EXHIBIT 10.6
PARITY LIEN
PLEDGE AGREEMENT
DATED AS OF JULY 7, 2004
BETWEEN
CAPITAL C ENERGY OPERATIONS, LP
AND
XXXXX FARGO BANK, N.A.,
AS COLLATERAL TRUSTEE
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; GRANT OF SECURITY............................................................... 2
1.1 GENERAL DEFINITIONS.......................................................................... 2
1.2 DEFINITIONS; INTERPRETATION.................................................................. 4
SECTION 2. GRANT OF SECURITY............................................................................ 4
2.1 GRANT OF SECURITY............................................................................ 4
SECTION 3. SECURITY FOR OBLIGATIONS; PLEDGOR REMAINS LIABLE............................................. 5
3.1 SECURITY FOR OBLIGATIONS..................................................................... 5
3.2 CONTINUING LIABILITY UNDER COLLATERAL........................................................ 5
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS................................................. 5
4.1 GENERALLY.................................................................................... 5
4.2 PLEDGED EQUITY INTERESTS..................................................................... 8
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES........................................... 11
5.1 ACCESS; RIGHT OF INSPECTION.................................................................. 11
5.2 FURTHER ASSURANCES........................................................................... 11
SECTION 6. COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT................................................ 12
6.1 POWER OF ATTORNEY............................................................................ 12
6.2 NO DUTY ON THE PART OF COLLATERAL TRUSTEE OR SECURED PARTIES................................. 13
SECTION 7. REMEDIES..................................................................................... 13
7.1 GENERALLY.................................................................................... 13
7.2 APPLICATION OF PROCEEDS...................................................................... 15
7.3 CASH PROCEEDS................................................................................ 15
SECTION 8. COLLATERAL TRUSTEE........................................................................... 15
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.............................................. 16
SECTION 10. STANDARD OF CARE; COLLATERAL TRUSTEE MAY PERFORM............................................ 16
SECTION 11. MISCELLANEOUS............................................................................... 17
SCHEDULE 4.1 -- GENERAL INFORMATION
SCHEDULE 4.2 -- PLEDGED EQUITY INTERESTS
EXHIBIT A -- PLEDGE SUPPLEMENT
i
EXHIBIT B -- UNCERTIFICATED SECURITIES CONTROL AGREEMENT
ii
This PARITY LIEN PLEDGE AGREEMENT, dated as of July 7, 2004 (this
"AGREEMENT"), between CAPITAL C ENERGY OPERATIONS, LP (the "PLEDGOR"), and XXXXX
FARGO BANK, N.A., as collateral trustee for the Secured Parties (as herein
defined) (in such capacity as collateral trustee, the "COLLATERAL Trustee").
RECITALS:
WHEREAS, reference is made to that certain Indenture dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified and
in effect from time to time, the "INDENTURE"), among XXXXXX & BLAKE CORPORATION,
an Ohio corporation (together with any successor, the "Company"), GUARANTORS
PARTY THERETO (together with the Company, the "CREDIT PARTIES"), and BNY MIDWEST
TRUST COMPANY, as trustee (in such capacity and together with its successors in
such capacity, the "INDENTURE TRUSTEE") pursuant to which the Company intends to
issue 8.75% Senior Secured Notes due 2012 (including any related exchange notes,
the "NOTES") in an aggregate principal amount of $192,500,000;
WHEREAS, reference is made to that certain ISDA Master Agreement (together
with the schedule thereto and the confirmations thereunder, as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time, the "HEDGE AGREEMENT"), dated as of June 30, 2004, by and between
Capital C Ohio, Inc. and X. Xxxx & Company (together with its successors, the
"HEDGE COUNTERPARTY"), and assumed by Company as of the date hereof pursuant to
the merger between Company and Capital C Ohio Inc., pursuant to which the
Company and the Hedge Counterparty have entered into certain gas price swaps;
WHEREAS, pursuant to the Indenture and the Hedge Agreement, the Pledgor is
required to execute and deliver this Agreement;
WHEREAS, the Credit Parties may, from time to time, incur Parity Lien Debt
(as defined in the Collateral Trust Agreement referred to below) that will,
subject to the terms and conditions of the Indenture and the Hedge Agreement, be
secured on a second priority basis by the Collateral (as defined herein) and
constitute Secured Obligations (as defined herein) hereunder;
WHEREAS, as of the date hereof, the Credit Parties have also entered into
that certain Credit and Guaranty Agreement, dated as of the date hereof (as may
be amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), by and among the Credit Parties, the lenders party thereto from
time to time (collectively, the "Lenders"), Xxxxxxx Sachs Credit Parties L.P.,
as Sole Lead Arranger, Sole Book Runner, Sole Syndication Agent and
Administrative Agent (the "ADMINISTRATIVE AGENT"), and [DOCUMENTATION AGENT], as
Documentation Agent;
WHEREAS, as of the date hereof, the Pledgor has also entered into that
Priority Lien Pledge Agreement, dated as of the date hereof (as may be amended,
supplemented or otherwise modified from time to time, the "PRIORITY LIEN PLEDGE
AGREEMENT"), by and between the Pledgor and Xxxxx Fargo Bank, N.A., as
Collateral Trustee for the benefit of the holders of Priority Lien Obligations
(as defined in the Collateral Trust Agreement referred to below) (the "PRIORITY
LIEN COLLATERAL TRUSTEE"), pursuant to which Pledgor has granted a first
priority Lien on the Collateral to secure the Pledgor's obligations under the
Credit Documents (as defined in the Credit Agreement);
WHEREAS the Credit Parties, the Administrative Agent, the Indenture
Trustee, the Hedge Counterparty and the Collateral Trustee have entered into a
Collateral Trust Agreement, dated as of the date hereof (as may be amended,
supplemented or otherwise modified from time to time, the "COLLATERAL TRUST
AGREEMENT"); and
WHEREAS, in consideration of the accommodations of the holders of the
Notes, the Hedge Counterparty and the other holders of Parity Lien Obligations,
the Pledgor has agreed to secure its obligations hereunder and the Credit
Parties' obligations under the Senior Secured Note Documents, the Hedge
Agreement Documents and the other Parity Lien Documents (as such terms are
defined in the Collateral Trust Agreement) as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Pledgor and the Collateral
Trustee agree as follows:
SECTION 1. DEFINITIONS; GRANT OF SECURITY.
1.1 GENERAL DEFINITIONS.
In this Agreement, the following terms shall have the following
meanings:
"AGREEMENT" shall have the meaning set forth in the preamble.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"CASH PROCEEDS" shall have the meaning assigned in Section 7.3.
