PLEDGE AGREEMENT
This
Pledge Agreement (this “Agreement”) dated as of February 14, 2008 by and among
each of the undersigned pledgors (each, a “Pledgor” and, together with any other
entity that becomes a pledgor hereunder pursuant to Section 26 hereof, the
“Pledgors”) and PNC BANK, NATIONAL ASSOCIATION, as agent for Lenders (as defined
below) (in such capacity, “Agent”).
BACKGROUND
HYBROOK
RESOURCES CORP. (to be renamed BEST ENERGY SERVICES, INC.) (“Best” or “Borrowing
Agent”), XXX XXXXXX DRILLING COMPANY (“BBD”) and BEST WELL SERVICE, INC. (“BWS”,
and together with Best and BBD, each a “Borrower”, and collectively the
“Borrowers”) have entered or are entering into a Revolving Credit, Term Loan and
Security Agreement dated as of February 14, 2008 (as amended, modified, restated
or supplemented from time to time, the “Loan Agreement”) with the financial
institutions named therein or which hereafter become a party thereto (each a
“Lender” and collectively, “Lenders”) and Agent, pursuant to which Agent and
Lenders have agreed, subject to the terms and conditions contained therein, to
provide certain financial accommodations to Borrowers.
In order
to induce Agent and Lenders to provide or continue to provide the financial
accommodations to Borrowers described in the Loan Agreement, each Pledgor has
agreed to pledge and grant a security interest to Agent for its benefit and for
the ratable benefit of Lenders in the Collateral (as hereinafter
defined).
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. All
capitalized terms used herein which are not defined shall have the meanings
given to them in the Loan Agreement.
2. Pledge and Grant of Security
Interest. To secure the full and punctual payment and
performance of (a) the Obligations and (b) all other indebtedness, obligations
and liabilities of each Pledgor to Agent and Lenders whether now existing or
hereafter arising, direct or indirect, liquidated or unliquidated, absolute or
contingent, due or not due and whether under, pursuant to or evidenced by a
note, agreement, guaranty, instrument or otherwise (a) and (b) collectively, the
“Indebtedness”), each Pledgor hereby pledges, assigns, hypothecates, transfers
and grants a security interest to Agent for its benefit and for the ratable
benefit of Lenders in all of the following (the “Collateral”):
(a) the
shares of stock set forth under such Pledgor’s name on Schedule A annexed
hereto and expressly made a part hereof (the “Pledged Stock”), the
certificates representing the Pledged Stock and all dividends, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Stock, provided
that the Pledged Stock shall not include more than 65% of the issued and
outstanding shares of voting stock of any Foreign Subsidiary;
(b) all of
each Pledgor’s now owned or hereafter acquired rights (but not its obligations),
membership interests and other equity ownership interests (whether certificated
or uncertificated) in each limited liability company set forth on Schedule A
(collectively, the “Membership
Interests”) and each of such limited liability company’s successors,
including, without limitation, all rights, proceeds, distributions, interest,
dividends, options, warrants, increases, profits and income from such limited
liability company;
(c) all
additional (i) shares of stock of any issuer of the Pledged Stock (and the
certificates representing such additional shares), (ii) Membership Interests of
any issuer of Membership Interests and the certificates evidencing such
Membership Interests (to the extent certificated) in each limited liability
company set forth on Schedule A (each of
the foregoing, an “Issuer”) from time to
time acquired by any Pledgor in any manner, including, without limitation, stock
dividends or a distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of
shares, stock split, spin-off or split-off (which shares and certificates shall
be deemed to be part of the Collateral), and all dividends, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
of the Pledged Stock or Membership Interests, provided that no Pledgor shall be
required to pledge more than 65% of the issued and outstanding shares of voting
stock of any Foreign Subsidiary; and
(d) all
options and rights, whether as an addition to, in substitution of or in exchange
for any shares of the Pledged Stock or Membership Interests.
