EXECUTION COPY
FORM OF
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT, dated as of November 16, 2006
(this "AGREEMENT"), is entered into by and among MAVERICK OIL AND GAS, INC., a
Nevada corporation (the "DEBTOR"), and _________________________ and
___________________ (together, the "SECURED PARTIES"), the Holders of (i) those
certain Senior Secured Convertible Debentures due 2008 (or other date as set
forth therein) in the original aggregate principal amount of $6,750,000, as the
same may be amended from time to time, (the "NOVEMBER DEBENTURES"), issued by
the Debtor to the Secured Parties in connection with that certain Securities
Purchase Agreement entered into by and among the Debtor and the Secured Parties
on the date hereof (the "NOVEMBER SPA") (ii) those certain senior secured
convertible debentures issued and sold by the Debtor on January 5, 2006, as the
same may be amended from time to time, (the "JANUARY DEBENTURES") to the Secured
Parties in connection with a Securities Purchase Agreement entered into by and
among the Debtor and the Secured Parties, as the same may be amended from time
to time (the "JANUARY SPA") and (iii) those certain senior secured convertible
debentures issued and sold by the Debtor on June 21, 2006, as the same may be
amended from time to time, (the "JUNE DEBENTURES" and together with the November
Debentures and the January Debentures, the "DEBENTURES") to the Secured Parties
in connection with a Securities Purchase Agreement entered into by and among the
Debtor and the Secured Parties, as the same may be amended from time to time
(the "JUNE SPA" and together with the November SPA and the January SPA, the
"SECURITIES PURCHASE AGREEMENTS").
W I T N E S S E T H:
WHEREAS, pursuant to the Debentures, the Secured Parties have extended
and have agreed to extend certain loans described above to the Debtor as
evidenced by the Debentures;
WHEREAS, reference is made to that certain Security Agreement, dated as
of January 5, 2006 (the "JANUARY PLEDGE AND SECURITY AGREEMENT") and that
certain Pledge and Security Agreement, dated as of June 21, 2006 (the "JUNE
PLEDGE AND SECURITY AGREEMENT", and together with the January Pledge and
Security Agreement and this Agreement, the "PLEDGE AND SECURITY AGREEMENTS") by
and among the Debtor and the Secured Parties pursuant to which the Debtor
granted to the he Secured Parties a lien on and security interest in all of the
Collateral (as defined in each agreement); and
WHEREAS, in conjunction herewith, the Debtor is reaffirming the January
Pledge and Security Agreement and the June Pledge and Security Agreement for the
purpose of, among other things, (i) reaffirming the grant of the lien and
security interests made thereby and (ii) for the avoidance of doubt, expressly
affirming herein that the Collateral provided for therein shall also secure the
full, prompt and complete payment and performance when due of the November
Debentures in addition to all other obligations secured thereby;
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC, and capitalized terms not
otherwise defined herein shall have the meaning given them in the applicable
Securities Purchase Agreements described above.
