Exhibit 10.33
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PLEDGE AGREEMENT
among
RENEGY HOLDINGS, INC.,
a Delaware corporation,
as Pledgor
RENEGY, LLC,
an Arizona limited liability company,
as Borrower
RENEGY TRUCKING, LLC,
an Arizona limited liability company,
as Borrower
SNOWFLAKE WHITE MOUNTAIN POWER, LLC,
an Arizona limited liability company,
as Borrower
AND
COBANK, ACB,
as Collateral Agent
DATED AS OF OCTOBER 1, 2007
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS................................................. 2
1.1 Defined Terms............................................... 2
1.2 Credit Agreement and UCC Definitions........................ 3
1.3 Rules of Interpretation..................................... 3
ARTICLE II PLEDGE AND GRANT OF SECURITY INTEREST....................... 3
2.1 Granting Clause............................................. 3
2.2 Retention of Certain Rights................................. 4
ARTICLE III OBLIGATIONS SECURED......................................... 4
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PLEDGOR................... 5
4.1 Organization................................................ 5
4.2 Power and Authorization; Enforceable Obligations............ 5
4.3 No Legal Bar................................................ 5
4.4 Beneficial Ownership; Pledged Equity Interests.............. 5
4.5 No Prior Assignment......................................... 6
4.6 No Other Financing Documents................................ 6
4.7 Compliance with Law......................................... 6
4.8 No Litigation............................................... 6
4.9 Taxes....................................................... 6
4.10 Investment Company Act; Federal Energy Laws................. 6
4.11 Name, Organizational Number................................. 6
4.12 Borrower's Information...................................... 6
4.13 Capital Adequacy, Etc....................................... 7
4.14 Perfection of Security Interest............................. 7
4.15 After-Acquired Collateral................................... 7
ARTICLE V COVENANTS OF PLEDGOR........................................ 7
5.1 Compliance with Obligations................................. 8
5.2 Defense of Collateral....................................... 8
5.3 Preservation of Value; Limitation of Liens.................. 8
5.4 No Other Filings............................................ 8
5.5 No Sale of Collateral....................................... 8
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TABLE OF CONTENTS
(continued)
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5.6 Notice...................................................... 8
5.7 Filing of Bankruptcy Proceedings............................ 8
5.8 Distributions............................................... 9
5.9 Maintenance of Records...................................... 9
5.10 Name; Jurisdiction of Organization.......................... 9
5.11 Amendments to Organizational Documents...................... 9
5.12 Proceeds of Collateral...................................... 9
5.13 Collateral Secured by Possession............................ 9
ARTICLE VI EVENTS OF DEFAULT........................................... 9
ARTICLE VII REMEDIES UPON EVENT OF DEFAULT.............................. 10
7.1 Remedies Upon an Event of Default........................... 10
7.2 Minimum Notice Period....................................... 11
7.3 Right to Cure............................................... 11
7.4 Expenses; Interest.......................................... 11
7.5 Sale of Collateral.......................................... 11
7.6 Compliance With Limitations and Restrictions................ 12
7.7 No Impairment of Remedies................................... 12
ARTICLE VIII MISCELLANEOUS............................................... 12
8.1 Remedies Cumulative; Delay Not Waiver....................... 12
8.2 Borrower's Consent and Covenant............................. 16
8.3 Attorney-in-Fact............................................ 16
8.4 Perfection; Further Assurances.............................. 17
8.5 Payment of Taxes............................................ 17
8.6 Place of Business; Location of Records...................... 18
8.7 Continuing Assignment and Security Interest; Transfer of
Notes.................................................... 18
8.8 Termination of Security Interest............................ 18
8.9 Security Interest Absolute.................................. 18
8.10 Limitation on Duty of Collateral Agent with Respect to the
Collateral............................................... 19
8.11 Amendments; Waivers; Consents............................... 19
8.12 Notices..................................................... 19
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TABLE OF CONTENTS
(continued)
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8.13 Modification of Obligations................................. 20
8.14 Governing Law............................................... 20
8.15 Reinstatement............................................... 21
8.16 Severability................................................ 21
8.17 Survival of Provisions...................................... 21
8.18 Headings Descriptive........................................ 21
8.19 Entire Agreement............................................ 21
8.20 Time........................................................ 21
8.21 Counterparts................................................ 21
8.22 Limitation of Liability..................................... 22
8.23 Submission to Jurisdiction.................................. 22
8.24 WAIVER OF JURY TRIAL........................................ 22
8.25 Knowledge and Attribution................................... 22
8.26 Rights of Collateral Agent.................................. 22
8.27 Consent and Acknowledgement................................. 23
8.28 Third Party Beneficiaries................................... 23
8.29 Waiver of Transfer Restrictions............................. 23
8.30 Scope of Liability.......................................... 23
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PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of October 1, 2007 (this "Agreement"), is
entered into by and among RENEGY HOLDINGS, INC., a Delaware corporation
("Pledgor"), RENEGY, LLC, an Arizona limited liability company ("Renegy"),
RENEGY TRUCKING, LLC, an Arizona limited liability company ("Renegy Trucking"),
SNOWFLAKE WHITE MOUNTAIN POWER, LLC, an Arizona limited liability company
("SWMP" and together with Renegy and Renegy Trucking, "Borrowers") and COBANK,
ACB, in its capacity as collateral agent (together with its successors,
designees and assigns in such capacity, "Collateral Agent").
RECITALS
A. Pledgor is the sole manager of, and owns all the membership interests of
Borrowers.
B. In order to finance the development, construction, financing, ownership,
operation and maintenance of the approximately 24 MW biomass-fired power
generation plant to be located near Snowflake, Arizona (the "Project"),
Borrowers entered into that certain Credit Agreement, dated as of September 1,
2006 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among Borrowers, CoBank, ACB, as lead
arranger, administrative agent (in such capacity, "Administrative Agent") and
Collateral Agent, CoBank, ACB, as letter of credit issuer ("LC Issuer") and the
financial institutions parties thereto ("Lenders"), pursuant to which, among
other things, Lenders have extended commitments to make loans to, and for the
benefit of, Borrowers.
C. It was a condition precedent to the effectiveness of the Credit
Agreement and the making of the advances of credit contemplated thereby that
SWMP, Collateral Agent and Stone Axe Power Ranch, LLC, an Arizona limited
liability company and sole member of SWMP ("Stone Axe"), enter into a Pledge
Agreement, dated as of September 1, 2006 (the "Stone Axe Pledge Agreement"),
pursuant to which Stone Axe pledged all of the membership interests of SWMP to
the Collateral Agent.
D. It was a condition precedent to the effectiveness of the Credit
Agreement and the making of the advances of credit contemplated thereby that
Renegy, Renegy Trucking, Collateral Agent and New Mexico and Arizona Land
Company, LLC, an Arizona limited liability company and sole member of each of
Renegy and Renegy Trucking ("NMALC"), enter into a Pledge Agreement, dated as of
September 1, 2006 (the "NMALC Pledge Agreement"), pursuant to which NMALC
pledged all of the membership interests of Renegy and Renegy Trucking to the
Collateral Agent.
E. Pursuant to that certain Contribution and Merger Agreement, dated May 8,
2007, by and among Catalytica Energy Systems, Inc., a Delaware corporation,
Pledgor, Snowflake Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Pledgor, (iv) Borrowers, Xxxxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxxx and the Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx Revocable Trust, as
amended, Pledgor acquired all of the membership interests of Borrower (the
"Transaction").
