Exhibit 4.5
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PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (this "Agreement") is made as of December 22, 2003,
by Quest Cherokee, LLC, a Delaware limited liability company ("Pledgor"), in
favor of Bank One, NA, with its main office in Chicago, Illinois, as Collateral
Agent (defined below) for the benefit of Revolving Lenders (as defined below)
and Term Lenders (defined below) (herein called "Pledgee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Pledgor, Bank One, NA, as Administrative Agent thereunder
("Revolving Agent"), and the financial institutions described as Banks on
Schedule 1.1-A thereto (collectively, "Revolving Lenders") are parties to that
certain Credit Agreement (as amended, restated, supplemented or otherwise
modified from time to time, the "Revolving Credit Agreement") dated as of
December 22, 2003, pursuant to which Revolving Lenders have agreed to make
revolving loans and participate in letters of credit issued on behalf of
Pledgor; and
WHEREAS, Pledgor, Bluestem Pipeline, LLC, a Delaware limited liability
company ("Bluestem"), Bank One, NA, as Agent thereunder ("Term Agent"), and the
financial institutions from time to time party thereto as Lenders (collectively,
"Term Lenders" and, together with Revolving Lenders, "Lenders" and, each
individually, a "Lender") are parties to that certain Senior Term Second Lien
Secured Credit Agreement (as amended, restated, supplemented or otherwise
modified from time to time, the "Term Credit Agreement" and, together with the
Revolving Credit Agreement, the "Credit Agreements" and, each individually, a
"Credit Agreement") dated as of December 22, 2003, pursuant to which Term
Lenders have agreed to make a term loan to Pledgor; and
WHEREAS, certain of the relative rights and remedies of the Revolving
Lenders and Term Lenders are set forth in that certain Collateral Agency and
Intercreditor Agreement dated December 22, 2003 among Revolving Agent, Term
Agent, Bank One, NA, as Collateral Agent thereunder ("Collateral Agent"),
Lenders, Cherokee Partners, LLC, a Delaware limited liability company, Bluestem
and Pledgor (as amended, restated, supplemented or otherwise modified from time
to time, the "Intercreditor Agreement"); and
WHEREAS, it is a condition precedent to the extensions of credit by the
applicable Lenders under the applicable Credit Agreements that, among other
things, Pledgor shall have executed and delivered to Pledgee a security
agreement granting to Pledgee, for the benefit of Lenders, a security interest
in the Collateral (as defined herein); and
WHEREAS, the board of directors of Pledgor has determined that Pledgor's
execution, delivery and performance of this Agreement may reasonably be expected
to benefit Pledgor, directly or indirectly, and are in the best interests of
Pledgor.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to extend credit under the Credit Agreements, Pledgor hereby agrees with
Pledgee as follows:
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ARTICLE I
Definitions and References
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Section 1.1. General Definitions. As used herein, the terms defined above
shall have the meanings indicated above, and the following terms shall have the
following meanings:
"Code" means the Uniform Commercial Code as now or hereafter in effect in
the State of Texas; provided, that if by reason of mandatory provisions of law,
the perfection or the effect of perfection or non-perfection of any Lien in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than Texas, "Code" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or the effect of perfection or non-perfection.
"Collateral" has the meaning given such term in Section 2.1.
"Commitments" means the agreement or commitment by Lenders to make loans or
otherwise extend credit to Pledgor under the Credit Agreements, and any other
agreement, commitment, statement of terms or other document contemplating the
making of loans or advances or other extension of credit by Lenders to or for
the account of Pledgor which is now or at any time hereafter intended to be
secured by the Collateral under this Agreement.
"Equity" means shares of capital stock or a partnership, limited liability
company, profits, capital or member interest, or options, warrants or any other
right to substitute for or otherwise acquire the capital stock or a partnership,
limited liability company, profits, capital or member interest of each
Subsidiary (as defined in Section 2.1(a)).
"Lien" means any collateral assignment, lien, pledge, encumbrance, charge
or security interest.
"Loan Papers" means, collectively, the Revolving Loan Papers and the Term
Loan Papers.
"Notes" means, collectively, the Revolving Notes and the Term Notes.
"Obligation Documents" means the Credit Agreements, the Notes, the Loan
Papers, and all other documents and instruments under, by reason of which, or
pursuant to which, any or all of the Obligations are evidenced, governed,
secured, or otherwise dealt with, and all other agreements, certificates, and
other documents, instruments and writings heretofore or hereafter delivered in
connection herewith or therewith.
"Obligations" means all present and future indebtedness, obligations and
liabilities of whatever type which are or shall be secured pursuant to Section
2.2.
