies to the affected Collateral), and also may require Debtor
to, and Debtor will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place to be designated by Secured Party which is
reasonably convenient to both parties at public or private sale, at any of
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as may be commercially reasonable. Debtor
agrees that, to the extent notice of sale shall be required by Legal
Requirement, ten days' notice to Debtor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public
RESTATED SECURITY AGREEMENT - Page 22
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
b. All cash proceeds received by Secured Party upon any sale of, collection
of, or other realization upon, all or any part of the Collateral shall be
applied as follows:
(i) to the repayment or reimbursement of the reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon,
the Collateral, and (C) the exercise or enforcement of any of the rights
and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of any Liens and other
encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as Collateral;
(v) to the payment of any other amounts required by applicable law
(including without limitation, Section 9.615 of the Code or any other
applicable statutory provision); and
(vi) by delivery to Debtor or any other party lawfully entitled to
receive such cash or proceeds whether by direction of a court of competent
jurisdiction or otherwise. All payments received by Debtor under or in
connection with any Collateral shall be received in trust for the benefit
of Secured Party, shall be segregated from other funds of Debtor, and shall
be forthwith paid over to Secured Party in the same form as so received
(with any necessary indorsement).
c. All payments received by Debtor under or in connection with any
Collateral shall be received in trust for the benefit of Secured Party, shall be
segregated from other funds of Debtor, and shall be forthwith paid over to
Secured Party in the same form as so received (with any necessary indorsement).
d. Because of the Securities Act of 1933, as amended ("Securities Act"),
Legal Requirements related to insurance companies and their holding companies,
and other laws, including without limitation state "blue sky" laws, or
contractual restrictions or agreements, there may be legal restrictions or
limitations affecting Secured Party in any attempts to dispose of the Collateral
and the enforcement of rights under this Agreement. For these reasons, Secured
Party is authorized by Debtor, but not obligated, if any Event of Default
exists, to sell or otherwise dispose of any of the Collateral at private sale,
subject to an investment letter, or in any other manner which will not require
the Collateral, or any part thereof, to be registered in accordance with the
Securities Act, or any other law. Secured Party is also hereby authorized by
Debtor, but not obligated, to take such actions, give such notices, obtain such
consents, and do such other things as Secured Party may deem required or
appropriate under the Securities Act or other
RESTATED SECURITY AGREEMENT - Page 23
securities laws, Legal Requirements related to insurance companies and their
holding companies, or other laws or contractual restrictions or agreements in
the event of a sale or disposition of any Collateral. Debtor understands that
Secured Party may in its discretion approach a restricted number of potential
purchasers and that a sale under such circumstances may yield a lower price for
the Collateral than would otherwise be obtainable if same were registered and/or
sold in the open market. No sale so made in good faith by Secured Party shall be
deemed to be not "commercially reasonable" because so made. Debtor agrees that
if Secured Party, if an Event of Default exists, sells the Collateral or any
portion thereof at any private sale or sales, Secured Party shall have the right
to rely upon the advice and opinion of appraisers and other Persons, which
appraisers and other Persons are acceptable to Secured Party, as to the best
price reasonably obtainable upon such a private sale thereof.
e. If Secured Party shall determine to exercise Secured Party's right to
sell any or all of the Collateral, and if in the opinion of counsel for Secured
Party it is necessary, or if in the opinion of Secured Party it is advisable, to
have the Collateral or that portion thereof to be sold, registered under the
provisions of the Securities Act, Debtor will, to the fullest extent it has the
capability to do so, cause the issuers of the Collateral contemplated to be sold
to execute and deliver, and cause the directors and officers of each thereof to
execute and deliver, all at Debtor's expense, all such instruments and
documents, and to do or cause to be done all such other acts and things, as may
be necessary or, in the opinion of Secured Party, advisable to register the
Collateral or that portion thereof to be sold, under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for such period as Secured Party may
deem appropriate to facilitate the sale or other disposition of such Collateral
from the date of the first public offering of the Collateral or that portion
thereof to be sold, and to make all amendments thereto and/or to the related
prospectus which, in the opinion of Secured Party, are necessary or advisable,
all in conformity with the requirements of the Securities Act. Debtor shall use
its best efforts to cause each issuer of Collateral to comply with the
provisions of the securities or "blue sky" laws of any jurisdiction which
Secured Party shall designate and to cause each Issuer to make available to its
security holders, as soon as practicable, an earnings statement which will
satisfy the provisions of the Securities Act and applicable "blue sky" laws.
f. Secured Party and such Persons as Secured Party may reasonably designate
shall have the right, at Debtor's own cost and expense, to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Collateral is located, to
discuss Debtor's affairs with the officers of Debtor and its independent
accountants, and to verify under reasonable procedures, the validity, amount,
quality, quantity, value, condition, and status of, or any other matter relating
to, the Collateral, including, in the case of Accounts or Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Collateral for the purpose of making such a verification.
g. For purposes of enabling Secured Party to exercise rights and remedies
under this Agreement, Debtor grants to Secured Party (to the extent not
prohibited by applicable Legal Requirements) an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to Debtor
or any other Person, provided, that if the license granted to
RESTATED SECURITY AGREEMENT - Page 24
Secured Party is a sublicense, Debtor shall be solely responsible for, and
indemnify Secured Party against, any royalty or other compensation payable to
Debtor's licensor or other Person) to use all of Debtor's Software, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded and all related manuals.
h. In connection with the exercise of Secured Party's rights under this
Agreement or any other Loan Document, Secured Party may, if an Event of Default
exists, obtain the appointment of a receiver or trustee to assume, upon receipt
of all necessary Governmental Authorizations, control of or ownership of any
Permits. Such receiver or trustee shall have all rights and powers provided to
it by law or by court order or provided to Secured Party under this Agreement or
any other Loan Document. Upon the appointment of such trustee or receiver,
Debtor shall cooperate, to the extent necessary or appropriate, in the
expeditious preparation, execution, and filing of an application to any
Governmental Authority or for consent to the transfer of control or assignment
of Debtor's Permits to the receiver or trustee.
i. In connection with the exercise by Secured Party of rights under this
Agreement that effects the disposition of or use of any Collateral, it may be
necessary to obtain the prior consent or approval of Governmental Authorities
and other Persons to a transfer or assignment of Collateral. In connection with
the exercise by Secured Party of its rights relating to the disposition of or
operation under any Permit, it may be necessary to obtain the prior consent or
approval of Governmental Authorities, or other Persons to the exercise of rights
with respect to the Permits. If an Event of Default exists, Debtor shall
execute, deliver, and file, and hereby appoints (to the extent not prohibited by
Governmental Authorizations) Secured Party as its attorney, to execute, deliver,
and file on Debtor's behalf and in Debtor's name, all applications,
certificates, filings, instruments, and other documents (including without
limitation any application for an assignment or transfer of control or
ownership) that may be necessary or appropriate, in Secured Party's opinion, to
obtain such consents or approvals. Debtor shall use its best efforts to obtain
such consents or approvals if an Event of Default exists. Debtor acknowledges
that there is no adequate remedy at law for failure by it to comply with the
provisions of this Section and that such failure would not be adequately
compensable in damages, and therefore agrees that this Section may be
specifically enforced.
VI. INDEMNITY AND EXPENSES.
6.1 Debtor shall indemnify, defend, and hold harmless Secured Party and its
Representatives (individually, an "Indemnitee" and collectively, the
"Indemnitees") from and against any and all loss, liability, obligation, damage,
penalty, judgment, claim, deficiency, and expense (including interest,
penalties, attorneys' fees, and amounts paid in settlement) to which any
Indemnitee may become subject arising out of this Agreement and the other Loan
Documents other than those which arise by reason of the gross negligence or
willful misconduct of Secured Party, BUT SPECIFICALLY INCLUDING ANY LOSS,
LIABILITY, OBLIGATION, DAMAGE, PENALTY, JUDGMENT, CLAIM, DEFICIENCY, OR EXPENSE
ARISING OUT OF THE SOLE OR CONCURRENT NEGLIGENCE OF LENDER OR ANY OF ITS
REPRESENTATIVES. Debtor shall also indemnify, protect, and hold each Indemnitee
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, proceedings, costs, expenses
(including without limitation all reasonable attorneys' fees and legal expenses
whether or not suit is
RESTATED SECURITY AGREEMENT - Page 25
brought), and disbursements of any kind or nature whatsoever which may at any
time be imposed on, incurred by, or asserted against such Indemnitee, with
respect to or as a direct or indirect result of the violation by Debtor of any
Environmental Law; or with respect to or as a direct or indirect result of
Debtor's use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal, or presence of a Hazardous Material on, under,
from, or about real property. The provisions of and undertakings and
indemnifications set forth in this Section 6.1 shall survive (a) the
satisfaction and payment of the Indebtedness and termination of this Agreement,
and (b) the release of any Liens held by Secured Party on real property or the
extinguishment of such Liens by foreclosure or action in lieu thereof; provided,
however, that the indemnification set forth herein shall not extend to any act
or omission by Secured Party with respect to any property subsequent to Secured
Party becoming the owner of such property and with respect to which property
such claim, loss, damage, liability, fine, penalty, charge, proceeding, order,
judgment, action, or requirement arises subsequent to the acquisition of title
thereto by Secured Party.
6.2 DEBTOR WILL UPON DEMAND PAY TO SECURED PARTY THE AMOUNT OF ANY AND ALL
REASONABLE EXPENSES, INCLUDING THE REASONABLE FEES AND EXPENSES OF ITS COUNSEL
AND OF ANY EXPERTS AND AGENTS, WHICH SECURED PARTY MAY INCUR IN CONNECTION WITH
(I) THE ADMINISTRATION OF THIS AGREEMENT, (II) THE CUSTODY, PRESERVATION, USE OR
OPERATION OF, OR THE SALE OF, COLLECTION FROM, OR OTHER REALIZATION UPON, ANY OF
THE COLLATERAL, (III) THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OF
SECURED PARTY HEREUNDER, OR (IV) THE FAILURE BY DEBTOR TO PERFORM OR OBSERVE ANY
OF THE PROVISIONS HEREOF.
VII. MISCELLANEOUS.
7.1 Waiver of Subrogation. Debtor shall not assert, enforce, or otherwise
exercise (a) any right of subrogation to any of the rights or Liens of Secured
Party or any other beneficiary against any Obligated Party or any Collateral or
other security, or (b) any right of recourse, reimbursement, contribution,
indemnification, or similar right against any Obligated Party on all or any part
of the Indebtedness, and Debtor hereby waives any and all of the foregoing
rights and the benefit of, and any right to participate in, and Collateral or
other security given to Secured Party or any other beneficiary to secure payment
of the Indebtedness. This Section 7.1 shall survive the termination of this
Agreement, and any satisfaction and discharge of Debtor by virtue of any
payment, court order, or Legal Requirement.
7.2 Cumulative Rights. All rights of Secured Party under the Loan Documents
are cumulative of each other and of every other right which Secured Party may
otherwise have at law or in equity or under any other agreement. The exercise of
one or more rights shall not prejudice or impair the concurrent or subsequent
exercise of other rights.
7.3 Amendments; Waivers. Any term, covenant, agreement, or condition of
this Agreement may be amended, and any right under this Agreement may be waived,
if, but only if, such amendment or waiver is in writing and is signed by Secured
Party and, in the case of an amendment, by Debtor. Unless otherwise specified in
such waiver, a waiver of any right under
RESTATED SECURITY AGREEMENT - Page 26
this Agreement shall be effective only in the specific instance and for the
specific purpose for which given. No election not to exercise, failure to
exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of Secured Party under this
Agreement or applicable law, nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right of Secured Party under this Agreement or applicable law.
7.4 Continuing Security Interest. This Agreement creates a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the later of (i) the final payment in full of the Indebtedness and
(ii) the expiration or termination of the obligation of Secured Party to extend
credit pursuant to any Loan Document, (b) be binding upon Debtor, its successors
and assigns, and (c) inure to the benefit of, and be enforceable by, Secured
Party and its successors, transferees and assigns. Upon any such termination,
Secured Party will, at Debtor's expense, execute and deliver to Debtor such
documents as Debtor shall reasonably request to evidence such termination.
Debtor agrees that to the extent that Secured Party receives any payment or
benefit and such payment or benefit, or any part thereof, is subsequently
invalidated, declared to be fraudulent or preferential, set aside or is required
to be repaid to a trustee, receiver, or any other party under any Debtor Law,
common law or equitable cause, then to the extent of such payment or benefit,
the Indebtedness or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment or benefit had not been
made and, further, any such repayment by Secured Party, to the extent that
Secured Party did not directly receive a corresponding cash payment, shall be
added to and be additional Indebtedness payable upon demand by Secured Party and
secured hereby, and, if the Lien and security interest hereof shall have been
released, such Lien and security interest shall be reinstated with the same
effect and priority as on the date of execution hereof all as if no release of
such Lien or security interest had ever occurred.
7.5 a. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS,
EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION
OF THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
TEXAS.
b. JURY TRIAL WAIVER. DEBTOR AND SECURED PARTY HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) BETWEEN OR AMONG DEBTOR AND SECURED PARTY ARISING OUT OF OR IN ANY
WAY RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP
BETWEEN SECURED PARTY AND DEBTOR. THIS PROVISION IS A MATERIAL INDUCEMENT TO
SECURED PARTY TO PROVIDE THE FINANCING PURSUANT TO THE LOAN DOCUMENTS.
c. Venue. This Agreement has been entered into in the county in Texas where
Bank's address for notice purposes is located, and it shall be performable for
all purposes in such
RESTATED SECURITY AGREEMENT - Page 27
county. Courts within the State of Texas shall have jurisdiction over any and
all disputes arising under or pertaining to this Agreement and venue for any
such disputes shall be in the county or judicial district where this Agreement
has been executed and delivered.
7.6 Secured Party's Right to Use Agents. Secured Party may exercise its
rights under this Agreement through an agent or other designee.
7.7 No Interference, Compensation or Expense. Secured Party may exercise
its rights under this Agreement (a) without resistance or interference by Debtor
and (b) without payment of any rent, license fee, or compensation of any kind to
Debtor.