"COLLATERAL" shall have the meaning assigned in Section 2.1.
"COLLATERAL TRUST AGREEMENT" shall have the meaning set forth in the
recitals.
"COLLATERAL TRUSTEE" shall have the meaning set forth in the
preamble.
"COMPANY" shall have the meaning set forth in the recitals.
"CREDIT AGREEMENT" shall have the meaning set forth in the recitals.
"EVENT OF DEFAULT" shall have the meaning set forth in the Indenture
and the Hedge Agreement.
"HEDGE COUNTERPARTY" shall have the meaning set forth in the
recitals.
"INDENTURE TRUSTEE" shall have the meaning set forth in the
recitals.
"LENDER" shall have the meaning set forth in the recitals.
"LIEN" shall mean (i) any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing
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and (ii) in the case of Pledged Equity Interests, any purchase option, call or
similar right of a third party with respect to such Pledged Equity Interests.
"NOTES" shall have the meaning set forth in the recitals.
"PLEDGE SUPPLEMENT" shall mean any supplement to this agreement in
substantially the form of Exhibit A.
"PLEDGED EQUITY INTERESTS" shall mean all shares of capital stock,
limited liability company interest, general partnership, limited partnership,
limited liability partnership or other partnership interest and all other equity
interests in the Company, including, without limitation, all interests listed on
Schedule 4.2 (as such schedule may be amended or modified from time to time) and
the certificates, if any, representing such equity interests and any interest of
the Pledgor on the books and records of the Company or on the books and records
of any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities 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 equity interest.
"PLEDGOR" shall have the meaning set forth in the preamble.
"PRIORITY LIEN PLEDGE AGREEMENT" shall have the meaning set forth in
the recitals.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in Article 9 of
the UCC, (ii) payments or distributions made with respect to any Pledged Equity
Interests and (iii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.
"RECORD" shall have the meaning specified in Article 9 of the UCC.
"SECURED OBLIGATIONS" shall have the meaning assigned in Section
3.1.
"SECURED PARTIES" shall mean the holders of the Notes, the Hedge
Counterparty, the Indenture Trustee, the Collateral Trustee and the other
holders of Parity Lien Obligations and shall include, without limitation, all
former holders of the Notes, the Hedge Counterparty, the Indenture Trustee, the
Collateral Trustee and other holders of Parity Lien Obligations to the extent
that any Obligations owing to such Persons were incurred while such Persons were
holders of the Notes, the Hedge Counterparty, the Indenture Trustee, the
Collateral Trustee and other holders of Parity Lien Obligations and such
Obligations have not been paid or satisfied in full.
"SECURITIES" shall mean any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
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"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
"UNITED STATES" shall mean the United States of America.
1.2 DEFINITIONS; INTERPRETATION.
All capitalized terms used herein (including the preamble and recitals
hereto) and not otherwise defined herein shall have the meanings ascribed
thereto in the Collateral Trust Agreement or, if not defined therein, in the
UCC. References to "Sections," "Exhibits" and "Schedules" shall be to Sections,
Exhibits and Schedules, as the case may be, of this Agreement unless otherwise
specifically provided. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect. Any of the
terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
Notwithstanding anything herein to the contrary, the Lien and security interest
granted to the Collateral Trustee pursuant to this Agreement and the exercise of
any right or remedy by such Collateral Trustee hereunder are subject to the
provisions of the Collateral Trust Agreement. In the event of any conflict
between the terms of the Collateral Trust Agreement and this Agreement, the
terms of the Collateral Trust Agreement will govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.
SECTION 2. GRANT OF SECURITY.
2.1 GRANT OF SECURITY.
The Pledgor hereby grants to the Collateral Trustee for its benefit and
the benefit of the Secured Parties a security interest in and continuing lien on
all of Pledgor's right, title and interest in, to and under all of the
following, in each case whether now owned or existing or hereafter acquired or
arising and wherever located (all of which being hereinafter collectively
referred to as the "COLLATERAL"):
(a) Pledged Equity Interests; and
(b) to the extent not otherwise included above, all Proceeds,
products, accessions, rents and profits of or in respect of any of the
foregoing.
2.2 SUBORDINATION. Notwithstanding anything herein to the contrary, it is
the understanding of the parties that the Liens granted pursuant to Section 2.1
shall, prior to the Discharge of Priority Lien Obligations, be subject and
subordinate to the Liens granted to the Priority Lien Collateral Trustee for the
benefit of the holders of the Priority Lien Obligations to secure the Priority
Lien Obligations pursuant to the Priority Lien Pledge Agreement and all other
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rights and remedies of the Collateral Trustee and the other Secured Parties are
further subject to the intercreditor and subordination provisions of the
Collateral Trust Agreement.
SECTION 3. SECURITY FOR OBLIGATIONS; PLEDGOR REMAINS LIABLE.
3.1 SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt and complete payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including the payment of amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a) (and any successor provision thereof)), of all Parity Lien
Obligations with respect to the Pledgor and the Credit Parties (the "SECURED
OBLIGATIONS").
3.2 CONTINUING LIABILITY UNDER COLLATERAL.
Notwithstanding anything herein to the contrary, (i) the Pledgor shall
remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Collateral Trustee
or any Secured Party, (ii) the Pledgor shall remain liable under each of the
agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Equity Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Collateral Trustee nor any
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Collateral Trustee nor any Secured Party have any
obligation to make any inquiry as to the nature or sufficiency of any payment
received by it or have any obligation to take any action to collect or enforce
any rights under any agreement included in the Collateral, including, without
limitation, any agreements relating to Pledged Equity Interests, and (iii) the
exercise by the Collateral Trustee of any of its rights hereunder shall not
release the Pledgor from any of its duties or obligations under the contracts
and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY.
(a) Representations and Warranties. The Pledgor hereby represents
and warrants, on the Closing Date and on each Credit Date, that:
(i) it owns the Collateral purported to be owned by it or
otherwise has the rights it purports to have in each item of Collateral
and, as to all Collateral whether now existing or hereafter acquired, will
continue to own or have such rights in each item of the Collateral, in
each case free and clear of any and all Liens (other than Permitted Liens
(as defined in the Indenture)), rights or claims of all other Persons,
including, without limitation, liens arising as a result of the Pledgor
becoming bound (as a result of merger or otherwise) as debtor under a
security agreement entered into by another Person; provided, that the
foregoing shall not prohibit the Pledgor from selling or otherwise
disposing of any Pledged Equity Interests as long as such sale or other
disposition does not result in a Change of Control and the Person
acquiring such Pledged Equity Interests pledges them to the Collateral
Trustee pursuant to a pledge agreement substantially in the form of this
Agreement;
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(ii) it has indicated on Schedule 4.1(A)(as such schedule may
be amended or supplemented from time to time): (w) its type of
organization, (x) its jurisdiction of organization, (y) its organizational
identification number and (z) the jurisdiction where its chief executive
office or its sole place of business is, and for the five-year period
preceding the date hereof has been, located.