(a) "Collateral" means the collateral in which the Secured
Parties are granted a security interest by this Agreement and which
shall include the following, whether presently owned or existing or
hereafter acquired or coming into existence, and all additions and
accessions thereto and all substitutions and replacements thereof, and
all proceeds, products and accounts thereof, including, without
limitation, all proceeds from the sale or transfer of the Collateral
and of insurance covering the same and of any tort claims in connection
therewith:
(i) all Accounts, Deposit Accounts, Instruments, Documents,
Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel
Paper), Goods (including Inventory, Equipment, Fixtures and Motor
Vehicles), Payment Intangibles, Software and other General Intangibles
and all Letter-of-Credit Rights;
(ii) the shares of common stock and preferred stock of, or
partnership, membership and other ownership interests in any subsidiary
organized under the laws of the United States or any political
subdivision thereof, now or hereafter owned by the Debtor, and all
certificates evidencing the same (collectively, the "PLEDGED EQUITY"),
together with, in each case:
(1) all shares, securities, monies or property representing a
dividend on any of the Pledged Equity, or representing a distribution
or return of capital upon or in respect of the Pledged Equity, or
resulting from a split up, revision, reclassification or other like
change of the Pledged Equity or otherwise received in exchange
therefor, and any subscription warrants, rights or options issued to
the holders of, or otherwise in respect of, the Pledged Equity, and
(2) without affecting the obligations of the Debtor under any
provision prohibiting such action hereunder or under any other
Transaction Document, in the event of any consolidation or merger or
similar transaction in which a subsidiary of the Debtor is not the
surviving corporation, all ownership interests of any class or
character of the successor corporation (unless such successor
corporation is the Debtor itself), formed by or resulting from such
consolidation or merger (the Pledged Equity, together with all other
certificates, shares, securities, properties or moneys as may from time
to time be pledged hereunder pursuant to this clause (2) and clause (1)
above being herein collectively called the "EQUITY COLLATERAL");
(iii) all Investment Property, Financial Assets and Securities
Accounts not covered by the foregoing clauses (i), (i) and (iii);
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(iv) all Intellectual Property;
(v) all commercial tort claims described on Schedule C hereto;
(vi) all other tangible and intangible property of the Debtor,
including all books, correspondence, credit files, records, invoices,
tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Debtor or any computer bureau or
service company from time to time acting for the Debtor;
(vii) all Proceeds and products in whatever form of all or any
part of the other Collateral, including all rents, profits, income and
benefits and all proceeds of insurance and all condemnation awards and
all other compensation for any event of loss with respect to all or any
part of the other Collateral (together with all rights to recover and
proceed with respect to the same), and all accessions to, substitutions
for and replacements of all or any part of the other Collateral.
(b) "Obligations" means all obligations of the Debtor owed to
the Secured Parties whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or
not from time to time decreased or extinguished and later increased,
created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from the Secured
Parties as a preference, fraudulent transfer or otherwise as such
obligations may be amended, supplemented, converted, extended or
modified from time to time.
(c) "UCC" means the Uniform Commercial Code and or any other
applicable law of any jurisdiction (including, without limitation, the
state of Nevada and New York) as to any Collateral located therein.
2. GRANT OF SECURITY INTEREST.
(a) As an inducement for the Secured Parties to extend the
loans as evidenced by the Debentures and to secure the complete and
timely payment, performance and discharge in full, as the case may be,
of all of the Obligations, the Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to the Secured Parties a
continuing security interest in and to, a lien upon and a right of
set-off against all of their respective right, title and interest of
whatsoever kind and nature in and to, the Collateral
(b) The Debtor hereby reaffirms that the January Pledge and
Security Agreement and all Collateral (as defined in the January Pledge
and Security Agreement) encumbered thereby, continues and will continue
to secure to the fullest extent possible the payment and performance of
all Obligations.
(c) The Debtor hereby reaffirms that the June Pledge and
Security Agreement and all Collateral (as defined in the June Pledge
and Security Agreement) encumbered thereby, continues and will continue
to secure to the fullest extent possible the payment and performance of
all Obligations.
(collectively, the "SECURITY INTEREST").
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3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE
DEBTOR. The Debtor represents and warrants to, and covenants and agrees with,
the Secured Parties as follows:
(a) The Debtor has the requisite corporate power and authority
to enter into this Agreement and otherwise to carry out its obligations
hereunder. The execution, delivery and performance by the Debtor of
this Agreement and the filings contemplated therein have been duly
authorized by all necessary action on the part of the Debtor and no
further action is required by the Debtor.
(b) The Debtor represents and warrants that it has no place of
business or offices where its books of account and records are kept
(other than temporarily at the offices of its attorneys or accountants)
or places where Collateral is stored or located, except as set forth on
Schedule A attached hereto.
(c) The Debtor is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Debtor in the ordinary course of
business), free and clear of any liens, security interests,
encumbrances, rights or claims, and is fully authorized to grant the
Security Interest in and to pledge the Collateral. There is not on file
in any governmental or regulatory authority, agency or recording office
an effective financing statement, security agreement, license or
transfer or any notice of any of the foregoing (other than those filed
in favor of the Secured Parties) covering or affecting any of the
Collateral. So long as this Agreement shall be in effect, the Debtor
shall not execute and shall not knowingly permit to be on file in any
such office or agency any such financing statement or other document or
instrument (except to the extent filed or recorded in favor of the
Secured Parties pursuant to the terms of the Pledge and Security
Agreements).