F. In connection with the Transaction, and in order to preserve the
security interest of the Collateral Agent for the benefit of the Secured Parties
in Borrowers, Pledgor has agreed to enter into this Pledge Agreement as of the
date set forth above to replace the Stone Axe Pledge Agreement and the NMALC
Pledge Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises contained herein, and to
induce the Administrative Agent, the Collateral Agent, Lenders and LC Issuer to
continue to perform under the Credit Agreement and to make the advances of
credit to Borrowers contemplated thereby and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledgor and Borrowers hereby agree with Collateral Agent, as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. The following terms when used in this Agreement,
including its preamble and recitals, shall have the following meanings:
"Administrative Agent" has the meaning given in the recitals to this
Agreement.
"Borrowers" has the meaning given in the preamble to this Agreement.
"Credit Agreement" has the meaning given in the recitals to this Agreement.
"Collateral" has the meaning given in Section 2.1.
"Collateral Agent" has the meaning given in the preamble to this Agreement.
"Governing Documents" means each Borrower's Articles of Organization.
"LC Issuer" has the meaning given in the recitals to this Agreement.
"Lenders" has the meaning given in the recitals to this Agreement.
"NMALC" has the meaning given in the recitals to this Agreement.
"NMALC Pledge Agreement" has the meaning given in the recitals to this
Agreement.
"Pledged Equity Interests" has the meaning given in Section 2.1.
"Pledgor" has the meaning given in the preamble to this Agreement.
"Project" has the meaning given in the recitals to this Agreement.
"Renegy" has the meaning given in the preamble to this Agreement.
"Renegy Trucking" has the meaning given in the preamble to this Agreement.
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"Secured Parties" means Collateral Agent, Administrative Agent, LC Issuer,
the Lenders and each of their respective successors, transferees and assigns;
provided, that no Affiliate of any Borrower shall be a "Secured Party" under
this Agreement.
"Stone Axe" has the meaning given in the recitals to this Agreement.
"Stone Axe Pledge Agreement" has the meaning given in the recitals to this
Agreement.
"SWMP" has the meaning given in the preamble to this Agreement.
"Transaction" has the meaning given in the recitals to this Agreement.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of New York; provided, however, that in the event
that, by reason of mandatory provisions of law, any or all of the perfection or
priority of the security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions related to such provisions.
1.2 Credit Agreement and UCC Definitions. Unless otherwise defined herein,
(i) all capitalized terms used in this Agreement shall have the meanings
provided in Exhibit A to the Credit Agreement or, if not defined therein, the
UCC, and (ii) all terms defined in the UCC and used herein shall have the same
definitions herein as specified therein. If a term is defined in Article 9 of
the UCC differently than in another Article of the UCC, the term has the meaning
specified in Article 9.
1.3 Rules of Interpretation. Unless otherwise provided herein, the rules of
interpretation set forth in Exhibit A of the Credit Agreement shall apply to
this Agreement, including its preamble and recitals, and are incorporated herein
by reference, mutatis mutandis.
ARTICLE II
PLEDGE AND GRANT OF SECURITY INTEREST
2.1 Granting Clause. Pledgor hereby assigns, grants and pledges to
Collateral Agent for the benefit of the Secured Parties a continuing
first-priority security interest in all right, title and interest of Pledgor,
now owned or hereafter existing or acquired, in, to and under any and all of the
following (collectively, the "Collateral"):
(a) all of the membership interests of Borrowers (the "Pledged Equity
Interests");
(b) all rights to receive income, gain, profit, dividends and other
distributions allocated or distributed to Pledgor in respect of or in exchange
for all or any portion of the Pledged Equity Interests;
(c) all of Pledgor's capital or ownership interest, including capital
accounts, in Borrowers, and all accounts, deposits or credits of any kind with
Borrowers;
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(d) all of Pledgor's voting rights in or rights to control or direct
the affairs of Borrowers;
(e) all of Pledgor's rights, title and interest, as the sole member of
Borrowers, in, to or under any and all of Borrowers' assets or properties;
(f) all other rights, title and interest in or to Borrowers derived
from the Pledged Equity Interests;
(g) all indebtedness or other obligations of Borrowers owed to
Pledgor;
(h) all claims of Pledgor for damages arising out of, or for any
breach or default relating to, the Collateral;
(i) all rights of Pledgor to terminate, amend, supplement, modify, or
cancel, the Governing Documents of Borrowers, to take all actions thereunder and
to compel performance and otherwise exercise all remedies thereunder;
(j) all securities, notes, certificates and other instruments
representing or evidencing any of the foregoing rights and interests or the
ownership thereof and any interest of Pledgor reflected in the books of any
financial intermediary pertaining to such rights and interests and all non-cash
dividends, cash, options, warrants, stock splits, reclassifications, rights,
instruments or other investment property and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such rights and interests; and
(k) to the extent not included in any of the foregoing, all proceeds
of the foregoing Collateral, whether cash or non-cash;
provided, however, that "Collateral" shall not include any distribution,
repayment of subordinated debt or any other payments made by or on behalf of
Borrowers to Pledgor expressly permitted pursuant to the terms of the Credit
Documents.
2.2 Retention of Certain Rights. So long as Collateral Agent has not
exercised remedies with respect to the Collateral under this Agreement or any
other Credit Document upon the occurrence of an Event of Default, Pledgor
reserves the right to exercise all voting and other rights with respect to the
Collateral (except as limited by the Credit Documents) and to receive all
income, dividends and other distributions from the Collateral (except as limited
by the Credit Documents); provided that no vote shall be cast, right exercised
or other action taken which could materially impair the Collateral.
ARTICLE III
OBLIGATIONS SECURED
Without limiting the generality of the foregoing, this Agreement and all of
the Collateral secure the payment and performance when due of all Obligations.
If enforcement of the liability of Pledgor under this Agreement for the full
amount of the Obligations would be an unlawful or voidable transfer under any
applicable fraudulent conveyance or fraudulent transfer law or any
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comparable law, notwithstanding the representation and warranty set forth in
Section 4.13 or anything to the contrary herein, then the liability of Pledgor
hereunder shall be reduced to the highest amount for which such liability may
then be enforced without giving rise to an unlawful or voidable transfer under
any such law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PLEDGOR
Pledgor represents and warrants to and in favor of Collateral Agent, as of
the date hereof, as follows:
4.1 Organization. Pledgor is (a) a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, (b) duly
qualified as a foreign corporation and in good standing, in each jurisdiction in
which such qualification is required by law, and (c) duly qualified, authorized
to do business and in good standing in each jurisdiction in which such
qualification is necessary to execute, deliver and perform this Agreement and
each of the other Project Documents to which it is a party.
4.2 Power and Authorization; Enforceable Obligations. Pledgor has the full
corporate power and authority to execute, deliver and perform this Agreement and
to take all action as may be necessary to complete the transactions contemplated
hereunder. Pledgor has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and to complete the
transactions contemplated hereby. No consent or authorization of, filing with,
or other act by or in respect of any other Person or governmental authority is
required in connection with the execution, delivery or performance by Pledgor,
or the validity or enforceability as to Pledgor, of this Agreement, except such
consents or authorizations or filings or other acts as have already been
obtained or made. This Agreement has been duly executed and delivered by Pledgor
and constitutes a legal, valid and binding obligation of Pledgor enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the right of creditors generally and by general principles of equity.
