COLLATERAL ASSIGNMENT
Exhibit
10.9
COLLATERAL
ASSIGNMENT made as of this 25th day of August, 2006 by Blast Energy Services,
Inc., a California corporation (“Assignor”), to Laurus Master Fund, Ltd.
(“Assignee”).
FOR
VALUE
RECEIVED, and as collateral security for all debts, liabilities and obligations
of Assignor to Assignee, now existing or hereafter arising under that certain
Securities Purchase Agreement dated as of the date hereof between Assignor
and
Assignee (the “SPA”) and the Related Agreements (as defined in the SPA) (each as
amended, modified, restated or supplemented from time to time), Assignor hereby
assigns, transfers and sets over unto, and grants a security interest to
Assignee and its successors and assigns in, all of its rights and benefits,
but
not its obligations, under that certain Definitive Purchase Agreement dated
as
of June 28, 2006 by and among the members of Eagle Domestic Drilling Operations
LLC named therein (collectively, the “Sellers”) and Assignor and all of the
agreements and documents by which assets or rights of Sellers are transferred
to
Assignor (as each may be amended, modified, restated or supplemented from time
to time, collectively, the “Agreements”), including, without limitation, all
indemnity rights and all moneys and claims for moneys due and/or to become
due
to Assignor under the Agreements.
Assignor
hereby (i) specifically authorizes and directs Sellers upon notice to Sellers
by
Assignee to make all payments due to Assignor under or arising under the
Agreements directly to Assignee and (ii) irrevocably authorizes and empowers
Assignee (a) to ask, demand, receive, receipt and give acquittance for any
and
all amounts which may be or become due or payable, or remain unpaid at any
time
and times to Assignor by Sellers under and pursuant to the Agreements, (b)
to
endorse any checks, drafts or other orders for the payment of money payable
to
Assignor in payment thereof, and (c) in Assignee’s discretion to file any claims
or take any action or institute any proceeding, either in its own name or in
the
name of Assignor or otherwise, which Assignee may deem necessary or advisable
to
effectuate the foregoing. It is expressly understood and agreed, however, that
Assignee shall not be required or obligated in any manner to make any demand
or
to make any inquiry as to the nature or sufficiency of any payment received
by
it, or to present or file any claim or take any other action to collect or
enforce the payment of any amounts which may have been assigned to Assignee
or
to which Assignee may be entitled hereunder at any time or times.
Sellers
are hereby authorized to recognize Assignee’s claims to rights hereunder without
investigating any reason for any action taken by Assignee or the validity or
the
amount of the obligations or existence of any default, or the application to
be
made by Assignee of any of the amounts to be paid to Assignee. Checks for all
or
any part of the sums payable under this Collateral Assignment shall be drawn
to
the sole and exclusive order of Assignee. Upon payment by Sellers to Assignee
of
any amounts due to Assignor under or arising under the Agreements, the
obligations of Sellers to Assignor with respect to such amounts shall be deemed
paid in full.
Without
first obtaining the written consent of Assignee, neither Assignor nor any Seller
shall (i) amend or modify the Agreements in any way which would affect any
payments or
material
obligations thereunder due from Sellers to Assignor or (ii) agree to or suffer
any amendment, extension, renewal, release, acceptance, forbearance,
modification or waiver with respect to any rights of Assignor to receive payment
from Sellers arising under the Agreements.
In
the
event Assignor declines to exercise any rights under the Agreements, Assignee
shall have the right to enforce any and all such rights of Assignor directly
against Sellers.
This
shall be a continuing agreement and the rights and benefits of the Assignor
in
and to the Agreements are in addition to and not in substitution for any other
security held by the Assignee and shall not operate as a merger of any simple
contract debt or suspend the fulfillment of or affect the right, remedies and
powers of the Assignee in respect of the said rights and benefits or any
collateral of the Assignor held by the Assignee. Without limiting the generality
of any of the foregoing, all claims present or future of the Assignor against
any person liable upon or for payment in respect of the Agreements are hereby
assigned to the Assignee.
The
security interests created hereby are intended to attach and take effect
forthwith upon the execution of this Collateral Assignment by the Assignor,
and
the Assignor acknowledges that value has been given and that the Assignor has
rights in the Agreements.
For
avoidance of any doubt, this Collateral Assignment shall not release the
Assignor from any of its obligations to Sellers under the
Agreements.
The
Assignor acknowledges receipt of an executed copy of this Collateral
Assignment.
This
Collateral Assignment shall be governed by and construed in accordance with
the
laws of the State of New York.
[Remainder
of this page intentionally left blank]
IN
WITNESS WHEREOF, Assignor has duly executed this Collateral Assignment the
day
and year first above written.
By:
/s/
Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title
President & Co-CEO
Each
Seller hereby consents and agrees
to
the
provisions of this Collateral Assignment
as
of
this 25th day of August, 2006.
/s/
Xxxxx X. Xxxxxx, Xx.
XXXXX
X.
XXXXXX, XX.
/s/
Xxxxxxx Xxxxxxxx
XXXXXXX
XXXXXXXX
/s/
Xxxxxx Xxxxxxx
XXXXXX
XXXXXXX
XXXXXXXX
FAMILY IRREVOCABLE TRUST
By:
/s/
Xxxx X’Xxxx
Name:
Xxxx X’Xxxx
Title:
Trustee
XXXXXXXX
BUSINESS SECURITY TRUST
By:
/s/
Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Trustee