(iii) the full legal name of the Pledgor is as set forth on
Schedule 4.1(A) and it has not done in the last five (5) years, and does
not do, business under any other name (including any trade-name or
fictitious business name) except for those names set forth on Schedule
4.1(B) (as such schedule may be amended or supplemented from time to
time);
(iv) except as provided on Schedule 4.1(C), it has not changed
its name, jurisdiction of organization, chief executive office or sole
place of business or its corporate structure in any way (e.g., by merger,
consolidation, change in corporate form or otherwise) within the past five
(5) years;
(v) it has not within the last five (5) years become bound
(whether as a result of merger or otherwise) as debtor under a security
agreement entered into by another Person, which has not heretofore been
terminated other than the agreements identified on Schedule 4.1(D) hereof
(as such schedule may be amended or supplemented from time to time);
(vi) with respect to each agreement identified on Schedule
4.1(D), it has indicated on Schedule 4.1 (A) and Schedule 4.1(B) the
information required pursuant to Section 4.1(a)(ii), (iii) and (iv) with
respect to the debtor under each such agreement;
(vii) (A) upon the filing of all UCC financing statements
naming the Pledgor as "debtor" and the Collateral Trustee as "secured
party" and describing the Collateral in the filing office(s) set forth on
Schedule 4.1(E) hereof (as such schedule may be amended or supplemented
from time to time) and (B) upon delivery of all certificated Pledged
Equity Interests in accordance with the Collateral Trust Agreement, the
security interests granted to the Collateral Trustee hereunder constitute
valid and perfected first priority Liens on all of the Collateral;
(viii) all actions and consents, including all filings,
notices, registrations and recordings necessary or desirable for the
exercise by the Collateral Trustee of the voting or other rights provided
for in this Agreement or the exercise of remedies in respect of the
Collateral have been made or obtained or otherwise authorized for filing;
(ix) other than the financing statements filed in favor of the
Collateral Trustee pursuant hereto (and any financing statements filed in
favor of the Collateral Trustee in connection with the Priority Lien
Debt), no effective UCC financing statement or other instrument similar in
effect under any applicable law covering all or any part of the Collateral
is on file in any filing or recording office except for financing
statements for which proper termination statements have been delivered to
the Collateral Trustee for filing;
(x) no authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body is
required for either (i) the
6
pledge or grant by the Pledgor of the Liens purported to be created in
favor of the Collateral Trustee hereunder or (ii) the exercise by
Collateral Trustee of any rights or remedies in respect of any Collateral
(whether specifically granted or created hereunder or created or provided
for by applicable law), except (A) for the filings contemplated by clause
(vii) above and (B) as may be required, in connection with the disposition
of any Pledged Equity Interests, by laws generally affecting the offering
and sale of Securities;
(xi) all information supplied by the Pledgor with respect to
any of the Collateral is accurate and complete in all material respects;
(xii) except as described on Schedule 4.1(D), it has not
become bound as a debtor, either by contract or by operation of law, by a
security agreement previously entered into by another Person covering any
of the Collateral; and
(xiii) it has been duly organized as a limited partnership
solely under the laws of the State of Delaware and remains duly existing
as such. The Pledgor has not filed any certificates of domestication,
transfer or continuance in any other jurisdiction.
(b) Covenants and Agreements. The Pledgor hereby covenants and
agrees that:
(i) except for the security interest created by this Agreement
and the Priority Lien Pledge Agreement and except for Permitted Liens (as
defined in the Indenture), it shall not create or suffer to exist any Lien
upon or with respect to any of the Collateral, and it shall defend the
Collateral against all Persons at any time claiming any interest therein;
(ii) it shall not change its name, identity, corporate
structure (e.g., by merger, consolidation, change in corporate form or
otherwise), type of organization or jurisdiction of organization unless it
shall have (a) notified the Collateral Trustee in writing, by executing
and delivering to the Collateral Trustee a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together with all
Supplements to Schedules thereto, at least thirty (30) days prior to any
such change or establishment, identifying such new proposed name,
identity, corporate structure or jurisdiction of organization and
providing such other information in connection therewith as the Collateral
Trustee may reasonably request and (b) taken all actions necessary or
advisable to maintain the continuous validity, perfection and the same or
better priority of the Collateral Trustee's security interest in the
Collateral intended to be granted and agreed to hereby;
(iii) it shall pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and
all claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith; provided, it shall in any event pay such taxes,
assessments, charges, levies or claims not later than five (5) days prior
to the date of any proposed sale under any judgment, writ or warrant of
attachment entered or filed against it or any of the Collateral as a
result of the failure to make such payment;
(iv) upon the Pledgor or any of its officer obtaining
knowledge thereof, it shall promptly notify the Collateral Trustee in
writing of any event (other than events related to the business or
prospects of Company or any of Company's Subsidiaries
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or events affecting the oil and/or gas business, or the economy generally)
that may have a Material Adverse Effect on the value of the Collateral or
any portion thereof, the ability of the Pledgor or the Collateral Trustee
to dispose of the Collateral or any portion thereof, or the rights and
remedies of the Collateral Trustee in relation thereto, including, without
limitation, the levy of any legal process against the Collateral or any
portion thereof;
(v) it shall not take or permit any action which could impair
the Collateral Trustee's rights in the Collateral; and
(c) it shall not sell, transfer or assign (by operation of law or
otherwise) any Collateral except as permitted by the Parity Lien Documents.
4.2 PLEDGED EQUITY INTERESTS
4.2.1 .
(a) Representations and Warranties. The Pledgor hereby represents
and warrants, on the Closing Date and on each Credit Date, that:
(i) Schedule 4.2(A) (as such schedule may be amended or
supplemented from time to time) sets forth all of the Pledged Equity
Interests owned by the Pledgor and such Pledged Equity Interests
constitute the percentage of issued and outstanding shares of stock or
percentage of membership interests, percentage of partnership interests or
percentage of beneficial interest of the Company;
(ii) except as set forth on Schedule 4.2(B) and other than as
a result of the merger contemplated by the Merger Agreement, it has not
acquired any Pledged Equity Interests from another Person within the past
five (5) years;
(iii) it is the record and beneficial owner of the Pledged
Equity Interests free of all Liens (other than Permitted Liens (as defined
in the Indenture)), rights or claims of other Persons and there are no
outstanding warrants, options or other rights to purchase, or shareholder,
voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale
of, any Pledged Equity Interests; and
(iv) without limiting the generality of Section 4.1(a)(viii),
no consent of any Person including any other general or limited partner,
any other member of the Company, any other shareholder or any other trust
beneficiary is necessary or desirable in connection with the creation,
perfection or first priority status of the security interest of the
Collateral Trustee in any Pledged Equity Interests or the exercise by the
Collateral Trustee of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect thereof.