7.8 Waivers of Rights Inhibiting Enforcement. Debtor waives (a) any claim
that, as to any part of the Collateral, a public sale, should Secured Party
elect so to proceed, is, in and of itself, not a commercially reasonable method
of sale for such Collateral, (b) except as otherwise provided in this Agreement,
TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LEGAL REQUIREMENTS, NOTICE OR
JUDICIAL HEARING IN CONNECTION WITH SECURED PARTY'S DISPOSITION OF ANY OF THE
COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT DEBTOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH
RESPECT TO THE ENFORCEMENT OF SECURED PARTY'S RIGHTS HEREUNDER and (c) all
rights of redemption, appraisement or valuation.
7.9 Obligations Not Affected. To the fullest extent not prohibited by
applicable Legal Requirements, the obligations of Debtor under this Agreement
shall remain in full force and effect without regard to, and shall not be
impaired or affected by:
a. any amendment, addition, or supplement to, or restatement of any Loan
Document, any instrument delivered in connection therewith or any assignment or
transfer thereof;
b. any exercise, non-exercise, or waiver by Secured Party of any right,
remedy, power, or privilege under or in respect of, or any release of any
guaranty, any collateral, or the Collateral or any part thereof provided
pursuant to, this Agreement or any Loan Document;
c. any waiver, consent, extension, indulgence, or other action or inaction
in respect of this Agreement, any Loan Document or any assignment or transfer of
any thereof;
d. any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation, or the like of any Obligated Party or any other
Person, whether or not Debtor shall have notice or knowledge of any of the
foregoing; or
e. any other event which may give Debtor or any other Obligated Party a
defense to, or a discharge of, any of its obligations under any Loan Document.
RESTATED SECURITY AGREEMENT - Page 28
7.10 Notices. All notices, requests, demands or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and given by (a) personal delivery, (b) expedited delivery service with proof of
delivery, or (c) United States mail, postage prepaid, registered or certified
mail, return receipt requested, sent to the intended addressee at the address
set forth on the signature page hereof or to such different address as the
addressee shall have designated by written notice sent pursuant to the terms
hereof and shall be deemed to have been received either, in the case of personal
delivery, at the time of personal delivery, in the case of expedited delivery
service, as of the date of first attempted delivery at the address and in the
manner provided herein, or in the case of mail, five (5) days after deposit in a
depository receptacle under the care and custody of the United States Postal
Service. Either party shall have the right to change its address for notice
hereunder to any other location within the continental United States by notice
to the other party of such new address at least thirty (30) days prior to the
effective date of such new address.
7.11 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws during the term
thereof, such provision shall be fully severable, this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to the illegal, invalid, or unenforceable
provision as may be possible.
7.12 Successors and Assigns. All of the provisions of this Agreement shall
be binding and inure to the benefit of the parties hereto and their respective
successors and assigns (including, as to Debtor, all Persons who may become
bound as a debtor or a new debtor to this Agreement); provided, Debtor may not
assign any of its rights or obligations under this Agreement.
7.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.
7.14 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH 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. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
7.15 *[Maximum Liability. Anything in this Agreement to the contrary
notwithstanding, the obligations of Debtor hereunder shall be limited to a
maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities of Debtor,
contingent or
RESTATED SECURITY AGREEMENT - Page 29
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of Debtor in respect of intercompany
indebtedness to other Obligated Parties to the extent that such indebtedness
would be discharged in an amount equal to the amount paid or property conveyed
by Debtor under the Loan Documents) and after giving effect as assets, subject
to Section 7.1, to the value (as determined under the applicable provisions of
the Fraudulent Transfer Laws) of any rights to subrogation or contribution of
Debtor pursuant to (a) Legal Requirements or (b) any agreement providing for an
equitable allocation among Debtor and other Obligated Parties of obligations
arising under the Loan Documents.]*
7.16 *[Restatement. Debtor previously executed and delivered the Security
Agreement dated as of November 13, 1998 ("Existing Security Agreement"), in
favor of Bank One, Texas, National Association, predecessor in interest to
Secured Party. This Agreement is an amendment and restatement of the Existing
Security Agreement. Debtor affirms its grant of a security interest, pledge and
assignment in the Existing Security Agreement and agrees that except for the
Liens in the Collateral, which remain valid, binding, and enforceable first
priority Liens for the benefit of Secured Party, this Agreement restates the
Existing Security Agreement in its entirety. This Agreement is not intended as,
and shall not be construed as, a release or novation of any Lien granted
pursuant to the Existing Security Agreement. ]*
EXECUTED as of the date first written above.
Debtor's Address: DEBTOR:
*[GAINSCO ENTITY]*
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
By:
------------------------------------
Print Name:
Print Title:
Secured Party's Address:
Bank One, NA
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
RESTATED SECURITY AGREEMENT - Page 30
RESTATED PLEDGE AGREEMENT
THIS RESTATED PLEDGE AGREEMENT (this agreement, together with all
amendments and restatements, this "Agreement") is made as of February 27, 2002,
by GAINSCO, INC., a Texas corporation ("Pledgor"), in favor of BANK ONE, NA
("Bank"). Pledgor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
meanings indicated below:
(a) "Borrower" means GAINSCO, Inc., a Texas corporation, and GAINSCO
Service Corp., a Texas corporation, or either of them.
(b) "Code" means the Uniform Commercial Code as in effect in the State
of Texas on the date of this Agreement or as it may hereafter be amended
from time to time.
(c) "Collateral" means all right, title and interest of Pledgor in and
to: (i) all Stock now or hereafter owned beneficially or of record by
Pledgor, including, but not limited to the interests listed on Schedule 1
and the interests in each Person which is a successor to such Persons
listed on Schedule 1 (each, an "Issuer"), (ii) all rights of management
with respect to any of the property described in this paragraph, (iii)
without affecting the obligation of any Issuer or Pledgor under any
agreement prohibiting such action, in the event of any consolidation or
merger in which any Issuer is not the surviving entity, or in the event of
any sale, lease, transfer or other disposition of all or substantially all
of the assets of any Issuer, all Stock, equity, partnership, limited
liability company, or other interest of the successor entity formed by or
resulting from such consolidation or merger, or of the Person to which such
sale, lease, transfer or other disposition shall have been made, (iv) all
certificates, instruments and/or other documents evidencing any property
described in this paragraph, including without limitation, any certificate
representing a stock dividend or any certificate in connection with any
recapitalization, reclassification, merger, consolidation, conversion, sale
of assets, combination of shares, stock split or spin-off with respect to
any of the property described in this paragraph; (v) any option, warrant,
subscription or right, whether as an addition to or in substitution of any
other property described in this paragraph; (vi) any Dividends or
distributions of any kind whatsoever, whether distributable in cash, stock
or other property with respect to any of the property described in this
paragraph; (vii) any interest, premium or principal payments with respect
to any of the property described in this paragraph; (viii) any conversion
or redemption proceeds with respect to any of the property described in
this paragraph, (ix) all renewals, replacements and substitutions of any
property described in this paragraph, and (x) all products and proceeds of
all of the foregoing. The designation of proceeds does not authorize
Pledgor to sell, transfer or otherwise convey any Collateral.
(d) "Indebtedness" means all indebtedness, obligations and liabilities
of Borrower and each Obligated Party to Secured Party of any kind or
character, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several, including without limitation all
indebtedness, obligations and liabilities of Borrower and each Obligated
Party to
Restated Pledge Agreement - Page 1
Secured Party now existing or hereafter arising by note, draft,
acceptance, guaranty, endorsement, letter of credit, assignment, purchase,
overdraft, discount, indemnity agreement or otherwise, (ii) all accrued but
unpaid interest on any of the indebtedness described in (i) above, (iii)
all obligations of Borrower and each Obligated Party to Secured Party under
any documents evidencing, securing, governing and/or pertaining to all or
any part of the indebtedness described in (i) and (ii) above, (iv) all
costs and expenses incurred by Secured Party in connection with the
collection and administration of all or any part of the indebtedness and
obligations described in (i), (ii) and (iii) above or the protection or
preservation of, or realization upon, the collateral securing all or any
part of such indebtedness and obligations, including without limitation all
reasonable attorneys' fees, and (v) all renewals, extensions, modifications
and rearrangements of the indebtedness and obligations described in (i),
(ii), (iii) and (iv) above. Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which
constitute part of the Indebtedness and would be owed by Pledgor or any
Obligated Party under any Loan Document, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding under any Debtor Law involving
Pledgor, any Obligated Party or any other Person (including all such
amounts which would become due or would be secured but for the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of Pledgor, any Obligated Party or any
other Person under any Debtor Law).
(e) "Loan Documents" means all instruments and documents evidencing,
securing, governing, guaranteeing and/or pertaining to the Indebtedness,
together with all renewals, extensions, amendments, supplements and
restatements thereto, including without limitation the Revolving Credit
Agreement dated as of November 13, 1998 (such agreement, together with all
amendments and restatements, the "Credit Agreement") among GAINSCO, Inc.,
GAINSCO Service Corp. and Bank.
(f) "Obligated Party" means any party other than Borrower who secures,
guarantees and/or is otherwise obligated to pay all or any portion of the
Indebtedness.
(g) "Secured Party" means Bank, its successors and assigns, including
without limitation, any party to whom Bank, or its successors or assigns,
may assign its rights and interests under this Agreement.
Capitalized terms not otherwise defined herein have the meaning specified in the
Credit Agreement, and, to the extent of any conflict, terms as defined in the
Credit Agreement shall control (provided, that a more expansive or explanatory
definition shall not be deemed a conflict). All words and phrases used herein
which are expressly defined in Section 1.201, Chapter 8 or Chapter 9 of the Code
shall have the meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein except to the
extent such meaning is inconsistent with a definition in Section 1.201, Chapter
8 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness, Pledgor, for value
received, hereby grants to Secured Party a continuing security interest in the
Collateral. The delivery at any time by Pledgor to Secured Party of any property
as a pledge to secure payment or
Restated Pledge Agreement - Page 2
performance of any indebtedness or obligation whatsoever shall also constitute a
pledge of such property as Collateral hereunder.
3. Additional Collateral. All Collateral received by Pledgor (except for
cash dividends permitted to be retained by Pledgor pursuant to the Credit
Agreement) shall be received in trust for the benefit of Secured Party. All
Collateral and all certificates or other written instruments or documents
evidencing and/or representing Collateral that is received by Pledgor, together
with such instruments of transfer as Secured Party may request, shall
immediately be delivered to or deposited with Secured Party and held by Secured
Party as Collateral under the term of this Agreement. If Collateral received by
Pledgor shall be shares of Stock or other securities, such shares of Stock or
other securities shall be duly endorsed in blank or accompanied by proper
instruments of transfer and assignment duly executed in blank with, if requested
by Secured Party, signatures guaranteed by a bank or member firm of the New York
Stock Exchange, all in form and substance satisfactory to Secured Party. Secured
Party shall be deemed to have possession of any Collateral in transit to Secured
Party or its agent.
4. Voting Rights. As long as no Event of Default exists, any voting rights
incident to any Stock or other securities pledged as Collateral may be exercised
by Pledgor; provided, however, that Pledgor will not exercise, or cause to be
exercised, any such voting rights, without the prior written consent of Secured
Party, if the direct or indirect effect of such vote will result in an Event of
Default.
5. Maintenance of Collateral. Other than the exercise of reasonable care to
assure the safe custody of any Collateral in Secured Party's possession from
time to time, Secured Party does not have any obligation, duty or responsibility
with respect to the Collateral. Without limiting the generality of the
foregoing, Secured Party shall not have any obligation, duty or responsibility
to do any of the following: (a) ascertain any maturities, calls, conversions,
exchanges, offers, tenders or similar matters relating to the Collateral or
informing Pledgor with respect to any such matters; (b) fix, preserve or
exercise any right, privilege or option (whether conversion, redemption or
otherwise) with respect to the Collateral unless (i) Pledgor makes written
demand to Secured Party to do so, (ii) such written demand is received by
Secured Party in sufficient time to permit Secured Party to take the action
demanded in the ordinary course of its business, and (iii) Pledgor provides
additional collateral, acceptable to Secured Party in its sole discretion; (c)
collect any amounts payable in respect of the Collateral (Secured Party being
liable to account to Pledgor only for what Secured Party may actually receive or
collect thereon); (d) sell all or any portion of the Collateral to avoid market
loss; (e) sell all or any portion of the Collateral unless and until (i) Pledgor
makes written demand upon Secured Party to sell the Collateral, and (ii) Pledgor
provides additional collateral, acceptable to Secured Party in its sole
discretion; or (f) hold the Collateral for or on behalf of any party other than
Pledgor.
6. Representations and Warranties. Pledgor hereby represents and warrants
the following to Secured Party:
(a) Due Authorization. The execution, delivery and performance of this
Agreement and all of the other Loan Documents by Pledgor have been duly
authorized by all necessary corporate action of Pledgor, to the extent
Pledgor is a corporation, or by all necessary partnership action, to the
extent Pledgor is a partnership.
Restated Pledge Agreement - Page 3
(b) Enforceability. This Agreement and the other Loan Documents
constitute legal, valid and binding obligations of Pledgor, enforceable in
accordance with their respective terms, except as limited by bankruptcy,
insolvency or similar laws of general application relating to the
enforcement of creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(c) Ownership and Liens. Pledgor has good and indefeasible title to
the Collateral free and clear of all Liens, security interests,
encumbrances or adverse claims, except for the security interest created by
this Agreement. No dispute, right of setoff, counterclaim or defense exists
with respect to all or any part of the Collateral. Pledgor has not executed
any other security agreement currently affecting the Collateral and no
financing statement or other instrument similar in effect covering all or
any part of the Collateral is on file in any recording office except as may
have been executed or filed in favor of Secured Party.