"Other Liable Party" means any Person, other than Pledgor, but including
each Subsidiary, who may now or may at any time hereafter be primarily or
secondarily liable for any of the Obligations or who may now or may at any time
hereafter have granted to Pledgee or any Lender a Lien upon any property as
security for the Obligations.
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"Person" means any individual, corporation, partnership, limited liability
company, association, trust, other entity or organization, or any court or
governmental department, commission, board, bureau, agency, or instrumentality
of any nation or of any province, state, commonwealth, nation, territory,
possession, county, parish, or municipality, whether now or hereafter
constituted or existing.
"Pledged Equity" has the meaning given it in Section 2.1(a).
"Revolving Loan Papers" means the Revolving Credit Agreement, the Revolving
Notes, this Agreement, each Master Debt Guaranty (as defined in the
Intercreditor Agreement) which may now or hereafter be executed, each Security
Document (as defined in the Intercreditor Agreement) which may now or hereafter
be executed, all mortgages, mortgage amendments and mortgage supplements or
modifications now or at any time hereafter delivered pursuant to Section 5.1 of
the Revolving Credit Agreement, and all other certificates, documents or
instruments delivered in connection with the Revolving Credit Agreement, as the
foregoing may be amended from time to time.
"Revolving Notes" means, collectively, the promissory notes from time to
time executed by Pledgor and payable to the order of each Revolving Lender
pursuant to the terms of the Revolving Credit Agreement and shall include,
without limitation, that certain Note dated December 22, 2003, payable to the
order of Bank One, NA, in the original principal amount of $200,000,000, bearing
interest as therein provided and with interest and principal being payable as
therein provided.
"Term Loan Papers" means the Term Credit Agreement, the Term Notes, this
Agreement, each Master Debt Guaranty which may now or hereafter be executed,
each Security Document which may now or hereafter be executed, all mortgages,
mortgage amendments and mortgage supplements or modifications now or at any time
hereafter delivered in connection with the Term Credit Agreement, as the
foregoing may be amended from time to time.
"Term Notes" means, collectively, the promissory notes from time to time
executed by Pledgor and payable to the order of each Term Lender pursuant to the
terms of the Term Credit Agreement.
Section 1.2. Other Definitions. Reference is hereby made to the Revolving
Credit Agreement for a statement of the terms thereof. All capitalized terms
used in this Agreement which are defined in the Revolving Credit Agreement and
not otherwise defined herein shall have the same meanings herein as set forth
therein, except where the context otherwise requires. All terms used in this
Agreement which are defined in the Code and not otherwise defined herein or in
the Intercreditor Agreement shall have the same meanings herein as set forth in
the Code, except where the context otherwise requires.
Section 1.3. Schedules. All schedules attached to this Agreement are a part
hereof for all purposes.
Section 1.4. Amendment of Defined Instruments. Unless the context otherwise
requires or unless otherwise provided herein, references in this Agreement to a
particular agreement, instrument or document also refer to and include all
renewals, extensions,
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amendments, modifications, supplements or restatements of any such agreement,
instrument or document, provided that nothing contained in this Section 1.4
shall be construed to authorize any Person to execute or enter into any such
renewal, extension, amendment, modification, supplement or restatement.
Section 1.5. References and Titles. All references in this Agreement to
Schedules, Articles, Sections, subsections, and other subdivisions refer to the
Schedules, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Titles appearing at the beginning
of any subdivision are for convenience only and do not constitute any part of
any such subdivision and shall be disregarded in construing the language
contained in this Agreement. The words "this Agreement," "herein," "hereof,"
"hereby," "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited. The
phrases "this Section" and "this subsection" and similar phrases refer only to
the Sections or subsections hereof in which the phrase occurs. The word "or" is
not exclusive, and the word "including" (in all of its forms) means "including
without limitation". Pronouns in masculine, feminine and neuter gender shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa unless the context otherwise
requires.
ARTICLE II
Security Interest
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Section 2.1. Grant of Security Interest. As collateral security for all of
the Obligations, Pledgor hereby pledges and assigns to Pledgee and grants to
Pledgee a continuing security interest for the benefit of Lenders in and to all
of the Pledgor's following rights, interests and property (collectively, the
"Collateral"):
(a) all of the issued and outstanding Equity (i) of Bluestem described on
Schedule 1 attached hereto, (ii) of Bluestem that Pledgor now owns or hereafter
acquires, and (iii) of any other Restricted Subsidiary of Pledgor (together with
Bluestem, referred to herein collectively as "Subsidiaries" and each
individually a "Subsidiary") now owned or hereafter created or acquired by
Pledgor including, without limitation, the Equity of each Subsidiary owned by
Pledgor on the date hereof (all of the foregoing being herein sometimes called
the "Pledged Equity");
(b) any and all proceeds, and all dividends and distributions (cash or
otherwise) payable and/or distributable with respect to, all or any of the
Pledged Equity; and
(c) all cash, securities, dividends and other property at any time and from
time to time receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Equity and any other property substituted or
exchanged therefor.
