Execution Version AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
Exhibit 10.2
Execution Version
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Security Agreement”) is entered into as of August 1, 2017, by Vanguard Natural Gas, LLC, a Kentucky limited liability company (“Borrower”), Vanguard Natural Resources, Inc., a Delaware corporation (“Parent”), each of the Subsidiaries party hereto, whether as an original signatory hereto or as an Additional Debtor (together with Borrower and Parent, collectively, “Debtors” and individually, a “Debtor”), in favor of CITIBANK, N.A., a national banking association (“Citibank”), as Administrative Agent (as defined in the Credit Agreement).
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1.2 Terms Defined in New York Uniform Commercial Code. Terms defined in the New York Uniform Commercial Code which are not otherwise defined in this Security Agreement (including by reference to the Credit Agreement) are used herein as defined in Articles 8 or 9 of the New York Uniform Commercial Code, as the context may require, as in effect on the date hereof.
“Accounts” shall have the meaning set forth in Article 9 of the UCC.
“Account Debtor” means any Person who is or who may become obligated to a Debtor under, with respect to, or on account of an Account.
“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.
“Collateral” means all of the Debtors’ right, title and interest in, to and under all of the following Property, whether now owned by, or owing to, or hereafter acquired by or arising in favor of the Debtors, and regardless of where located and, in each case, all Supporting Obligations and all accessions to, substitutions and replacements for, Proceeds and products of the following, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the following and all collateral security and guarantees given by any Person with respect to any of the following: all Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts (including all funds, certificates, checks, drafts, wire transfer receipts, and other earnings, profits, or other proceeds from time to time representing, evidencing, deposited into, or held in Deposit Accounts), Securities Accounts, Commodities Accounts, and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Debtor with any bank or other financial institution, all Security Entitlements in any or all of the foregoing and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing, Documents, Equipment, Financial Assets, Fixtures, General Intangibles, Goods, Money, cash and Cash Equivalents, all Contracts together with all Contract Rights arising thereunder, Instruments, Intellectual Property, Inventory, Investment Property, letters of credit, Letter-of-Credit Rights, Pledged Equity, Securities, Stock Rights, all other personal property not otherwise described in the foregoing, in each case, now owned or at any time hereafter acquired by such Debtor or in which such Debtor now has or at any time in the future may acquire any right, title or interest.
“Commercial Tort Claims” shall have the meaning set forth in Article 9 of the UCC.
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“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
“Copyrights” means all United States and foreign copyrights, whether registered or unregistered and whether published or unpublished, now or hereafter in force throughout the world, all registrations and applications therefor, including the registrations and applications referred to in Schedule 2 under the heading “Copyrights”, all rights and privileges corresponding thereto throughout the world, whether as author, assignee, transferee or otherwise, all registrations and applications for registration, including extensions, continuations, reissues and renewals of any thereof, the right to xxx for past, present and future infringements of any of the foregoing, and all Proceeds of the foregoing, including, without limitation, with respect to the foregoing, Proceeds from licenses, royalties, fees, income, payments, claims, damages and registrations, recordings, supplemental registrations and pending applications for registration in the relevant IP Filing Office.
“Debtor” has the meaning set forth in the introductory paragraph hereof.
“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC and includes, without limitation, those Deposit Accounts identified on Schedule 1.
“Documents” shall have the meaning set forth in Article 9 of the UCC.
“Electronic Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.
“Equipment” shall have the meaning set forth in Article 9 of the UCC.
“Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.
“Excluded Account” means, as of any date of determination, each Deposit Account that is, as of such date, (a) a payroll account containing a balance not exceeding the amount of payroll expenses for one payroll period, (b) a tax withholding account, (c) a zero balance account (other than any lockbox accounts, to the extent account control agreements are permitted by the applicable depository bank), (d) a xxxxx cash account containing a balance not exceeding $50,000 per account and not to exceed $250,000 for all such xxxxx cash accounts in the aggregate or (e) a trust account holding royalty payments and working interest payments solely to the extent constituting property of a third party held in trust.