(b) Covenants and Agreements. The Pledgor hereby covenants and
agrees that:
(i) in the event it acquires rights in any Pledged Equity
Interests after the date hereof, it shall deliver to the Collateral
Trustee a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules
thereto, reflecting such new Pledged Equity Interests and all
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other Pledged Equity Interests. Notwithstanding the foregoing, it is
understood and agreed that the security interest of the Collateral Trustee
shall attach to all Pledged Equity Interests immediately upon the
Pledgor's acquisition of rights therein and shall not be affected by the
failure of the Pledgor to deliver a supplement to Schedule 4.4 as required
hereby;
(ii) except as provided in the next sentence, in the event the
Pledgor receives any securities or other property (other than cash) upon
the merger, consolidation, liquidation or dissolution of the Company, then
(a) such securities or other property shall be included in the definition
of Collateral without further action and (b) the Pledgor shall immediately
take all steps, if any, necessary or advisable to ensure the validity,
perfection, priority and, if applicable, control of the Collateral Trustee
in accordance with the Collateral Trust Agreement) over such Pledged
Equity Interests (including, without limitation, delivery thereof to the
Collateral Trustee in accordance with the Collateral Trust Agreement) and
pending any such action the Pledgor shall be deemed to hold such
securities or other property in trust for the benefit of the Collateral
Trustee and shall segregate such securities or other property from all
other property of the Pledgor. Notwithstanding the foregoing, so long as
no Event of Default shall have occurred and be continuing, the Pledgor
shall be entitled to receive and retain any dividends or distributions on
the Pledged Equity Interests paid in cash and all such dividends or
distributions so received shall be deemed released from the Liens granted
by this Agreement;
(iii) without the prior written consent of the Collateral
Trustee, it shall not vote to enable or take any other action to: (a)
amend or terminate any partnership agreement, limited liability company
agreement, certificate of incorporation, by-laws or other organizational
documents in any way that materially changes the rights of the Pledgor
with respect to any Pledged Equity Interests or adversely affects the
validity, perfection or priority of the Collateral Trustee's security
interest or (b) cause the Pledged Equity Interests which are not
securities (for purposes of the UCC) on the date hereof to elect or
otherwise take any action to cause such Pledged Equity Interests to be
treated as securities for purposes of the UCC; provided, however,
notwithstanding the foregoing, if the Company takes any such action in
violation of the foregoing in this clause (b), the Pledgor shall promptly
notify the Collateral Trustee in writing of any such election or action
and, in such event, shall take all steps necessary or advisable to
establish the Collateral Trustee's "control" thereof; provided, further,
that notwithstanding the foregoing, so long as such actions are in
accordance with the Parity Lien Documents and so long as no Event of
Default has occurred and is continuing, the Pledgor may enable or allow
the Company, and nothing in this Agreement shall restrict the Company, to
offer, issue, sell or otherwise dispose of, any equity securities, or any
options, warrants or other rights convertible, exercisable or exchangeable
at any time into any equity securities of the Company, or to amend the
articles of incorporation of the Company to change the authorized number
of shares of capital stock of the Company or to designate the rights and
preferences of any series of preferred stock, or amend the bylaws of the
Company to provide for any rights to nominate directors with respect to
any stockholder, or among the stockholders, of the Company, or any rights
of any stockholder to special voting on any matters;
(iv) it shall comply with all of its obligations under any
partnership agreement or limited liability company agreement relating to
Pledged Equity Interests and shall enforce all of its rights with respect
to any Pledged Equity Interests, except
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where such failure to comply or enforce could not reasonably be expected
to have a Material Adverse Effect; and
(v) without the prior written consent of the Collateral
Trustee, it shall not permit the Company to merge or consolidate unless
(i) the surviving entity creates a security interest that is perfected by
a filed financing statement (that is not effective solely under section
9-508 of the UCC) in collateral in which such new debtor has or acquires
rights, and (ii) all the outstanding capital stock or other equity
interests of the surviving or resulting corporation, limited liability
company, partnership or other entity is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property
is distributed in respect of the outstanding equity interests of any other
constituent Credit Parties.
(c) Delivery and Control.
(i) The Pledgor agrees that with respect to any Pledged Equity
Interests in which it currently has rights it shall comply with the
provisions of this Section 4.2(c)(i) on or before the Closing Date and
with respect to any Pledged Equity Interests hereafter acquired by the
Pledgor it shall comply with the provisions of this Section 4.2(c)(i)
immediately upon acquiring rights therein, in each case in form and
substance satisfactory to the Collateral Trustee. With respect to any
Pledged Equity Interests that is represented by a certificate or that is
an "instrument," it shall cause such certificate or instrument to be
delivered to the Collateral Trustee (or the Priority Lien Collateral
Trustee in accordance with the Collateral Trust Agreement), indorsed in
blank by an "effective indorsement" (as defined in Section 8-107 of the
UCC), regardless of whether such certificate constitutes a "certificated
security" for purposes of the UCC. With respect to any Pledged Equity
Interests that is an "uncertificated security" for purposes of the UCC, it
shall cause the Company to either (i) register the Collateral Trustee as
the registered owner thereof on the books and records of the Company or
(ii) execute an agreement substantially in the form of Exhibit B hereto,
pursuant to which such issuer agrees to comply with the Collateral
Trustee's instructions with respect to such uncertificated security
without further consent by the Pledgor.
(d) Voting and Distributions.
(i) So long as no Event of Default shall have occurred and be
continuing:
(1) except as otherwise provided under the covenants and agreements in
this Agreement or elsewhere herein or in the Parity Lien Documents,
the Pledgor shall be entitled to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the
Pledged Equity Interests or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Parity Lien
Documents; and
(2) the Collateral Trustee shall promptly execute and deliver (or cause
to be executed and delivered) to the Pledgor all proxies, and other
instruments as the Pledgor may from time to time reasonably request
for the purpose of enabling the Pledgor to exercise the voting and
other consensual rights when and to the extent which it is entitled
to exercise pursuant to clause (1) above;
10
(ii) Upon the occurrence and during the continuation of an
Event of Default:
(1) all rights of the Pledgor to exercise or refrain from exercising the
voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights
shall thereupon become vested in the Collateral Trustee who shall
thereupon have the sole right to exercise such voting and other
consensual rights; and
(2) in order to permit the Collateral Trustee to exercise the voting and
other consensual rights which it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions
which it may be entitled to receive hereunder: (1) the Pledgor shall
promptly execute and deliver (or cause to be executed and delivered)
to the Collateral Trustee all proxies, dividend payment orders and
other instruments as the Collateral Trustee may from time to time
reasonably request and (2) the Pledgor acknowledges that the
Collateral Trustee may utilize the power of attorney set forth in
Section 6.1.