Section 2.2. Obligations Secured. The security interest created hereby in
the Collateral constitutes continuing collateral security for all of the
following obligations, indebtedness and liabilities, whether now existing or
hereafter incurred:
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(a) Credit Agreement Indebtedness. The payment by Pledgor, as and when due
and payable, of all amounts from time to time owing by Pledgor under or in
respect of the Credit Agreements, the Notes or any of the other Obligation
Documents.
(b) Renewals. All renewals, extensions, amendments, modifications,
supplements, or restatements of, or substitutions for, any of the foregoing.
(c) Performance. The due performance and observance by Bluestem and Pledgor
of all of their other obligations from time to time existing under or in respect
of any of the Obligation Documents.
(d) Oil & Gas Hedge Transactions. The payment and performance of any and
all present or future obligations of any Credit Party according to the terms of
any present or future Oil & Gas Hedge Transaction, including, without
limitation, any present or future swap agreements, cap, floor, collar, exchange,
transaction, forward agreement or other exchange or protection agreements
relating to crude oil, natural gas or other hydrocarbons, or any option with
respect to any such transaction now existing or hereafter entered into between
and/or among any Credit Party, Pledgee, any Lender or any affiliate of any of
the foregoing.
ARTICLE III
Representations, Warranties and Covenants
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Section 3.1. Representations and Warranties. Pledgor represents and
warrants as follows:
(a) Ownership and Liens. Pledgor has good and marketable title to the
Collateral free and clear of all Liens, encumbrances or adverse claims, except
for the Lien created by this Agreement. No effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office except such as have been filed in favor of
Pledgee relating to this Agreement.
(b) No Conflicts or Consents. Neither the ownership or the intended use of
the Collateral by Pledgor, nor the grant of the security interest by Pledgor to
Pledgee herein, will (i) conflict with any provision of (a) any domestic or
foreign law, statute, rule or regulation, (b) the certificate of incorporation,
articles of incorporation, charter or bylaws of Pledgor or any Subsidiary, or
(c) any agreement, judgment, license, order or permit applicable to or binding
upon Pledgor or any Subsidiary; or (ii) result in or require the creation of any
Lien upon any assets or properties of Pledgor other than the Lien created by
this Agreement. No consent, approval, authorization or order of, and no notice
to or filing with any Subsidiary or any other Person is required in connection
with the grant by Pledgor of the security interest herein, or, except to the
extent required by applicable law, the exercise by Pledgee of its rights and
remedies hereunder.
(c) Security Interest. Pledgor has and will have at all times full right,
power and authority to grant a security interest in the Collateral to Pledgee in
the manner provided herein, free and clear of any Lien. This Agreement creates a
valid and binding security interest in favor of Pledgee in the Collateral
securing the Obligations. The taking possession by Pledgee (for the
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benefit of Lenders) of all certificates, instruments and cash constituting
Collateral from time to time and the filing of the financing statements
delivered concurrently herewith by Pledgor to Pledgee will perfect Pledgee's
security interest hereunder in the Collateral securing the Obligations, subject
to no Liens. No further or subsequent filing, recording, registration, other
public notice or other action is necessary or desirable to perfect or otherwise
continue, preserve or protect such security interest except for continuation
statements or filings as contemplated in Section 3.3(b). Upon completion of the
perfection acts contemplated in this Section 3.1(c), Pledgee will have a first
priority perfected Lien in the Collateral.
(d) Pledged Equity. (i) Pledgor is the legal and beneficial owner of the
Pledged Equity; (ii) the Pledged Equity is duly authorized and issued, fully
paid and non-assessable (as applicable), and all documentary, stamp or other
taxes or fees owing in connection with the issuance, transfer and/or pledge
thereof hereunder have been paid; (iii) no dispute, right of setoff,
counterclaim or defense exists with respect to all or any part of the Pledged
Equity; (iv) the Pledged Equity is free and clear of all Liens, options,
warrants, puts, calls or other rights of third Persons, and restrictions, other
than the Lien created by this Agreement; (v) Pledgor has full right and
authority to pledge the Pledged Equity for the purposes and upon the terms set
out herein; (vi) certificates (as applicable) representing the Pledged Equity
have been delivered to Pledgee, together with a duly executed blank stock or
transfer power for each certificate; and (vii) no Subsidiary has issued, and
there are not outstanding, any options, warrants or other rights to acquire
Equity of any Subsidiary.