“Excluded Property” means the following:
(a) any lease (other than an oil and gas lease), license, contract or agreement to which Debtor is a party or any of its rights or interests thereunder if and only if for so long as the grant of a lien or security interest under this Security Agreement will constitute or will result in a termination under, or a default or a breach thereof that would give the other party thereto (excluding any Affiliates of any Debtor) the right to terminate any such lease, license, contract or agreement (other than (a) to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC or any other applicable law or principles of equity, or (b) to the extent such other party consents to the grant of such lien or security interest on such lease, license, contract or agreement);
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(b) any Equity Interests of a Foreign Subsidiary, or any Domestic Subsidiary, that has no material assets other than the Equity Interests of one or more Foreign Subsidiaries (such Domestic Subsidiary being a “FSHCO”) in excess of 65% of the voting rights of all outstanding Equity Interests of such Foreign Subsidiary or FSHCO and any Equity Interests issued by any Foreign Subsidiaries or any FSHCO other than Foreign Subsidiaries and FSHCOs directly owned by Debtor;
(c) any deposit account which is used as an escrow account or as a fiduciary or trust account and solely contains deposits made for the benefit of another Person (other than the Parent or any of its Subsidiaries), and which such deposits are held in such Deposit Account on behalf of, and for the benefit of, such other Person;
(d) any intent to use trademark or service xxxx application to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest used therein would impair the availability or enforceability of such intent to use trademark or service xxxx application under applicable federal law; and
(e) any interests in partnerships, joint ventures and subsidiaries of the Borrower that are not wholly-owned subsidiaries which cannot be pledged without the consent of one or more third parties other than a Debtor and/or any of its subsidiaries or other Affiliates (after giving effect to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law);
provided that, Proceeds, substitutions or replacements of any Excluded Property referred to above shall not constitute “Excluded Property” solely by virtue of being Proceeds, substitutions or replacements thereof but shall constitute “Excluded Property” only to the extent that such Proceeds, substitutions or replacements otherwise independently constitute Excluded Property hereunder.
Notwithstanding anything to the contrary contained herein, immediately upon the ineffectiveness, lapse or termination of any restriction or condition causing or resulting in such Property to constitute Excluded Property pursuant to this definition, the Collateral shall include, and the applicable Debtor shall be deemed to have granted a continuing lien and security interest in, all relevant previously restricted or conditioned right, title and interest in, to and under such Property as if such restriction or condition had never been in effect.
“Financial Asset” shall have the meaning set forth in Article 8 of the UCC.
“Fixtures” shall have the meaning set forth in Article 9 of the UCC.
“General Intangibles” shall have the meaning set forth in Article 9 of the UCC.
“Intellectual Property” means all Copyrights, Patents, Trademarks, Trade Secrets and Intellectual Property Licenses.
“Intellectual Property Licenses” means any and all written agreements providing for the granting of any right in, or to, any Person’s owned Intellectual Property (whether such Person is licensee or licensor thereunder) and all renewals and extensions thereof.
“Intellectual Property Security Agreement” means a short-form security agreement, substantially in the form of Exhibit 2 to this Agreement, executed by each applicable Debtor and the Administrative Agent (or any analogous agreement or filing under applicable law, as may be reasonably requested by the Administrative Agent or reasonably necessary to evidence the Administrative Agent’s lien and security interest in any IP Registration).
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“IP Filing Office” means, as applicable, the United States Patent and Trademark Office or the United States Copyright Office.
“IP Registrations” means, with respect to any Debtor, (a) registrations of Patents, Trademarks and Copyrights and (b) applications of registration or publication thereof, in each case made with the relevant IP Filing Office.
“Inventory” shall have the meaning set forth in Article 9 of the UCC.
“Investment Property” shall have the meaning set forth in Article 9 of the UCC, and, in any event, shall include, without limitation, all of the following, whether now owned or hereafter acquired by such Debtor: (a) any security, whether certificated or uncertificated; (b) any security entitlement; (c) any Securities Account (including, without limitation, those described on Schedule 3); (d) any commodity contract; and (e) any Commodities Account (including, without limitation, those identified on Schedule 3)
“Letter-of-Credit Right” shall have the meaning set forth in Article 9 of the UCC.
“Patents” means all United States and foreign patents and applications therefor throughout the world, including each patent and patent application referred to in Schedule 2 under the heading “Patents”, all reissues, divisionals, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all rights and privileges corresponding thereto throughout the world, the right to xxx for past, present and future infringements of any of the foregoing, and all Proceeds of the foregoing, including, with respect to the foregoing, Proceeds from licenses, royalties, fees, income, payments, claims, damages, and suit.
“Pledged Collateral” means all Pledged Equity, Instruments, Securities and other Investment Property.