(d) No Conflicts or Consents. Neither the ownership, the intended use
of the Collateral by Pledgor, the grant of the security interest by Pledgor
to Secured Party herein nor (except for restrictions imposed by any
applicable Insurance Holding Company Laws (as hereinafter defined) the
exercise by Secured Party of its rights or remedies hereunder, will (i)
conflict with any provision of (A) any domestic or foreign law, statute,
rule or regulation, (B) the articles or certificate of incorporation,
charter, bylaws or partnership agreement, as the case may be, of Pledgor,
or (C) any agreement, judgment, license, order or permit applicable to or
binding upon Pledgor or otherwise affecting the Collateral, or (ii) result
in or require the creation of any Lien, charge or encumbrance upon any
assets or properties of Pledgor or of any person except as may be expressly
contemplated in the Loan Documents. Except as expressly contemplated in the
Loan Documents, no consent, approval, authorization or order of, and no
notice to or filing with, any court, governmental authority or third party
is required in connection with the grant by Pledgor of the security
interest herein or the exercise by Secured Party of its rights and remedies
hereunder.
(e) Security Interest. Pledgor has and will have at all times full
right, power and authority to grant a security interest in the Collateral
to Secured Party in the manner provided herein, free and clear of any Lien,
security interest or other charge or encumbrance. This Agreement creates a
legal, valid and binding security interest in favor of Secured Party in the
Collateral.
(f) Pledgor Information. Pledgor's chief executive office and the
office where the records concerning the Collateral are kept is located at
its address set forth on the signature page hereof. Schedule 2, Section (a)
states the jurisdiction of organization, type of entity, entity
identification number issued by the appropriate authority of the
jurisdiction of Pledgor's organization, and exact name of Pledgor, as such
name appears in its currently effective organizational documents as filed
with the appropriate authority of the jurisdiction of Pledgor's
organization. Schedule 2, Section (b) sets forth each other name Pledgor
has had in the past five years, together with the date of the relevant
change. Except as set forth in Schedule 2, Section (c), Pledgor has not
changed its identity or type of entity in any way within the past five
years. Changes in identity or type of entity include mergers,
consolidations, acquisitions (including both equity and asset
Restated Pledge Agreement - Page 4
acquisitions), and any change in the form, nature, or jurisdiction of
organization. Schedule 2, Section (d) states all other names (including
trade, assumed, and similar names) used by Pledgor or any of its divisions
or other business units at any time during the past five years. Schedule 2,
Section (e) states the Federal Taxpayer Identification Number of Pledgor.
(g) Solvency of Pledgor. As of the date hereof, and after giving
effect to this Agreement and the completion of all other transactions
contemplated by Pledgor at the time of the execution of this Agreement, (i)
Pledgor is and will be solvent, (ii) the fair saleable value of Pledgor's
assets exceeds and will continue to exceed Pledgor's liabilities (both
fixed and contingent), (iii) Pledgor is and will continue to be able to pay
its debts as they mature, and (iv) if Pledgor is not an individual, Pledgor
has and will have sufficient capital to carry on Pledgor's businesses and
all businesses in which Pledgor is about to engage.
(h) Nature of Ownership. Pledgor is the registered owner of the
securities pledged as Collateral and a certificate has been issued in
Pledgor's name to evidence Pledgor's ownership in such securities.
(i) Representations and Warranties Concerning Collateral. Pledgor
represents and warrants to Secured Party that (i) as of the date hereof,
Schedule 1 is a complete and correct description of all Stock in which
Pledgor has any interest, including each class of interest and number of
shares or units owned by Pledgor, and each certificate representing such
interest; (ii) the pledge, assignment, and delivery of the Collateral
hereunder, and filing of an appropriate financing statement, create a valid
first and prior perfected security interest in the Collateral, securing the
Indebtedness; (iii) the Stock pledged hereunder is duly authorized, validly
issued, fully paid, and non-assessable, and was not issued in violation of
the rights of any Person; (iv) no unpaid capital call or dispute exists
with respect to any of the Collateral; (v) none of the Collateral is
evidenced by a certificate, instrument or other writing that has not been
delivered to Secured Party; (vi) except as described on Schedule 3, none of
the Collateral is subject to any buy-sell, voting trust, transfer
restriction, preferential right to purchase or similar agreement or any
option, warrant, put or call or similar agreement; (vii) Pledgor owns 100%
of the issued and outstanding shares of capital stock of each issuer which
is a corporation listed on Schedule 1; (viii) Pledgor owns the percentage
of all partnership interest indicated on Schedule 1 of each issuer which is
a partnership listed on Schedule 1; and (ix) no Issuer described on
Schedule 1 has issued any certificate evidencing Stock of such Issuer not
described on Schedule 1. The delivery at any time by Pledgor to Secured
Party of Collateral shall constitute a representation and warranty by
Pledgor under this Agreement that, with respect to such Collateral, Pledgor
is the sole legal and beneficial owner of the Collateral, and that the
matters set forth in this Section 6(i) are true and correct with respect to
such Collateral.
(j) Chattel Paper, Documents and Instruments. The security interest in
chattel paper, documents and instruments of Pledgor granted hereunder is
valid and genuine, and all such chattel paper, documents and instruments
have only one original counterpart. No party other than Pledgor or Secured
Party is in actual or constructive possession of any such chattel paper,
documents or instruments.
Restated Pledge Agreement - Page 5
7. Affirmative Covenants. Pledgor will comply with the covenants contained
in this Section at all times during the period of time this Agreement is
effective unless Secured Party shall otherwise consent in writing.
(a) Ownership and Liens. Pledgor will maintain good and indefeasible
title to all Collateral free and clear of all Liens, security interests,
encumbrances or adverse claims, except for the security interest created by
this Agreement and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Pledgor will not permit any dispute,
right of setoff, counterclaim or defense to exist with respect to all or
any part of the Collateral. Pledgor will cause any financing statement or
other security instrument with respect to the Collateral to be terminated,
except as may exist or as may have been filed in favor of Secured Party.
Pledgor will defend at its expense Secured Party's right, title and
security interest in and to the Collateral against the claims of any third
party.
(b) Inspection of Books and Records. Pledgor will keep adequate
records concerning the Collateral and will permit Secured Party and all
representatives and agents appointed by Secured Party to inspect Pledgor's
books and records of or relating to the Collateral at any time during
normal business hours, to make and take away photocopies, photographs and
printouts thereof and to write down and record any such information.
(c) Adverse Claim. Pledgor covenants and agrees to promptly notify
Secured Party of any claim, action or proceeding affecting title to the
Collateral, or any part thereof, or the security interest created hereunder
and, at Pledgor's expense, defend Secured Party's security interest in the
Collateral against the claims of any third party. Pledgor also covenants
and agrees to promptly deliver to Secured Party a copy of all written
notices received by Pledgor with respect to the Collateral, including
without limitation, notices received from the issuer of any securities
pledged hereunder as Collateral.
(d) Delivery of Instruments and/or Certificates. Contemporaneously
herewith, Pledgor covenants and agrees to deliver to Secured Party any
certificates, documents or instruments representing or evidencing the
Collateral, together with Pledgor's endorsement thereon and/or accompanied
by proper instruments of transfer and assignment duly executed in blank
with, if requested by Secured Party, signatures guaranteed by a bank or
member firm of the New York Stock Exchange, all in form and substance
satisfactory to Secured Party. If required by Secured Party, Pledgor also
covenants and agrees to cooperate with Secured Party in registering the
pledge of the securities pledged as Collateral with the issuer of such
securities.
(e) Further Assurances. Pledgor will from time to time at its expense
promptly execute and deliver all further instruments and documents and take
all further action necessary or appropriate or that Secured Party may
request in order (i) to perfect and protect the security interest created
or purported to be created hereby and the first priority of such security
interest, (ii) to enable Secured Party to exercise and enforce its rights
and remedies hereunder in respect of the Collateral, and (iii) to otherwise
effect the purposes of this Agreement, including without limitation,
executing and filing such financing or continuation statements, or any
amendments thereto.
Restated Pledge Agreement - Page 6
(f) Chattel Paper Documents and Instruments. Pledgor will take such
action as may be requested by Secured Party in order to cause any chattel
paper, documents or instruments to be valid and enforceable and will cause
all chattel paper to have only one original counterpart. Upon request by
Secured Party, Pledgor will deliver to Secured Party all originals of
chattel paper, documents or instruments and will xxxx all chattel paper
with a legend indicating that such chattel paper is subject to the security
interest granted hereunder.
8. Negative Covenants. Pledgor will comply with the covenants contained in
this Section at all times during the period of time this Agreement is effective,
unless Secured Party shall otherwise consent in writing.
(a) Transfer or Encumbrance. Pledgor will not (i) sell, assign (by
operation of law or otherwise) or transfer Pledgor's rights in any of the
Collateral, (ii) xxxxx x Xxxx or security interest in or execute, file or
record any financing statement or other security instrument with respect to
the Collateral to any party other than Secured Party, or (iii) deliver
actual or constructive possession of any certificate, instrument or
document evidencing and/or representing any of the Collateral to any party
other than Secured Party.
(b) Impairment of Security Interest. Pledgor will not take or fail to
take any action which would in any manner impair the value or
enforceability of Secured Party's security interest in any Collateral.
(c) Dilution of Ownership. As to any securities pledged as Collateral
(other than securities of a class which are publicly traded), Pledgor will
not consent to or approve of the issuance of (i) any additional shares of
any class of securities of such issuer (unless immediately upon issuance
additional securities are pledged and delivered to Secured Party pursuant
to the terms hereof to the extent necessary to give Secured Party a
security interest after such issuance in at least the same percentage of
such issuer's outstanding securities as Secured Party had before such
issuance), (ii) any instrument convertible voluntarily by the holder
thereof or automatically upon the occurrence or non-occurrence of any event
or condition into, or exchangeable for, any such securities, or (iii) any
warrants, options, contracts or other commitments entitling any third party
to purchase or otherwise acquire any such securities.
(d) Restrictions on Securities. Pledgor will not enter into any
agreement creating, or otherwise permit to exist, any restriction or
condition upon the transfer, voting or control of any securities pledged as
Collateral, except as consented to in writing by Secured Party.
(e) Place of Perfection. Pledgor will not change the jurisdiction of
its organization from the jurisdiction specified in Schedule 2, Section (a)
or its type of entity from the type of entity specified in Schedule 2,
Section (a). Pledgor will not change its name from the name specified in
Schedule 2, Section (a) unless Secured Party has received written notice
from Pledgor specifying the new name, such notice to be received by Secured
Party not less than 30 days prior to such change of name. Pledgor shall not
change the location of its chief executive office and the office where it
keeps its records
Restated Pledge Agreement - Page 7
concerning the Collateral to a location other than the address
specified on the signature pages hereto unless Secured Party has received
written notice from Pledgor specifying the address of the new location of
Pledgor's chief executive office and the office where it keeps its records
concerning the Collateral, such notice to be received by Secured Party not
less than 30 days prior to such change of location.
9. Rights of Secured Party. Secured Party shall have the rights contained
in (y) this Section (except as provided in clause (z)) at all times during the
period of time this Agreement is effective, and (z) Section 9(a), clauses(i),
(ii) and (iv) if an Event of Default exists.
(a) Power of Attorney. PLEDGOR HEREBY IRREVOCABLY GRANTS TO SECURED
PARTY PLEDGOR'S PROXY AND APPOINTS SECURED PARTY AS PLEDGOR'S
ATTORNEY-IN-FACT, WITH FULL AUTHORITY IN THE PLACE AND STEAD OF PLEDGOR AND
IN THE NAME OF PLEDGOR OR OTHERWISE, TO TAKE ANY ACTION AND TO EXECUTE ANY
INSTRUMENT WHICH SECURED PARTY MAY FROM TIME TO TIME IN SECURED PARTY'S
DISCRETION DEEM NECESSARY OR APPROPRIATE TO ACCOMPLISH THE PURPOSES OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, THE FOLLOWING ACTION: (i) subject
to any applicable Insurance Holding Company Laws, transfer any securities,
instruments, documents or certificates pledged as Collateral in the name of
Secured Party or its nominee; (ii) use any interest, premium or principal
payments, conversion or redemption proceeds or other cash proceeds received
in connection with any Collateral to reduce any of the Indebtedness; (iii)
exchange any of the securities pledged as Collateral for any other property
upon any merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof, and, in connection therewith, to
deposit and deliver any and all of such securities with any committee,
depository, transfer agent, registrar or other designated agent upon such
terms and conditions as Secured Party may deem necessary or appropriate;
(iv) exercise or comply with any conversion, exchange, redemption,
subscription or any other right, privilege or option pertaining to any
securities pledged as Collateral; provided, however, except as provided
herein, Secured Party shall not have a duty to exercise or comply with any
such right, privilege or option (whether conversion, redemption or
otherwise) and shall not be responsible for any delay or failure to do so;
and (v) file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or appropriate for the collection
and/or preservation of the Collateral or otherwise to enforce the rights of
Secured Party with respect to the Collateral. THE PROXY AND POWER OF
ATTORNEY HEREIN GRANTED, AND EACH STOCK POWER AND SIMILAR POWER NOW OR
THEREAFTER GRANTED (INCLUDING ANY EVIDENCED BY A SEPARATE WRITING), ARE
COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR TO FINAL PAYMENT IN FULL
OF THE INDEBTEDNESS.
(b) Performance by Secured Party. If Pledgor fails to perform any
agreement or obligation provided herein, Secured Party may itself perform,
or cause performance of, such agreement or obligation, and the expenses of
Secured Party incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by Pledgor on demand.
Restated Pledge Agreement - Page 8
(c) Notification of Account Debtors and Other Rights. With respect to
chattel paper or instruments which are Collateral, Secured Party, without
notice to Pledgor, shall have the right at any time and from time to time
after the occurrence and during the continuation of an Event of Default to
notify and direct the account debtor or obligor thereon to thereafter make
all payments on such Collateral directly to Secured Party, regardless of
whether Pledgor was previously making collections thereon. Each account
debtor and obligor making payment to Secured Party hereunder shall be fully
protected in relying on the written statement of Secured Party that it then
holds a security interest which entitles it to receive such payment, and
the receipt of Secured Party for such payment shall be full acquittance
therefor to the party making such payment. Payments received by Secured
Party shall be held or disposed of by it in accordance with the terms of
this Agreement. Secured Party shall, however, never be obligated to
collect, or use any effort to collect, any such payments, its sole
liability to the Pledgor being to account for payments, if any, actually
received.