3. Delivery of
Collateral. All certificates representing or evidencing the
(i) the Pledged Stock and (ii) certificated Membership Interests (including
Membership Interests which become certificated after the date hereof) shall be
delivered to and held by or on behalf of Agent pursuant hereto and shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Agent. Each Pledgor hereby
authorizes each Issuer upon written demand by Agent to deliver any certificates,
instruments or other distributions issued in connection with the Collateral
directly to Agent, in each case to be held by Agent, subject to the terms
hereof. Agent shall have the right, at any time following the
occurrence and during the continuance of an Event of Default, in its discretion
and without notice to the Pledgor, to transfer to or to register in the name of
Agent or any of its nominees any or all of the Pledged Stock or Membership
Interests. In addition, Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing any Pledged
Stock or Membership Interests for certificates or instruments of smaller or
larger denominations.
4. Representations and
Warranties of Pledgor. Each Pledgor represents and warrants to
Agent (which representations and warranties shall be deemed to continue to be
made until all of the Indebtedness has been paid in full and the Loan Agreement
has been irrevocably terminated) that:
(a) Each
Pledgor has the requisite power and authority to enter into this Agreement, to
pledge the Collateral for the purposes described herein and to carry out the
transactions contemplated by this Agreement.
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(b) The
execution, delivery and performance by each Pledgor of this Agreement and the
pledge of the Collateral hereunder have been duly and properly authorized and do
not and will not result in any violation of any material agreement, indenture,
instrument, license, judgment, decree, order, law, statute, ordinance or other
governmental rule or regulation applicable to such Pledgor.
(c) This
Agreement constitutes the legal, valid and binding obligation of each Pledgor
enforceable against such Pledgor in accordance with its terms.
(d) Each
Pledgor is the direct and beneficial owner of each share of the Pledged Stock
and Membership Interests set forth under such Pledgor’s name on Schedule A annexed
hereto.
(e) All of
the Collateral has been duly authorized, validly issued and is fully paid and
nonassessable.
(f) This
Agreement creates and grants a valid first lien on and perfected security
interest in the Collateral and the proceeds thereof, subject to no prior
security interest, mortgage, pledge, claim, lien, charge, hypothecation,
assignment, offset or encumbrance whatsoever (collectively, “Liens”) or to any
agreement purporting to grant to any third party a Lien upon the property or
assets of any Pledgor which would include the Collateral.
(g) There are
no restrictions on transfer of the Pledged Stock or Membership Interests
contained in the Certificate of Incorporation or by-laws (or Certificate of
Formation, limited liability company agreement or other organizational
documents, as the case may be) of any Issuer or otherwise which have not
otherwise been enforceably and legally waived by the necessary
parties.
(h) None of
the Collateral has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject.
(i) There are
no pending or, to the best of each Pledgor’s knowledge, threatened actions or
proceedings before any court, judicial body, administrative agency or arbitrator
which may materially adversely affect the Collateral.
(j) No
consent, approval, authorization or other order of any Person and no consent,
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required by any Pledgor either (i)
for the pledge of the Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement or (ii) for the exercise by
the Agent of the voting or other rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement, except as may
be required in connection with such disposition by laws affecting the offering
and sale of securities generally.
(k) No
notification of the pledge evidenced hereby to any Person is
required.
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(l) The
Pledged Stock and the Membership Interests constitutes one hundred percent
(100%) of the issued and outstanding shares of capital stock and limited
liability company interests of the Issuers thereof set forth on Schedule A annexed
hereto.
(m) As of the
date hereof, there are no existing options, warrants, calls or commitments of
any such character whatsoever relating to any Collateral and no indebtedness or
other security convertible into any Collateral.
(n) As of the
date hereof any proxy or proxies heretofore given by such Pledgor to any Person
or Persons whatsoever have been revoked.
The
representations and warranties set forth in this Section 4 shall survive the
execution and delivery of this Agreement.
5. Covenants. Until
such time as all of the Indebtedness has been paid in full and the Loan
Agreement has been irrevocably terminated, each Pledgor shall:
(a) Not sell,
assign, transfer, convey, or otherwise dispose of its rights in or to the
Collateral or any interest therein; nor create, incur or permit to exist any
Lien whatsoever with respect to any of the Collateral or the proceeds thereof
other than that created hereby, in each case unless expressly permitted by the
Loan Agreement.