4.3 No Legal Bar. The execution, delivery and performance by Pledgor of
this Agreement and the consummation of the transactions contemplated hereby
(including the granting of security interests hereunder) do or will not violate
any applicable law or any material contractual obligation of Pledgor and do or
will not result in, or require, the creation or imposition of any Lien (other
than the Liens created pursuant to this Agreement) on any of the properties or
revenues of Pledgor pursuant to any applicable law or any such contractual
obligation.
4.4 Beneficial Ownership; Pledged Equity Interests. Pledgor is the lawful
and beneficial owner of and has full right, title and interest in, to and under
rights and interests comprising the Collateral, subject to no Liens (other than
the Lien created by this Agreement). The Pledged Equity Interests (a) have been
duly authorized and validly issued, (b) are fully paid and non-assessable and
(c) constitute all of the outstanding membership interests of Borrowers. The
Pledged Equity Interests are not securities governed by Article 8 of the New
York Uniform Commercial Code, and are not certificated.
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4.5 No Prior Assignment. Pledgor has not previously assigned any of its
rights in, to or under all or any portion of the Collateral.
4.6 No Other Financing Documents. Pledgor has not executed and is not aware
of any effective financing statement, security agreement or other instrument
similar in effect covering all or any part of the Collateral on file in any
recording office, except such as may have been filed pursuant to this Agreement
and the other Credit Documents.
4.7 Compliance with Law. Pledgor is in compliance with all applicable laws,
except noncompliance which could not reasonably be expected to have a Material
Adverse Effect, and no written notices of any material violation of any law
relating to the Project or any Project Document have been received by Pledgor.
4.8 No Litigation. There are no pending or, to Pledgor's knowledge,
threatened in writing actions, suits, proceedings or investigations of any kind,
including actions or proceedings of or before any governmental authority,
relating to the Collateral or to which Pledgor is a party or is subject, or by
which it or its properties are bound that, if adversely determined to or against
Pledgor could reasonably be expected to have a Material Adverse Effect.
4.9 Taxes. Pledgor has timely filed all federal, state and local tax
returns that it is required to file (except where a failure to file such local
tax return could not reasonably be expected to have a Material Adverse Effect),
has paid all taxes it is required to pay to the extent due (other than those
taxes that it is contesting in good faith and by appropriate proceedings, with
adequate reserves established for such taxes) and, to the extent such taxes are
not due, has established reserves that are adequate for the payment thereof to
the extent required by GAAP.
4.10 Investment Company Act; Federal Energy Laws. Pledgor is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. No
provision of the Federal Power Act or the Public Utility Holding Company Act as
to securities, rates or financial or organizational matters precludes Pledgor
from entering into and performing its obligations hereunder.
4.11 Name, Organizational Number. The name of Pledgor is "Renegy Holdings,
Inc.", as indicated in the public records of the State of Delaware, and
Pledgor's federal employee identification number is 00-0000000 and Pledgor's
Delaware organizational number is 4335338.
4.12 Borrower's Information. Pledgor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial or otherwise) of Borrowers and their
properties on a continuing basis, and Pledgor now is and hereafter will be
completely familiar with the businesses, operations and condition (financial or
otherwise) of Borrowers and their properties. Pledgor hereby agrees that
Collateral Agent shall not have any duty to advise Pledgor of information known
to Collateral Agent regarding such condition or any such circumstances or of any
changes or potential changes affecting the Collateral. In the event Collateral
Agent, in its respective discretion, undertakes at any time or from time to time
to provide any such information to Pledgor, Collateral Agent shall not be under
any obligation (a) to undertake any investigation not a part of its regular
business routine,
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or reasonable commercial lending practices or (b) to make any other or future
disclosure of such information to Pledgor.
4.13 Capital Adequacy, Etc.
(a) After giving effect to the transactions contemplated by this
Agreement and the contingent obligations evidenced hereby (but excluding the
effect of the provisions of Article III which limit the Obligations to an amount
that would not render Pledgor's indebtedness, liabilities or obligations under
this Agreement subject to avoidance), Pledgor is not, on either an
unconsolidated basis or a consolidated basis with any Affiliates of Borrowers,
insolvent as such term is used or defined in any applicable Bankruptcy Law, and
Pledgor has and will have assets which, fairly valued, exceed its indebtedness,
liabilities or obligations.
(b) Pledgor is not executing this Agreement with any intention to
hinder, delay or defraud any present or future creditor or creditors of Pledgor.
(c) Pledgor is not engaged in any business or transaction which, after
giving effect to the transactions contemplated by this Agreement, will leave
Pledgor with capital or assets which are unreasonably small in relation to the
business or transactions engaged by Pledgor, and Pledgor does not intend to
engage in any such business or transaction.
(d) Pledgor does not intend to incur, nor does Pledgor believe that it
will incur, debts beyond Pledgor's ability to repay such debts as they mature.
4.14 Perfection of Security Interest. The security interest granted to
Collateral Agent pursuant to this Agreement constitutes as to personal property
included in the Collateral a valid lien. The security interest granted to
Collateral Agent pursuant to this Agreement in the Collateral consisting of
personal property will be perfected (a) with respect to any property that can be
perfected by filing, upon the filing of financing statements in the proper
filing offices and (b) with respect to any property, if any, that can be
perfected by possession, upon Collateral Agent receiving possession thereof and,
in each case, such security interest will be, as to Collateral perfected under
the UCC or otherwise as aforesaid, superior and prior to the rights of all third
Persons now existing or hereafter arising whether by way of mortgage, lien,
security interests, encumbrance, assignment or otherwise.
4.15 After-Acquired Collateral. It is understood and agreed that the
foregoing representations and warranties shall apply only to the Collateral
pledged on the date hereof and that, with respect to Collateral pledged
thereafter, Pledgor shall, upon the written request of Collateral Agent, be
required to make representations and warranties in form and substance
substantially similar to the foregoing in supplements hereto and that such
representations and warranties contained in such supplements hereto shall be
applicable to such Collateral hereafter delivered.
ARTICLE V
COVENANTS OF PLEDGOR
Pledgor covenants to and in favor of Collateral Agent as follows:
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5.1 Compliance with Obligations. Pledgor shall perform and comply in all
material respects with all obligations and conditions on its part to be
performed with respect to the Collateral.
5.2 Defense of Collateral. Pledgor shall, until the payment in full in cash
and performance in full of all Obligations and the termination of all the
Lender's Commitments and all other obligations to the Secured Parties under the
Credit Documents (other than the Obligations that are intended to survive the
termination of the Credit Documents and return or expiration of the Letter of
Credit), defend its title to the Collateral and the interest of Collateral Agent
in the Collateral pledged hereunder against the claims and demands of all
Persons.
5.3 Preservation of Value; Limitation of Liens. Pledgor shall not take or
permit to be taken any action in connection with the Collateral which would
impair in any material respect the value of the interests or rights of Pledgor
therein or which would impair the interests or rights of Collateral Agent
therein or with respect thereto, except as expressly permitted by the Credit
Documents; provided, however, that nothing in this Agreement shall prevent
Pledgor, prior to the exercise by Collateral Agent of any rights, pursuant to
the terms hereof, from undertaking Pledgor's operations in the ordinary course
of business in accordance with the Credit Documents. Pledgor shall not directly
or indirectly create, incur, assume or suffer to exist any Liens on or with
respect to all or any part of the Collateral (other than the Lien created by
this Agreement). Pledgor shall at its own cost and expense promptly take such
action as may be necessary to discharge any such Liens.
5.4 No Other Filings. Pledgor shall not file or authorize or permit to be
filed in any jurisdiction any financing statements under the UCC or any like
statement relating to the Collateral in which Collateral Agent is not named as
the sole secured party.