“Pledged Equity” means, with respect to each Debtor, all of such Debtor’s right, title, and interest in, to and under all Equity Interests of any other Person (as used in this definition, each, an “Issuer”), including, without limitation, the Equity Interests of such Debtor’s subsidiaries set forth on Schedule 3, in each case, together with the certificates (or other agreements or instruments), if any, representing such Equity Interests, and all options and other rights, contractual or otherwise, with respect thereto, including, but not limited to, the following:
| (a) | all Equity Interests representing a non-cash dividend thereon, or representing distribution or return of capital upon or in respect thereof, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder thereof, or otherwise in respect thereof; and |
| (b) | in the event of any consolidation or merger involving the issuer thereof and in which such Issuer is not the surviving Person, all shares of each class of the Equity Interests of the successor Person formed by or resulting from such consolidation or merger, to the extent that such successor Person is a direct subsidiary of such Debtor. |
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“Proceeds” shall have the meaning set forth in Article 9 of the UCC and, in any event, shall include, but not be limited to, (a) any and all proceeds of any insurance, indemnity, warranty, or guaranty payable to a Debtor from time to time with respect to any of the Collateral, (b) any and all payments (in any form whatsoever) made or due and payable to such Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), and (c) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments, or Commercial Tort Claims, and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.
“Secured Obligations” means all Obligations.
“Security” shall have the meaning set forth in Article 8 of the UCC.
“Stock Rights” means any securities, dividends or other distributions and any other right or property which a Debtor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any securities or other ownership interests in a corporation, partnership, joint venture or limited liability company constituting Collateral and any securities, any right to receive securities and any right to receive earnings, in which such Debtor now has or hereafter acquires any right, issued by an issuer of such securities.
“Tangible Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.
“UCC” means the Uniform Commercial Code as in effect in the State of New York, as the same has been or may be amended or revised from time to time, or, if so required with respect to the attachment, perfection or priority of the Administrative Agent’s or any other Secured Party’s lien and security interest in any Collateral by mandatory provisions of applicable law, as in effect in such other jurisdiction.
The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.
Article II GRANT OF SECURITY INTERESt
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Article III REPRESENTATIONS AND WARRANTIES
Each Debtor represents and warrants to Administrative Agent that:
3.1 Title, Authorization, Validity, Perfection and Enforceability. Such Debtor has good title to the Collateral and none of the Collateral is subject to any Lien, except for Liens permitted by Section 9.03 of the Credit Agreement, and has full power and authority to grant to Administrative Agent the lien and security interest in such Collateral pursuant hereto and the other Security Instruments. The execution and delivery by such Debtor of this Security Agreement has been duly authorized by necessary corporate, limited liability company or partnership, as applicable, action and this Security Agreement constitutes a legal, valid, and binding obligation of each Debtor. When UCC financing statements in appropriate form in accordance with the UCC have been filed in the appropriate offices against such Debtor in the locations listed on Schedule 6 and in the case of Pledged Equity, delivery of a stock certificate or equivalent certificate or by any such filing, as applicable, the Administrative Agent will have a fully perfected, first-priority (subject to Liens permitted by Section 9.03 of the Credit Agreement) lien and security interest in that Collateral of the Debtor upon which a security interest may be perfected by such filings or, in the case of Pledged Collateral, perfection by possession.
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3.4 Property Locations. Such Debtor’s Inventory, other than Inventory in transit, and Equipment are located solely at the locations described in Schedule 5 (as such schedule may be updated by the Borrower from time to time). All of said locations are owned by such Debtor in fee simple except for locations (i) which are leased by such Debtor, as lessee, and designated in Part B of Schedule 5 (as such schedule may be updated by the Borrower from time to time) and (ii) where Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment as designated in Part C of Schedule 5 (as such schedule may be updated by the Borrower from time to time). Upon the reasonable request of the Administrative Agent, such Debtor shall use commercially reasonable efforts to deliver landlord lien waivers, estoppels and collateral access letters or other documents satisfactory to Administrative Agent to protect Administrative Agent’s security interest in such Inventory described in clause (ii) of the preceding sentence.
3.5 Deposit, Commodity, and Securities Account. Schedule 1 (as such schedule may be updated by the Borrower from time to time) correctly identifies all Deposit Accounts, Commodities Accounts, and Securities Accounts maintained by, or on behalf of, such Debtor and the institutions holding such accounts.