Section 3.2. Affirmative Covenants. Unless Pledgee shall otherwise consent
in writing, Pledgor will at all times comply with the covenants contained in
this Section 3.2 from the date hereof and so long as any part of the Obligations
or Commitments is outstanding.
(a) Ownership and Liens. Pledgor will maintain good title to all Collateral
free and clear of all Liens, except for the first priority security interest
created by this Agreement. Pledgor will cause to be terminated any financing
statement or other registration with respect to the Collateral, except such as
may exist or as may have been filed in favor of (or otherwise assigned to)
Pledgee. Pledgor will defend Pledgee's right, title and special property and
security interest in and to the Collateral against the claims of any Person.
(b) Further Assurances. Pledgor will at any time and from time to time
promptly execute and deliver all further instruments and documents and take all
further action that may be necessary or that Pledgee may reasonably request in
order (i) to perfect and protect the security interest created or purported to
be created hereby and the first priority of such security interest; (ii) to
enable Pledgee to exercise and enforce its rights and remedies hereunder in
respect of the Collateral; or (iii) to otherwise effect the purposes of this
Agreement, including: (A) authorizing and filing such financing or continuation
statements, or amendments thereto, as may be necessary or that Pledgee may
reasonably request in order to perfect and preserve the security interest
created or purported to be created hereby, and (B) furnishing to Pledgee from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as Pledgee
may reasonably request, all in reasonable detail.
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(c) Delivery of Pledged Equity. All certificates, instruments and writings
evidencing the Pledged Equity shall be delivered to Pledgee on or prior to the
execution and delivery of this Agreement. All other certificates, instruments
and writings hereafter evidencing or constituting Pledged Equity shall be
delivered to Pledgee promptly upon the receipt thereof by or on behalf of
Pledgor. All Pledged Equity shall be held by or on behalf of Pledgee pursuant
hereto and shall be delivered in the same manner and with the same effect as
described in Section 2.1 and Section 3.1. Upon delivery, such Equity shall
thereupon constitute "Pledged Equity" and shall be subject to the Liens herein
created, for the purposes and upon the terms and conditions set forth in this
Agreement and the other Loan Papers.
(d) Proceeds of Pledged Equity. If Pledgor shall receive, by virtue of its
being or having been an owner of any Pledged Equity, any (i) Equity (including
any certificate representing any Equity or distribution in connection with any
increase or reduction of capital, reorganization, reclassification, merger,
consolidation, sale of assets, or spinoff or split-off), promissory note or
other instrument or writing; (ii) option or right, whether as an addition to,
substitution for, or in exchange for, any Pledged Equity or otherwise; (iii)
dividends or other distributions payable in cash (except such dividends or other
distributions permitted to be retained by Pledgor pursuant to Section 4.7) or in
securities or other property; or (iv) dividends or other distributions in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus, Pledgor shall
receive the same in trust for the benefit of Pledgee, shall segregate it from
Pledgor's other property, and shall promptly deliver it to Pledgee in the exact
form received, with any necessary endorsement or appropriate stock or transfer
powers duly executed in blank, to be held by Pledgee as Collateral.
(e) Status of Pledged Equity. The certificates evidencing the Pledged
Equity (as applicable) shall at all times be valid and genuine and shall not be
altered. The Pledged Equity at all times shall be duly authorized, validly
issued, fully paid, and non-assessable (as applicable), shall not be issued in
violation of the pre-emptive rights of any Person or of any agreement by which
Pledgor or any Subsidiary is bound, and shall not be subject to any restrictions
or conditions with respect to the transfer, voting or capital of any Pledged
Equity.
Section 3.3. Negative Covenants. Unless Pledgee shall otherwise consent in
writing, Pledgor will at all times comply with the covenants contained in this
Section 3.3 from the date hereof and so long as any part of the Obligations or
the Commitments is outstanding.
(a) Transfer or Encumbrance. Pledgor will not sell, assign (by operation of
law or otherwise), transfer, exchange, lease or otherwise dispose of any of the
Collateral, nor will Pledgor xxxxx x Xxxx upon or file or record any financing
statement or other registration with respect to the Collateral, nor will Pledgor
allow any such Lien, financing statement, or other registration to exist or
deliver actual or constructive possession of the Collateral to any other Person.