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES.
5.1 ACCESS; RIGHT OF INSPECTION.
The Collateral Trustee shall at all times have full and free access upon
reasonable notice during normal business hours, to all the books, correspondence
and records of the Pledgor relating to the Collateral, and the Collateral
Trustee and its representatives may examine the same, take extracts therefrom
and make photocopies thereof, and the Pledgor agrees to render to the Collateral
Trustee, at such Pledgor's cost and expense, such clerical and other assistance
as may be reasonably requested with regard thereto.
5.2 FURTHER ASSURANCES.
(a) The Pledgor agrees that from time to time, at its expense, that
it shall promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that the
Collateral Trustee may reasonably request in accordance with the Collateral
Trust Agreement, in order to create and/or maintain the validity, perfection or
priority of and protect any security interest granted hereby or to enable the
Collateral Trustee to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, the Pledgor shall:
(i) file such financing or continuation statements, or
amendments thereto, and execute and deliver such other agreements,
instruments, endorsements, powers of attorney or notices, as may be
necessary or desirable, or as the Collateral Trustee may reasonably
request, in order to perfect and preserve the security interests granted
or purported to be granted hereby;
(ii) at any reasonable time, upon request by the Collateral
Trustee, assemble the Collateral and allow inspection of the Collateral by
the Collateral Trustee, or persons designated by the Collateral Trustee;
and
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(iii) at the Collateral Trustee's request, appear in and
defend any action or proceeding that may affect the Pledgor's title to or
the Collateral Trustee's security interest in all or any part of the
Collateral.
The Pledgor hereby authorizes the Collateral Trustee to file a Record or
Records, including, without limitation, financing or continuation statements,
and amendments thereto, in any jurisdictions and with any filing offices as the
Collateral Trustee may determine, in its sole discretion, are necessary or
advisable to perfect the security interest granted to the Collateral Trustee
herein. Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of collateral
that describes such property in any other manner as the Collateral Trustee may
determine, in its sole discretion, is necessary, advisable or prudent to ensure
the perfection of the security interest in the Collateral granted to the
Collateral Trustee herein. The Pledgor shall furnish to the Collateral Trustee
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Collateral Trustee may reasonably request, all in reasonable detail.
SECTION 6. COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY.
The Pledgor hereby irrevocably appoints the Collateral Trustee (such
appointment being coupled with an interest) as its attorney-in-fact, with full
authority in its place and stead and in its name, the Collateral Trustee or
otherwise, from time to time in the Collateral Trustee's discretion to take any
action and to execute any instrument that the Collateral Trustee may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, the following:
(a) upon the occurrence and during the continuance of any Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) upon the occurrence and during the continuance of any Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;
(c) upon the occurrence and during the continuance of any Event of
Default, to file any claims or take any action or institute any proceedings that
the Collateral Trustee may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Collateral Trustee
with respect to any of the Collateral;
(d) to prepare and file any UCC financing statements against the
Pledgor as debtor;
(e) to take or cause to be taken all actions necessary to perform or
comply or cause performance or compliance with the terms of this Agreement,
including, without limitation, access to pay or discharge taxes or Liens levied
or placed upon or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by the
Collateral Trustee in its sole discretion, any such payments made by the
Collateral Trustee to become obligations of the Pledgor to the Collateral
Trustee, due and payable immediately without demand; and
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(f) upon the occurrence and during the continuance of any Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Collateral Trustee were the absolute owner thereof for all purposes, and to
do, at the Collateral Trustee's option and the Pledgor's expense, at any time or
from time to time, all acts and things that the Collateral Trustee deems
reasonably necessary to protect, preserve or realize upon the Collateral and the
Collateral Trustee's security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as the Pledgor might do.
6.2 NO DUTY ON THE PART OF COLLATERAL TRUSTEE OR SECURED PARTIES.
The powers conferred on the Collateral Trustee hereunder are solely to
protect the interests of the Secured Parties in the Collateral and shall not
impose any duty upon the Collateral Trustee or any Secured Party to exercise any
such powers. The Collateral Trustee and the Secured Parties shall be accountable
only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Pledgor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
SECTION 7. REMEDIES.
7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be continuing,
the Collateral Trustee may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it
at law or in equity, all the rights and remedies of the Collateral Trustee on
default under the UCC (whether or not the UCC applies to the affected
Collateral) to collect, enforce or satisfy any Secured Obligations then owing,
whether by acceleration or otherwise, and also may pursue any of the following
separately, successively or simultaneously:
(i) require the Pledgor, and the Pledgor hereby agrees that it
shall at its expense and promptly upon request of the Collateral Trustee
forthwith, assemble all or part of the Collateral as directed by the
Collateral Trustee and make it available to the Collateral Trustee at a
place to be designated by the Collateral Trustee that is reasonably
convenient to both parties; and
(ii) without notice except as specified below or under the
UCC, sell, assign or otherwise dispose of the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Trustee's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and
upon such other terms as the Collateral Trustee may deem commercially
reasonable.
(b) The Collateral Trustee or any Secured Party may be the purchaser
of any or all of the Collateral at any public or private (to the extent to the
portion of the Collateral being privately sold is of a kind that is customarily
sold on a recognized market or the subject of widely distributed standard price
quotations) sale in accordance with the UCC and the Collateral Trustee, as
Collateral Trustee for and representative of the Secured Parties, shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such sale
made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable by
13
the Collateral Trustee at such sale. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of the
Pledgor, and the Pledgor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. The Pledgor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days notice to such Grantor 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. The Collateral Trustee shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Trustee 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. The Pledgor agrees that it would not be commercially unreasonable for
the Collateral Trustee to dispose of the Collateral or any portion thereof by
using Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets. The Pledgor hereby waives any claims
against the Collateral Trustee arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if the Collateral
Trustee accepts the first offer received and does not offer such Collateral to
more than one offeree. The Pledgor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Collateral Trustee, that the Collateral Trustee has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against the Pledgor,
and the Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
default has occurred giving rise to the Secured Obligations becoming due and
payable prior to their stated maturities. Nothing in this Section shall in any
way alter the rights of the Collateral Trustee hereunder.