(b) At
Pledgor’s expense, defend Agent’s right, title and security interest in and to
the Collateral against the claims of any Person and keep the Collateral free
from all Liens, except for the Liens granted to Agent under this
Agreement.
(c) At any
time, and from time to time, upon the written request of Agent, execute and
deliver such further documents and do such further acts and things as Agent may
reasonably request in order to effect the purposes of this Agreement including,
but without limitation, delivering to Agent upon the occurrence and during the
continuance of an Event of Default irrevocable proxies in respect of the
Collateral in form satisfactory to Agent. Until receipt thereof, this
Agreement shall constitute each Pledgor’s proxy to Agent or its nominee to vote
all shares of Collateral then registered in such Pledgor’s name. Each
Pledgor hereby revokes any proxy or proxies heretofore given by such Pledgor to
any Person or Persons whatsoever and agrees not to give any other proxies in
derogation hereof until this Agreement is no longer in full force and effect as
hereinafter provided.
(d) Within
two (2) Business Days of receipt thereof by any Pledgor, deliver to Agent all
notices and statements relating to the Collateral received by such
Pledgor.
(e) Unless
expressly permitted by the Loan Agreement, not consent to or approve the
issuance of (i) any additional shares of any class of capital stock or limited
liability company interests of any Issuer; (ii) any securities convertible
either voluntarily by the holder thereof or automatically upon the occurrence or
nonoccurrence of any event or condition into, or any securities exchangeable
for, any such shares; or (iii) any warrants, options, contracts or other
commitments entitling any person to purchase or otherwise acquire any such
shares.
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6. Voting Rights and
Dividends. In addition to Agent’s rights and remedies set
forth in Section 8 hereof, in case an Event of Default shall have occurred and
be continuing, Agent shall (i) be entitled to vote the Collateral, (ii) be
entitled to give consents, waivers and ratifications in respect of the
Collateral (each Pledgor hereby irrevocably constituting and appointing Agent,
with full power of substitution, the proxy and attorney-in-fact of such Pledgor
for such purposes) and (iii) be entitled to collect and receive for its own use
cash dividends paid on the Collateral. No Pledgor shall be permitted
to exercise or refrain from exercising any voting rights or other powers if, in
the reasonable judgment of Agent, such action would have a Material Adverse
Effect on the value of the Collateral or any part thereof; and, provided,
further, that each Pledgor shall give at least five (5) days’ written notice of
the manner in which such Pledgor intends to exercise, or the reasons for
refraining from exercising, any voting rights or other powers other than with
respect to any election of directors and voting with respect to any incidental
matters. All dividends and all other distributions in respect of any
of the Collateral, whenever paid or made, shall be delivered to Agent to hold as
Collateral and shall, if received by any Pledgor, be received in trust for the
benefit of Agent, be segregated from the other property or funds of such
Pledgor, and be forthwith delivered to Agent as Collateral in the same form as
so received (with any necessary endorsement); provided however, so long as
no Event of Default has occurred and is continuing, the foregoing shall not
apply to any dividends or distributions expressly permitted by the Loan
Agreement.
7. Events of
Default. The term “Event of Default” wherever used herein
shall mean the occurrence of any Event of Default under the Loan
Agreement.
8. Remedies. Upon
the occurrence and during the continuance of an Event of Default, Agent
may:
(a) Demand,
collect, receipt for, settle, compromise, adjust, xxx for, foreclose or realize
upon the Collateral (or any part thereof), as Agent may determine in its sole
discretion;
(b) Transfer
any or all of the Collateral into its name, or into the name of its nominee or
nominees;
(c) Exercise
all rights with respect to the Collateral including, without limitation, all
rights of conversion, exchange, subscription or any other rights, privileges or
options pertaining to any shares of the Collateral as if it were the absolute
owner thereof, including, but without limitation, the right to exchange, at its
discretion, any or all of the Collateral upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the Issuer thereof, or
upon the exercise by any Issuer of any right, privilege or option pertaining to
any of the Collateral, and, in connection therewith, to deposit and deliver any
and all of the Collateral with any committee, depository, transfer agent,
registrar or other designated agent upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it; and
(d) Subject
to the requirements of applicable law, sell, assign and deliver the whole or,
from time to time, any part of the Collateral at the time held by Agent, at any
private or public sale or auction, with or without demand, advertisement or
notice of the time or place of sale or adjournment thereof or otherwise (all of
which are hereby waived, except such notice as
5
is
required by applicable law and cannot be waived), for cash or credit or for
other property for immediate or future delivery, and for such price or prices
and on such terms as Agent in its sole discretion may determine, or as may be
required by applicable law.