(b) Financing Statement Filings. Pledgor recognizes that financing
statements pertaining to the Collateral have been or may be filed where Pledgor
is organized or formed, maintains any Collateral, has its records concerning any
Collateral, has its chief executive office or chief place of business, or has
its principal place of residence. Without limitation of any other
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covenant herein, Pledgor will not cause or permit any change to be made in its
name, identity or corporate structure, or any change to be made to its
jurisdiction of formation or organization unless Pledgor shall have notified
Pledgee of such change at least thirty (30) days prior to the effective date of
such change, and shall have first taken all action required by Pledgee for the
purpose of further perfecting or protecting the security interest in favor of
Pledgee in the Collateral. In any notice furnished pursuant to this subsection,
Pledgor will expressly state that the notice is required by this Agreement and
contains facts that may require additional filings of financing statements or
other notices for the purposes of continuing perfection of Pledgee's security
interest in the Collateral.
(c) Impairment of Security Interest. Pledgor will not take or fail to take
any action which would in any manner impair the enforceability or priority of
Pledgee's security interest in any Collateral.
(d) Restrictions on Pledged Equity. Pledgor will not enter into any
agreement creating, or otherwise permit to exist, any restriction or condition
upon the transfer, voting or control of any Pledged Equity.
ARTICLE IV
Remedies, Powers and Authorizations
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Section 4.1. Provisions Concerning the Collateral.
(a) Additional Financing Statement Filings. Pledgor hereby authorizes
Pledgee to file one or more financing or continuation statements, and amendments
thereto, relating to the Collateral. Pledgor further agrees that a carbon,
photographic or other reproduction of this Agreement or any financing statement
describing any Collateral is sufficient as a financing statement and may be
filed in any jurisdiction Pledgee may deem appropriate.
(b) Power of Attorney. Pledgor hereby irrevocably appoints Pledgee as
Pledgor's attorney-in-fact and proxy, with full authority in the place and stead
of Pledgor and in the name of Pledgor or otherwise, from time to time to give
notification to Pledgor, any Subsidiary, registrar, transfer agent, financial
intermediary, or other Person of Pledgee's security interests hereunder and,
following the occurrence and during the continuance of an Event of Default and
in Pledgee's discretion, to take any action (except for the exercise of any
voting rights pertaining to the Pledged Equity or any part thereof) and to
execute any instrument, certificate or notice which Pledgee may deem necessary
or advisable to accomplish the purposes of this Agreement including: (i) to
request or instruct Pledgor or any Subsidiary (and each registrar, transfer
agent, or similar Person acting on behalf of Pledgor or any Subsidiary) to
register the pledge or transfer of the Collateral to Pledgee; (ii) to ask,
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; (iii) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper; and (iv) to file any claims or take
any action or institute any proceedings which Pledgee may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Pledgee with respect to any of the Collateral.
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(c) Performance by Pledgee. If Pledgor fails to perform any agreement or
obligation contained herein, Pledgee may itself perform, or cause performance
of, such agreement or obligation, and the expenses of Pledgee reasonably
incurred in connection therewith shall be payable by Pledgor under Section 4.4.
(d) Collection Rights. Pledgee shall have the right at any time, upon the
occurrence and during the continuance of a Default or an Event of Default, to
notify any or all obligors (including each Subsidiary) under any accounts or
general intangibles included among the Collateral of the assignment thereof to
Pledgee and to direct such obligors to make payment of all amounts due or to
become due to Pledgor thereunder directly to Pledgee and, upon such notification
and at the expense of Pledgor and to the extent permitted by law, to enforce
collection thereof and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as Pledgor could have done.
After Pledgor receives notice that Pledgee has given any notice referred to
above in this subsection, (i) all amounts and proceeds (including instruments
and writings) received by Pledgor in respect of such accounts or general
intangibles shall be received in trust for the benefit of Pledgee hereunder,
shall be segregated from other funds of Pledgor and shall be forthwith paid over
to Pledgee in the same form as so received (with any necessary endorsement) to
be held as cash collateral and (A) released to Pledgor upon the remedy of all
Defaults or Events of Default, or (B) if any Event of Default shall have
occurred and be continuing, applied as specified in Section 4.3; and (ii)
Pledgor will not adjust, settle or compromise the amount or payment of any such
account or general intangible or release wholly or partly any account debtor or
obligor thereof or allow any credit or discount thereon.