(d) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral
or the Debtor's use of any Collateral violates the rights of any third
party. There has been no adverse decision to the Debtor's claim of
ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to the Debtor's right to keep and maintain such
Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of the Debtor,
threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.
(e) The Debtor shall at all times maintain its books of
account and records relating to the Collateral at its principal place
of business and its Collateral at the locations set forth on Schedule A
attached hereto and may not relocate such books of account and records
or tangible Collateral unless it delivers to the Secured Parties at
least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the
United States) and (ii) evidence that appropriate financing statements
under the UCC and other necessary documents have been filed and
recorded and other steps have been taken to perfect the Security
Interest to create in favor of each of the Secured Parties a valid,
perfected and continuing perfected first priority lien in the
Collateral.
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(f) This Agreement creates in favor of the Secured Parties a
valid security interest in the Collateral securing the payment and
performance of the Obligations and, upon making the filings described
in the immediately following sentence, a perfected first priority
security interest in such Collateral.
(g) The Debtor hereby authorizes each of the Secured Parties
to file one or more financing statements under the UCC, with respect to
the Security Interest with the proper filing and recording agencies in
any jurisdiction deemed proper by them.
(h) The execution, delivery and performance of this Agreement
by the Debtor does not conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument
(evidencing the Debtor's debt or otherwise) or other understanding to
which the Debtor is a party or by which any property or asset of the
Debtor is bound or affected. No consent (including, without limitation,
from stockholders or creditors of the Debtor) is required for the
Debtor to enter into and perform its obligations hereunder.
(i) The Debtor shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected first
priority liens and security interests in the Collateral in favor of the
Secured Parties until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 11 hereof. The Debtor
hereby agrees to defend the same against any and all persons.
The Debtor shall safeguard and protect all Collateral for the account
of the Secured Parties. The Debtor irrevocably authorizes the Secured
Parties at any time and from time to time to file in any filing office
in any jurisdiction any initial financing statement or amendment
thereto that indicates the collateral as "all assets" or "all personal
property" of the Debtor or words of similar effect and will pay the
cost of filing the same in all public offices wherever filing is, or is
deemed by the Secured Parties to be, necessary or desirable to effect
the rights and obligations provided for herein. Without limiting the
generality of the foregoing, the Debtor shall pay all fees, taxes and
other amounts necessary to maintain the Collateral and the Security
Interest hereunder, and the Debtor shall obtain and furnish to the
Secured Parties from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to maintain
the priority of the Security Interest hereunder.
(j) The Debtor will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by the
Debtor in its ordinary course of business and sales of inventory), sell
or otherwise dispose of any of the Collateral without the prior written
consent of the Secured Parties.
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(k) The Debtor shall keep and preserve its Equipment,
Inventory and other tangible Collateral in good condition, repair and
order and shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance coverage.
(l) The Debtor shall, within ten (10) days of obtaining
knowledge thereof, advise the Secured Parties promptly, in sufficient
detail, of any substantial change in the Collateral, and of the
occurrence of any event which would have a material adverse effect on
the value of the Collateral or on the Secured Parties' security
interest therein.
(m) The Debtor shall promptly execute and deliver to the
Secured Parties such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments, documents,
certificates and assurances and take such further action as any Secured
Party may from time to time request and may in its sole discretion deem
necessary to perfect, protect or enforce its security interest in the
Collateral including, without limitation, if applicable, the execution
and delivery of a separate security agreement with respect to the
Debtor's intellectual property ("INTELLECTUAL PROPERTY SECURITY
AGREEMENT") in which each of the Secured Parties has been granted a
security interest hereunder, substantially in a form acceptable to the
Secured Party, which Intellectual Property Security Agreement, other
than as stated therein, shall be subject to all of the terms and
conditions hereof.
(n) The Debtor shall permit the Secured Parties and their
representatives and agents to inspect the Collateral at any time, and
to make copies of records pertaining to the Collateral as may be
requested by the Secured Parties from time to time.
(o) The Debtor shall take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable in respect of the
Collateral.