3.6 Pledged Equity and Other Investment Property. Schedule 3 (as such schedule may be updated by the Borrower from time to time) sets forth a complete and accurate list of the Pledged Collateral in which such Debtor has any right, title or interest. Except as set forth on Schedule 3 (as such schedule may be updated by the Borrower from time to time), such Debtor is the direct and beneficial owner of all Pledged Collateral listed on Schedule 3 (as such schedule may be updated by the Borrower from time to time). Such Debtor further represents and warrants that (i) all of such Debtor’s Pledged Equity is duly and validly issued, and fully paid and non-assessable and (ii) with respect to any certificates delivered to Administrative Agent representing an ownership interest in any Issuer of Pledged Equity, such certificates are Securities as defined in Article 8 of the UCC of the applicable jurisdiction as a result of actions by the issuer or otherwise. all certificates or instruments representing or evidencing the Pledged Collateral, which, if acquired by any Debtor after the Effective Date, would be required to be delivered pursuant to Section 8.14 of the Credit Agreement and Section 5.4 hereof, have been delivered to the Administrative Agent in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank and that the Administrative Agent has a perfected first-priority (subject only to Liens permitted by Section 9.03 of the Credit Agreement) lien and security interest therein.
3.7 [Reserved.]
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3.9 Identification Numbers. Such Debtor’s Federal employer identification number and state organizational identification number are listed on Schedule 6.
The failure of any of these representations or warranties or any description of Collateral therein to be accurate or complete shall not impair the security interest in any such Collateral.
Article IV CONCERNING INTELLECTUAL PROPERTY
(a) Upon filing of appropriate financing statements with the Secretary of State (or equivalent office) of the state of organization of such Debtor and the filing of the Intellectual Property Security Agreement with the appropriate IP Filing Office, the Administrative Agent shall have a fully perfected first-priority (except for Liens permitted by Section 9.03 of the Credit Agreement) Lien on the Collateral constituting United States issued, registered or applied for Patents, Trademarks and Copyrights under the UCC and the laws of the United States for the ratable benefit of the Secured Parties, and such perfected security interests shall be enforceable as such as against any and all creditors of and purchasers from the Debtors, subject to applicable law.
(b) No Debtor has knowledge of (i) any third-party claim (A) that any of its owned Patent, Trademark or Copyright registrations or applications is invalid or unenforceable, or (B) challenging such Debtor’s rights to such registrations and applications or (ii) any basis for such claims other than, in each case, to the extent any such third-party claim would not reasonably be expected to have a Material Adverse Effect.
(a) (i) At any time when an Event of Default exists and is continuing and upon the written request of the Administrative Agent, each Debtor will (i) use its commercially reasonable efforts to obtain all consents and approvals necessary for the assignment to or for the benefit of the Administrative Agent of any material Intellectual Property License held by such Debtor in the United States to enable the Administrative Agent to enforce the security interests granted hereunder and (ii) to the extent required pursuant to any material Intellectual Property License in the United States under which such Debtor is the licensee, deliver to the licensor thereunder any notice of the grant of security interest hereunder or such other notices required to be delivered thereunder in order to permit the security interest created or permitted to be created hereunder pursuant to the terms of such Intellectual Property License.
(b) Each Debtor shall notify the Administrative Agent promptly if it knows that any application for or registration of any Patent, Trademark or Copyright (now or hereafter existing) has become abandoned or dedicated to the public, or of any determination or development (including the institution of, or any such determination or development in, any proceeding in any IP Filing Office or any court) abandoning such Debtor’s ownership of any such Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same, except, in each case, to the extent the same is permitted or not restricted by the Credit Agreement or where the same, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
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(c) In the event that any Debtor files an application for the registration of any IP Filing Office, acquires any such application or registration by purchase or assignment, in each case, after the Effective Date and to the extent the same constitutes Collateral (and other than as a result of an application that is then subject to an Intellectual Property Security Agreement becoming registered), it shall, (or such longer period as the Administrative Agent may reasonably agree), notify the Agent and, promptly upon the Administrative Agent’s request, execute and deliver to the Administrative Agent, at such Debtor’s sole cost and expense, any Intellectual Property Security Agreement or other instrument as the Administrative Agent may reasonably request and require, promptly (in any event, on or before the next date on which a certificate required by Section 8.01(c) of the Credit Agreement is required to be delivered (or such longer period as the Administrative Agent may agree)) to evidence the Administrative Agent’s security interest in such registered Patent, Trademark or Copyright (or application therefor), and the General Intangibles of such Debtor relating thereto or represented thereby.