(c) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Collateral Trustee may be compelled, with respect to any sale of all or any part
of the Pledged Equity Interests conducted without prior registration or
qualification of such Pledged Equity Interests under the Securities Act and/or
such state securities laws, to limit purchasers to those who will agree, among
other things, to acquire the Pledged Equity Interests for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances, The
Pledgor agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Collateral Trustee shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Pledged Equity Interests for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If the Collateral Trustee
determines to exercise its right to sell any or all of the Pledged Equity
Interests, upon written request, the Pledgor shall and shall cause the Company
to furnish to the Collateral Trustee all such information as the Collateral
Trustee may request in order to determine the number and nature of interest,
shares or other instruments included in the Pledged Equity Interests which may
be sold by the Collateral Trustee in exempt transactions under the Securities
Act and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
14
(d) The Collateral Trustee may sell the Collateral without giving
any warranties as to the Collateral. The Collateral Trustee may specifically
disclaim or modify any warranties of title or the like. This procedure will not
be considered to adversely affect the commercial reasonableness of any sale of
the Collateral.
(e) The Collateral Trustee shall have no obligation to marshal any
of the Collateral.
7.2 APPLICATION OF PROCEEDS
(a). Except as expressly provided elsewhere in this Agreement, all
proceeds received by the Collateral Trustee in respect of any sale, any
collection from, or other realization upon all or any part of the Collateral
shall be applied in full or in part by the Collateral Trustee against, the
Secured Obligations in the following order of priority: first, to the payment of
all reasonable costs and expenses of such sale, collection or other realization,
including reasonable compensation to the Collateral Trustee and its agents and
counsel, and all other reasonable expenses, liabilities and advances made or
incurred by the Collateral Trustee in connection therewith, and all amounts for
which the Collateral Trustee is entitled to indemnification hereunder (in its
capacity as the Collateral Trustee and not as a holder of Note), and to the
payment of all reasonable costs and expenses paid or incurred by the Collateral
Trustee in connection with the exercise of any right or remedy hereunder or
under the Parity Lien Documents, all in accordance with the terms hereof or
thereof; second, to the extent of any excess of such proceeds, to the payment of
all other Secured Obligations for the ratable benefit of the holders of the
Parity Lien Obligations; and third, to the extent of any excess of such
proceeds, to the payment to or upon the order of the Pledgor or to whosoever may
be lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.
7.3 CASH PROCEEDS.
After an Event of Default shall have occurred and be continuing, upon
receipt of any Collateral consisting of cash, checks and other non-cash items
(collectively, "CASH PROCEEDS") by the Pledgor, the Pledgor shall turn over all
such Cash Proceeds to the Collateral Trustee. Any Cash Proceeds shall be applied
by the Collateral Trustee against the Secured Obligations then due and owing.
SECTION 8. COLLATERAL TRUSTEE.
The Collateral Trustee has been appointed to act as Collateral Trustee
under the Collateral Trust Agreement by Indenture Trustee and Hedge Counterparty
and, by their acceptance of the benefits hereof, the other Secured Parties. The
Collateral Trustee shall be obligated, and shall have the right hereunder, to
make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including, without
limitation, the release or substitution of Collateral), solely in accordance
with this Agreement and the Parity Lien Documents. In furtherance of the
foregoing provisions of this Section, each Secured Party, by its acceptance of
the benefits hereof, agrees that it shall have no right individually to realize
upon any of the Collateral hereunder, it being understood and agreed by such
Secured Party that all rights and remedies hereunder may be exercised solely by
the Collateral Trustee for the benefit of Secured Parties in accordance with the
terms of this Section. Collateral Trustee may resign at any time by giving
thirty (30) days' prior written notice thereof to Parity Lien Representative and
the Pledgor, and Collateral Trustee may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to the
15
Pledgor and Collateral Trustee signed by the Parity Lien Representative. Upon
any such notice of resignation or any such removal, Parity Lien Representative
shall have the right to appoint a successor Collateral Trustee. Upon the
acceptance of any appointment as Collateral Trustee hereunder by a successor
Collateral Trustee, that successor Collateral Trustee shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Collateral Trustee under this Agreement, and the retiring or
removed Collateral Trustee under this Agreement shall promptly (i) transfer to
such successor Collateral Trustee all sums, Securities and other items of
Collateral held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Collateral Trustee under this Agreement, and (ii) execute and deliver
to such successor Collateral Trustee or otherwise authorize the filing of such
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Collateral Trustee of the security interests created hereunder, whereupon such
retiring or removed Collateral Trustee shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Collateral
Trustee's resignation or removal hereunder as the Collateral Trustee, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was the Collateral
Trustee hereunder.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations (other than any Secured Obligations consisting of
indemnity or similar obligations in respect of which no amounts are due and
payable), be binding upon The Pledgor, its successors and assigns, and inure,
together with the rights and remedies of the Collateral Trustee hereunder, to
the benefit of the Collateral Trustee and its successors, transferees and
assigns. Without limiting the generality of the foregoing, but subject to the
terms of the Priority Lien Documents, any Secured Party may assign or otherwise
transfer any Obligations held by it to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise. Upon the payment in full of all
Secured Obligations (other than any Secured Obligations consisting of indemnity
or similar obligations in respect of which no amounts are due and payable), the
security interest granted hereby shall terminate hereunder and of record, all
rights to the Collateral shall revert to the Pledgor and this Agreement
(including any provision providing for the appointment of the Collateral Trustee
as an attorney-in-fact for the Pledgor) shall terminate. Upon any such
termination the Collateral Trustee shall, at Pledgor's expense, execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence such termination.
SECTION 10. STANDARD OF CARE; COLLATERAL TRUSTEE MAY PERFORM.
The powers conferred on the Collateral Trustee hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Collateral Trustee shall have no duty as
to any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. The
Collateral Trustee shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Collateral Trustee
accords its own property. Neither the Collateral Trustee nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of
16
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of the Pledgor or
otherwise. If the Pledgor fails to perform any agreement contained herein, the
Collateral Trustee may itself perform, or cause performance of, such agreement,
and the expenses of the Collateral Trustee incurred in connection therewith
shall be payable by the Pledgor.
SECTION 11. MISCELLANEOUS.
11.1 Any notice required or permitted to be given under this Agreement
shall be given in accordance with Section 7.7 of the Collateral Trust Agreement.