(p) The Debtor shall promptly notify the Secured Parties in
sufficient detail upon becoming aware of any attachment, garnishment,
execution or other legal process levied against any Collateral and of
any other information received by the Debtor that may materially affect
the value of the Collateral, the Security Interest or the rights and
remedies of the Secured Parties hereunder.
(q) All information heretofore, herein or hereafter supplied
to the Secured Parties by or on behalf of the Debtor with respect to
the Collateral is accurate and complete in all material respects as of
the date furnished.
(r) The Debtor shall, and cause it subsidiaries to, at all
times preserve and keep in full force and effect their respective valid
existence and good standing and any rights and franchises material to
their businesses.
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(s) The Debtor will not change its name, corporate structure,
or identity, or add any new fictitious name unless it provides at least
30 days prior written notice to the Secured Parties of such change and,
at the time of such written notification, the Debtor provides any
financing statements or fixture filings necessary to perfect and
continue perfected the perfected first priority Security Interest
granted and evidenced by the Security and Pledge Agreements.
(t) The Debtor may not consign any of its Inventory or sell
any of its Inventory on xxxx and hold, sale or return, sale on
approval, or other conditional terms of sale without the consent of the
Secured Parties which shall not be unreasonably withheld.
(u) The Debtor may not relocate its chief executive office to
a new location without providing thirty (30) days prior written
notification thereof to the Secured Parties and so long as, at the time
of such written notification, the Debtor provides any financing
statements or fixture filings necessary to perfect and continue
perfected the perfected first priority Security Interest granted and
evidenced by the Security and Pledge Agreements.
(v) The Debtor, to the extent any of its subsidiaries has
opted into Article 8 of the UCC, shall not allow such entity to amend
its organizational documents so as to opt out of Article 8 of the UCC.
(w) The Debtor, to the extent any of its subsidiaries has not
opted into Article 8 of the UCC, shall not allow such entity to amend
its organizational documents so as to opt into Article 8 of the UCC.
4. Defaults. The following events shall be "EVENTS OF DEFAULT":
(a) The occurrence of an Event of Default (as defined in any
of the Debentures) under any Debenture;
(b) Any representation or warranty of the Debtor in this
Agreement shall prove to have been incorrect in any material respect
when made;
(c) The failure by the Debtor to observe or perform any of its
obligations hereunder for five (5) days after delivery to the Debtor of
notice of such failure by or on behalf of a Secured Party; or
(d) If any provision of this Agreement shall at any time for
any reason be declared to be null and void, or the validity or
enforceability hereof shall be contested by Debtor, or a proceeding
shall be commenced by the Debtor, or by any governmental authority
having jurisdiction over the Debtor, seeking to establish the
invalidity or unenforceability thereof, or the Debtor shall deny that
the Debtor has any liability or obligation purported to be created
under this Agreement.
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5. Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Debtor shall, upon receipt of any
revenue, income or other sums subject to the Security Interest, whether payable
pursuant to the Debentures or otherwise, or of any check, draft, note, trade
acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Parties and shall forthwith endorse and
transfer any such sums or instruments, or both, to the Secured Parties (pro rata
in accordance with the principal amount of Debentures held by each) for
application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon the occurrence of any
Event of Default and at any time thereafter, each Secured Party shall have the
right to exercise all of the remedies conferred hereunder and under the
Debentures, and each Secured Party shall have all the rights and remedies of a
secured party under the UCC. Without limitation, each Secured Party shall have
the following rights and powers:
(a) The Majority Secured Party shall have the right to take
possession of the Collateral and, for that purpose, enter, with the aid
and assistance of any person, any premises where the Collateral, or any
part thereof, is or may be placed and remove the same, and the Debtor
shall assemble the Collateral and make it available to the Majority
Secured Party at places which the Majority Secured Party shall
reasonably select, whether at the Debtor's premises or elsewhere, and
make available to the Majority Secured Party, without rent, all of the
Debtor's respective premises and facilities for the purpose of the
Majority Secured Party taking possession of, removing or putting the
Collateral in saleable or disposable form.