(d) Each Debtor shall take all actions reasonably necessary to (i) maintain and pursue each application for, and to obtain and maintain the registration of each material Patent, Trademark and, to the extent consistent with past practice, Copyright included in the Collateral (now or hereafter existing), including by filing applications for renewal, affidavits of use, affidavits of noncontestability and, if necessary (as determined by such Debtor in the exercise of its good faith and reasonable business judgment), by initiating opposition and interference and cancellation proceedings against third parties and (ii) otherwise protect and preserve such Debtor’s rights in, and the validity or enforceability of, its Intellectual Property Collateral, in each case except where failure to do so (A) could not reasonably be expected to result in a Material Adverse Effect, or (B) is otherwise permitted under the Credit Agreement.
(e) Each Debtor shall promptly notify the Agent of any material infringement or misappropriation of such Debtor’s Patents, Trademarks or Copyrights of which it becomes aware and shall take such actions as are reasonable and appropriate, in the good faith and reasonable business judgment of the applicable Debtor, under the circumstances to protect such Patent, Trademark or Copyright, except where such infringement or misappropriation could not reasonably be expected to cause a Material Adverse Effect.
From the date of this Security Agreement, and thereafter until the earlier of (x) the Termination Date and (y) the release of such Debtor in accordance with Section 11.10 of the Credit Agreement, each Debtor agrees as follows:
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5.1.2 [Reserved].
5.1.3 [Reserved].
5.1.5 [Reserved].
5.1.6 [Reserved].
5.1.7 Change in Location, Jurisdiction of Organization or Name. Such Debtor shall not maintain Collateral at any location other than as specified in Schedule 5 (as such schedule may be updated by the Borrower from time to time), unless such Debtor shall have given Administrative Agent prompt written notice thereof (and in any event within thirty days prior thereto), and Administrative Agent shall have determined that such change will not adversely affect the validity, perfection or priority of Administrative Agent’s security interest in the Collateral.
5.2 [Reserved.]
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5.6 Stock and Other Ownership Interests.
5.6.1 [Reserved.]
5.6.4 [Reserved.]
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5.7.2 Appointment of the Agent as Attorney-in-Fact. Such Debtor hereby irrevocably designates, makes, constitutes and appoints Administrative Agent (and all Persons designated by Administrative Agent), exercisable after an Event of Default has occurred and is continuing, as its true and lawful attorney-in-fact, and authorizes Administrative Agent, in such Debtor’s or Administrative Agent’s name, to: (i) demand payment of Accounts; (ii) enforce payment of Accounts by legal proceedings or otherwise; (iii) exercise all of such Debtor’s rights and remedies with respect to proceedings brought to collect an Account; (iv) sell or assign any Account upon such terms, for such amount and at such time or times as Administrative Agent deems advisable; (v) settle, adjust, compromise, extend or renew an Account; (vi) discharge and release any Account; (vii) take control in any manner of any item of payment or proceeds thereof; (viii) prepare, file and sign such Debtor’s name on any proof of claim in bankruptcy or other similar document against an Account Debtor; (ix) endorse such Debtor’s name upon any items of payment or proceeds thereof and deposit the same in Administrative Agent’s account on account of the Secured Obligations; (x) endorse such Debtor’s name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any Account or any goods pertaining thereto; (xi) sign such Debtor’s name on any verification of Accounts and notices thereof to Account Debtor; (xii) notify the post office authorities to change the address for delivery of such Debtor’s mail to an address designated by Administrative Agent, have access to any lock box or postal box into which any of such Debtor’s mail is deposited, and open and dispose of all mail addressed to such Debtor, and (xiii) do all acts and things which are necessary, in Administrative Agent’s sole discretion, to fulfill such Debtor’s obligations under this Security Agreement.
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5.9 Federal, State or Municipal Claims. Such Debtor will notify Administrative Agent of any Collateral which constitutes a claim against a Governmental Authority, the assignment of which claim is restricted by federal, state or municipal law.
5.10 Warehouse Receipts Non-Negotiable. Such Debtor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its inventory, such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the UCC).
5.11 [Reserved.]
5.14 Further Assurances. Each Debtor agrees to comply with Section 8.11 of the Credit Agreement.
Article VI
(i) Those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan Document.
(ii) Those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank's right of setoff or bankers' lien) when a debtor is in default under a security agreement.
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(iii) Without notice, except as specifically provided in Section 6.3 or elsewhere herein, demand or advertisement of any kind to any Debtor or any other Person, enter the premises of any Debtor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Debtor's premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable.
(iv) Concurrently with written notice to the applicable Debtor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Equity, to exchange certificates or instruments representing or evidencing Pledged Equity for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Equity as though the Administrative Agent was the outright owner thereof.