Each
Pledgor hereby waives and releases any and all right or equity of redemption,
whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, Agent may bid for and purchase the whole or any
part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by Agent hereunder whether upon sale
of the Collateral or any part thereof or otherwise shall be held by Agent and
applied by it as provided in Section 11 hereof. No failure or delay
on the part of Agent in exercising any rights hereunder shall operate as a
waiver of any such rights nor shall any single or partial exercise of any such
rights preclude any other or future exercise thereof or the exercise of any
other rights hereunder. Agent shall have no duty as to the collection
or protection of the Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 11 hereof. Agent may
exercise its rights with respect to property held hereunder without resort to
other security for or sources of reimbursement for the
Indebtedness. In addition to the foregoing, Agent shall have all of
the rights, remedies and privileges of a secured party under applicable law and
the Uniform Commercial Code of New York regardless of the jurisdiction in which
enforcement hereof is sought.
9. Registration. If
Agent shall exercise its right to sell all or any part of the Collateral
following the occurrence and during the continuance of an Event of Default, and
if, in the opinion of counsel for Agent, it is necessary to have the Collateral
being sold registered under the provisions of the Securities Act of 1933, as
amended (the “Securities Act”), each Pledgor will use its best efforts to cause
the applicable Issuer to execute and deliver, and to cause the directors and
officers of such Issuer to execute and deliver, all at such Pledgor’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 to register the Collateral being sold under
the provisions of the Securities Act. Such Pledgor shall cause any
such registration statement to become effective and to remain effective for a
period of one year from the date of the first public offering of the Collateral
being sold and to make all amendments thereto and to related documents which, in
the opinion of Agent or its counsel, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable
thereto. Such Pledgor shall also cause the applicable Issuer to
comply with the provisions of the “Blue Sky” law of any jurisdiction which Agent
shall designate in connection with any sale hereunder; and to cause such Issuer
to make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) covering a period of at least twelve
months but not more than eighteen months, beginning with the first month after
the effective date of any such registration statement, which earnings statement
will satisfy the provisions of Section 11(a) of the Securities
Act. Each Pledgor acknowledges that a breach of any of the covenants
contained in this Section may cause irreparable injury to Agent, that Agent will
have no adequate remedy at law with respect to such breach and, as a
consequence, such covenants of such Pledgor shall be specifically enforceable
against such Pledgor.
10. Private
Sale. Notwithstanding anything contained in Section 9, each
Pledgor recognizes that Agent may be unable to effect (or to do so only after
delay which would
6
adversely
affect the value that might be realized from the Collateral) a public sale of
all or part of the Collateral by reason of certain prohibitions contained in the
Securities Act, and may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such Collateral for their own account, for investment and not with a
view to the distribution or resale thereof. Each Pledgor agrees that
any such private sale may be at prices and on terms less favorable to the seller
than if sold at public sales and that such private sales shall be deemed to have
been made in a commercially reasonable manner. Each Pledgor agrees
that Agent has no obligation to delay sale of any Collateral for the period of
time necessary to permit any Issuer to register the Collateral for public sale
under the Securities Act.
11. Proceeds of
Sale. The proceeds of any collection, recovery, receipt,
appropriation, realization, disposition or sale of the Collateral shall be
applied by Agent as follows:
(a) First, to
the payment of all costs, expenses and charges of Agent and to the reimbursement
of Agent for the prior payment of such costs, expenses and charges incurred in
connection with the care and safekeeping of any of the Collateral (including,
without limitation, the expenses of any sale or other proceeding, the expenses
of any taking, attorneys’ fees and expenses, court costs, any other fees or
expenses incurred or expenditures or advances made by Agent and Lenders in the
protection, enforcement or exercise of its rights, powers or remedies hereunder)
with interest on any such reimbursement at the rate prescribed in the Loan
Agreement as the Default Rate for Revolving Advances maintained as Domestic Rate
Loans.