(b) The Majority Secured Party shall have the right to operate
the business of the Debtor using the Collateral and shall have the
right to assign, sell, lease or otherwise dispose of and deliver all or
any part of the Collateral, at public or private sale or otherwise,
either with or without special conditions or stipulations, for cash or
on credit or for future delivery, in such parcel or parcels and at such
time or times and at such place or places, and upon such terms and
conditions as the Majority Secured Party may deem commercially
reasonable, all without (except as shall be required by applicable
statute and cannot be waived) advertisement or demand upon or notice to
the Debtor or right of redemption of the Debtor, which are hereby
expressly waived. Upon each such sale, lease, assignment or other
transfer of Collateral, the Majority Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or
any part of the Collateral being sold, free from and discharged of all
trusts, claims, right of redemption and equities of the Debtor, which
are hereby waived and released. For purposes of this Agreement,
"MAJORITY SECURITY PARTY" shall mean the Secured Party or Security
Parties that hold in the aggregate a Debenture or Debentures
representing a majority in aggregate principal amount of all
Debentures.
7. Applications of Proceeds. The proceeds of any such sale, lease or
other disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys' fees and expenses incurred by the Majority Secured Party in enforcing
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its rights hereunder and in connection with collecting, storing and disposing of
the Collateral, and then to satisfaction of the Obligations to each Secured
Party, and to the payment of any other amounts required by applicable law, after
which the Secured Parties shall pay to the Debtor any surplus proceeds. If, upon
the sale, license or other disposition of the Collateral, the proceeds thereof
are insufficient to pay all amounts to which the Secured Parties are legally
entitled, the Debtor will be liable for the deficiency, together with interest
thereon, at the rate of 15% per annum or the lesser amount permitted by
applicable law (the "DEFAULT RATE"), and the reasonable fees of any attorneys
employed by the Majority Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Debtor waives all claims, damages and demands
against the Secured Parties arising out of the repossession, removal, retention
or sale of the Collateral, unless due to the gross negligence or willful
misconduct of the Secured Parties.
8. Costs and Expenses. The Debtor agrees to pay all reasonable
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements
pursuant to the UCC, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by any Secured Party. The Debtor shall also pay all other
claims and charges which in the reasonable opinion of the Majority Secured Party
might prejudice, imperil or otherwise affect the Collateral or the Security
Interest therein. The Debtor will also, upon demand, pay to the Majority 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 the
Majority Secured Party may incur in connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the exercise or
enforcement of any of the rights of the Secured Parties under the Debentures.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Debentures and shall bear interest at the Default Rate.
9. Responsibility for Collateral. The Debtor assumes all liabilities
and responsibility in connection with all Collateral, and the Obligations shall
in no way be affected or diminished by reason of the loss, destruction, damage
or theft of any of the Collateral or its unavailability for any reason.
10. Security Interest Absolute. All rights of each Secured Party and
all Obligations of the Debtor hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures or any agreement entered into in connection with the foregoing,
or any portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Debentures or any other agreement entered into in connection with the
foregoing; (c) any exchange, release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Majority Secured Party to obtain, adjust,
settle and cancel in its sole discretion any insurance claims or matters made or
arising in connection with the Collateral; or (e) any other circumstance which
might otherwise constitute any legal or equitable defense available to the
Debtor, or a discharge of all or any part of the Security Interest granted
hereby. Until the Obligations shall have been paid and performed in full, the
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rights of each Secured Party shall continue even if the Obligations are barred
for any reason, including, without limitation, the running of the statute of
limitations or bankruptcy. The Debtor expressly waives presentment, protest,
notice of protest, demand, notice of nonpayment and demand for performance. In
the event that at any time any transfer of any Collateral or any payment
received by any Secured Party hereunder shall be deemed by final order of a
court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or
shall be deemed to be otherwise due to any party other than any Secured Party,
then, in any such event, the Debtor's obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof. The Debtor waives all right to require a Secured Party to
proceed against any other person or to apply any Collateral which such Secured
Party may hold at any time, or to marshal assets, or to pursue any other remedy.
The Debtor waives any defense arising by reason of the application of the
statute of limitations to any obligation secured hereby.
