COLLATERAL ASSIGNMENT
Exhibit
10.9
COLLATERAL
ASSIGNMENT made as of this 18th day of September 2007 (“Collateral
Assignment”)
by
True North Energy Corporation, a Nevada corporation (“TNEC”)
and
ICF Energy Corporation, a Texas corporation (“ICF”,
and
together with TNEC, the “Assignors”
and
each an “Assignor”),
to
Valens U.S. SPV I, LLC (“Assignee”),
as
agent for Purchasers (as defined in the Purchase Agreement (as defined
below)).
FOR
VALUE
RECEIVED, and as collateral security for all debts, liabilities and obligations
of each Assignor to Assignee and the Purchasers, now existing or hereafter
arising under that certain Securities Purchase Agreement dated as of September
18, 2007 (as amended, modified, restated or supplemented from time to time,
the
“Purchase
Agreement”)
among
the Assignors, Purchasers and Assignee, as agent for Purchasers, and the Related
Agreements (as defined in the Purchase Agreement), each Assignor hereby assigns,
transfers and sets over unto Assignee, for the ratable benefit of Assignee
and
the other Purchasers, its successors and assigns, all of its rights, but not
its
obligations, under that certain (i) Purchase and Sale Agreement
effective as of July 1, 2007 between Prime Natural Resources, Inc.
(“Seller”)
and
ICF with a limited appearance by TNEC and (ii) all of the agreements and
documents by which assets or rights of the Seller are transferred to either
or
both Assignors (as each may be amended, modified, restated or supplemented
from
time to time, collectively, the “Acquisition
Agreement”),
including, without limitation, all indemnity rights and all moneys and claims
for moneys due and/or to become due to Assignors under the Acquisition Agreement
and all documents entered into in connection therewith (the “Agreements”).
Each
Assignor hereby (a) specifically authorizes and directs Seller, upon notice
to
Seller by Assignee, to make all payments due to either or both Assignors under
or arising under the Agreements directly to Assignee for the ratable benefit
of
Assignee and the other Purchasers and (b) irrevocably authorizes and empowers
Assignee (i) 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 either or both Assignors by Seller under and pursuant to the
Agreements, (ii) to endorse any checks, drafts or other orders for the payment
of money payable to either or both Assignors in payment thereof, and (iii)
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 either or both Assignors
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.
Seller
is
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 and Seller is
hereby expressly released by Assignors from any and all liabilities arising
under or resulting from Seller’s performance of its authorizations given by
Assignors hereunder. 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 (i) payment by Seller to Assignee of any amounts due to either
or
both Assignors under or arising under the Agreements, (ii) the termination
of
the Agreements; or (iii) the expiration or the performance by Seller of its
obligations under the Agreements, the obligations of Seller to either or both
Assignors, and Assignee pursuant to this Collateral Assignment with respect
to
such amounts shall be deemed paid in full.
Without
first obtaining the written consent of Assignee, each Assignor and/or Seller
shall not amend or modify the Acquisition Agreement.
In
the
event either or both Assignors decline to exercise any rights under the
Agreements, Assignee shall have the right to enforce any and all such rights
of
such Assignor(s) directly against Seller. A facsimile signature shall be treated
as an original signature.
If
all
Obligations, as such term is defined in the Master Security Agreement dated
the
18th day of September 2007, between the Assignors and Assignee, as agent for
itself and the other Purchasers, are paid, performed or otherwise extinguished,
then and in that case only, this Collateral Assignment shall have no force
and
effect and all rights under the Agreements assigned hereby shall be reassigned
by Assignee to the Assignors with an acknowledgement that Seller has no further
obligation to Assignee hereunder or thereunder and the Assignors shall promptly
thereafter provide Seller a written notification of such
acknowledgement.
This
Collateral Assignment shall be governed by and interpreted in accordance with
the laws of the State of Texas, without regard to its conflict of laws
principles.
This
Collateral Assignment may be executed in one or more counterparts, each of
which
shall be deemed an original, but all of which together shall constitute one
and
the same instrument.
[Signature
Page Follows]
2
IN
WITNESS WHEREOF, each Assignor has duly executed this Collateral Assignment
as
of the day and year first above written.
| TRUE NORTH ENERGY CORPORATION | ||
| |
|
|
| By: | /s/ Xxxx X. Folnovic | |
|
Name: Xxxx X. Folnovic |
||
| Title: President and CEO | ||
| ICF ENERGY CORPORATION | ||
| |
|
|
| By: | /s/ Xxxx X. Folnovic | |
|
Name: Xxxx X. Folnovic |
||
| Title: President and CEO | ||
| VALENS U.S. SPV I, LLC, as Agent | ||
| By: |
Valens Capital Management, LLC, as
investment manager
|
|
| |
|
|
| By: | /s/ Xxxxxx Grin | |
|
Name: Xxxxxx Grin |
||
| Title: Authorized Signatory | ||
Seller
hereby consents and
agrees
to
the provisions of this
Collateral
Assignment as of this
18th
day of
September, 2007.
PRIME
NATURAL RESOURCES, INC.
| By: /s/ Xxxx X. Xxxxx | |||
|
Name:
Xxxx X. Xxxxx
Title:
CFO
|