Notwithstanding any other provision herein to the contrary, Secured
Party does not have any duty to exercise or continue to exercise any of
the foregoing rights and shall not be responsible for any failure to do
so or for any delay in doing so.
10. Events of Default. Each of the following constitutes an "Event of
Default" under this Agreement:
(a) Non-Performance of Covenants. The failure of Pledgor, any other
Borrower or any Obligated Party to timely and properly observe, keep or
perform (i) any covenant, agreement, warranty or condition contained in
Sections 7(a), 7(e) or 8 or (ii) any other covenant, agreement, warranty or
condition required herein and, in the case of (ii), such failure shall
continue for fifteen (15) days; or
(b) Default Under other Credit Agreement. The occurrence of an Event
of Default under Article 8 of the Credit Agreement; or
(c) False Representation. Any representation contained herein or in
any of the other Loan Documents made by Borrower or any Obligated Party is
false or misleading in any material respect; or
(d) Execution on Collateral. The Collateral or any portion thereof is
taken on execution or other process of law in any action against Pledgor;
or
(e) Abandonment. Pledgor abandons the Collateral or any portion
thereof; or
(f) Action by Other Lienholder. The holder of any Lien or security
interest on any of the Collateral (without hereby implying the consent of
Secured Party to the existence or creation of any such Lien or security
interest on the Collateral), declares a default thereunder or institutes
foreclosure or other proceedings for the enforcement of its remedies
thereunder; or
(g) Dilution of Ownership. The issuer of any securities (other than
securities of a class which are publicly traded) constituting Collateral
hereafter issues any shares of any class of capital stock (unless
immediately upon issuance, additional securities are
Restated Pledge Agreement - Page 9
pledged and delivered to Secured Party pursuant to the terms hereof to
the extent necessary to give Secured Party a security interest after
such issuance in at least the same percentage of such issuer's
outstanding securities as Secured Party had before such issuance) or
any options, warrants or other rights to purchase any such capital
stock.
11. Remedies and Related Rights. If an Event of Default exists, and
without limiting any other rights and remedies provided herein, under any of the
other Loan Documents or otherwise available to Secured Party, Secured Party may
exercise one or more of the rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at its discretion,
subject to compliance with any applicable Insurance Holding Company Laws,
without limitation and without notice except as expressly provided in any
of the Loan Documents:
(i) exercise in respect of the Collateral all the rights and
remedies of a secured party under the Code (whether or not the
Code applies to the affected Collateral);
(ii) reduce its claim to judgment or foreclose or otherwise enforce,
in whole or in part, the security intent granted hereunder by
any available judicial procedure;
(iii) sell or otherwise dispose of, at its office, on the premises of
Pledgor or elsewhere, the Collateral, as a unit or in parcels,
by public or private proceedings, and by way of one or more
contracts (it being agreed that the sale or other disposition of
any part of the Collateral shall not exhaust Secured Party's
power of sale, but sales or other dispositions may be made from
time to time until all of the Collateral has been sold or
disposed of or until the Indebtedness has been paid and
performed in full), and at any such sale or other disposition
it shall not be necessary to exhibit any of the Collateral;
(iv) buy the Collateral, or any portion thereof, at any public sale;
(v) buy the Collateral, or any portion thereof, at any private sale
if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely
distributed standard price quotations;
(vi) apply for the appointment of a receiver for the Collateral, and
Pledgor hereby consents to any such appointment; and
(vii) at its option, retain the Collateral in satisfaction of the
Indebtedness whenever the circumstances are such that Secured
Party is entitled to do so under the Code or otherwise.
Pledgor agrees that in the event Pledgor is entitled to receive any
notice under the Code, as it exists in the state governing any such
notice, of the sale or other disposition of any Collateral, reasonable
notice shall be deemed given five (5) days after such notice is
Restated Pledge Agreement - Page 10
deposited in a depository receptacle under the care and custody of the
United States Postal Service, postage prepaid, at Pledgor's address set
forth on the signature page hereof, ten (10) days prior to the date of
any public sale, or after which a private sale, of any of such
Collateral is to be held. Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it
was so adjourned. Pledgor further acknowledges and agrees that the
redemption by Secured Party of any certificate of deposit pledged as
Collateral shall be deemed to be a commercially reasonable disposition
under the Code.
(b) Private Sale of Securities. Pledgor recognizes that Secured Party
may be unable to effect a public sale of all or any part of the securities
pledged as Collateral because of restrictions in applicable federal and
state securities laws and that Secured Party may, therefore, determine to
make one or more private sales of any such securities to a restricted group
of purchasers who will be obligated 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. Pledgor acknowledges that
each any such private sale may be at prices and other terms less favorable
then what might have been obtained at a public sale and, notwithstanding
the foregoing, agrees that each such private sale shall be deemed to have
been made in a commercially reasonable manner and that Secured Party shall
have no obligation to delay the sale of any such securities for the period
of time necessary to permit the issuer to register such securities for
public sale under any federal or state securities laws. Pledgor further
acknowledges and agrees that any offer to sell such securities which has
been made privately in the manner described above to not less than five (5)
bona fide offerees shall be deemed to involve a "public sale" for purposes
of the Code, notwithstanding that such sale may not constitute a "public
offering" under any federal or state securities laws and that Secured Party
may, in such event, bid for the purchase of such securities.
(c) Application of Proceeds. If an Event of Default exists, Secured
Party may at its discretion apply or use any cash held by Secured Party as
Collateral, and any cash proceeds received by Secured Party in respect of
any sale or other disposition of, collection from, or other realization
upon, all or any part of the Collateral as follows in such order and manner
as Secured Party may elect:
(i) to the repayment or reimbursement of the reasonable costs and
expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by Secured Party in connection with
(A) the administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of, collection
from, or other realization upon, the Collateral, and (C) the
exercise or enforcement of any of the rights and remedies of
Secured Party hereunder;
(ii) to the payment or other satisfaction of any Liens and other
encumbrances upon the Collateral;
Restated Pledge Agreement - Page 11
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as Collateral;
(v) to the payment of any other amounts required by applicable law
(including without limitation, Section 9.615 of the Code or any
other applicable statutory provision); and
(vi) by delivery to Pledgor or any other party lawfully entitled to
receive such cash or proceeds whether by direction of a court of
competent jurisdiction or otherwise.
(d) Deficiency. In the event that the proceeds of any sale of,
collection from, or other realization upon, all or any part of the
Collateral by Secured Party are insufficient to pay all amounts to which
Secured Party is legally entitled, Borrower and any party who guaranteed or
is otherwise obligated to pay all or any portion of the Indebtedness shall
be liable for the deficiency, together with interest thereon as provided in
the Loan Documents.
(e) Non-Judicial Remedies. In granting to Secured Party the power to
enforce its rights hereunder without prior judicial process or judicial
hearing, Pledgor expressly waives, renounces and knowingly relinquishes any
legal right which might otherwise require Secured Party to enforce its
rights by judicial process. Pledgor recognizes and concedes that
non-judicial remedies are consistent with the usage of trade, are
responsive to commercial necessity and are the result of a bargain at arm's
length. Nothing herein is intended to prevent Secured Party or Pledgor from
resorting to judicial process at either party's option.
(f) Other Recourse. Pledgor waives any right to require Secured Party
to proceed against any third party, exhaust any Collateral or other
security for the Indebtedness, or to have any third party joined with
Pledgor in any suit arising out of the Indebtedness or any of the Loan
Documents, or pursue any other remedy available to Secured Party. Pledgor
further waives any and all notice of acceptance of this Agreement and of
the creation, modification, rearrangement, renewal or extension of the
Indebtedness. Pledgor further waives any defense arising by reason of any
disability or other defense of any third party or by reason of the
cessation from any cause whatsoever of the liability of any third party.
Pledgor authorizes Secured Party, and without notice or demand and without
any reservation of rights against Pledgor and without affecting Pledgor's
liability hereunder or on the Indebtedness, to (i) take or hold any other
property of any type from any third party as security for the Indebtedness,
and exchange, enforce, waive and release any or all of such other property,
(ii) apply such other property and direct the order or manner of sale
thereof as Secured Party may in its discretion determine, (iii) renew,
extend, accelerate, modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv) waive, enforce or
modify any of the provisions of any of the Loan Documents executed by any
third party, and (v) release or substitute any third party.
Restated Pledge Agreement - Page 12
(g) Voting Rights. If an Event of Default exists, Pledgor will not
exercise any voting rights with respect to securities pledged as
Collateral. PLEDGOR HEREBY IRREVOCABLY APPOINTS SECURED PARTY AS PLEDGOR'S
ATTORNEY-IN-FACT (SUCH POWER OF ATTORNEY BEING COUPLED WITH AN INTEREST)
AND PROXY TO EXERCISE, SUBJECT TO COMPLIANCE WITH ANY APPLICABLE INSURANCE
HOLDING COMPANY LAWS, ANY VOTING RIGHTS WITH RESPECT TO PLEDGOR'S
SECURITIES PLEDGED AS COLLATERAL UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT.
(h) Dividend Rights and Interest Payments. If an Event of Default
exists:
(i) all rights of Pledgor to receive and retain the dividends
and interest payments which it would otherwise be authorized
to receive and retain shall automatically cease, and all
such rights shall thereupon become vested with Secured Party
which shall thereafter have the sole right to receive, hold
and apply as Collateral such dividends and interest
payments; and
(ii) all dividend and interest payments which are received by
Pledgor contrary to the provisions of clause (i) of this
Subsection shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of
Pledgor, and shall be forthwith paid over to Secured Party
in the exact form received (properly endorsed or assigned if
requested by Secured Party), to be held by Secured Party as
Collateral.
(i) Insurance Holding Company Laws. Because of laws and regulations
governing change of control of insurance companies that may be applicable
(collectively, the "Insurance Holding Company Laws"), certain purchasers of
the Collateral at foreclosure may be required to obtain regulatory approval
prior to a final and binding acquisition of the Collateral. The Pledgor
acknowledges that such laws and regulations may adversely affect the
purchase price to be paid by a purchaser of the Collateral, or any part
thereof, at a private or public foreclosure sale, and that the Bank may
(and is hereby authorized by the Pledgor to) modify the notices,
advertisements, terms and procedures of any foreclosure sale of the
Collateral in order to comply with Insurance Holding Company Laws. Without
limiting the foregoing, the Pledgor acknowledges that the Bank may accept
bids at foreclosure sale on a provisional basis, pending receipt by the
successful bidder of necessary regulatory approvals under the Insurance
Holding Company Laws. In addition, the Pledgor acknowledges that the Bank
may (but shall not be required to) limit bidding at foreclosure sales to
those parties which have demonstrated an ability to comply with
requirements of the Insurance Holding Company Laws. Moreover, the Pledgor
acknowledges that the Bank may require the successful bidder at a
foreclosure sale to execute a purchase agreement, deposit a portion of the
purchase price, and take other actions reflecting the requirements of the
Insurance Holding Company Laws and the resulting delay in consummating a
foreclosure sale.
Restated Pledge Agreement - Page 13
12. Indemnity. PLEDGOR HEREBY INDEMNIFIES AND AGREES TO HOLD HARMLESS
SECURED PARTY, AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND
REPRESENTATIVES (EACH AN "INDEMNIFIED PERSON") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE
(COLLECTIVELY, THE "CLAIMS") WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST, ANY INDEMNIFIED PERSON (WHETHER OR NOT CAUSED BY ANY INDEMNIFIED
PERSON'S SOLE, CONCURRENT OR CONTRIBUTORY NEGLIGENCE) ARISING IN CONNECTION WITH
THE LOAN DOCUMENTS, THE INDEBTEDNESS OR THE COLLATERAL (INCLUDING WITHOUT
LIMITATION, THE ENFORCEMENT OF THE LOAN DOCUMENTS AND THE DEFENSE OF ANY
INDEMNIFIED PERSON'S ACTIONS AND/OR INACTIONS IN CONNECTION WITH THE LOAN
DOCUMENTS), EXCEPT TO THE LIMITED EXTENT THE CLAIMS AGAINST AN INDEMNIFIED
PERSON ARE PROXIMATELY CAUSED BY SUCH INDEMNIFIED PERSON'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. If Pledgor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the indemnification
provided for in this Section shall nonetheless be paid upon demand, subject to
later adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. The indemnification provided for in this
Section shall survive the termination of this Agreement and shall extend and
continue to benefit each individual or entity who is or has at any time been an
Indemnified Person hereunder.
13. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire
agreement of Secured Party and Pledgor with respect to the Collateral.
If the parties hereto are parties to any prior agreement, either
written or oral, relating to the Collateral, the terms of this
Agreement shall amend and supersede the terms of such prior agreements
as to transactions on or after the effective date of this Agreement,
but all security agreements, financing statements, guaranties, other
contracts and notices for the benefit of Secured Party shall continue
in full force and effect to secure the Indebtedness unless Secured
Party specifically releases its rights thereunder by separate release.
(b) Amendment. No modification, consent or amendment of any
provision of this Agreement or any of the other Loan Documents shall
be valid or effective unless the same is in writing and signed by the
party against whom it is sought to be enforced.
(c) Actions by Secured Party. The Lien, security interest and
other security rights of Secured Party hereunder shall not be impaired
by (i) any renewal, extension, increase or modification with respect
to the Indebtedness, (ii) any surrender, compromise, release, renewal,
extension, exchange or substitution which Secured Party may grant with
respect to the Collateral, or (iii) any release or indulgence granted
to any endorser, guarantor or surety of the Indebtedness. The taking
of additional security by Secured Party shall not release or impair
the Lien, security interest or other security rights of Secured Party
hereunder or affect the obligations of Pledgor hereunder.
Restated Pledge Agreement - Page 14
(d) Waiver by Secured Party. Secured Party may waive any Event of
Default without waiving any other prior or subsequent Event of
Default. Secured Party may remedy any default without waiving the
Event of Default remedied. Neither the failure by Secured Party to
exercise, nor the delay by Secured Party in exercising, any right or
remedy upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to exercise any such
right or remedy at a later date. No single or partial exercise by
Secured Party of any right or remedy hereunder shall exhaust the same
or shall preclude any other or further exercise thereof, and every
such right or remedy hereunder may be exercised at any time. No waiver
of any provision hereof or consent to any departure by Pledgor
therefrom shall be effective unless the same shall be in writing and
signed by Secured Party and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which
given and to the extent therein specified. No notice to or demand on
Pledgor in any case shall of itself entitle Pledgor to any other or
further notice or demand in similar or other circumstances.