11. Term of Agreement. This Agreement and the Security Interest
shall terminate on the date on which all payments under the Debentures have been
made in full or have been satisfied and all other Obligations have been paid or
discharged. Upon such termination, each Secured Party, at the request and at the
expense of the Debtor, will join in executing any termination statement with
respect to any financing statement executed and filed pursuant to this
Agreement.
12. Power of Attorney; Further Assurances.
(a) The Debtor authorizes the Majority Secured Party, and does
hereby make, constitute and appoint the Majority Secured Party and its
respective officers, agents, successors or assigns with full power of
substitution, as the Debtor's true and lawful attorney-in-fact, with
power, in the name of the Majority Secured Party or the Debtor, after
the occurrence and during the continuance of an Event of Default, (i)
to endorse any note, checks, drafts, money orders or other instruments
of payment (including payments payable under or in respect of any
policy of insurance) in respect of the Collateral that may come into
possession of the Secured Party; (ii) to sign and endorse any financing
statement pursuant to the UCC or any invoice, freight or express xxxx,
xxxx of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and
other documents relating to the Collateral; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iv) to
demand, collect, receipt for, compromise, settle and xxx for monies due
in respect of the Collateral; and (v) generally, to do, at the option
of the Majority Secured Party, and at the expense of the Debtor, at any
time, or from time to time, all acts and things which the Majority
Secured Party deem necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect
the intent of this Agreement and the Debentures all as fully and
effectually as the Debtor might or could do; and the Debtor hereby
ratifies all that said attorney shall lawfully do or cause to be done
by virtue hereof. This power of attorney is coupled with an interest
and shall be irrevocable for the term of this Agreement and thereafter
as long as any of the Obligations shall be outstanding.
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(b) On a continuing basis, the Debtor will make, execute,
acknowledge, deliver, file and record, as the case may be, with the
proper filing and recording agencies in any jurisdiction, including,
without limitation, the jurisdictions indicated on Schedule B attached
hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested
by the Majority Secured Party, to perfect the Security Interest granted
hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Majority Secured Party
the grant or perfection of a perfected first priority security interest
in all the Collateral under the UCC.
(c) The Debtor hereby irrevocably appoints the Majority
Secured Party as the Debtor's attorney-in-fact, with full authority in
the place and instead of the Debtor and in the name of the Debtor, from
time to time in the Majority Secured Party's discretion, to take any
action and to execute any instrument which the Majority Secured Party
may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative
to any of the Collateral without the signature of the Debtor where
permitted by law.
13. Notices. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the applicable Securities
Purchase Agreement.
14. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Majority Secured Party shall have the right, in its sole discretion, to
pursue, relinquish, subordinate, modify or take any other action with respect
thereto, without in any way modifying or affecting any Secured Party's rights
and remedies hereunder.
15. Best Efforts for Licensed Collateral. Notwithstanding any other
provision contained herein or any of the other Transaction Documents, upon the
occurrence of an Event of Default, the Debtor hereby agrees that with respect to
any part of the Collateral which may require the consent of any third party or
third parties in order for the Debtor to transfer and/or convey its interest in
and to such Collateral to the Majority Secured Party, as may be required in
accordance herewith, the Debtor agrees to and shall use its best efforts to
obtain such consents or approvals in as expedient manner as possible.
16. Miscellaneous.
(a) No course of dealing between the Debtor and any Secured
Party, nor any failure to exercise, nor any delay in exercising, on the
part of any Secured Party, any right, power or privilege hereunder or
under the Debentures shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder
or thereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
11
(b) All of the rights and remedies of each Secured Party with
respect to the Collateral, whether established hereby or by the
Debentures or by any other agreements, instruments or documents or by
law shall be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a
written agreement specifically referring to this Agreement and signed
by the parties hereto.
(d) In the event any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial construction,
this Agreement shall, as to such jurisdiction, be construed as if such
invalid, prohibited or unenforceable provision had been more narrowly
drawn so as not to be invalid, prohibited or unenforceable. If,
notwithstanding the foregoing, any provision of this Agreement is held
to be invalid, prohibited or unenforceable in any jurisdiction, such
provision, as to such jurisdiction, shall be ineffective to the extent
of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other
provisions of this Agreement and without affecting the validity or
enforceability of such provision or the other provisions of this
Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver
of any subsequent breach or default or right, whether of the same or
similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in
order to carry out the provisions and purposes of this Agreement.