Section 4.2. Event of Default Remedies. If an Event of Default shall have
occurred and be continuing, Pledgee may from time to time in its discretion,
without limitation and without notice except as expressly provided below:
(a) exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein, under the other Obligation Documents or otherwise
available to it, all the rights and remedies of a secured party on default under
the Code (whether or not the Code applies to the affected Collateral);
(b) require Pledgor to, and Pledgor hereby agrees that it will upon request
of Pledgee forthwith, assemble all or part of the Collateral as directed by
Pledgee and make it available to Pledgee at a place to be designated by Pledgee
which is reasonably convenient to both parties;
(c) reduce its claim to judgment against Pledgor or foreclose or otherwise
enforce, in whole or in part, the security interest created hereby by any
available judicial procedure;
(d) dispose of, at its office, on the premises of Pledgor or elsewhere, all
or any part of the Collateral, as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it being agreed that the sale
of any part of the Collateral shall not exhaust Pledgee's power of sale, but
sales may be made from time to time, and at any time, until all of the
Collateral has been sold or until the Obligations have been paid and performed
in full), and at any such sale it shall not be necessary to exhibit any of the
Collateral;
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(e) buy (or allow any Lender to buy) the Collateral, or any part thereof,
at any public sale;
(f) buy (or allow any Lender to buy) the Collateral, or any part thereof,
at any private sale if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations; and
(g) apply by appropriate judicial proceedings for appointment of a receiver
for the Collateral, or any part thereof, and Pledgor hereby consents to any such
appointment.
Pledgor agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days' notice to Pledgor 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. Pledgee shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Pledgee 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.
Section 4.3. Application of Proceeds. If any Event of Default shall have
occurred and be continuing, Pledgee may in its discretion apply any cash held by
Pledgee as Collateral, and any cash proceeds received by Pledgee in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral, in the order and manner contemplated by Section 4.4 of the
Intercreditor Agreement.
Section 4.4. Release and Expenses. In addition to, and not in qualification
of, any similar obligations under other Obligation Documents:
(a) Pledgor agrees to release and forever discharge Pledgee and each Lender
from and against any and all claims, losses and liabilities growing out of or
resulting from this Agreement (including enforcement of this Agreement). The
foregoing release and discharge shall apply whether or not such claims, losses
and liabilities are in any way or to any extent owed, in whole or in part, under
any claim or theory of strict liability or are, to any extent caused, in whole
or in part, by any negligent act or omission of any kind by Pledgee or any
Lender.
(b) Pledgor agrees to pay on demand all reasonable costs and expenses of
Pledgee in connection with the preparation, execution, delivery, modification,
and amendment of this Agreement, and the perfection and preservation of the Lien
created under this Agreement, including, without limitation, the reasonable fees
and expenses of counsel for Pledgee with respect thereto and with respect to
advising Pledgee as to its rights under this Agreement. Pledgor further agrees
to pay on demand all costs and expenses of Pledgee, if any (including, without
limitation, reasonable attorneys' fees and expenses), in connection with the (i)
the custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any Collateral; and (ii) the exercise or enforcement
of any of the rights of Pledgee hereunder (whether through negotiations, legal
proceedings, or otherwise).
Section 4.5. Non-Judicial Remedies. In granting to Pledgee the power to
enforce its rights hereunder without prior judicial process or judicial hearing,
Pledgor expressly waives,
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renounces and knowingly relinquishes, to the fullest extent permitted by
applicable law, any legal right which might otherwise require Pledgee to enforce
its rights by judicial process. In so providing for non-judicial remedies,
Pledgor recognizes and concedes that such remedies are consistent with the usage
of trade, are responsive to commercial necessity, and are the result of a
bargain at arm's length. Nothing herein is intended to prevent Pledgee or
Pledgor from resorting to judicial process at either party's option.
Section 4.6. Other Recourse. Pledgor waives, to the fullest extent
permitted by applicable law, any right to require Pledgee or Lenders to proceed
against any other Person, exhaust any Collateral or other security for the
Obligations, or to have any Other Liable Party joined with Pledgor in any suit
arising out of the Obligations or this Agreement, or pursue any other remedy in
Pledgee's power. Pledgor further waives, to the fullest extent permitted by
applicable law, any and all notice of acceptance of this Agreement and of the
creation, modification, rearrangement, renewal or extension for any period of
any of the Obligations from time to time. Pledgor further waives, to the fullest
extent permitted by applicable law, any defense arising by reason of any
disability or other defense of any Other Liable Party or by reason of the
cessation from any cause whatsoever of the liability of any Other Liable Party.
Until all of the Obligations shall have been paid in full, Pledgor shall have no
right to subrogation and Pledgor waives, to the fullest extent permitted by
applicable law, the right to enforce any remedy which Pledgee or any Lender has
or may hereafter have against any Other Liable Party, and waives, to the fullest
extent permitted by applicable law, any benefit of and any right to participate
in any other security whatsoever now or hereafter held by Pledgee. Pledgor
authorizes Pledgee and each Lender, without notice or demand and without any
reservation of rights against Pledgor and without affecting Pledgor's liability
hereunder or on the Obligations, from time to time to (a) take or hold any other
property of any type from any other Person as security for the Obligations, and
exchange, enforce, waive and release any or all of such other property; (b)
renew, extend for any period, accelerate, modify, compromise, settle or release
any of the obligations of any Other Liable Party in respect to any or all of the
Obligations or other security for the Obligations; (c) waive, enforce, modify,
amend or supplement any of the provisions of any Obligation Document with any
Person other than Pledgor; and (d) release or substitute any Other Liable Party.