(v) With respect to any Collateral consisting of Intellectual Property or an Intellectual Property License, on demand, cause the security interest to become an assignment, transfer and conveyance of any or all of such Collateral by the applicable Debtors to the Administrative Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any such Collateral throughout the world on such terms and conditions and in such manner as the Administrative Agent may determine (other than where such assignment, transfer, conveyance, license or sublicense would constitute a breach or violation of any then-existing Intellectual Property Licenses or any other licensing arrangements to the extent that waivers cannot be obtained or to the extent such assignment, transfer or conveyance would impair the validity or enforceability of, or result in the abandonment of, such Intellectual Property or Intellectual Property License).
(b) The Administrative Agent, on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.
(c) The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Debtor hereby expressly releases.
(d) Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.
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(e) Notwithstanding the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, any Debtor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Indebtedness or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Indebtedness or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.
(f) Each Debtor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Equity and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Debtor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Equity for the period of time necessary to permit any Debtor or the issuer of the Pledged Equity to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Debtor and the issuer would agree to do so.
(a) assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at any place or places specified by the Administrative Agent, whether at a Debtor's premises or elsewhere;
(b) permit the Administrative Agent, by the Administrative Agent's representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Debtor for such use and occupancy;
(c) at its own expense, cause the independent certified public accountants then engaged by each Debtor to prepare and deliver to the Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Debtor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts;
(d) use its commercially reasonable efforts to obtain all requisite consents or approvals by the licensor of each Intellectual Property License to effect the assignment of all of such Debtor’s right, title and interest thereunder to the Administrative Agent or its designee; and
(e) grant to the Administrative Agent an irrevocable (except for failure to comply with the terms and conditions set forth herein), non-exclusive license (exercisable without payment of royalty or other compensation to the Debtors) to use, license or sub-license, on a non-exclusive basis only, any of the Collateral consisting of Intellectual Property (other than where such use, license, or sublicense would constitute a breach or violation of any then-existing Intellectual Property Licenses or any other license arrangements), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Debtor to avoid the risk of abandonment, invalidation, unenforceability or dilution of such Trademark, now owned or hereafter acquired by such Debtor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. Such license to the Administrative Agent may be exercised, at the option of the Administrative Agent, only upon the occurrence and during the continuance of an Event of Default; provided that any license, sub-license or other transaction entered into by the Administrative Agent in accordance herewith will be binding upon the Debtors notwithstanding any subsequent cure or waiver of an Event of Default.
| PAGE 16 |
No Debtor shall have any obligation to register or qualify any Pledged Equity whether to enable the Administrative Agent to consummate a public sale or other disposition of the Pledged Equity or otherwise.
6.4 [Reserved.]
6.7 Cumulative Rights; Obligations Not Affected.
6.7.1 All rights of Administrative Agent and each other Secured Party under the Loan Documents, Secured Swap Agreements and the Secured Treasury Management Agreements are cumulative of each other and of every other right which Administrative Agent and each other Secured Party may otherwise have at law or in equity or under any other agreement. The exercise of one or more rights shall not prejudice or impair the concurrent or subsequent exercise of other rights.
6.7.2 To the fullest extent not prohibited by applicable law, the obligations of each Debtor under this Security Agreement shall remain in full force and effect without regard to, and shall not be impaired or affected by:
| PAGE 17 |
(a) any amendment, addition, or supplement to, or restatement of any Loan Document, Secured Swap Agreement, Secured Treasury Management Agreement or any instrument delivered in connection therewith or any assignment or transfer thereof;
(b) any exercise, non-exercise, or waiver by Administrative Agent or any other Secured Party of any right, remedy, power, or privilege under or in respect of, or any release of any guaranty, any collateral, or the Collateral or any part thereof provided pursuant to this Security Agreement, any other Loan Document, any Secured Swap Agreement or any Secured Treasury Management Agreement;
(c) any waiver, consent, extension, indulgence, or other action or inaction in respect of this Security Agreement, any other Loan Document, and Secured Swap Agreement or any Secured Treasury Management Agreement or any assignment or transfer of any thereof; or
(d) any other event which may give Debtor or any other Loan Party a defense to, or a discharge of, any of its obligations under any Loan Document, Secured Swap Agreement or any Secured Treasury Management Agreement.