(b) Second,
to the payment of the Indebtedness, in whole or in part, in such order as Agent
may elect, whether such Indebtedness is then due or not due.
(c) Third, to
such Persons as required by applicable law including, without limitation,
Section 9-615(a)(3) of the Uniform Commercial Code.
(d) Fourth,
to the extent of any surplus thereafter remaining, to the applicable Pledgor or
as a court of competent jurisdiction may direct.
In the
event that the proceeds of any collection, recovery, receipt, appropriation,
realization or sale are insufficient to satisfy the Indebtedness, each Pledgor
shall be liable for the deficiency together with interest thereon at the rate
prescribed in the Loan Agreement as the Default Rate for Revolving Advances
maintained as Domestic Rate Loans plus the costs and fees of any attorneys
employed by Agent and/or Lenders to collect such deficiency.
Agent, in
its sole and absolute discretion, with or without notice to Pledgors, may
deposit any proceeds of any collection, recovery, receipt, appropriation,
realization, disposition or sale of the Collateral in a non-interest bearing
cash collateral deposit account to be maintained as security for the
Indebtedness.
12. Waiver of
Marshaling. Each Pledgor hereby waives any right to compel any
marshaling of any of the Collateral.
7
13. Agent Appointed
Attorney-In-Fact and Performance by Agent. Upon the occurrence
of an Event of Default which is continuing, each Pledgor hereby irrevocably
constitutes and appoints Agent as such Pledgor’s true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and to do in such Pledgor’s name, place and stead, all
such acts, things and deeds for and on behalf of and in the name of such
Pledgor, which such Pledgor could or might do or which Agent may deem necessary,
desirable or convenient to accomplish the purposes of this Agreement, including,
without limitation, to execute such instruments of assignment or transfer or
orders and to register, convey or otherwise transfer title to the Collateral
into Agent’s name. Each Pledgor hereby ratifies and confirms
all that said attorney-in-fact may so do and hereby declares this power of
attorney to be coupled with an interest and irrevocable. If any
Pledgor fails to perform any agreement herein contained, Agent may itself
perform or cause performance thereof, and any costs and expenses of Agent
incurred in connection therewith shall be paid by Pledgors as provided in
Section 24 hereof.
14. Termination. This
Agreement shall terminate and each Pledgor shall be entitled to the return, at
such Pledgor’s expense, of such of the Collateral as has not theretofore been
sold, disposed of or otherwise applied pursuant to this Agreement upon payment
in full of the Indebtedness and irrevocable termination of the Loan
Agreement.
15. Concerning
Agent. The recitals of fact herein shall be taken as
statements of Pledgors for which Agent assumes no
responsibility. Agent makes no representation to anyone as to the
value of the Collateral or any part thereof or as to the validity or adequacy of
the security afforded or intended to be afforded thereby or as to the validity
of this Agreement. Agent shall be protected in relying upon any
notice, consent, request or other paper or document believed by it to be genuine
and correct and to have been signed by a proper person. The
permissive rights of Agent hereunder shall not be construed as duties of
Agent. Agent shall be under no obligation to take any action toward
the enforcement of this Agreement or rights or remedies in respect of any of the
Collateral. Agent shall not be personally liable for any action taken
or omitted by it in good faith and reasonably believed by it to be within the
power or discretion conferred upon it by this Agreement.