Section 4.7. Voting Rights, Dividends Etc. in Respect of Pledged Equity.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, Pledgor may receive and retain any and all dividends, distributions
or interest paid in respect of the Pledged Equity; provided, however, that any
and all
(i) dividends, distributions and interest paid or payable other than in
cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of or in exchange for, any Pledged
Equity,
(ii) dividends and other distributions paid or payable in cash in respect
of any Pledged Equity in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus
or paid-in surplus, and
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(iii) cash paid, payable or otherwise distributed in redemption of, or in
exchange for, any Pledged Equity,
shall be, and shall forthwith be delivered to Pledgee to hold as, Pledged
Equity and shall, if received by Pledgor, be received in trust for the benefit
of Pledgee, be segregated from the other property or funds of Pledgor, and be
forthwith delivered to Pledgee in the exact form received with any necessary
endorsement or appropriate stock or transfer powers duly executed in blank, to
be held by Pledgee as Collateral.
(b) Upon the occurrence and during the continuance of a Default or an Event
of Default:
(i) all rights of Pledgor to receive and retain the dividends,
distributions and interest payments which Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (a) of this Section
4.7 shall automatically cease, and all such rights shall thereupon become
vested in Pledgee which shall thereupon have the right to receive and hold
as Pledged Equity such dividends, distributions and interest payments;
(ii) without limiting the generality of the foregoing, Pledgee may at its
option exercise any and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to any of the Pledged
Equity (except voting rights) as if it were the absolute owner thereof,
including the right to exchange, in its discretion, any and all of the
Pledged Equity upon the merger, consolidation, reorganization,
recapitalization or other adjustment of Pledgor or any Subsidiary, or upon
the exercise by Pledgor or any Subsidiary of any right, privilege or option
pertaining to any Pledged Equity, and, in connection therewith, to deposit
and deliver any and all of the Pledged Equity with any committee,
depository, transfer agent, registrar or other designated agent upon such
terms and conditions as it may determine; and
(iii) all dividends and interest payments which are received by Pledgor
contrary to the provisions of subsection (b) (i) of this Section 4.7 shall
be received in trust for the benefit of Pledgee, shall be segregated from
other funds of Pledgor, and shall be forthwith paid over to Pledgee as
Pledged Equity in the exact form received, to be held by Pledgee as
Collateral.
Anything herein to the contrary notwithstanding, Pledgee may not exercise
any voting rights pertaining to the Pledged Equity, and Pledgor may at all
times exercise any and all voting rights pertaining to the Pledged Equity
or any part thereof for any purpose not inconsistent with the terms of this
Agreement or any other Obligation Document; provided, however, upon the
occurrence and during the continuance of a Default or an Event of Default,
Pledgor will not exercise or refrain from exercising any such right, as the
case may be, if Pledgee gives notice that, in Pledgee's judgment, such
action would result in a Material Adverse Change with respect to the value
of the Pledged Equity or the benefits to Pledgee of its security interest
hereunder.
Section 4.8. Private Sale of Pledged Equity. Pledgor recognizes that
Pledgee may deem it impracticable to effect a public sale of all or any part of
the Pledged Equity and that Pledgee may, therefore, determine to make one or
more private sales of any such securities to a
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restricted group of purchasers who will be obligated to agree, among other
things, to acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges that any
such private sale may be at prices and on terms less favorable to the seller
than the prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that such private sales shall be
deemed to have been made in a commercially reasonable manner and that Pledgee
shall have no obligation to delay the sale of any such securities for the period
of time necessary to permit Pledgor or any Subsidiary to register such
securities (with no obligation of Pledgor or any Subsidiary to accomplish such
registration) for public sale under the Securities Act of 1933, as amended (the
"Securities Act").
ARTICLE V
Miscellaneous
-------------
Section 5.1. Notices. Any notice or communication required or permitted
hereunder shall be given in writing, sent by personal delivery, by telecopy, by
delivery service with proof of delivery, or by registered or certified United
States mail, postage prepaid, addressed to the appropriate party as follows:
To Pledgor: c/o Quest Resource Corporation
0000 X. Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Fax No.: (000) 000-0000
To Pledgee: Bank One, NA, as Collateral Agent
0000 Xxxx Xxxxxx, 0xx Xxxxx
Mail Code TX1-2448
Xxxxxx, Xxxxx 00000
Attn: J. Xxxxx Xxxxxx
Fax No.: (000) 000-0000
or to such other address or to the attention of such other individual as
hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to have
been given (a) in the case of personal delivery or delivery service, as of the
date of first attempted delivery at the address or in the manner provided
herein, (b) in the case of telecopy, upon receipt, or (c) in the case of
registered or certified United States mail, three (3) days after deposit in the
mail.