(e) Costs and Expenses. Pledgor will upon demand pay to Secured
Party the amount of any and all costs and expenses (including without
limitation, attorneys' fees and expenses), which Secured Party may
incur in connection with (i) the transactions which give rise to the
Loan Documents, (ii) the preparation of this Agreement and the
perfection and preservation of the security interests granted under
the Loan Documents, (iii) the administration of the Loan Documents,
(iv) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, the Collateral, (v) the
exercise or enforcement of any of the rights of Secured Party under
the Loan Documents, or (vi) the failure by Pledgor to perform or
observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE
EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST
GRANTED HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.
(g) Venue. This Agreement has been entered into in the county in
Texas where Bank's address for notice purposes is located, and it
shall be performable for all purposes in such county. Courts within
the State of Texas shall have jurisdiction over any and all disputes
arising under or pertaining to this Agreement and venue for any such
disputes shall be in the county or judicial district where this
Agreement has been executed and delivered.
(h) Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be illegal, invalid or
unenforceable under present or future laws, such provision shall be
fully severable, shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision
held to be illegal, invalid or unenforceable.
Restated Pledge Agreement - Page 15
(i) No Obligation. Nothing contained herein shall be construed as
an obligation on the part of Secured Party to extend or continue to
extend credit to Borrower.
(j) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to this
Agreement shall be in writing and given by (i) personal delivery, (ii)
expedited delivery service with proof of delivery, or (iii) United
States mail, postage prepaid, registered or certified mail, return
receipt requested, sent to the intended addressee at the address set
forth on the signature page hereof or to such different address as the
addressee shall have designated by written notice sent pursuant to the
terms hereof and shall be deemed to have been received either, in the
case of personal delivery, at the time of personal delivery, in the
case of expedited delivery service, as of the date of first attempted
delivery at the address and in the manner provided herein, or in the
case of mail, five (5) days after deposit in a depository receptacle
under the care and custody of the United States Postal Service. Either
party shall have the right to change its address for notice hereunder
to any other location within the continental United States by notice
to the other party of such new address at least thirty (30) days prior
to the effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i) creates a
continuing security interest in the Collateral, (ii) shall be binding
on Pledgor and the heirs, executors, administrators, personal
representatives, successors and assigns of Pledgor, and (iii) shall
inure to the benefit of Secured Party and its successors and assigns.
Without limiting the generality of the foregoing, Secured Party may
pledge, assign or otherwise transfer the Indebtedness and its rights
under this Agreement and any of the other Loan Documents to any other
party, subject to any rights of Pledgor hereunder. Pledgor's rights
and obligations hereunder may not be assigned or otherwise transferred
without the prior written consent of Secured Party.
(l) Termination. It is contemplated by the parties hereto that
from time to time there may be no outstanding Indebtedness, but
notwithstanding such occurrences, this Agreement shall remain valid
and shall be in full force and effect as to subsequent outstanding
Indebtedness. Upon (i) the final satisfaction in full of the
Indebtedness, (ii) the termination or expiration of any commitment of
Secured Party to extend credit to Borrower, (iii) written request for
the termination hereof delivered by Pledgor to Secured Party, and (iv)
written release delivered by Secured Party to Pledgor, this Agreement
and the security interests created hereby shall terminate. Upon
termination of this Agreement and Pledgor's written request, Secured
Party will, at Pledgor's sole cost and expense, return to Pledgor such
of the Collateral as shall not have been sold or otherwise disposed of
or applied pursuant to the terms hereof and execute and deliver to
Pledgor such documents as Pledgor shall reasonably request to evidence
such termination.
(m) JURY TRIAL WAIVER. PLEDGOR AND BANK EACH HEREBY WAIVE ANY
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OR RELATING
TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Restated Pledge Agreement - Page 16
(n) Cumulative Rights. All rights and remedies of Secured Party
hereunder are cumulative of each other and of every other right or
remedy which Secured Party may otherwise have at law or in equity or
under any of the other Loan Documents, and the exercise of one or more
of such rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or remedies.
(o) Gender and Number. Within this Agreement, words of any gender
shall be held and construed to include the other gender, and words in
the singular number shall be held and construed to include the plural
and words in the plural number shall be held and construed to include
the singular, unless in each instance the context requires otherwise.
(p) Waiver of Subrogation. Pledgor shall not assert, enforce, or
otherwise exercise (i) any right of subrogation to any of the rights
or Liens of Secured Party or any other beneficiary against any other
Borrower any Obligated Party or any Collateral or other security, or
(ii) any right of recourse, reimbursement, contribution,
indemnification, or similar right against any other Borrower or any
Obligated Party, and Pledgor hereby waives any and all of the
foregoing rights and the benefit of, and any right to participate in,
and Collateral or other security given to Secured Party or any other
beneficiary to secure payment of the Indebtedness. This Section 13(p)
shall survive the termination of this Agreement, and any satisfaction
and discharge of Pledgor by virtue of any payment, court order, or
Legal Requirement.
(q) Descriptive Headings. The headings in this Agreement are for
convenience only and shall in no way enlarge, limit or define the
scope or meaning of the various and several provisions hereof.
(r) Restatement. Pledgor previously executed and delivered the
Pledge Agreement dated as of November 13, 1998 ("Existing Pledge
Agreement "), in favor of Bank One, Texas, National Association,
predecessor in interest to Secured Party. This Agreement is an
amendment and restatement of the Existing Pledge Agreement. Pledgor
affirms its grant of a security interest, pledge and assignment in the
Existing Pledge Agreement and agrees that except for the Liens in the
Collateral, which remain valid, binding, and enforceable first priority
Liens for the benefit of Secured Party, this Agreement restates the
Existing Pledge Agreement in its entirety. This Agreement is not
intended as, and shall not be construed as, a release or novation of
any Lien granted pursuant to the Existing Pledge Agreement.
[Signature Page Follows]
Restated Pledge Agreement - Page 17
EXECUTED as of the date first written above.
Pledgor's Address: PLEDGOR:
000 Xxxxxxxx Xxxxxx GAINSCO, INC.
Xxxx Xxxxx, Xxxxx 00000
By:
----------------------------------
Xxxxx X. Xxxxxxxx,
President and Chief Executive Officer
Secured Party's Address:
Bank One, NA
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Restated Pledge Agreement - Page 18
RESTATED PLEDGE AGREEMENT
THIS RESTATED PLEDGE AGREEMENT (this agreement, together with all
amendments and restatements, this "Agreement ") is made as of February 27, 2002,
by GAINSCO SERVICE CORP., a Texas corporation ("Pledgor"), in favor of BANK ONE,
NA ("Bank"). Pledgor hereby agrees with Bank as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the meanings indicated below:
(a) "Borrower" means GAINSCO, Inc., a Texas corporation, and GAINSCO
Service Corp., a Texas corporation, or either of them.
(b) "Code" means the Uniform Commercial Code as in effect in the State
of Texas on the date of this Agreement or as it may hereafter be amended
from time to time.
(c) "Collateral" means all right, title and interest of Pledgor in and
to: (i) all Stock now or hereafter owned beneficially or of record by
Pledgor, including, but not limited to the interests listed on Schedule 1
and the interests in each Person which is a successor to such Persons
listed on Schedule 1 (each, an "Issuer"), (ii) all rights of management
with respect to any of the property described in this paragraph, (iii)
without affecting the obligation of any Issuer or Pledgor under any
agreement prohibiting such action, in the event of any consolidation or
merger in which any Issuer is not the surviving entity, or in the event of
any sale, lease, transfer or other disposition of all or substantially all
of the assets of any Issuer, all Stock, equity, partnership, limited
liability company, or other interest of the successor entity formed by or
resulting from such consolidation or merger, or of the Person to which such
sale, lease, transfer or other disposition shall have been made, (iv) all
certificates, instruments and/or other documents evidencing any property
described in this paragraph, including without limitation, any certificate
representing a stock dividend or any certificate in connection with any
recapitalization, reclassification, merger, consolidation, conversion, sale
of assets, combination of shares, stock split or spin-off with respect to
any of the property described in this paragraph; (v) any option, warrant,
subscription or right, whether as an addition to or in substitution of any
other property described in this paragraph; (vi) any Dividends or
distributions of any kind whatsoever, whether distributable in cash, stock
or other property with respect to any of the property described in this
paragraph; (vii) any interest, premium or principal payments with respect
to any of the property described in this paragraph; (viii) any conversion
or redemption proceeds with respect to any of the property described in
this paragraph, (ix) all renewals, replacements and substitutions of any
property described in this paragraph, and (x) all products and proceeds of
all of the foregoing. The designation of proceeds does not authorize
Pledgor to sell, transfer or otherwise convey any Collateral.
(d) "Indebtedness" means all indebtedness, obligations and liabilities
of Borrower and each Obligated Party to Secured Party of any kind or
character, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several, including without limitation all
indebtedness, obligations and liabilities of Borrower and each Obligated
Party to
Restated Pledge Agreement - Page 1
Secured Party now existing or hereafter arising by note, draft, acceptance,
guaranty, endorsement, letter of credit, assignment, purchase, overdraft,
discount, indemnity agreement or otherwise, (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above, (iii) all
obligations of Borrower and each Obligated Party to Secured Party under any
documents evidencing, securing, governing and/or pertaining to all or any
part of the indebtedness described in (i) and (ii) above, (iv) all costs
and expenses incurred by Secured Party in connection with the collection
and administration of all or any part of the indebtedness and obligations
described in (i), (ii) and (iii) above or the protection or preservation
of, or realization upon, the collateral securing all or any part of such
indebtedness and obligations, including without limitation all reasonable
attorneys' fees, and (v) all renewals, extensions, modifications and
rearrangements of the indebtedness and obligations described in (i), (ii),
(iii) and (iv) above. Without limiting the generality of the foregoing,
this Agreement secures the payment of all amounts which constitute part of
the Indebtedness and would be owed by Pledgor or any Obligated Party under
any Loan Document, but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding under any Debtor Law involving Pledgor, any Obligated Party or
any other Person (including all such amounts which would become due or
would be secured but for the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding of
Pledgor, any Obligated Party or any other Person under any Debtor Law).
(e) "Loan Documents" means all instruments and documents evidencing,
securing, governing, guaranteeing and/or pertaining to the Indebtedness,
together with all renewals, extensions, amendments, supplements and
restatements thereto, including without limitation the Revolving Credit
Agreement dated as of November 13, 1998 (such agreement, together with all
amendments and restatements, the "Credit Agreement") among GAINSCO, Inc.,
GAINSCO Service Corp. and Bank.
(f) "Obligated Party" means any party other than Borrower who secures,
guarantees and/or is otherwise obligated to pay all or any portion of the
Indebtedness.
(g) "Secured Party" means Bank, its successors and assigns, including
without limitation, any party to whom Bank, or its successors or assigns,
may assign its rights and interests under this Agreement.
Capitalized terms not otherwise defined herein have the meaning specified in the
Credit Agreement, and, to the extent of any conflict, terms as defined in the
Credit Agreement shall control (provided, that a more expansive or explanatory
definition shall not be deemed a conflict). All words and phrases used herein
which are expressly defined in Section 1.201, Chapter 8 or Chapter 9 of the Code
shall have the meaning provided for therein. Other words and phrases defined
elsewhere in the Code shall have the meaning specified therein except to the
extent such meaning is inconsistent with a definition in Section 1.201, Chapter
8 or Chapter 9 of the Code.
2. Security Interest. As security for the Indebtedness, Pledgor, for value
received, hereby grants to Secured Party a continuing security interest in the
Collateral. The delivery at any time by Pledgor to Secured Party of any property
as a pledge to secure payment or
Restated Pledge Agreement - Page 2
performance of any indebtedness or obligation whatsoever shall also constitute a
pledge of such property as Collateral hereunder.
3. Additional Collateral. All Collateral received by Pledgor (except for
cash dividends permitted to be retained by Pledgor pursuant to the Credit
Agreement) shall be received in trust for the benefit of Secured Party. All
Collateral and all certificates or other written instruments or documents
evidencing and/or representing Collateral that is received by Pledgor, together
with such instruments of transfer as Secured Party may request, shall
immediately be delivered to or deposited with Secured Party and held by Secured
Party as Collateral under the term of this Agreement. If Collateral received by
Pledgor shall be shares of Stock or other securities, such shares of Stock or
other securities shall be duly endorsed in blank or accompanied by proper
instruments of transfer and assignment duly executed in blank with, if requested
by Secured Party, signatures guaranteed by a bank or member firm of the New York
Stock Exchange, all in form and substance satisfactory to Secured Party. Secured
Party shall be deemed to have possession of any Collateral in transit to Secured
Party or its agent.
4. Voting Rights. As long as no Event of Default exists, any voting rights
incident to any Stock or other securities pledged as Collateral may be exercised
by Pledgor; provided, however, that Pledgor will not exercise, or cause to be
exercised, any such voting rights, without the prior written consent of Secured
Party, if the direct or indirect effect of such vote will result in an Event of
Default.
5. Maintenance of Collateral. Other than the exercise of reasonable care to
assure the safe custody of any Collateral in Secured Party's possession from
time to time, Secured Party does not have any obligation, duty or responsibility
with respect to the Collateral. Without limiting the generality of the
foregoing, Secured Party shall not have any obligation, duty or responsibility
to do any of the following: (a) ascertain any maturities, calls, conversions,
exchanges, offers, tenders or similar matters relating to the Collateral or
informing Pledgor with respect to any such matters; (b) fix, preserve or
exercise any right, privilege or option (whether conversion, redemption or
otherwise) with respect to the Collateral unless (i) Pledgor makes written
demand to Secured Party to do so, (ii) such written demand is received by
Secured Party in sufficient time to permit Secured Party to take the action
demanded in the ordinary course of its business, and (iii) Pledgor provides
additional collateral, acceptable to Secured Party in its sole discretion; (c)
collect any amounts payable in respect of the Collateral (Secured Party being
liable to account to Pledgor only for what Secured Party may actually receive or
collect thereon); (d) sell all or any portion of the Collateral to avoid market
loss; (e) sell all or any portion of the Collateral unless and until (i) Pledgor
makes written demand upon Secured Party to sell the Collateral, and (ii) Pledgor
provides additional collateral, acceptable to Secured Party in its sole
discretion; or (f) hold the Collateral for or on behalf of any party other than
Pledgor.