16. Notices. Any
notice or other communication required or permitted pursuant to this Agreement
shall be deemed given (a) when personally delivered to any officer of the party
to whom it is addressed, (b) on the earlier of actual receipt thereof or three
(3) days following posting thereof by certified or registered mail, postage
prepaid, (c) upon actual receipt thereof when sent by a recognized overnight
delivery service or (d) upon actual receipt thereof when sent by telecopier to
the number set forth below with electronic confirmation of receipt, in each case
addressed to each party at its address or telecopier number set forth below or
at such other address or telecopier number as has been furnished in writing by a
party to the other by like notice:
|
If
to Agent:
|
PNC
Bank, National Association
|
|
Xxx
Xxxxx Xxxxxx Xxxxxxxxx
|
|
|
Xxxx
Xxxxxxxxx, XX 00000
|
|
|
Attention:
|
|
|
Facsimile:
|
8
|
with
a copy to:
|
PNC
Bank, National Association
|
| PNC Agency Services | |
|
PNC
Firstside Center
|
|
| 000 Xxxxx Xxxxxx, 0xx Xxxxx | |
| Xxxxxxxxxx, XX 00000 | |
| Attention: Xxxx Xxxxxx | |
| Facsimile: (000) 000-0000 | |
| and: | Xxxx & Hessen LLP |
| 000 Xxxxxxx Xxxxxx | |
| Xxx Xxxx, XX 00000 | |
|
Attention: Xxxxxx
X. Xxxx, Esq.
|
|
| Telephone: (000) 000-0000 | |
| Facsimile: (000) 000-0000 | |
|
If
to any Pledgor:
|
Best
Energy Services, Inc.
|
|
0000
Xxxxx Xxxxxx, Xxxxx 0000
|
|
|
Xxxxxxx,
Xxxxx 00000
|
|
| Attention: Xxxxx Xxxxxxxx | |
| Facsimile: (000)-000-0000 | |
|
with
a copy to:
|
Xxxxxxx
Xxxxxx L.L.P.
|
| 000 Xxxxxxxx Xxxxxx, Xxxxx 0000 | |
| Xxxxxx, Xxxxx 00000 | |
| Attention: Xxxxxxxx X. Xxxx, Esq. | |
| Facsimile: (000) 000-0000 |
17. Governing
Law. This Agreement and all rights and obligations hereunder
shall be governed by and construed and enforced in all respects in accordance
with the laws of the State of New York applied to contracts to be performed
wholly within the State of New York.
18. Waivers. EACH
PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED BY THEM IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH PARTY TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY.
9
19. Litigation. EACH
PLEDGOR EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF EACH COURT OF
COMPETENT JURISDICTION LOCATED IN THE STATE OF NEW YORK FOR ALL PURPOSES IN
CONNECTION WITH THIS AGREEMENT. ANY JUDICIAL PROCEEDING BY ANY
PLEDGOR AGAINST AGENT INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN
ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A STATE COURT LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK. EACH PLEDGOR FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR
OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR
OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR
ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER
AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. EACH PLEDGOR
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON
AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED
UPON FORUM NON CONVENIENS.
20. No Waiver; Cumulative
Remedies. Any and all of Agent’s and Lenders’ rights with
respect to the Liens granted under this Agreement shall continue unimpaired, and
each Pledgor shall be and remain obligated in accordance with the terms hereof,
notwithstanding (a) the bankruptcy, insolvency or reorganization of any Pledgor,
(b) the release or substitution of any item of the Collateral at any time, or of
any rights or interests therein, or (c) any delay, extension of time, renewal,
compromise or other indulgence granted by Agent and Lenders in reference to any
of the Indebtedness. Each Pledgor hereby waives all notice of any
such delay, extension, release, substitution, renewal, compromise or other
indulgence, and hereby consents to be bound hereby as fully and effectively as
if such Pledgor had expressly agreed thereto in advance. No failure
on the part of Agent or Lenders to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any such right, power or remedy by Agent and
Lenders preclude any other or further exercise thereof or the exercise of any
right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
21. Severability. In
case any security interest or other right of Agent and/or any Lender shall be
held to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other security interest or other right,
privilege or power granted under this Agreement. In the event that
any provision of this Agreement or the application thereof to Pledgors or any
circumstance in any jurisdiction governing this Agreement shall, to any extent,
be invalid or unenforceable under any applicable statute, regulation, or rule of
law, such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform to such statute,
regulation or rule of law, and the remainder of this Agreement and the
application of any such invalid or unenforceable provision to parties,
jurisdictions, or circumstances other than to whom or to which it is held
invalid or
10
unenforceable
shall not be affected thereby, nor shall same affect the validity or
enforceability of any other provision of this Agreement.