No failure or delay on the part of the Collateral Trustee in the exercise of any
power, right or privilege hereunder or under any other Parity Lien Obligations
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing under
this Agreement and the other Parity Lien Documents are cumulative to, and not
exclusive of, any rights or remedies otherwise available. In case any provision
in or obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists. This Agreement
shall be binding upon and inure to the benefit of the Collateral Trustee and
Grantors and their respective successors and assigns. The Pledgor shall not,
without the prior written consent of the Collateral Trustee given in accordance
with the Parity Lien Documents, assign any right, duty or obligation hereunder.
This Agreement and the other Parity Lien Documents embody the entire agreement
and understanding between the Pledgor and the Collateral Trustee and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof. Accordingly, the Parity Lien Documents 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 Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
11.2 THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
11.3 Limitation of Liability.
(a) Each party hereto hereby agrees that all representations,
warranties, covenants and other agreements (except for the representations and
warranties provided in Section 4.1(a)(i)) made by the Pledgor herein are made
without recourse to any assets, monies, properties (tangible, intangible,
personal or real) of the Pledgor (other than the Collateral), and
17
the Pledgor shall have no obligation to the Collateral Trustee, the Secured
Parties, or any other Person with respect to any breach by the Pledgor of any
such representation, warranty, covenant or other agreement (except for the
representations and warranties provided in Section 4.1(a)(i)), other than to the
extent of any proceeds actually received upon the liquidation of the Collateral.
(b) Notwithstanding any other provision of this Agreement or of any
of the other Parity Lien Documents, there shall be no recourse against the
Pledgor or any of its stockholders, members, partners, officers, directors,
employees or agents (collectively, the "NONRECOURSE PERSONS"), for any liability
to the Secured Parties arising in connection with any breach or default under
this Agreement, and the Secured Parties shall look solely to Company and the
Collateral in exercising the Secured Parties' rights and remedies and enforcing
the obligations of the other parties under and in connection with the Parity
Lien Documents, provided, that the foregoing provisions shall not limit or
restrict the right of any Secured Party to name the Pledgor as defendant in any
action or suit solely for a judicial foreclosure or for the exercise of any
other remedy or with respect to this Agreement so long as no judgment in the
nature of a deficiency judgment shall be enforced against any Nonrecourse Person
out of any Property. The limitations on recourse set forth in this paragraph
shall survive the termination of this Agreement and the full payment and
performance of the Secured Obligations.
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IN WITNESS WHEREOF, the Pledgor and the Collateral Trustee have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
CAPITAL C ENERGY OPERATIONS, LP
BY: CAPITAL C ENERGY, LP, ITS GENERAL PARTNER
BY: CAPITAL C ENERGY, LLC, ITS GENERAL PARTNER
By: /s/ Frost X. Xxxxxxx
-------------------------------
Name: Frost X. Xxxxxxx
Title: President
XXXXX FARGO BANK, N.A., as Collateral Trustee
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
19
SCHEDULE 4.1
TO PLEDGE AGREEMENT
GENERAL INFORMATION
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization, Chief
Executive Office/Sole Place of Business and Organizational Identification
Number of the Pledgor:
Chief Executive
Type of Jurisdiction of Office/Sole Place of
Full Legal Name Organization Organization Business Organization I.D.#
--------------- ------------ --------------- -------------------- ------------------
(B) Other Names (including any Trade-Name or Fictitious Business Name) under
which the Pledgor has conducted business for the past five (5) years:
Trade Name or Fictitious Business Name
(C) Changes in Name, Jurisdiction of Organization, Chief Executive Office or
Sole Place of Business and Corporate Structure within past five (5) years:
Date of Change Description of Change
(D) Agreements pursuant to which Pledgor is found as debtor within past five
(5) years:
Description of Agreement
(E) Financing Statements:
Filing Jurisdiction(s)
SCHEDULE 4.1-1
SCHEDULE 4.2
TO PLEDGE AGREEMENT
PLEDGED EQUITY INTERESTS
LIMITED LIABILITY COMPANY/ CERTIFICATED CERTIFICATE NO. OF PLEDGED % OF OUTSTANDING LLC/PARTNERSHIP
PARTNERSHIP/CORPORATION/TRUST (Y/N) NO. (IF ANY) UNITS/STOCK INTERESTS/STOCK/TRUST INTERESTS
----------------------------- ------------ ------------ -------------- --------------------------------
(B)
Name of Pledgor Date of Acquisition Description of Acquisition
EXHIBIT 4.2-1
EXHIBIT A
TO PLEDGE AGREEMENT
PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by CAPITAL C ENERGY
OPERATIONS, LP., a Delaware limited partnership (the "PLEDGOR") pursuant to the
Pledge Agreement, dated as of July __, 2004 (as it may be from time to time
amended, restated, modified or supplemented, the "Pledge Agreement"), between
PLEDGOR and XXXXX FARGO BANK, N.A., as Collateral Trustee. Capitalized terms
used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Pledge Agreement.
Pledgor hereby confirms the grant to the Collateral Trustee set forth in
the Pledge Agreement of, and does hereby grant to the Collateral Trustee, a
security interest in all of Pledgor's right, title and interest in and to all
Collateral to secure the Secured Obligations, in each case whether now or
hereafter existing or in which Pledgor now has or hereafter acquires an interest
and wherever the same may be located. Pledgor represents and warrants that the
attached Supplements to Schedules accurately and completely set forth all
additional information required pursuant to the Pledge Agreement and hereby
agrees that such Supplements to Schedules shall constitute part of the Schedules
to the Pledge Agreement.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of [MM/DD/YY].