(h) All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the
State of New York. Each party agrees that all proceedings concerning
the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and the Debentures (whether brought
against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in New York, New
York. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York, New
12
York for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court or that such proceeding is improper.
Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a
proceeding to enforce any provisions of this Agreement, then the
prevailing party in such proceeding shall be reimbursed by the other
party for its reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
proceeding.
(i) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed on the day and year first above written.
DEBTOR
MAVERICK OIL AND GAS, INC. Address for Notice and Delivery:
00000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000-0000
Attn: Chief Executive Officer
By:_________________________________
Name:
Title:
SECURED PARTY
By:_________________________________
Name:
Title:
SECURED PARTY
By:_________________________________
Name:
Title:
SCHEDULE A
Principal Place of Business of Debtor:
00000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000
Locations Where Collateral is Located or Stored:
0000 Xxx Xxxx Xxxx., Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000
00000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000
SCHEDULE B
State of Nevada
SCHEDULE C
COMMERCIAL TORT CLAIMS
NONE
SCHEDULE D
PLEDGED EQUITY
Certificate Ownership
Issuer Numbers Interest Type of Investment Property
--------------------------------- ----------- ------------------------- -------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Maverick Operating Company, 1 100% - Sole Acts as operator for RBE (Xxxxxxx Xxxx),
LLC, a Texas LLC Shareholder Whitewater and Fayetteville.
(100 Shares)
----------------------------------------------------------------------------------------------------------------------------------
Maverick Xxxxxx Xxxxxxxx, LLC, a (*) 100% of Class A Units (1) 9.625% interest in option leasehold acreage
Delaware LLC in Xxx Xxxxx County, Texas. 17.5% interest
in leasehold acreage in Pesos County, Texas.
Ceased any further development.
----------------------------------------------------------------------------------------------------------------------------------
Maverick Whitewater, LLC, a A-1 100% of Class A Units 30% working interest in gross leasehold
Delaware LLC (1) (99 Shares) acreage in Colorado. MVOG operator.
----------------------------------------------------------------------------------------------------------------------------------
Maverick Xxxxxx County, LLC, a 1 100% Interest in La Duquesa and Xxxxxxxx xxxxx in
Delaware LLC (formerly Maverick (100 Shares) Xxxxxx County, Texas
La Duquesa, LLC)
----------------------------------------------------------------------------------------------------------------------------------
RBE, LLC, a Delaware LLC A-1 100% of Class A (reflects 50% working interest in leasehold acreage in
50% ownership) Wise County, Texas, operated by Devon
(2) (50 Shares) Energy. 100% working interest in leasehold
acreage in Wise County, Texas. MVOG
operator.
----------------------------------------------------------------------------------------------------------------------------------
Maverick Basin Exploration, LLC, (*) 74.25% of Class A Right to drill xxxxx in Maverick Basin,
a Delaware LLC Texas. Assigned to Blue Star for shut-in
[Presently Inactive] responsibility. Abandoned.
----------------------------------------------------------------------------------------------------------------------------------
Maverick Xxxxxxxx County, LLC, a 1 100%(3) Fayetteville Shale leases
Delaware LLC (100 Shares)
----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx RBE Holdings, LLC, a 1 33% 80% of Class B (reflects 40% ownership), of
Delaware LLC (33.34 Shares) RBE, LLC
(1) Maverick owns 100% of the Class A Units. South Oil owns the Class B Units.
Class A Units are entitled to return of capital, then distributions are
split 85% to Class A Unit holders, and 15% to Class B Unit holders.
(2) Maverick owns 100% of the Class A Units. Xxxxxxx RBE Holdings, LLC owns 80%
of the Class B Units and Bamco Gas, LLC owns 20% the Class B Units. Class A
Units are entitled to first distributions up to $1 million. Therefore,
distributions are split 50% -50% among Class A and Class B members.
(3) Subject to participation rights granted to project partners; 45% to MVOG;
45% to TSNU; 10% to Bamco.
(*) Uncertificated