5.5 No Sale of Collateral. Except as expressly permitted by this Agreement
or the other Credit Documents, Pledgor shall not cause, suffer or permit the
sale, assignment, conveyance, pledge or other transfer of all or any portion of
Pledgor's ownership or interest or any portion of the Collateral. As used
herein, the transfer of an ownership interest in the Collateral includes the
sale, assignment, pledge, hypothecation, transfer or other disposition
(voluntarily or involuntarily, by gift or otherwise, and whether as security or
otherwise) of an equity interest in any Person substantially all of the assets
of which consist directly or indirectly of an interest in any Borrower.
5.6 Notice. Pledgor shall promptly, upon acquiring notice or giving notice,
as the case may be, or obtaining knowledge thereof, give written notice (with
copies of any such underlying notices) to Collateral Agent of any and all
writings, documents or instruments evidencing any additional Collateral or any
Collateral which has been converted from one type of Collateral into another
type, including, without limitation, any Collateral with respect to which
possession is required or permitted for the Lien and security interest granted
therein under this Agreement to be perfected.
5.7 Filing of Bankruptcy Proceedings. To the extent it may so agree to do
so under applicable law, Pledgor, for itself, its successors and assigns, shall
not cast any vote as an owner in any Borrower (a) in favor of the commencement
of a voluntary case or other proceeding
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seeking liquidation, reorganization, rehabilitation or other relief with respect
to any Borrower or any of their debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of the owners of any Borrower or any substantial part of any Borrower's
property, (b) to authorize any Borrower to consent to any such aforesaid relief
or to the appointment of or taking possession by any such aforesaid official in
an involuntary case or other proceeding commenced against any Borrower or (c) to
authorize any Borrower to make a general assignment for the benefit of
creditors.
5.8 Distributions. If Pledgor in its capacity as owner of Borrowers
receives any income, dividend or other distribution of money or property of any
kind from any Borrower (other than as expressly permitted by the Credit
Documents), Pledgor shall hold such income or distribution as trustee for, and
shall promptly deliver the same to, Collateral Agent.
5.9 Maintenance of Records. Pledgor shall, at all times, keep accurate and
complete records of the Collateral. Pledgor shall permit representatives of
Collateral Agent, upon reasonable prior written notice, at any time during
normal business hours of Pledgor to inspect and make abstracts from Pledgor's
books and records pertaining to the Collateral. Upon the occurrence and during
the continuation of any Event of Default, at Collateral Agent's written request,
Pledgor shall promptly deliver copies of any and all such records to Collateral
Agent.
5.10 Name; Jurisdiction of Organization. Pledgor shall not change its name,
its jurisdiction of organization, the location of its principal place of
business, its organization identification number or its fiscal year without
notice to Collateral Agent at least 30 days prior to such change. In the event
of such change, Pledgor shall at its expense or at the expense of any Borrower,
as applicable, execute and deliver such instruments and documents as may be
reasonably required by Collateral Agent or applicable law to maintain a prior
perfected security interest in the Collateral.
5.11 Amendments to Organizational Documents. Except as expressly permitted
by this Agreement or the other Credit Documents, Pledgor shall not terminate,
amend, supplement or otherwise modify, or cancel, the Governing Documents of
Borrowers without the prior written consent of Collateral Agent.
5.12 Proceeds of Collateral. Pledgor shall, at all times, keep pledged to
Collateral Agent pursuant hereto all Collateral and shall not permit any
Borrower to issue any membership interests or other equity interests unless such
membership interests or other equity interests are immediately duly pledged to
Collateral Agent hereunder on a first priority perfected basis.
5.13 Collateral Secured by Possession. Pledgor shall, if requested by
Collateral Agent, properly deliver or cause to be delivered to Collateral Agent
all Collateral in which the Lien and security interest granted therein under
this Agreement may be or is required to be perfected by possession.
ARTICLE VI
EVENTS OF DEFAULT
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The occurrence of an Event of Default under, and as defined in, the Credit
Agreement shall constitute an Event of Default hereunder. Any such Event of
Default shall be considered cured for the purposes of this Agreement when it has
been cured in accordance with the Credit Agreement.
ARTICLE VII
REMEDIES UPON EVENT OF DEFAULT
7.1 Remedies Upon an Event of Default. Upon the occurrence and during the
continuation of an Event of Default, Collateral Agent, shall have the right, at
its election, but not the obligation, to do any of the following:
(a) vote or exercise any and all of Pledgor's rights or powers
incident to its ownership of the Pledged Equity Interests, including any rights
or powers to manage or control Borrowers;
(b) demand, xxx for, collect or receive any money or property at any
time payable to or receivable by Pledgor on account of or in exchange for all or
any part of the Collateral;
(c) cause any action at law or suit in equity or other proceeding to
be instituted and prosecuted to collect or enforce any obligation or right
hereunder or included in the Collateral, including specific enforcement of any
covenant or agreement contained herein, or to foreclose or enforce the security
interest in all or any part of the Collateral granted herein, or to enforce any
other legal or equitable right vested in it by this Agreement or by applicable
law;
(d) incur expenses, including reasonable attorneys' fees, reasonable
consultants' fees, and other costs appropriate to the exercise of any right or
power under this Agreement;
(e) perform any obligation of Pledgor hereunder;
(f) secure the appointment of a receiver for Pledgor without notice to
Borrowers or Pledgor;
(g) exercise any other or additional rights or remedies granted to
Collateral Agent under any other provision of this Agreement or any other Credit
Document, or exercisable by a secured party under the UCC, whether or not the
UCC applies to the affected Collateral, or under any other applicable law;
(h) take any other action which Collateral Agent deems necessary or
desirable to protect or realize upon its security interest in the Collateral or
any part thereof, and Pledgor hereby irrevocably appoints Collateral Agent as
Pledgor's attorney-in-fact (as set forth in Section 8.3) to take any such
action, including the execution and delivery of any and all documents or
instruments related to the Collateral or any part thereof in Pledgor's name, and
said appointment shall create in Collateral Agent a power coupled with an
interest which shall be irrevocable; or
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(i) appoint another Person (who may be an employee, officer or other
representative of Collateral Agent) to do any of the foregoing, or take any
other action permitted hereunder, as agent for or representative of, and on
behalf of, Collateral Agent.
7.2 Minimum Notice Period. If, pursuant to applicable law, prior notice of
any action described in Section 7.1 is required to be given to Pledgor or any
Borrower, Pledgor and Borrowers hereby acknowledge and agree that the minimum
time required by such applicable law, or if no minimum is specified, 10 Business
Days, shall be deemed a reasonable notice period.
7.3 Right to Cure. In addition to the foregoing remedies, Collateral Agent
may, but shall not be obligated to, cure any Event of Default and incur
reasonable fees, costs and expenses in doing so, in which event each applicable
Borrower shall reimburse Collateral Agent within five Business Days after
written demand for all such fees, costs and expenses, together with interest
thereon at the Default Rate from the date payable until the date repaid in full.
7.4 Expenses; Interest. All reasonable costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Collateral Agent in
connection with exercising any actions taken under Section 7.1, together with
interest thereon (to the extent permitted by law) computed at a rate per annum
equal to the Default Rate or the maximum rate permitted by law, whichever is
less, from the date due to the date of payment thereof, shall be added to the
indebtedness secured by this Agreement and shall be paid by each applicable
Borrower to Collateral Agent within 10 Business Days after written demand.