CAPITAL C ENERGY OPERATIONS, LP
BY: CAPITAL C ENERGY, LP, ITS GENERAL PARTNER
BY: CAPITAL C ENERGY, LLC, ITS GENERAL PARTNER
By:_____________________________
Name:
Title:
EXHIBIT A-1
SUPPLEMENT TO SCHEDULE 4.1
TO PLEDGE AGREEMENT
Additional Information:
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization,
Chief Executive Office/Sole Place of Business and Organizational
Identification Number of the Pledgor:
Chief Executive
Office/Sole Place of
Business (or Residence
Jurisdiction of if Grantor is a Natural
Full Legal Name Type of Organization Organization Person) Organization I.D.#
--------------- -------------------- --------------- ----------------------- ------------------
(B) Other Names (including any Trade-Name or Fictitious Business Name)
under which the Pledgor has conducted business for the past five (5)
years:
Trade Name or Fictitious Business Name
(C) Changes in Name, Jurisdiction of Organization, Chief Executive
Office or Sole Place of Business (or Principal Residence if Grantor
is a Natural Person) and Corporate Structure within past five (5)
years:
Date of Change Description of Change
(D) Agreements pursuant to which the Pledgor is found as debtor within
past five (5) years:
Description of Agreement
(E) Financing Statements:
Filing Jurisdiction(s)
EXHIBIT A-2
SUPPLEMENT TO SCHEDULE 4.2
TO PLEDGE AGREEMENT
PLEDGED EQUITY INTERESTS
Additional Information:
(A)
LIMITED LIABILITY COMPANY/ CERTIFICATED CERTIFICATE NO. OF PLEDGED % OF OUTSTANDING LLC/PARTNERSHIP
PARTNERSHIP/CORPORATION/TRUST (Y/N) NO. (IF ANY) UNITS/STOCK INTERESTS/STOCK/TRUST INTERESTS
----------------------------- ------------ ------------ -------------- ---------------------------------
(B)
Date of Acquisition Description of Acquisition
EXHIBIT A-3
EXHIBIT B
TO PLEDGE AGREEMENT
UNCERTIFICATED SECURITIES CONTROL AGREEMENT
This Uncertificated Securities Control Agreement dated as of _________,
200__ among CAPITAL C ENERGY OPERATIONS, LP (the "PLEDGOR"), XXXXX FARGO BANK,
N.A., as Collateral Trustee for the Secured Parties, (the "COLLATERAL TRUSTEE")
and ____________, a ________corporation (the "ISSUER"). Capitalized terms used
but not defined herein shall have the meaning assigned in the Pledge Agreement
dated [as of the date hereof], among the Pledgor, the other Grantors party
thereto and the Collateral Trustee (the "PLEDGE AGREEMENT"). All references
herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York.
SECTION 1. REGISTERED OWNERSHIP OF SHARES. The Issuer hereby confirms and
agrees that as of the date hereof the Pledgor is the registered owner of
__________ shares of the Issuer's [common] stock (the "PLEDGED SHARES") and the
Issuer shall not change the registered owner of the Pledged Shares without the
prior written consent of the Collateral Trustee.
SECTION 2. INSTRUCTIONS. If at any time the Issuer shall receive
instructions originated by the Collateral Trustee relating to the Pledged
Shares, the Issuer shall comply with such instructions without further consent
by the Pledgor or any other person.
SECTION 3. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The
Issuer hereby represents and warrants to the Collateral Trustee:
(a) It has not entered into, and until the termination of this agreement
will not enter into, any agreement with any other person relating the Pledged
Shares pursuant to which it has agreed to comply with instructions issued by
such other person; and
(b) It has not entered into, and until the termination of this agreement
will not enter into, any agreement with the Pledgor or the Collateral Trustee
purporting to limit or condition the obligation of the Issuer to comply with
Instructions as set forth in Section 2 hereof.
(c) Except for the claims and interest of the Collateral Trustee and of
the Pledgor in the Pledged Shares, the Issuer does not know of any claim to, or
interest in, the Pledged Shares. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Pledged Shares, the Issuer will
promptly notify the Collateral Trustee and the Pledgor thereof.
(d) This Uncertificated Securities Control Agreement is the valid and
legally binding obligation of the Issuer.
SECTION 4. CHOICE OF LAW. This Agreement shall be governed by the laws of
the State of [New York].
SECTION 5. CONFLICT WITH OTHER AGREEMENTS. In the event of any conflict
between this Agreement (or any portion thereof) and any other agreement now
existing or hereafter entered
Exhibit B-1
into, the terms of this Agreement shall prevail. No amendment or modification of
this Agreement or waiver of any right hereunder shall be binding on any party
hereto unless it is in writing and is signed by all of the parties hereto.
SECTION 6. VOTING RIGHTS. Until such time as the Collateral Trustee shall
otherwise instruct the Issuer in writing, the Pledgor shall have the right to
vote the Pledged Shares.
SECTION 7. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. The Collateral Trustee may assign its
rights hereunder only with the express written consent of the Issuer and by
sending written notice of such assignment to the Pledgor.
SECTION 8. INDEMNIFICATION OF ISSUER. The Pledgor and the Collateral
Trustee hereby agree that (a) the Issuer is released from any and all
liabilities to the Pledgor and the Collateral Trustee arising from the terms of
this Agreement and the compliance of the Issuer with the terms hereof, except to
the extent that such liabilities arise from the Issuer's negligence and (b) the
Pledgor, its successors and assigns shall at all times indemnify and save
harmless the Issuer from and against any and all claims, actions and suits of
others arising out of the terms of this Agreement or the compliance of the
Issuer with the terms hereof, except to the extent that such arises from the
Issuer's negligence, and from and against any and all liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising by reason of the same, until the termination of this
Agreement.
SECTION 9. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.
Pledgor: [INSERT ADDRESS]
Attention:
Telecopier:
Collateral Trustee: Xxxxx Fargo Bank, N.A.
Sixth & Marquette; X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Telecopier: 000-000-0000
Issuer: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 10. TERMINATION. The obligations of the Issuer to the Collateral
Trustee pursuant to this Control Agreement shall continue in effect until the
security interests of the Collateral Trustee in the Pledged Shares have been
terminated pursuant to the terms of the Security Agreement and the Collateral
Trustee has notified the Issuer of such termination in
Exhibit B-2
writing. The Collateral Trustee agrees to provide Notice of Termination in
substantially the form of Exhibit A hereto to the Issuer upon the request of the
Pledgor on or after the termination of the Collateral Trustee's security
interest in the Pledged Shares pursuant to the terms of the Security Agreement.
The termination of this Control Agreement shall not terminate the Pledged Shares
or alter the obligations of the Issuer to the Pledgor pursuant to any other
agreement with respect to the Pledged Shares.
SECTION 11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
CAPITAL C ENERGY OPERATIONS, LP
By:_________________________
Name:
Title:
XXXXX FARGO BANK, N.A., as Collateral Trustee
By:_________________________
Name:
Title:
[NAME OF ISSUER]
By:_________________________
Name:
Title:
Exhibit B-3
Exhibit A
[Letterhead of Collateral Trustee]
[Date]
[Name and Address of Issuer]
Attention:__________________________
Re: Termination of Control Agreement
You are hereby notified that the Uncertificated Securities Control
Agreement between you, [the Pledgor] and the undersigned (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to
Pledged Shares (as defined in the Uncertificated Control Agreement) from [the
Pledgor]. This notice terminates any obligations you may have to the undersigned
with respect to the Pledged Shares, however nothing contained in this notice
shall alter any obligations which you may otherwise owe to [the Pledgor]
pursuant to any other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to [insert name of Pledgor].
Very truly yours,
XXXXX FARGO BANK, N.A.,
as Collateral Trustee
By:________________________
Name:
Title:
Exhibit D-A-1