Section 5.2. Amendments. No amendment of any provision of this Agreement
shall be effective unless it is in writing and signed by Pledgor and Pledgee,
and no waiver of any provision of this Agreement, and no consent to any
departure by Pledgor therefrom, shall be effective unless it is in writing and
signed by Pledgee, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given and to the
extent specified in such writing.
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Section 5.3. Preservation of Rights. No failure on the part of Pledgee or
any Lender to exercise, and no delay in exercising, any right hereunder or under
any other Obligation Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Neither the execution nor
the delivery of this Agreement shall in any manner impair or affect any other
security for the Obligations. The rights and remedies of Pledgee and Lenders
provided herein and in the other Obligation Documents are cumulative of and are
in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of Pledgee and Lenders under any Obligation Document against any
party thereto are not conditional or contingent on any attempt by Pledgee or
Lenders to exercise any of its or their rights under any other Obligation
Document against such party or against any other Person.
Section 5.4. Unenforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
Section 5.5. Survival of Agreements. All representations and warranties of
Pledgor herein, and all covenants and agreements herein shall survive the
execution and delivery of this Agreement, the execution and delivery of any
other Obligation Documents and the creation of the Obligations.
Section 5.6. Other Liable Party. Neither this Agreement nor the exercise by
Pledgee or the failure of Pledgee to exercise any right, power or remedy
conferred herein or by law shall be construed as relieving any Other Liable
Party from liability on the Obligations or any deficiency thereon. This
Agreement shall continue irrespective of the fact that the liability of any
Other Liable Party may have ceased or irrespective of the validity or
enforceability of any other Obligation Document to which Pledgor or any Other
Liable Party may be a party, and notwithstanding the reorganization, death,
incapacity or bankruptcy of any Other Liable Party, and notwithstanding the
reorganization or bankruptcy or other event or proceeding affecting any Other
Liable Party.
Section 5.7. Binding Effect and Assignment. This Agreement creates a
continuing security interest in the Collateral and (a) shall be binding on
Pledgor and its successors and permitted assigns, and (b) shall inure, together
with all rights and remedies of Pledgee hereunder, to the benefit of Pledgee and
Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing, Pledgee and Lenders may pledge, assign
or otherwise transfer any or all of their respective rights under any or all of
the Obligation Documents to any other Person, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted
herein or otherwise. None of the rights or duties of Pledgor hereunder may be
assigned or otherwise transferred without the prior written consent of Pledgee.
Section 5.8. Termination. It is contemplated by the parties hereto that
there may be times when no Obligations are outstanding, but notwithstanding such
occurrences, this Agreement shall remain valid and shall be in full force and
effect as to subsequent outstanding Obligations. Upon the satisfaction in full
of the Obligations, upon the termination or expiration
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of each Credit Agreement and any other Commitment of Lenders to extend credit to
Pledgor, and upon written request for the termination hereof delivered by
Pledgor to Pledgee, this Agreement and the security interest created hereby
shall terminate and all rights to the Collateral shall revert to Pledgor.
Pledgee will, upon Pledgor's request and at Pledgor's expense, (a) return to
Pledgor such of the Collateral as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof, and (b) execute and deliver to
Pledgor such documents as Pledgor shall reasonably request to evidence such
termination.
Section 5.9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED
STATES OF AMERICA.
Section 5.10. Counterparts. This Agreement may be separately executed in
any number of counterparts, all of which when so executed shall be deemed to
constitute one and the same Agreement.
Section 5.11. Loan Paper. This Agreement is a "Loan Paper", and, except as
expressly provided herein to the contrary, this Agreement is subject to all
provisions of the Credit Agreements governing the Loan Papers.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, Pledgor has executed and delivered this Agreement, as
of the date first above written.
QUEST CHEROKEE, LLC,
a Delaware limited liability company
By: /s/ Xxxxx Xxxx
------------------------------
Name: Xxxxx X. Xxxx
------------------------------
Title: Manager
------------------------------
Bluestem hereby acknowledges and consents to the pledge of the Collateral and
hereby agrees to observe and perform each and every provision of this Agreement
applicable to Bluestem.
BLUESTEM PIPELINE, LLC,
a Delaware limited liability company
By: /s/ Xxxxx Xxxx
------------------------------
Name: Xxxxx X. Xxxx
------------------------------
Title: Manager
------------------------------
[Signature Page]
SCHEDULE 1
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[Signature Page]