7.5 Sale of Collateral. In addition to exercising the foregoing rights,
upon the occurrence and during the continuation of an Event of Default,
Collateral Agent may, to the extent permitted by applicable law, arrange for and
conduct a sale of the Collateral at a public or private sale (as Collateral
Agent may elect) which sale may be conducted by an employee or representative of
Collateral Agent, without any demand of performance or notice of intention to
sell or dispose of, or of time or place of sale or disposition (except such
notice as required by any applicable law), and any such sale shall be considered
or deemed to be a sale made in a commercially reasonable manner. Collateral
Agent may release, temporarily or otherwise, to Pledgor any item of Collateral
of which Collateral Agent has taken possession pursuant to any right granted to
Collateral Agent by this Agreement without waiving any rights granted to
Collateral Agent under this Agreement, the Credit Agreement or the other Credit
Documents. Pledgor, in dealing with or disposing of the Collateral or any part
thereof, hereby waives all rights, legal and equitable, it may now or hereafter
have to require marshaling of assets or to require, upon foreclosure, sales of
assets in a particular order. Pledgor also waives its right to challenge the
reasonableness of any disclaimer of warranties, title and the like made by
Collateral Agent in connection with a sale of the Collateral. Each successor and
assign of Pledgor, including a holder of a Lien subordinate to the Lien created
hereby (without implying that Pledgor has, except as expressly provided in the
Credit Documents, a right to grant an interest in, or a subordinate Lien on, any
of the Collateral), by acceptance of its interest or Lien agrees that it shall
be bound by the above waiver, to the same extent as if such holder gave the
waiver itself. Pledgor also hereby waives, to the full extent it may lawfully do
so, the benefit of all laws providing for rights of appraisal, valuation, stay
or extension or of redemption after foreclosure now or hereafter in force. If
Collateral Agent sells any of the Collateral upon credit,
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Pledgor will be credited only with payments actually made by the purchaser,
received by Collateral Agent and applied to the indebtedness of the purchaser.
In the event the purchaser fails to pay for the Collateral, Collateral Agent may
resell the Collateral and Pledgor shall be credited with the proceeds of the
sale. In the event Collateral Agent shall bid at any foreclosure or trustee's
sale or at any private sale permitted by law or this Agreement or any other
Credit Document, Collateral Agent may bid all or less than the amount of the
Obligations. To the extent permitted by applicable law, the amount of the
successful bid at any such sale, whether Collateral Agent or any other party is
the successful bidder, shall be conclusively deemed to be the fair market value
of the Collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations.
7.6 Compliance With Limitations and Restrictions. Pledgor hereby agrees
that in respect of any sale of any of the Collateral pursuant to the terms
hereof, Collateral Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as Collateral Agent may be advised by
counsel is necessary in order to avoid any violation of applicable law, or in
order to obtain any required approval of the sale or of the purchaser by any
governmental authority or official, and Pledgor further agrees that such
compliance shall not, in and of itself, result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall
Collateral Agent be liable or accountable to Pledgor for any discount allowed by
reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
7.7 No Impairment of Remedies. If, in the exercise of any of its rights and
remedies under this Agreement, Collateral Agent shall forfeit any of its rights
or remedies, whether because of any applicable law pertaining to "election of
remedies" or otherwise, Pledgor hereby consents to such action by Collateral
Agent and, to the extent permitted by applicable law, waives any claim based
upon such action, even if such action by Collateral Agent shall result in a full
or partial loss of any rights of subrogation, indemnification or reimbursement
which Pledgor might otherwise have had but for such action by Collateral Agent
or the terms herein. Any election of remedies which results in the denial or
impairment of the right of Collateral Agent to seek a deficiency judgment
against any Borrower shall not, to the extent permitted by applicable law,
impair Pledgor's obligations hereunder.
ARTICLE VIII
MISCELLANEOUS
8.1 Remedies Cumulative; Delay Not Waiver.
8.1.1 Remedies Cumulative. No right, power or remedy herein conferred
upon or reserved to Collateral Agent is intended to be exclusive of any other
right, power or remedy, and every such right, power and remedy shall, to the
extent permitted by applicable law, be cumulative and in addition to every other
right, power and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy
hereunder shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by Collateral Agent may be taken concurrently or successively and in one or
several consolidated or
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independent judicial actions or lawfully taken nonjudicial proceedings, or both.
If Collateral Agent may, under applicable law, proceed to realize its benefits
under this Agreement or any other Credit Document giving Collateral Agent a Lien
upon any Collateral, whether owned by Pledgor or by any other Person, either by
judicial foreclosure or by non judicial sale or enforcement, Collateral Agent
may, at its sole option, determine which of its remedies or rights it may pursue
without affecting any of the rights and remedies of Collateral Agent under this
Agreement.
8.1.2 No Waiver; Separate Causes of Action. No delay or omission to
exercise any right, power or remedy accruing to Collateral Agent upon the
occurrence and during the continuance of any Event of Default as aforesaid shall
impair any such right, power or remedy of Collateral Agent, nor shall it be
construed to be a waiver of any such Event of Default or of any similar breach
or default thereafter occurring or an acquiescence therein, nor shall any waiver
of any other breach or default under this Agreement or any other Credit Document
be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Each and every default by Pledgor in payment hereunder shall give
rise to a separate cause of action hereunder, and separate suits may be brought
hereunder as each cause of action arises and every power and remedy given by
this Agreement may be exercised from time to time, and as often as shall be
deemed expedient, by Collateral Agent.
8.1.3 Application of Proceeds. The proceeds of any sale of or other
realization upon, all or any part of the Collateral taken in accordance with
this Agreement, shall be applied to the repayment of the Advances and otherwise
in accordance with the Credit Agreement. Each applicable Borrower shall remain
liable for any deficiency.