Article VII PROCEEDS; COLLECTION OF RECEIVABLE
| PAGE 18 |
Article VIII GENERAL PROVISIONS
| PAGE 19 |
8.7 [Reserved].
| PAGE 20 |
8.18 Restatement. This Agreement is a consolidation, and an omnibus amendment and restatement, of the following: (i) the Pledge and Security Agreement, dated as of November 30, 2011 (as in effect immediately before the effectiveness hereof, the “Existing Vanguard Natural Gas Security Agreement”), among the Borrower as Debtor thereunder and the Administrative Agent, (ii) the Pledge and Security Agreement, dated as of November 30, 2011, (as in effect immediately before the effectiveness hereof, the “Existing Subsidiary Security Agreement”) among certain subsidiaries and affiliates of the Borrower, as Debtors thereunder, and the Administrative Agent. and (iii) the Pledge and Security Agreement, dated as of February 10, 2016 (as in effect immediately before the effectiveness hereof, the “Existing VNR Finance Security Agreement” and, together with the Existing Vanguard Natural Gas Security Agreement and the Existing Subsidiary Security Agreement, the “Existing Security Agreements”), among VNR Finance Corp., a Delaware corporation as Debtor thereunder and the Administrative Agent The parties hereto agree that this Agreement is an amendment and restatement, and not a novation, of the Existing Security Agreements.
| PAGE 21 |
Notwithstanding any other provision contained herein, this Agreement, the liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the applicable Security Documents (as defined in the Intercreditor Agreement). In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.
[Remainder of page intentionally left blank; signature pages follow]
| PAGE 22 |
| Vanguard Natural Resources, Inc. | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial Officer | ||
| VANGUARD NATURAL GAS, LLC | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial | ||
| Officer | ||
| VANGUARD OPERATING, LLC | ||
| By: | Vanguard Natural Gas, LLC | |
| Sole Member |
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial | ||
| Officer |
| ENCORE CLEAR FORK PIPELINE LLC | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial | ||
| Officer |
[Signature Page to Amended and Restated Security Agreement]
| EAGLE ROCK ACQUISITION PARTNERSHIP, L.P. | ||
| By: | EAGLE ROCK UPSTREAM DEVOLOPMENT COMPANY, INC., | |
| its general partner |
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President, Chief Financial Officer and Secretary |
| EAGLE ROCK ACQUISITION PARTNERSHIP II, L.P. | ||
| By: | EAGLE ROCK UPSTREAM DEVOLOPMENT COMPANY II, INC., | |
| its general partner |
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President, Chief Financial Officer and Secretary |
| EAGLE ROCK ENERGY ACQUISITION CO., INC. | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial | ||
| Officer | ||
| EAGLE ROCK ENERGY ACQUISITION CO. II, INC. | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial | ||
| Officer |
[Signature Page to Amended and Restated Security Agreement]
| EAGLE ROCK UPSTREAM DEVELOPMENT COMPANY, INC. | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President, Chief Financial Officer and Secretary | ||
| EAGLE ROCK UPSTREAM DEVELOPMENT COMPANY II, INC. | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President, Chief Financial Officer and Secretary | ||
| ESCAMBIA ASSET CO. LLC | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President, Chief Financial Officer and Secretary | ||
| ESCAMBIA OPERATING CO. LLC | ||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President, Chief Financial Officer and Secretary |
[Signature Page to Amended and Restated Security Agreement]
| VNR HOLDINGS, LLC | ||
| By: | Vanguard Natural Gas, LLC | |
| Sole Member |
| By: | /s/ Xxxxxxx Xxxxxx | |
| Xxxxxxx Xxxxxx | ||
| Executive Vice President and Chief Financial | ||
| Officer |
[Signature Page to Amended and Restated Security Agreement]
| ADMINISTRATIVE AGENT: | ||
| CITIBANK, N.A., | ||
| as Administrative Agent | ||
| By: | /s/ Xxxx Xxx | |
| Name: | Xxxx Xxx | |
| Title: | Vice President |
[Signature Page to Amended and Restated Security Agreement]
EXHIBIT A
Form of Joinder Agreement JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”) is entered into as of ____________, 20[●] by the undersigned (“Additional Debtor”), being a Subsidiary or Affiliate of Vanguard Natural Gas, LLC (“Borrower”), in favor of Citibank, N.A., as Administrative Agent for the Lenders as defined in the Agreement referred to below (in such capacity, “Administrative Agent”), and is executed and delivered pursuant to that certain Fourth Amended and Restated Credit Agreement dated as of August 1, 2017 (as same may be amended, restated or modified from time to time, the “Credit Agreement”) among Administrative Agent, the Lenders party thereto, VNR Finance Corp., a Delaware corporation (“Parent”) and Borrower.