6. Representations and Warranties. Pledgor hereby represents and warrants
the following to Secured Party:
(a) Due Authorization. The execution, delivery and performance of this
Agreement and all of the other Loan Documents by Pledgor have been duly
authorized by all necessary corporate action of Pledgor, to the extent
Pledgor is a corporation, or by all necessary partnership action, to the
extent Pledgor is a partnership.
Restated Pledge Agreement - Page 3
(b) Enforceability. This Agreement and the other Loan Documents
constitute legal, valid and binding obligations of Pledgor, enforceable in
accordance with their respective terms, except as limited by bankruptcy,
insolvency or similar laws of general application relating to the
enforcement of creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
(c) Ownership and Liens. Pledgor has good and indefeasible title to
the Collateral free and clear of all Liens, security interests,
encumbrances or adverse claims, except for the security interest created by
this Agreement. No dispute, right of setoff, counterclaim or defense exists
with respect to all or any part of the Collateral. Pledgor has not executed
any other security agreement currently affecting the Collateral and no
financing statement or other instrument similar in effect covering all or
any part of the Collateral is on file in any recording office except as may
have been executed or filed in favor of Secured Party.
(d) No Conflicts or Consents. Neither the ownership, the intended use
of the Collateral by Pledgor, the grant of the security interest by Pledgor
to Secured Party herein nor (except for restrictions imposed by any
applicable Insurance Holding Company Laws (as hereinafter defined) the
exercise by Secured Party of its rights or remedies hereunder, will (i)
conflict with any provision of (A) any domestic or foreign law, statute,
rule or regulation, (B) the articles or certificate of incorporation,
charter, bylaws or partnership agreement, as the case may be, of Pledgor,
or (C) any agreement, judgment, license, order or permit applicable to or
binding upon Pledgor or otherwise affecting the Collateral, or (ii) result
in or require the creation of any Lien, charge or encumbrance upon any
assets or properties of Pledgor or of any person except as may be expressly
contemplated in the Loan Documents. Except as expressly contemplated in the
Loan Documents, no consent, approval, authorization or order of, and no
notice to or filing with, any court, governmental authority or third party
is required in connection with the grant by Pledgor of the security
interest herein or the exercise by Secured Party of its rights and remedies
hereunder.
(e) Security Interest. Pledgor has and will have at all times full
right, power and authority to grant a security interest in the Collateral
to Secured Party in the manner provided herein, free and clear of any Lien,
security interest or other charge or encumbrance. This Agreement creates a
legal, valid and binding security interest in favor of Secured Party in the
Collateral.
(f) Pledgor Information. Pledgor's chief executive office and the
office where the records concerning the Collateral are kept is located at
its address set forth on the signature page hereof. Schedule 2, Section (a)
states the jurisdiction of organization, type of entity, entity
identification number issued by the appropriate authority of the
jurisdiction of Pledgor's organization, and exact name of Pledgor, as such
name appears in its currently effective organizational documents as filed
with the appropriate authority of the jurisdiction of Pledgor's
organization. Schedule 2, Section (b) sets forth each other name Pledgor
has had in the past five years, together with the date of the relevant
change. Except as set forth in Schedule 2, Section (c), Pledgor has not
changed its identity or type of entity in any way within the past five
years. Changes in identity or type of entity include mergers,
consolidations, acquisitions (including both equity and asset
Restated Pledge Agreement - Page 4
acquisitions), and any change in the form, nature, or jurisdiction of
organization. Schedule 2, Section (d) states all other names (including
trade, assumed, and similar names) used by Pledgor or any of its divisions
or other business units at any time during the past five years. Schedule 2,
Section (e) states the Federal Taxpayer Identification Number of Pledgor.
(g) Solvency of Pledgor. As of the date hereof, and after giving
effect to this Agreement and the completion of all other transactions
contemplated by Pledgor at the time of the execution of this Agreement, (i)
Pledgor is and will be solvent, (ii) the fair saleable value of Pledgor's
assets exceeds and will continue to exceed Pledgor's liabilities (both
fixed and contingent), (iii) Pledgor is and will continue to be able to pay
its debts as they mature, and (iv) if Pledgor is not an individual, Pledgor
has and will have sufficient capital to carry on Pledgor's businesses and
all businesses in which Pledgor is about to engage.
(h) Nature of Ownership. Pledgor is the registered owner of the
securities pledged as Collateral and a certificate has been issued in
Pledgor's name to evidence Pledgor's ownership in such securities.
(i) Representations and Warranties Concerning Collateral. Pledgor
represents and warrants to Secured Party that (i) as of the date hereof,
Schedule 1 is a complete and correct description of all Stock in which
Pledgor has any interest, including each class of interest and number of
shares or units owned by Pledgor, and each certificate representing such
interest; (ii) the pledge, assignment, and delivery of the Collateral
hereunder, and filing of an appropriate financing statement, create a valid
first and prior perfected security interest in the Collateral, securing the
Indebtedness; (iii) the Stock pledged hereunder is duly authorized, validly
issued, fully paid, and non-assessable, and was not issued in violation of
the rights of any Person; (iv) no unpaid capital call or dispute exists
with respect to any of the Collateral; (v) none of the Collateral is
evidenced by a certificate, instrument or other writing that has not been
delivered to Secured Party; (vi) except as described on Schedule 3, none of
the Collateral is subject to any buy-sell, voting trust, transfer
restriction, preferential right to purchase or similar agreement or any
option, warrant, put or call or similar agreement; (vii) Pledgor owns 100%
of the issued and outstanding shares of capital stock of each issuer which
is a corporation listed on Schedule 1; (viii) Pledgor owns the percentage
of all partnership interest indicated on Schedule 1 of each issuer which is
a partnership listed on Schedule 1; and (ix) no Issuer described on
Schedule 1 has issued any certificate evidencing Stock of such Issuer not
described on Schedule 1. The delivery at any time by Pledgor to Secured
Party of Collateral shall constitute a representation and warranty by
Pledgor under this Agreement that, with respect to such Collateral, Pledgor
is the sole legal and beneficial owner of the Collateral, and that the
matters set forth in this Section 6(i) are true and correct with respect to
such Collateral.
(j) Chattel Paper, Documents and Instruments. The security interest in
chattel paper, documents and instruments of Pledgor granted hereunder is
valid and genuine, and all such chattel paper, documents and instruments
have only one original counterpart. No party other than Pledgor or Secured
Party is in actual or constructive possession of any such chattel paper,
documents or instruments.
Restated Pledge Agreement - Page 5
(k) Surplus Debenture. With regard to the Surplus Debenture described
on Schedule 1, as of the date hereof, the unpaid principal balance of such
Surplus Debenture is $2,600,000 and the payment of interest thereon is
current. No dispute, right of setoff, counterclaim or defense exists with
respect to such Surplus Debenture.
7. Affirmative Covenants. Pledgor will comply with the covenants contained
in this Section at all times during the period of time this Agreement is
effective unless Secured Party shall otherwise consent in writing.
(a) Ownership and Liens. Pledgor will maintain good and indefeasible
title to all Collateral free and clear of all Liens, security interests,
encumbrances or adverse claims, except for the security interest created by
this Agreement and the security interests and other encumbrances expressly
permitted by the other Loan Documents. Pledgor will not permit any dispute,
right of setoff, counterclaim or defense to exist with respect to all or
any part of the Collateral. Pledgor will cause any financing statement or
other security instrument with respect to the Collateral to be terminated,
except as may exist or as may have been filed in favor of Secured Party.
Pledgor will defend at its expense Secured Party's right, title and
security interest in and to the Collateral against the claims of any third
party.
(b) Inspection of Books and Records. Pledgor will keep adequate
records concerning the Collateral and will permit Secured Party and all
representatives and agents appointed by Secured Party to inspect Pledgor's
books and records of or relating to the Collateral at any time during
normal business hours, to make and take away photocopies, photographs and
printouts thereof and to write down and record any such information.
(c) Adverse Claim. Pledgor covenants and agrees to promptly notify
Secured Party of any claim, action or proceeding affecting title to the
Collateral, or any part thereof, or the security interest created hereunder
and, at Pledgor's expense, defend Secured Party's security interest in the
Collateral against the claims of any third party. Pledgor also covenants
and agrees to promptly deliver to Secured Party a copy of all written
notices received by Pledgor with respect to the Collateral, including
without limitation, notices received from the issuer of any securities
pledged hereunder as Collateral.
(d) Delivery of Instruments and/or Certificates. Contemporaneously
herewith, Pledgor covenants and agrees to deliver to Secured Party any
certificates, documents or instruments representing or evidencing the
Collateral, together with Pledgor's endorsement thereon and/or accompanied
by proper instruments of transfer and assignment duly executed in blank
with, if requested by Secured Party, signatures guaranteed by a bank or
member firm of the New York Stock Exchange, all in form and substance
satisfactory to Secured Party. If required by Secured Party, Pledgor also
covenants and agrees to cooperate with Secured Party in registering the
pledge of the securities pledged as Collateral with the issuer of such
securities.
(e) Further Assurances. Pledgor will from time to time at its expense
promptly execute and deliver all further instruments and documents and take
all further action necessary or appropriate or that Secured Party may
request in order (i) to perfect
Restated Pledge Agreement - Page 6
and protect the security interest created or purported to be created hereby
and the first priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies hereunder in respect
of the Collateral, and (iii) to otherwise effect the purposes of this
Agreement, including without limitation, executing and filing such
financing or continuation statements, or any amendments thereto.
(f) Chattel Paper Documents and Instruments. Pledgor will take such
action as may be requested by Secured Party in order to cause any chattel
paper, documents or instruments to be valid and enforceable and will cause
all chattel paper to have only one original counterpart. Upon request by
Secured Party, Pledgor will deliver to Secured Party all originals of
chattel paper, documents or instruments and will xxxx all chattel paper
with a legend indicating that such chattel paper is subject to the security
interest granted hereunder.
8. Negative Covenants. Pledgor will comply with the covenants contained in
this Section at all times during the period of time this Agreement is effective,
unless Secured Party shall otherwise consent in writing.
(a) Transfer or Encumbrance. Pledgor will not (i) sell, assign (by
operation of law or otherwise) or transfer Pledgor's rights in any of the
Collateral, (ii) xxxxx x Xxxx or security interest in or execute, file or
record any financing statement or other security instrument with respect to
the Collateral to any party other than Secured Party, or (iii) deliver
actual or constructive possession of any certificate, instrument or
document evidencing and/or representing any of the Collateral to any party
other than Secured Party.
(b) Impairment of Security Interest. Pledgor will not take or fail to
take any action which would in any manner impair the value or
enforceability of Secured Party's security interest in any Collateral.
(c) Dilution of Ownership. As to any securities pledged as Collateral
(other than securities of a class which are publicly traded), Pledgor will
not consent to or approve of the issuance of (i) any additional shares of
any class of securities of such issuer (unless immediately upon issuance
additional securities are pledged and delivered to Secured Party pursuant
to the terms hereof to the extent necessary to give Secured Party a
security interest after such issuance in at least the same percentage of
such issuer's outstanding securities as Secured Party had before such
issuance), (ii) any instrument convertible voluntarily by the holder
thereof or automatically upon the occurrence or non-occurrence of any event
or condition into, or exchangeable for, any such securities, or (iii) any
warrants, options, contracts or other commitments entitling any third party
to purchase or otherwise acquire any such securities.
(d) Restrictions on Securities. Pledgor will not enter into any
agreement creating, or otherwise permit to exist, any restriction or
condition upon the transfer, voting or control of any securities pledged as
Collateral, except as consented to in writing by Secured Party.
Restated Pledge Agreement - Page 7
(e) Place of Perfection. Pledgor will not change the jurisdiction of
its organization from the jurisdiction specified in Schedule 2, Section (a)
or its type of entity from the type of entity specified in Schedule 2,
Section (a). Pledgor will not change its name from the name specified in
Schedule 2, Section (a) unless Secured Party has received written notice
from Pledgor specifying the new name, such notice to be received by Secured
Party not less than 30 days prior to such change of name. Pledgor shall not
change the location of its chief executive office and the office where it
keeps its records concerning the Collateral to a location other than the
address specified on the signature pages hereto unless Secured Party has
received written notice from Pledgor specifying the address of the new
location of Pledgor's chief executive office and the office where it keeps
its records concerning the Collateral, such notice to be received by
Secured Party not less than 30 days prior to such change of location.
9. Rights of Secured Party. Secured Party shall have the rights contained
in (y) this Section (except as provided in clause (z)) at all times during the
period of time this Agreement is effective, and (z) Section 9(a), clauses(i),
(ii) and (iv) if an Event of Default exists.