8.1.4 Certain Waivers. Pledgor hereby waives and relinquishes, to the
maximum extent permitted by applicable law, all rights and remedies accorded to
pledgors, sureties or guarantors and agrees not to assert or take advantage of
any such rights or remedies, including:
(a) any law limiting remedies, including recovery of a deficiency
against Borrowers, under an obligation secured by a mortgage or deed of trust on
real property if the real property is sold under a power of sale contained in
the mortgage or deed of trust, and all defenses based on any loss whether as a
result of any such sale or otherwise;
(b) any right to require Collateral Agent to proceed against any
Borrower or any other Person or to proceed against or exhaust any security held
by Collateral Agent at any time or to pursue any other remedy in Collateral
Agent's power before proceeding against Pledgor;
(c) any defense that may arise by reason of the incapacity, lack of
power or authority, death, dissolution, merger, termination or disability of
Pledgor, any Borrower or any other Person or the failure of Collateral Agent or
any Secured Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of Pledgor, any Borrower or
any other Person;
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(d) any right to enforce any remedy that Collateral Agent may have
against any Borrower or any other Person and any right to participate in any
security held by Collateral Agent until the Obligations have been paid and the
covenants of the Credit Documents have been performed in full;
(e) any right to require Collateral Agent to give any notices of any
kind, including, without limitation, notices of nonpayment, nonperformance,
protest, dishonor, default, delinquency or acceleration, or to make any
presentments, demands or protests, except as set forth herein or expressly
provided in the Credit Agreement or any of the Credit Documents;
(f) any right to assert the bankruptcy or insolvency of any Borrower
or any other Person as a defense hereunder or as the basis for rescission hereof
and any defense arising because of Collateral Agent's election, in any
proceeding instituted under the Federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the Federal Bankruptcy Code;
(g) subject to Section 8.9, any right under any law purporting to
reduce Pledgor's obligations hereunder if the Obligations are reduced other than
as a result of payment of such Obligations;
(h) any defense based on the repudiation of the Credit Documents by
any Borrower or any other Person, the failure by Collateral Agent or any Secured
Party to enforce any claim against Pledgor, any Borrower or any other Person or
the unenforceability in whole or in part of any Credit Documents;
(i) all suretyship and guarantor's defenses generally;
(j) any right to insist upon, plead or in any manner whatever claim or
take the benefit or advantage of, any appraisal, valuation, stay, extension,
marshaling of assets, redemption or similar law, or exemption, whether now or at
any time hereafter in force, which may delay, prevent or otherwise affect the
performance by Pledgor of its obligations under, or the enforcement by
Collateral Agent of, this Agreement;
(k) any requirement on the part of Collateral Agent to mitigate the
damages resulting from any default;
(l) any defense based upon an election of remedies by Collateral
Agent, including an election to proceed by non judicial rather than judicial
foreclosure, which destroys or otherwise impairs the subrogation rights of
Pledgor, the right of Pledgor to proceed against any Borrower or another Person
for reimbursement, or both;
(m) any defense based on any offset against any amounts which may be
owed by any Person to Pledgor for any reason whatsoever;
(n) any defense based on any act, failure to act, delay or omission
whatsoever on the part of any Borrower or any of their Affiliates or the failure
by any Borrower or any of their Affiliates to do any act or thing or to observe
or perform any covenant, condition or agreement to be observed or performed by
it under the Credit Documents;
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(o) any defense, setoff or counterclaim which may at any time be
available to or asserted by any Borrower or any of their Affiliates against
Collateral Agent or any Secured Party or any other Person under the Credit
Documents;
(p) any duty on the part of Collateral Agent to disclose to Pledgor
any facts Collateral Agent may now or hereafter know about any Borrower or any
of their Affiliates, regardless of whether Collateral Agent has reason to
believe that any such facts materially increase the risk beyond that which
Pledgor intends to assume, or have reason to believe that such facts are unknown
to Pledgor, or have a reasonable opportunity to communicate such facts to
Pledgor; and
(q) any defense based on any change in the time, manner or place of
any payment under, or in any other term of, the Credit Documents or any other
amendment, renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms of the Credit Documents; and
(r) any defense based upon any borrowing or grant of a security
interest under Section 364 of Title 11 of the United States Code.
8.1.5 Foreclosure Waiver. To the extent permitted by applicable law,
Pledgor waives the posting of any bond otherwise required of Collateral Agent in
connection with any judicial process or proceeding to obtain possession of,
replevy, attach, or levy upon the Collateral, to enforce any judgment or other
security for the Obligations, to enforce any judgment or other court order
entered in favor of Collateral Agent, or to enforce by specific performance,
temporary restraining order, preliminary or permanent injunction, this Agreement
or any other agreement or document between Pledgor and Collateral Agent. Pledgor
further agrees that upon the occurrence and during the continuation of an Event
of Default, Collateral Agent may elect to nonjudicially or judicially foreclose
against any real or personal property security it holds for the Obligations or
any part thereof, or to exercise any other remedy against any Borrower or any
other Person, any security or any guarantor, even if the effect of that action
is to deprive Pledgor of the right to collect reimbursement from any Borrower or
any other Person for any sums paid by Pledgor to Collateral Agent.
8.1.6 Waiver of Rights of Subrogation. Until the indefeasible payment
in full in cash of the Obligations and the termination of all the Lender's
Commitments and all other obligations to the Secured Parties under the Credit
Documents (other than the Obligations that are intended to survive the
termination of the Credit Documents), (a) Pledgor shall not have any right of
subrogation and waives all rights to enforce any remedy which Collateral Agent
now have or may hereafter have against any Borrower or any of their Affiliates,
and waives the benefit of, and all rights to participate in, any security now or
hereafter held by Collateral Agent from any Borrower or any of their Affiliates
and (b) Pledgor waives any claim, right or remedy which Pledgor may now have or
hereafter acquire against any Borrower or any of their Affiliates that arises
hereunder and/or from the performance by Pledgor hereunder, including any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of Collateral
Agent against any Borrower or any of their Affiliates, or any security which
Collateral Agent now have or hereafter acquire, whether or not such claim, right
or remedy arises in equity, under contract, by statute, under common law or
15
otherwise. Any amount paid to Pledgor on account of any such subrogation rights
prior to the payment in full in cash of the Obligations and the termination of
the Lender's Commitments and all other obligations to the Secured Parties under
the Credit Documents (other than the Obligations that are intended to survive
the termination of the Credit Documents) shall be held in trust for the benefit
of the Secured Parties and shall immediately thereafter be paid to Collateral
Agent, for the benefit of the Secured Parties.
8.2 Borrower's Consent and Covenant. Any Borrower hereby consents to the
assignment of and grant of a security interest in the Collateral to Collateral
Agent for the benefit of the Secured Parties and to the exercise by Collateral
Agent of all rights and powers assigned or delegated to Collateral Agent by
Pledgor hereunder, including the rights upon and during an Event of Default to
exercise Pledgor's voting rights and other rights to manage or control
Borrowers, all in accordance with the Credit Documents.
8.3 Attorney-in-Fact. Pledgor hereby constitutes and appoints Collateral
Agent, acting for and on behalf of itself and each successor or assign of
Collateral Agent the true and lawful attorney-in-fact of Pledgor, with full
power and authority in the place and stead of Pledgor and in the name of
Pledgor, Collateral Agent or otherwise, subject to the terms of the Credit
Agreement, this Agreement and applicable law, to enforce all rights, interests
and remedies of Pledgor with respect to the Collateral, including the right:
(a) to ask, require, demand, receive and give acquittance for any and
all moneys and claims for money due and to become due under or arising out of
the Collateral, including any insurance policies;
(b) to elect remedies under the Collateral and to endorse any checks
or other instruments or orders in connection therewith;
(c) to vote, demand, receive and enforce Pledgor's rights with respect
to the Collateral;
(d) to give appropriate receipts, releases and satisfactions for and
on behalf of and in the name of Pledgor or, at the option of Collateral Agent,
in the name of Collateral Agent, with the same force and effect as Pledgor could
do if this Agreement had not been made;
(e) to file any claims or take any action or institute any proceedings
in connection therewith which Collateral Agent may reasonably deem to be
necessary or advisable; and
(f) to pay, settle or compromise all bills and claims which may be or
become Liens or security interests against any or all of the Collateral, or any
part thereof, unless a bond or other security satisfactory to Collateral Agent
has been provided;
provided, however, that Collateral Agent shall not exercise any of the
aforementioned rights unless an Event of Default has occurred and is continuing
and Collateral Agent has not waived its remedies with respect thereto in
accordance with the Credit Documents. This power of attorney is a power coupled
with an interest and shall be irrevocable until the termination of this
Agreement in accordance with the terms hereof and the other Credit Documents;
provided
16
further, however, that nothing in this Agreement shall prevent the Pledgor from,
prior to the exercise by Collateral Agent of any of the aforementioned rights,
undertaking the Pledgor's operations in the ordinary course of business in
accordance with the Collateral and the Credit Documents.