22. Counterparts;
Facsimiles. This Agreement and any amendments, waivers,
consents, or supplements may be executed via telecopier or facsimile or other
electronic method of transmission reasonably satisfactory to Agent in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute one and the same
instrument.
23. Miscellaneous.
(a) This
Agreement constitutes the entire and final agreement among the parties with
respect to the subject matter hereof and neither this Agreement nor any term
hereof may be changed, discharged or terminated orally, but only by an
instrument in writing, signed by Agent (with the consent of the Required
Lenders) and each Pledgor. No waiver of any term or condition of this
Agreement, whether by delay, omission or otherwise, shall be effective unless in
writing and signed by the party sought to be charged, and then such waiver shall
be effective only in the specific instance and for the purpose for which
given.
(b) This
Agreement shall be binding upon each Pledgor, and each Pledgor’s successors and
assigns, and shall inure to the benefit of Agent, Lenders and their successors
and assigns. The term “Agent”, as used herein, shall include any
successor or assign of Agent at the time entitled to the pledged interest in the
Collateral.
(c) The
headings and captions in this Agreement are for purposes of reference only and
shall not constitute part of this Agreement for any other purpose.
24. Expenses. The
Collateral shall also secure, and each Pledgor shall pay to Agent on demand,
from time to time, all costs and expenses, (including but not limited to,
attorneys’ fees and costs, taxes, and all transfer, recording, filing and other
charges) of, or incidental to, the custody, care, transfer, administration of
the Collateral or any other collateral, or in any way relating to the
enforcement, protection or preservation of the rights or remedies of Agent and
Lenders under this Agreement or with respect to any of the
Indebtedness.
25. Recapture. Anything
in this Agreement to the contrary notwithstanding, if Agent and/or Lenders
receives any payment or payments on account of the Indebtedness, which payment
or payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver, or any other party under the United States Bankruptcy Code, as
amended, or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors’ rights
generally, common law or equitable doctrine, then to the extent of any sum not
finally retained by Agent and/or Lenders, each Pledgor’s obligations to Agent
and Lenders shall be reinstated and this Agreement shall remain in full force
and effect (or be reinstated) until payment shall have been made to Agent, which
payment shall be due on demand.
26. Additional
Pledgors. Pursuant to the Loan Agreement, each Subsidiary of
the Borrowers that was not in existence or not a Subsidiary of the Borrowers on
the date of the Loan
11
Agreement
is or may be required (if and to the extent set forth in the Loan Agreement) to
enter in this Agreement as a Pledgor upon becoming a Subsidiary of a Borrower if
such Subsidiary owns or possesses property of a type that would be considered
Collateral hereunder. Upon execution and delivery by the Agent and
such Subsidiary of a supplement to this Agreement in form and substance
satisfactory to Agent, such Subsidiary shall become a Pledgor hereunder with the
same force and effect as if originally named as a Pledgor herein. The
execution and delivery of such supplement shall not require the consent of any
Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Pledgor as a party to this Agreement.
[Signature
Page Follows This Page]
12
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and
year first written above.
| BEST ENERGY SERVICES, INC. | |
| as a Pledgor | |
| By: /s/ Xxxxx Xxxxxxxx | |
|
Name:
Xxxxx Xxxxxxxx
|
|
|
Title:
CEO
|
|
PNC
BANK, NATIONAL ASSOCIATION,
|
|
|
as
Agent
|
|
| By: /s/ Xxxxxxx X. Xxxxxx | |
| Name: Xxxxxxx X. Xxxxxx | |
| Title: VP |
13
SCHEDULE
A
PLEDGED
STOCK
|
Pledgor
|
Name
of Issuing Corporation
|
Type
of Shares
|
Number
of Shares
|
Certificate
No.
|
Percentage
Owned
|
|
Best
Energy Services, Inc.
|
Best
Well Services, Inc.
|
Common
|
100%
|
||
|
Xxx
Xxxxxx Drilling Company
|
Common
|
100%
|
MEMBERSHIP
INTERESTS
|
Pledgor
|
Name
of Issuing Corporation
|
Number
of Interests
|
Certificate
No.
|
Percentage
Owned
|
|
N/A
|
||||