(a) Power of Attorney. PLEDGOR HEREBY IRREVOCABLY GRANTS TO SECURED
PARTY PLEDGOR'S PROXY AND APPOINTS SECURED PARTY AS PLEDGOR'S
ATTORNEY-IN-FACT, WITH FULL AUTHORITY IN THE PLACE AND STEAD OF PLEDGOR AND
IN THE NAME OF PLEDGOR OR OTHERWISE, TO TAKE ANY ACTION AND TO EXECUTE ANY
INSTRUMENT WHICH SECURED PARTY MAY FROM TIME TO TIME IN SECURED PARTY'S
DISCRETION DEEM NECESSARY OR APPROPRIATE TO ACCOMPLISH THE PURPOSES OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, THE FOLLOWING ACTION: (i) subject
to any applicable Insurance Holding Company Laws, transfer any securities,
instruments, documents or certificates pledged as Collateral in the name of
Secured Party or its nominee; (ii) use any interest, premium or principal
payments, conversion or redemption proceeds or other cash proceeds received
in connection with any Collateral to reduce any of the Indebtedness; (iii)
exchange any of the securities pledged as Collateral for any other property
upon any merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof, and, in connection therewith, to
deposit and deliver any and all of such securities with any committee,
depository, transfer agent, registrar or other designated agent upon such
terms and conditions as Secured Party may deem necessary or appropriate;
(iv) exercise or comply with any conversion, exchange, redemption,
subscription or any other right, privilege or option pertaining to any
securities pledged as Collateral; provided, however, except as provided
herein, Secured Party shall not have a duty to exercise or comply with any
such right, privilege or option (whether conversion, redemption or
otherwise) and shall not be responsible for any delay or failure to do so;
and (v) file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or appropriate for the collection
and/or preservation of the Collateral or otherwise to enforce the rights of
Secured Party with respect to the Collateral. THE PROXY AND POWER OF
ATTORNEY HEREIN GRANTED, AND EACH STOCK POWER AND SIMILAR POWER NOW OR
THEREAFTER GRANTED (INCLUDING ANY EVIDENCED BY A SEPARATE WRITING), ARE
COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR TO FINAL PAYMENT IN FULL
OF THE INDEBTEDNESS.
Restated Pledge Agreement - Page 8
(b) Performance by Secured Party. If Pledgor fails to perform any
agreement or obligation provided herein, Secured Party may itself perform,
or cause performance of, such agreement or obligation, and the expenses of
Secured Party incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by Pledgor on demand.
(c) Notification of Account Debtors and Other Rights. With respect to
chattel paper or instruments which are Collateral, Secured Party, without
notice to Pledgor, shall have the right at any time and from time to time
after the occurrence and during the continuation of an Event of Default to
notify and direct the account debtor or obligor thereon to thereafter make
all payments on such Collateral directly to Secured Party, regardless of
whether Pledgor was previously making collections thereon. Each account
debtor and obligor making payment to Secured Party hereunder shall be fully
protected in relying on the written statement of Secured Party that it then
holds a security interest which entitles it to receive such payment, and
the receipt of Secured Party for such payment shall be full acquittance
therefor to the party making such payment. Payments received by Secured
Party shall be held or disposed of by it in accordance with the terms of
this Agreement. Secured Party shall, however, never be obligated to
collect, or use any effort to collect, any such payments, its sole
liability to the Pledgor being to account for payments, if any, actually
received.
Notwithstanding any other provision herein to the contrary, Secured Party
does not have any duty to exercise or continue to exercise any of the
foregoing rights and shall not be responsible for any failure to do so or
for any delay in doing so.
10. Events of Default. Each of the following constitutes an "Event of
Default" under this Agreement:
(a) Non-Performance of Covenants. The failure of Pledgor, any other
Borrower or any Obligated Party to timely and properly observe, keep or
perform (i) any covenant, agreement, warranty or condition contained in
Sections 7(a), 7(e) or 8 or (ii) any other covenant, agreement, warranty or
condition required herein and, in the case of (ii), such failure shall
continue for fifteen (15) days; or
(b) Default Under other Credit Agreement. The occurrence of an Event
of Default under Article 8 of the Credit Agreement; or
(c) False Representation. Any representation contained herein or in
any of the other Loan Documents made by Borrower or any Obligated Party is
false or misleading in any material respect; or
(d) Execution on Collateral. The Collateral or any portion thereof is
taken on execution or other process of law in any action against Pledgor;
or
(e) Abandonment. Pledgor abandons the Collateral or any portion
thereof; or
(f) Action by Other Lienholder. The holder of any Lien or security
interest on any of the Collateral (without hereby implying the consent of
Secured Party to the existence or creation of any such Lien or security
interest on the Collateral), declares a
Restated Pledge Agreement - Page 9
default thereunder or institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder; or
(g) Dilution of Ownership. The issuer of any securities (other than
securities of a class which are publicly traded) constituting Collateral
hereafter issues any shares of any class of capital stock (unless
immediately upon issuance, additional securities are pledged and delivered
to Secured Party pursuant to the terms hereof to the extent necessary to
give Secured Party a security interest after such issuance in at least the
same percentage of such issuer's outstanding securities as Secured Party
had before such issuance) or any options, warrants or other rights to
purchase any such capital stock.
11. Remedies and Related Rights. If an Event of Default exists, and without
limiting any other rights and remedies provided herein, under any of the other
Loan Documents or otherwise available to Secured Party, Secured Party may
exercise one or more of the rights and remedies provided in this Section.
(a) Remedies. Secured Party may from time to time at its discretion,
subject to compliance with any applicable Insurance Holding Company Laws,
without limitation and without notice except as expressly provided in any
of the Loan Documents:
(i) exercise in respect of the Collateral all the rights and remedies
of a secured party under the Code (whether or not the Code
applies to the affected Collateral);
(ii) reduce its claim to judgment or foreclose or otherwise enforce,
in whole or in part, the security intent granted hereunder by any
available judicial procedure;
(iii) sell or otherwise dispose of, at its office, on the premises of
Pledgor or elsewhere, the Collateral, as a unit or in parcels, by
public or private proceedings, and by way of one or more
contracts (it being agreed that the sale or other disposition of
any part of the Collateral shall not exhaust Secured Party's
power of sale, but sales or other dispositions may be made from
time to time until all of the Collateral has been sold or
disposed of or until the Indebtedness has been paid and performed
in full), and at any such sale or other disposition it shall not
be necessary to exhibit any of the Collateral;
(iv) buy the Collateral, or any portion thereof, at any public sale;
(v) buy the Collateral, or any portion thereof, at any private sale
if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed
standard price quotations;
(vi) apply for the appointment of a receiver for the Collateral, and
Pledgor hereby consents to any such appointment; and
Restated Pledge Agreement - Page 10
(vii) at its option, retain the Collateral in satisfaction of the
Indebtedness whenever the circumstances are such that Secured
Party is entitled to do so under the Code or otherwise.
Pledgor agrees that in the event Pledgor is entitled to receive any notice
under the Code, as it exists in the state governing any such notice, of the
sale or other disposition of any Collateral, reasonable notice shall be
deemed given five (5) days after such notice is deposited in a depository
receptacle under the care and custody of the United States Postal Service,
postage prepaid, at Pledgor's address set forth on the signature page
hereof, ten (10) days prior to the date of any public sale, or after which
a private sale, of any of such Collateral is to be held. Secured Party
shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Pledgor further acknowledges and
agrees that the redemption by Secured Party of any certificate of deposit
pledged as Collateral shall be deemed to be a commercially reasonable
disposition under the Code.
(b) Private Sale of Securities. Pledgor recognizes that Secured Party
may be unable to effect a public sale of all or any part of the securities
pledged as Collateral because of restrictions in applicable federal and
state securities laws and that Secured Party may, therefore, determine to
make one or more private sales of any such securities to a restricted group
of purchasers who will be obligated 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. Pledgor acknowledges that
each any such private sale may be at prices and other terms less favorable
then what might have been obtained at a public sale and, notwithstanding
the foregoing, agrees that each such private sale shall be deemed to have
been made in a commercially reasonable manner and that Secured Party shall
have no obligation to delay the sale of any such securities for the period
of time necessary to permit the issuer to register such securities for
public sale under any federal or state securities laws. Pledgor further
acknowledges and agrees that any offer to sell such securities which has
been made privately in the manner described above to not less than five (5)
bona fide offerees shall be deemed to involve a "public sale" for purposes
of the Code, notwithstanding that such sale may not constitute a "public
offering" under any federal or state securities laws and that Secured Party
may, in such event, bid for the purchase of such securities.
(c) Application of Proceeds. If an Event of Default exists, Secured
Party may at its discretion apply or use any cash held by Secured Party as
Collateral, and any cash proceeds received by Secured Party in respect of
any sale or other disposition of, collection from, or other realization
upon, all or any part of the Collateral as follows in such order and manner
as Secured Party may elect:
(i) to the repayment or reimbursement of the reasonable costs
and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Secured Party in
connection with (A) the administration of the Loan
Documents, (B) the custody, preservation, use or operation
of, or the sale of, collection from, or
Restated Pledge Agreement - Page 11
other realization upon, the Collateral, and (C) the exercise
or enforcement of any of the rights and remedies of Secured
Party hereunder;
(ii) to the payment or other satisfaction of any Liens and other
encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as Collateral;
(v) to the payment of any other amounts required by applicable
law (including without limitation, Section 9.615 of the Code
or any other applicable statutory provision); and
(vi) by delivery to Pledgor or any other party lawfully entitled
to receive such cash or proceeds whether by direction of a
court of competent jurisdiction or otherwise.
(d) Deficiency. In the event that the proceeds of any sale of,
collection from, or other realization upon, all or any part of the
Collateral by Secured Party are insufficient to pay all amounts to which
Secured Party is legally entitled, Borrower and any party who guaranteed or
is otherwise obligated to pay all or any portion of the Indebtedness shall
be liable for the deficiency, together with interest thereon as provided in
the Loan Documents.
(e) Non-Judicial Remedies. In granting to Secured Party the power to
enforce its rights hereunder without prior judicial process or judicial
hearing, Pledgor expressly waives, renounces and knowingly relinquishes any
legal right which might otherwise require Secured Party to enforce its
rights by judicial process. Pledgor recognizes and concedes that
non-judicial remedies are consistent with the usage of trade, are
responsive to commercial necessity and are the result of a bargain at arm's
length. Nothing herein is intended to prevent Secured Party or Pledgor from
resorting to judicial process at either party's option.
(f) Other Recourse. Pledgor waives any right to require Secured Party
to proceed against any third party, exhaust any Collateral or other
security for the Indebtedness, or to have any third party joined with
Pledgor in any suit arising out of the Indebtedness or any of the Loan
Documents, or pursue any other remedy available to Secured Party. Pledgor
further waives any and all notice of acceptance of this Agreement and of
the creation, modification, rearrangement, renewal or extension of the
Indebtedness. Pledgor further waives any defense arising by reason of any
disability or other defense of any third party or by reason of the
cessation from any cause whatsoever of the liability of any third party.
Pledgor authorizes Secured Party, and without notice or demand and without
any reservation of rights against Pledgor and without affecting Pledgor's
liability hereunder or on the Indebtedness, to (i) take or hold any other
property of any type from any third party as security for the Indebtedness,
and exchange, enforce, waive and release any or all of such other property,
(ii) apply such other property and direct the order or manner of sale
thereof as Secured Party may in its discretion
Restated Pledge Agreement - Page 12
determine, (iii) renew, extend, accelerate, modify, compromise, settle or
release any of the Indebtedness or other security for the Indebtedness,
(iv) waive, enforce or modify any of the provisions of any of the Loan
Documents executed by any third party, and (v) release or substitute any
third party.
(g) Voting Rights. If an Event of Default exists, Pledgor will not
exercise any voting rights with respect to securities pledged as
Collateral. PLEDGOR HEREBY IRREVOCABLY APPOINTS SECURED PARTY AS PLEDGOR'S
ATTORNEY-IN-FACT (SUCH POWER OF ATTORNEY BEING COUPLED WITH AN INTEREST)
AND PROXY TO EXERCISE, SUBJECT TO COMPLIANCE WITH ANY APPLICABLE INSURANCE
HOLDING COMPANY LAWS, ANY VOTING RIGHTS WITH RESPECT TO PLEDGOR'S
SECURITIES PLEDGED AS COLLATERAL UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT.
(h) Dividend Rights and Interest Payments. If an Event of Default
exists:
(i) all rights of Pledgor to receive and retain the dividends
and interest payments which it would otherwise be authorized
to receive and retain shall automatically cease, and all
such rights shall thereupon become vested with Secured Party
which shall thereafter have the sole right to receive, hold
and apply as Collateral such dividends and interest
payments; and
(ii) all dividend and interest payments which are received by
Pledgor contrary to the provisions of clause (i) of this
Subsection shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of
Pledgor, and shall be forthwith paid over to Secured Party
in the exact form received (properly endorsed or assigned if
requested by Secured Party), to be held by Secured Party as
Collateral.
(i) Insurance Holding Company Laws. Because of laws and regulations
governing change of control of insurance companies that may be applicable
(collectively, the "Insurance Holding Company Laws"), certain purchasers of
the Collateral at foreclosure may be required to obtain regulatory approval
prior to a final and binding acquisition of the Collateral. The Pledgor
acknowledges that such laws and regulations may adversely affect the
purchase price to be paid by a purchaser of the Collateral, or any part
thereof, at a private or public foreclosure sale, and that the Bank may
(and is hereby authorized by the Pledgor to) modify the notices,
advertisements, terms and procedures of any foreclosure sale of the
Collateral in order to comply with Insurance Holding Company Laws. Without
limiting the foregoing, the Pledgor acknowledges that the Bank may accept
bids at foreclosure sale on a provisional basis, pending receipt by the
successful bidder of necessary regulatory approvals under the Insurance
Holding Company Laws. In addition, the Pledgor acknowledges that the Bank
may (but shall not be required to) limit bidding at foreclosure sales to
those parties which have demonstrated an ability to comply with
requirements of the Insurance Holding Company Laws. Moreover, the Pledgor
acknowledges that the Bank may require the successful
Restated Pledge Agreement - Page 13
bidder at a foreclosure sale to execute a purchase agreement, deposit a
portion of the purchase price, and take other actions reflecting the
requirements of the Insurance Holding Company Laws and the resulting delay
in consummating a foreclosure sale.
12. Indemnity. PLEDGOR HEREBY INDEMNIFIES AND AGREES TO HOLD HARMLESS
SECURED PARTY, AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND
REPRESENTATIVES (EACH AN "INDEMNIFIED PERSON") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE
(COLLECTIVELY, THE "CLAIMS") WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST, ANY INDEMNIFIED PERSON (WHETHER OR NOT CAUSED BY ANY INDEMNIFIED
PERSON'S SOLE, CONCURRENT OR CONTRIBUTORY NEGLIGENCE) ARISING IN CONNECTION WITH
THE LOAN DOCUMENTS, THE INDEBTEDNESS OR THE COLLATERAL (INCLUDING WITHOUT
LIMITATION, THE ENFORCEMENT OF THE LOAN DOCUMENTS AND THE DEFENSE OF ANY
INDEMNIFIED PERSON'S ACTIONS AND/OR INACTIONS IN CONNECTION WITH THE LOAN
DOCUMENTS), EXCEPT TO THE LIMITED EXTENT THE CLAIMS AGAINST AN INDEMNIFIED
PERSON ARE PROXIMATELY CAUSED BY SUCH INDEMNIFIED PERSON'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. If Pledgor or any third party ever alleges such gross
negligence or willful misconduct by any Indemnified Person, the indemnification
provided for in this Section shall nonetheless be paid upon demand, subject to
later adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. The indemnification provided for in this
Section shall survive the termination of this Agreement and shall extend and
continue to benefit each individual or entity who is or has at any time been an
Indemnified Person hereunder.
13. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire agreement of
Secured Party and Pledgor with respect to the Collateral. If the parties
hereto are parties to any prior agreement, either written or oral, relating
to the Collateral, the terms of this Agreement shall amend and supersede
the terms of such prior agreements as to transactions on or after the
effective date of this Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the benefit of
Secured Party shall continue in full force and effect to secure the
Indebtedness unless Secured Party specifically releases its rights
thereunder by separate release.
(b) Amendment. No modification, consent or amendment of any provision
of this Agreement or any of the other Loan Documents shall be valid or
effective unless the same is in writing and signed by the party against
whom it is sought to be enforced.
(c) Actions by Secured Party. The Lien, security interest and other
security rights of Secured Party hereunder shall not be impaired by (i) any
renewal, extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release, renewal, extension,
exchange or substitution which Secured Party may grant with respect to the
Collateral, or (iii) any release or indulgence granted to any endorser,
Restated Pledge Agreement - Page 14
guarantor or surety of the Indebtedness. The taking of additional security
by Secured Party shall not release or impair the Lien, security interest or
other security rights of Secured Party hereunder or affect the obligations
of Pledgor hereunder.
(d) Waiver by Secured Party. Secured Party may waive any Event of
Default without waiving any other prior or subsequent Event of Default.
Secured Party may remedy any default without waiving the Event of Default
remedied. Neither the failure by Secured Party to exercise, nor the delay
by Secured Party in exercising, any right or remedy upon any Event of
Default shall be construed as a waiver of such Event of Default or as a
waiver of the right to exercise any such right or remedy at a later date.
No single or partial exercise by Secured Party of any right or remedy
hereunder shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right or remedy hereunder may be exercised
at any time. No waiver of any provision hereof or consent to any departure
by Pledgor therefrom shall be effective unless the same shall be in writing
and signed by Secured Party and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which given
and to the extent therein specified. No notice to or demand on Pledgor in
any case shall of itself entitle Pledgor to any other or further notice or
demand in similar or other circumstances.
(e) Costs and Expenses. Pledgor will upon demand pay to Secured Party
the amount of any and all costs and expenses (including without limitation,
attorneys' fees and expenses), which Secured Party may incur in connection
with (i) the transactions which give rise to the Loan Documents, (ii) the
preparation of this Agreement and the perfection and preservation of the
security interests granted under the Loan Documents, (iii) the
administration of the Loan Documents, (iv) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization
upon, the Collateral, (v) the exercise or enforcement of any of the rights
of Secured Party under the Loan Documents, or (vi) the failure by Pledgor
to perform or observe any of the provisions hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL
LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF
ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF TEXAS.
(g) Venue. This Agreement has been entered into in the county in Texas
where Bank's address for notice purposes is located, and it shall be
performable for all purposes in such county. Courts within the State of
Texas shall have jurisdiction over any and all disputes arising under or
pertaining to this Agreement and venue for any such disputes shall be in
the county or judicial district where this Agreement has been executed and
delivered.
(h) Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be illegal, invalid or unenforceable
under present or future laws, such provision shall be fully severable,
shall not impair or invalidate the remainder of this
Restated Pledge Agreement - Page 15
Agreement and the effect thereof shall be confined to the provision held to
be illegal, invalid or unenforceable.
(i) No Obligation. Nothing contained herein shall be construed as an
obligation on the part of Secured Party to extend or continue to extend
credit to Borrower.
(j) Notices. All notices, requests, demands or other communications
required or permitted to be given pursuant to this Agreement shall be in
writing and given by (i) personal delivery, (ii) expedited delivery service
with proof of delivery, or (iii) United States mail, postage prepaid,
registered or certified mail, return receipt requested, sent to the
intended addressee at the address set forth on the signature page hereof or
to such different address as the addressee shall have designated by written
notice sent pursuant to the terms hereof and shall be deemed to have been
received either, in the case of personal delivery, at the time of personal
delivery, in the case of expedited delivery service, as of the date of
first attempted delivery at the address and in the manner provided herein,
or in the case of mail, five (5) days after deposit in a depository
receptacle under the care and custody of the United States Postal Service.
Either party shall have the right to change its address for notice
hereunder to any other location within the continental United States by
notice to the other party of such new address at least thirty (30) days
prior to the effective date of such new address.
(k) Binding Effect and Assignment. This Agreement (i) creates a
continuing security interest in the Collateral, (ii) shall be binding on
Pledgor and the heirs, executors, administrators, personal representatives,
successors and assigns of Pledgor, and (iii) shall inure to the benefit of
Secured Party and its successors and assigns. Without limiting the
generality of the foregoing, Secured Party may pledge, assign or otherwise
transfer the Indebtedness and its rights under this Agreement and any of
the other Loan Documents to any other party, subject to any rights of
Pledgor hereunder. Pledgor's rights and obligations hereunder may not be
assigned or otherwise transferred without the prior written consent of
Secured Party.
(l) Termination. It is contemplated by the parties hereto that from
time to time there may be no outstanding Indebtedness, but notwithstanding
such occurrences, this Agreement shall remain valid and shall be in full
force and effect as to subsequent outstanding Indebtedness. Upon (i) the
final satisfaction in full of the Indebtedness, (ii) the termination or
expiration of any commitment of Secured Party to extend credit to Borrower,
(iii) written request for the termination hereof delivered by Pledgor to
Secured Party, and (iv) written release delivered by Secured Party to
Pledgor, this Agreement and the security interests created hereby shall
terminate. Upon termination of this Agreement and Pledgor's written
request, Secured Party will, at Pledgor's sole cost and expense, return to
Pledgor such of the Collateral as shall not have been sold or otherwise
disposed of or applied pursuant to the terms hereof and execute and deliver
to Pledgor such documents as Pledgor shall reasonably request to evidence
such termination.
(m) JURY TRIAL WAIVER. PLEDGOR AND BANK EACH HEREBY WAIVE ANY RIGHT TO
A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN
Restated Pledge Agreement - Page 16
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(n) Cumulative Rights. All rights and remedies of Secured Party
hereunder are cumulative of each other and of every other right or remedy
which Secured Party may otherwise have at law or in equity or under any of
the other Loan Documents, and the exercise of one or more of such rights or
remedies shall not prejudice or impair the concurrent or subsequent
exercise of any other rights or remedies.
(o) Gender and Number. Within this Agreement, words of any gender
shall be held and construed to include the other gender, and words in the
singular number shall be held and construed to include the plural and words
in the plural number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(p) Waiver of Subrogation. Pledgor shall not assert, enforce, or
otherwise exercise (i) any right of subrogation to any of the rights or
Liens of Secured Party or any other beneficiary against any other Borrower
any Obligated Party or any Collateral or other security, or (ii) any right
of recourse, reimbursement, contribution, indemnification, or similar right
against any other Borrower or any Obligated Party, and Pledgor hereby
waives any and all of the foregoing rights and the benefit of, and any
right to participate in, and Collateral or other security given to Secured
Party or any other beneficiary to secure payment of the Indebtedness. This
Section 13(p) shall survive the termination of this Agreement, and any
satisfaction and discharge of Pledgor by virtue of any payment, court
order, or Legal Requirement.
(q) Descriptive Headings. The headings in this Agreement are for
convenience only and shall in no way enlarge, limit or define the scope or
meaning of the various and several provisions hereof.
(r) Restatement. Pledgor previously executed and delivered the Pledge
Agreement dated as of November 13, 1998 ("Existing Pledge Agreement"), in
favor of Bank One, Texas, National Association, predecessor in interest to
Secured Party. This Agreement is an amendment and restatement of the
Existing Pledge Agreement. Pledgor affirms its grant of a security
interest, pledge and assignment in the Existing Pledge Agreement and agrees
that except for the Liens in the Collateral, which remain valid, binding,
and enforceable first priority Liens for the benefit of Secured Party, this
Agreement restates the Existing Pledge Agreement in its entirety. This
Agreement is not intended as, and shall not be construed as, a release or
novation of any Lien granted pursuant to the Existing Pledge Agreement.
[Signature Page Follows]
Restated Pledge Agreement - Page 17
EXECUTED as of the date first written above.
Pledgor's Address: PLEDGOR:
000 Xxxxxxxx Xxxxxx GAINSCO SERVICE CORP.
Xxxx Xxxxx, Xxxxx 00000
By:
-------------------------------
Xxxxxx X. Xxxxx,
Senior Vice President and
Chief Financial Officer
Secured Party's Address:
Bank One, NA
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Restated Pledge Agreement - Page 18
February 27, 2002
BANK ONE, N.A.
0000 Xxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxx, 00000
RE: Discontinuance of Treasury Management Services, performed by
Bank One, N.A. and/or its affiliated entities on behalf of
GAINSCO, Inc., and/or its affiliated entities
Gentlemen:
Bank One, N.A. ("Bank One") and/or certain entities affiliated with Bank
One (collectively, the "Bank One Parties") currently provide certain treasury
management services and other functions for the signatory parties hereto
(collectively, the "GAINSCO Parties), or certain of the GAINSCO Parties. The
GAINSCO Parties and Bank One have mutually determined that it would be in their
respective best interests if the GAINSCO Parties would transition the
performance of such treasury management services and other functions from the
Bank One Parties to third parties that are not affiliated with Bank One, as more
fully described in this letter agreement. For purposes of this letter agreement,
the term "Treasury Management Services Agreements" shall mean, collectively,
that certain Treasury Management Service Agreement, dated March 1, 2000, between
Bank One and GAINSCO, Inc., together with any and all other or additional,
agreements, contracts and/or other arrangements pursuant to which any of the
Bank One Parties perform, render or furnish any treasury management services,
automated clearinghouse functions and/or similar financial services and
functions to, for or on behalf of any of the GAINSCO Parties, as all of such
agreements, contracts and/or other arrangements may have heretofore been
modified, amended and/or supplemented.
Notwithstanding anything to the contrary contained in any of the Treasury
Management Services Agreements, Bank One and the GAINSCO Parties hereby agree as
follows:
1. The GAINSCO Parties shall hereafter transfer all of their respective
treasury management services, automated clearinghouse functions and similar
financial services and functions (whether performed, rendered, or furnished
pursuant to a Treasury Management Services Agreement, or otherwise) from the
Bank One Parties to one or more other financial institutions, or other third
party(ies), other than the Bank One Parties; which transfer of such services and
functions shall commence immediately and shall thereafter be pursued diligently
by the GAINSCO Parties, with the GAINSCO Parties to use their respective
reasonable best efforts to complete the transfer of all such services and
functions on or before June 1, 2002.
Bank One, N.A.
February 27, 2002
Page 2
2. Without limiting the obligations of the GAINSCO Parties under Paragraph
1 above, at all times after the date hereof, any and all obligations and/or
liabilities of the GAINSCO Parties to the Bank One Parties under, or in
connection with, any Treasury Management Services Agreement shall be funded by
the applicable GAINSCO Party in advance of the incurrence of such obligation or
liability, in a manner reasonably acceptable to Bank One.
3. Bank One shall, at the cost and expense of the GAINSCO Parties,
cooperate with the GAINSCO Parties in connection with the transition of the
services and functions heretofore performed, rendered or furnished by the Bank
One parties under the Treasury Management Services Agreements, as required by
Paragraph 1 hereof.
This Letter Agreement shall constitute a "Loan Document" as such term is
defined in that certain Revolving Credit Agreement, dated as of November 13,
1998, among GAINSCO, Inc. and Gainsco Service Corp., as borrowers, and Bank One,
as lender (as such Revolving Credit Agreement may from time to time be amended,
modified, supplemented and/or restated, the "Credit Agreement"), and a default
under this Letter Agreement shall immediately, and without the necessity for any
notice whatsoever and without the passage of any cure, grace or similar period,
constitute an "Event of Default" under the Credit Agreement and the other Loan
Documents.
This Letter Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute but one and the same instrument.
THIS WRITTEN AGREEMENT, THE CREDIT AGREEMENT, AND THE LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
This Letter Agreement shall be governed by the laws of the State of Texas.
This Letter Agreement may be modified or amended only in writing by the parties
hereto.
Bank One, N.A.
February 27, 2002
Page 3
GAINSCO PARTIES: GAINSCO, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
GAINSCO SERVICE CORP.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
AGENTS PROCESSING SYSTEMS, INC
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
RISK RETENTION ADMINISTRATORS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
Bank One, N.A.
February 27, 2002
Page 4
GENERAL AGENTS PREMIUM FINANCE
COMPANY
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
MGA PREMIUM FINANCE COMPANY
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
NATIONAL SPECIALTY LINES, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
DLT INSURANCE ADJUSTERS, INC.
(formerly known as De La Torre
Insurance Adjusters, Inc.)
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
LALANDE FINANCIAL GROUP, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
Bank One, N.A.
February 27, 2002
Page 5
MGA AGENCY, INC.
By: /s/ Xxxxxxx Xxx
-------------------------------
Name:
Title:
GAINSCO COUNTY MUTUAL
INSURANCE COMPANY
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
MGA INSURANCE COMPANY, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
GENERAL AGENTS INSURANCE COMPANY
OF AMERICA, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
MIDWEST CASUALTY INSURANCE COMPANY
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name:
Title:
Bank One, N.A.
February 27, 2002
Page 6
Accepted and Agreed to as of the 27th day of February, 2002
BANK ONE: BANK ONE, NA
By: /s/ C. Xxxxxx Xxxxxx
-------------------------------
C. Xxxxxx Xxxxxx
First Vice President