8.4 Perfection; Further Assurances.
8.4.1 Perfection. Pledgor agrees that from time to time, at the
expense of Pledgor, Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary, or that Collateral Agent may reasonably request, in order to perfect,
to ensure the continued perfection of, and to protect the assignment and
security interest granted or intended to be granted hereby or to enable
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Pledgor shall (a) deliver the Collateral or any part thereof to Collateral
Agent, as Collateral Agent may reasonably request in accordance with this
Agreement, accompanied by such duly executed instruments of transfer or
assignment as Collateral Agent may reasonably request, and (b) authorize,
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments, endorsements or notices, as may be
reasonably necessary or desirable or as Collateral Agent may reasonably request,
in order to perfect and preserve the assignments and security interests granted
or purported to be granted hereby.
8.4.2 Filing of Financing and Continuation Statements. Pledgor hereby
authorizes the filing of any financing statements or continuation statements,
and amendments to financing statements, or any similar document in any
jurisdictions and with any filing offices as Collateral Agent may reasonably
determine are necessary or advisable to perfect the security interest granted to
Collateral Agent, for the benefit of the Secured Parties, herein. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of the Collateral that describes such
property in any other manner as Collateral Agent may reasonably determine is
necessary, advisable or prudent to ensure the perfection of the security
interest in the Collateral granted to Collateral Agent herein. Copies of any
such financing statements shall promptly be delivered to Pledgor.
8.4.3 Information Concerning Collateral. Pledgor shall, promptly upon
receipt of prior written request, provide to Collateral Agent all information
and evidence it may reasonably request concerning the Collateral to enable
Collateral Agent to enforce the provisions of this Agreement.
8.5 Payment of Taxes. Pledgor shall pay or cause to be paid, before any
fine, penalty, interest or cost attaches thereto, all taxes, assessments and
other governmental or nongovernmental charges or levies (other than those taxes
that it is contesting in good faith and by appropriate proceedings, and in
respect of which it has established adequate reserves for such taxes) now or
hereafter assessed or levied against the Collateral pledged by it hereunder (or
against the Collateral in which Pledgor has granted to Collateral Agent a
security interest of first priority) and shall retain copies of, and, upon
written request, permit Collateral Agent to examine receipts showing payment of
any of the foregoing.
17
8.6 Place of Business; Location of Records. Unless Collateral Agent is
otherwise notified under Section 5.10, the chief executive office of Pledgor is,
and all records of Pledgor concerning the Collateral are and will be, located at
the address set forth in Section 8.12.
8.7 Continuing Assignment and Security Interest; Transfer of Notes. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full in cash and performance in full of the Obligations (other
than the Obligations that are intended to survive the termination of the Credit
Agreement) and as otherwise provided in Section 8.9; (b) be binding upon
Borrowers, Pledgor, and their respective successors and assigns; and (c) inure,
together with the rights and remedies of Collateral Agent, to the benefit of the
Secured Parties and their successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), Collateral Agent may assign or
otherwise transfer the Notes or other evidence of indebtedness held by it for
the benefit of the Secured Parties to any other Person to the extent permitted
by and in accordance with the Credit Agreement, and such other Person shall
thereupon become vested with all or an appropriate part of the benefits in
respect thereof granted to Collateral Agent herein or otherwise. The release of
the security interest in any or all of the Collateral, the taking or acceptance
of additional security, or the resort by Collateral Agent to any security it may
have in any order it may deem appropriate, shall not affect the liability of any
Person on the indebtedness secured hereby.
8.8 Termination of Security Interest. Upon the payment in full in cash of
all Obligations and the termination of all the Lender's Commitments (other than
the obligations that are intended to survive the termination of the Credit
Documents and return or expiration of the Letter of Credit), this Agreement and
the security interest and all other rights granted hereby shall terminate and
all rights to the Collateral shall revert to Pledgor. Upon any such termination,
Collateral Agent will return all certificates previously delivered, if any, to
Collateral Agent representing the Pledged Equity Interests and, at Pledgor's
expense and upon its written direction, execute and deliver to Pledgor such
documents (including UCC-3 termination statements) as any Borrower or Pledgor
shall reasonably request to evidence such termination, to release all security
interest on the Collateral and to return such Collateral to Pledgor. If this
Agreement shall be terminated or revoked by operation of law, Pledgor shall
indemnify and save Collateral Agent harmless from any loss (other than any loss
arising out of the gross negligence or willful misconduct of Collateral Agent)
which may be suffered or incurred by Collateral Agent in acting hereunder prior
to the receipt by Collateral Agent, its successors, transferees, or assigns of
notice of such termination or revocation.
8.9 Security Interest Absolute. All rights of Collateral Agent and the
security interest hereunder, and all obligations of Pledgor hereunder, shall be
unconditional irrespective of: (a) any lack of validity or enforceability of the
Credit Agreement, any other Credit Document or any other agreement or instrument
relating thereto; (b) the failure of Collateral Agent (i) to assert any claim or
demand or to enforce any right or remedy against any Borrower, any Affiliate of
any Borrower or any other Person under the provisions of any Credit Document or
otherwise or (ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any of the Obligations; (c) any change in the time,
manner or place of payment of, or in any other term of the Obligations
(including any increase in the amount thereof), or any other amendment or waiver
of or any consent to any departure from the any Credit Document; (d) any
reduction,
18
limitation, impairment or termination of any of the Obligations for any reason
other than the written agreement of the Secured Parties to terminate the
Obligations in full, but including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to, and Pledgor hereby waives
any right to or claim of, any defense or setoff, counterclaim, recoupment, or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligation of any Borrower, any Affiliate of any Borrower
or otherwise; (e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of any Credit Document;
(f) any exchange, surrender, release or non-perfection of any Collateral, or any
release, amendment or waiver or addition of or consent to departure from any
other security interest held by Collateral Agent; (g) any bankruptcy or
insolvency of Borrowers, Pledgor or any other Person; or (h) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, Pledgor or any third party pledgor (other than the defense of
payment).
8.10 Limitation on Duty of Collateral Agent with Respect to the Collateral.
The powers conferred on Collateral Agent hereunder are solely to protect its
interest in the Collateral for the benefit of the Secured Parties and shall not
impose any duty on Collateral Agent or any of its designated agents to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for monies actually received by it hereunder, and except to
the extent of any duties imposed by applicable law which have not been waived
hereunder, Collateral Agent shall have no duty with respect to any Collateral
and no provision of this Agreement shall be interpreted as giving rise to any
implied duties or obligations on the part of Collateral Agent. Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment that is substantially equivalent to that which Collateral Agent
accords its own property, it being expressly agreed, to the maximum extent
permitted by applicable law, that Collateral Agent shall have no responsibility
for (a) taking any necessary steps to preserve rights against any Persons with
respect to any Collateral, or (b) taking any action to protect against any
diminution in value of the Collateral, but, in each case, Collateral Agent may
do so and all expenses reasonably incurred in connection therewith shall be part
of the Obligations.
8.11 Amendments; Waivers; Consents. This Agreement may not be amended,
amended and restated, supplemented or otherwise modified, except in a writing
signed by each of the parties hereto and otherwise in accordance with the
provisions of Section 11.21 of the Credit Agreement.
8.12 Notices. All notices required or permitted under the terms and
provisions hereof shall be in writing, and any such notice shall become
effective upon delivery in accordance with Section 11.1 of the Credit Agreement.
Notices to Borrowers or Collateral Agent may be given at the address set forth
in Section 11.1 of the Credit Agreement. Notices to Pledgor may be given at the
following address (or such other address as notified by Borrowers or Collateral
Agent):
Pledgor: Renegy Holdings, Inc.