WHEREAS, pursuant to the Credit Agreement, Parent and certain Subsidiaries and Affiliates of Borrower entered into that certain Pledge and Security Agreement dated as of August 1, 2017, in favor of Administrative Agent (as same may be amended, restated or modified from time to time, this “Security Agreement”) in order to, among other things, induce the Lenders to enter into and extend credit to Borrower under the Credit Agreement; and
(a) Additional Debtor’s information for purposes of Schedule 1 to the Security Agreement is set forth on Schedule 1 attached hereto.
(b) Additional Debtor’s information for purposes of Schedule 2 to the Security Agreement is set forth on Schedule 2 attached hereto.
(c) Additional Debtor’s information for purposes of Schedule 3 to the Security Agreement is set forth on Schedule 3 attached hereto.
(d) Additional Debtor’s information for purposes of Schedule 4 to the Security Agreement is set forth on Schedule 4 attached hereto.
(e) Additional Debtor’s information for purposes of Schedule 5 to the Security Agreement is set forth on Schedule 5 attached hereto.
(f) Additional Debtor’s information for purposes of Schedule 6 to the Security Agreement is set forth on Schedule 6 attached hereto.
| ADDITIONAL DEBTOR | |
| By: |
| Name: | ||
| Title: |
| ADMINISTRATIVE AGENT | ||
| CITIBANK, N.A., | ||
| as Administrative Agent | ||
| By: |
| Name: | ||
| Title: |
EXHIBIT B
[FORM OF] INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Agreement”) is entered into as of ____________, 201__, by the undersigned (“Grantor”), being a Subsidiary or Affiliate of Vanguard Natural Gas, LLC (“Borrower”), in favor of Citibank, N.A., as Administrative Agent for the Lenders as defined in the Agreement referred to below (in such capacity, “Administrative Agent”), and is executed and delivered pursuant to that Pledge and Security Agreement dated as of August 1, 2017, in favor of Administrative Agent (as same may be amended, restated or modified from time to time, this “Security Agreement”) in order to, among other things, induce the Lenders to enter into and extend credit to Borrower under that certain Fourth Amended and Restated Credit Agreement dated as of August 1, 2017 (as same may be amended, restated or modified from time to time, the “Credit Agreement”) among Administrative Agent, the Lenders party thereto, VNR Finance Corp., a Delaware corporation (“Parent”) and Borrower.
The parties hereto agree as follows:
(A) all Trademarks, including the Trademark registrations and registration applications in the United States Patent and Trademark Office listed on Schedule I hereto but excluding any intent-to-use Trademark application prior to the filing and acceptance of a “Statement of Use”, “Declaration of Use”, “Amendment to Allege Use” or similar notice and/or filing with respect thereto, only to the extent, if any, that, and solely during the period if any, in which, the grant of such security interest may impair the validity or enforceability, or result in the voiding, of such intent-to-use Trademark application or any registration issuing therefrom under applicable Requirements of Law;
(B) all Patents, including the Patent registrations and pending applications in the United States Patent and Trademark Office listed on Schedule II hereto
(C) all Copyrights, including the Copyright registrations and pending applications for registration in the United States Copyright Office listed on Schedule III; [and]
(D) all proceeds of the foregoing;
in each case to the extent the foregoing items constitute Collateral.
SECTION 4. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
[Signature Pages Follow]
| [Grantor] | ||
| By: |
| Name: | ||
| Title: |
| ADMINISTRATIVE AGENT | ||
| CITIBANK, N.A., | ||
| as Administrative Agent | ||
| By: |
| Name: | ||
| Title: |
SCHEDULE I
TRADEMARKS
| REGISTERED OWNER | REGISTRATION NUMBER | TRADEMARK |
TRADEMARK APPLICATIONS
| APPLICANT | APPLICATION NO. | TRADEMARK |
Schedule I
SCHEDULE II
PATENTS
| REGISTERED OWNER | SERIAL NUMBER | DESCRIPTION |
PATENT APPLICATIONS
| APPLICANT | APPLICATION NO. | DESCRIPTION |
Schedule II
SCHEDULE III
COPYRIGHTS
| REGISTERED OWNER | REGISTRATION NUMBER | TITLE |
COPYRIGHT APPLICATIONS
|
APPLICANT | APPLICATION NUMBER | TITLE |
Schedule III