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000-0000
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8.13 Modification of Obligations. If Collateral Agent shall at any time or
from time to time, with or without the consent of, or notice to, Pledgor:
(a) change or extend the manner, place or terms of payment of, or
renew or alter all or any portion of, the Obligations;
(b) take any action under or in respect of the Credit Documents in the
exercise of any remedy, power or privilege contained therein or available at
law, equity or otherwise, or waive or refrain from exercising any such remedies,
power or privileges;
(c) amend or modify, in any manner whatsoever, the Credit Documents;
(d) extend or waive the time for Pledgor's, any Borrower's or any
other Person's performance of, or compliance with, any term, covenant or
agreement on its part to be performed or observed under the Credit Documents, or
waive such performance or compliance or consent to a failure of, or departure
from, such performance or compliance;
(e) take and hold security or collateral for the payment of the
Obligations, or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which Collateral Agent has been
granted a Lien, to secure any indebtedness of Pledgor, any Borrower or any other
Person party to a Credit Document to the Secured Parties;
(f) release or limit the liability of anyone who may be liable in any
manner for the payment of any amounts owed by Pledgor, any Borrower or any other
Person party to a Credit Document to Collateral Agent;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of Pledgor,
any Borrower or any other Person party to a Credit Document are subordinated to
the claims of Collateral Agent; or
(h) apply any sums by whomever paid or however realized to any amounts
owing by Pledgor or any Borrower to the Secured Parties in such manner as
Collateral Agent shall determine in its discretion;
then, subject to Section 8.8, Collateral Agent shall not incur any liability to
Pledgor pursuant hereto as a result thereof and no such action shall impair or
release the obligations of Pledgor under this Agreement.
8.14 Governing Law. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
Lien of, and security interests created by, this Agreement in or upon the
Collateral shall be governed by the laws of the State of New York, without
reference to conflicts of law (other than Section 5-1401 and Section 5-1402 of
the New York General Obligations Law), except as required by mandatory
provisions of law and except to the extent that the validity or perfection or
priority of the Lien and security interest hereunder, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York.
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8.15 Reinstatement. This Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time any payment
pursuant to this Agreement is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, reorganization, liquidation of
Pledgor, any Borrower or any other Person party to a Credit Document or upon the
dissolution of, or appointment of any intervenor or conservator of, or trustee
or similar official for, Pledgor, any Borrower or any other Person party to a
Credit Document or any substantial part of Pledgor's, any Borrower's or any
other such Person's assets, or otherwise, all as though such payments had not
been made, and each applicable Borrower shall pay Collateral Agent on demand all
reasonable costs and expenses (including reasonable fees of counsel) incurred by
Collateral Agent in connection with such rescission or restoration.
8.16 Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
8.17 Survival of Provisions. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
Credit Agreement and the making of the Advances and extensions of credit
thereunder. Except as otherwise provided in this Agreement or implied by law,
the agreements, representations and warranties of Pledgor set forth herein shall
terminate at the same time as the security interest and other rights granted
hereunder shall terminate pursuant to Section 8.8.
8.18 Headings Descriptive. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
8.19 Entire Agreement. This Agreement, together with the Credit Documents,
is intended by the parties hereto as a final expression of their agreement and
is intended as a complete and exclusive statement of the terms and conditions
thereof. For the avoidance of doubt, this Agreement shall be deemed to supersede
and replace the Stone Axe Pledge Agreement and NMALC Pledge Agreement for the
purposes of the Credit Agreement and Credit Documents and upon the effectiveness
of this Agreement, the Stone Axe Pledge Agreement and the NMALC Pledge Agreement
are hereby terminated.
8.20 Time. Time is of the essence of this Agreement.
8.21 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document.
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8.22 Limitation of Liability. No claim shall be made by Pledgor or any
Borrower against Collateral Agent or any of its Affiliates, directors,
employees, attorneys or agents for any loss of profits, business or anticipated
savings, special or punitive damages or any indirect or consequential loss
whatsoever in respect of any breach or wrongful conduct (whether or not the
claim therefor is based on contract, tort or duty imposed by law), in connection
with, arising out of or in any way related to the transactions contemplated by
this Agreement or the other Credit Documents or any act or omission or event
occurring in connection therewith; and Pledgor and Borrowers hereby waive,
release and agree not to xxx upon any such claim for any such damages, whether
or not accrued and whether or not known or suspected to exist in their favor.
8.23 Submission to Jurisdiction. Collateral Agent, Borrowers and Pledgor
agree that any legal action or proceeding by or against Pledgor or any Borrower
or with respect to or arising out of this Agreement or any other Credit Document
may be brought in or removed to the courts of the State of New York, in and for
the County of New York, or of the United States of America for the Southern
District of New York, as Collateral Agent may elect. By execution and delivery
of this Agreement, Collateral Agent, Borrowers and Pledgor accept, for
themselves and in respect of their property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. Collateral Agent, Borrowers
and Pledgor irrevocably consent to the service of process out of any of the
aforementioned courts in any manner permitted by law. Nothing herein shall
affect the right of Collateral Agent to bring legal action or proceedings in any
other competent jurisdiction. Collateral Agent, Borrowers and Pledgor hereby
waive any right to stay or dismiss any action or proceeding under or in
connection with this Agreement brought before the foregoing courts on the basis
of forum non-conveniens.
8.24 WAIVER OF JURY TRIAL. PLEDGOR, BORROWERS AND COLLATERAL AGENT HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG
PLEDGOR, BORROWERS AND COLLATERAL AGENT THAT IS BEING ESTABLISHED. PLEDGOR,
BORROWERS AND COLLATERAL AGENT ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. PLEDGOR, BORROWERS AND
COLLATERAL AGENT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
8.25 Knowledge and Attribution. Reference in this Agreement to the
"knowledge", "best knowledge" or facts and circumstances "known to" Pledgor, and
all like references, means facts or circumstances of which a responsible officer
of Pledgor has actual knowledge.
8.26 Rights of Collateral Agent. Collateral Agent shall be entitled to the
rights, protections, immunities and indemnities set forth in the Credit
Agreement as if specifically set forth herein.
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8.27 Consent and Acknowledgement. Pledgor hereby acknowledges receiving
copies of the Credit Agreement and the other Credit Documents and consents to
the terms and provisions of each.
8.28 Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon, or give to any
Person, other than Pledgor, Borrowers and Collateral Agent, acting for the
benefit of the Secured Parties, any security, rights, remedies or claims, legal
or equitable, under or by reason hereof, or any covenant or condition hereof.
This Agreement and the covenants and agreements herein contained are and shall
be held to be for the sole and exclusive benefit of Pledgor, Borrowers and
Collateral Agent, acting for the benefit of the Secured Parties.
8.29 Waiver of Transfer Restrictions. Notwithstanding anything to the
contrary contained in the LLC Agreement, Pledgor hereby waives any requirement
contained in the LLC Agreement that it consent to a transfer of a membership
interest in Borrowers in connection with a foreclosure on such membership
interest under the Credit Documents.
8.30 Scope of Liability. Collateral Agent acknowledges the applicability of
the terms of Article 8 of the Credit Agreement.
[Remainder of this Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute this Pledge Agreement as of the date first above written.
RENEGY HOLDINGS, INC.
as Pledgor
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
RENEGY, LLC,
as Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
RENEGY TRUCKING, LLC,
as Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
SNOWFLAKE WHITE MOUNTAIN POWER, LLC,
as Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Manager
COBANK, ACB, as Collateral Agent
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director, Energy
Services, Communications and
Energy Banking Group
