Exhibit 10.3
GUARANTEE AND COLLATERAL AGREEMENT
made by
each of the Grantors (as defined herein)
in favor of
JPMORGAN CHASE BANK,
as Administrative Agent
Dated as of May 28, 2002
TABLE OF CONTENTS
ARTICLE I Definitions .................................................... 1
Section 1.01 Definitions ............................................ 1
Section 1.02 Other Definitional Provisions .......................... 3
ARTICLE II Guarantee ..................................................... 3
Section 2.01 Guarantee .............................................. 3
Section 2.02 [Intentionally Left Blank] ............................. 4
Section 2.03 No Subrogation, Contribution or Reimbursement .......... 4
Section 2.04 Amendments, Etc. with respect to the Obligations ....... 5
Section 2.05 Guarantee Absolute and Unconditional ................... 5
Section 2.06 Reinstatement .......................................... 6
Section 2.07 Payments ............................................... 6
ARTICLE III Grant of Security Interest ................................... 6
Section 3.01 Grant of Security Interest ............................. 6
Section 3.02 Transfer of Collateral ................................. 7
ARTICLE IV Representations and Warranties ................................ 8
Section 4.01 Representations in Credit Agreement .................... 8
Section 4.02 Title; No Other Liens .................................. 8
Section 4.03 Perfected First Priority Liens ......................... 8
Section 4.04 Legal Name, Organizational Status, Chief Executive
Office ................................................. 8
Section 4.05 Prior Names and Addresses .............................. 8
Section 4.06 Pledged Securities ..................................... 9
Section 4.07 Pledged Intangibles .................................... 9
Section 4.08 Deposit Accounts and Securities Accounts ............... 9
Section 4.09 Benefit to the Guarantor ............................... 9
ARTICLE V Covenants ...................................................... 9
Section 5.01 Covenants in Credit Agreement .......................... 10
Section 5.02 Maintenance of Perfected Security Interest; Further
Documentation .......................................... 10
Section 5.03 Pledged Interests ...................................... 10
Section 5.04 Consents ............................................... 11
Section 5.05 New Accounts ........................................... 11
ARTICLE VI Remedial Provisions ........................................... 12
Section 6.01 Pledged Interests ...................................... 12
Section 6.02 Code and Other Remedies ................................ 13
Section 6.03 Private Sales of Pledged Interests ..................... 14
Section 6.04 Waiver; Deficiency ..................................... 15
Section 6.05 Non-Judicial Enforcement ............................... 15
ARTICLE VII The Administrative Agent ..................................... 15
Section 7.01 Administrative Agent's Appointment as Attorney-in-Fact,
Etc .................................................... 15
Section 7.02 Duty of Administrative Agent ........................... 16
i
Section 7.03 Execution of Financing Statements ...................... 17
Section 7.04 Authority of Administrative Agent ...................... 17
ARTICLE VIII Subordination of Indebtedness ............................... 18
Section 8.01 Subordination of All Guarantor Claims .................. 18
Section 8.02 Claims in Bankruptcy ................................... 18
Section 8.03 Payments Held in Trust ................................. 18
Section 8.04 Liens Subordinate ...................................... 18
Section 8.05 Notation of Records .................................... 19
ARTICLE IX Miscellaneous ................................................. 19
Section 9.01 Waiver ................................................. 19
Section 9.02 Notices ................................................ 19
Section 9.03 Payment of Expenses, Indemnities, Etc .................. 19
Section 9.04 Amendments in Writing .................................. 20
Section 9.05 Successors and Assigns ................................. 20
Section 9.06 Invalidity ............................................. 20
Section 9.07 Counterparts ........................................... 20
Section 9.08 References ............................................. 20
Section 9.09 Survival ............................................... 20
Section 9.10 Captions ............................................... 21
Section 9.11 No Oral Agreements ..................................... 21
Section 9.12 Governing Law; Submission to Jurisdiction .............. 21
Section 9.13 WAIVER OF JURY TRIAL ................................... 22
Section 9.14 Acknowledgments ........................................ 22
Section 9.15 Additional Grantors .................................... 23
Section 9.16 Set-Off ................................................ 23
Section 9.17 Releases ............................................... 23
Section 9.18 Acceptance ............................................. 24
SCHEDULES:
1. Notice Addresses of Grantors
2. Description of Pledged Securities
3. Filings and Other Actions Required to Perfect Security Interests
4. Legal Name, Location of Jurisdiction of Organization, Organizational
Identification Number, Taxpayer Identification Number and Chief
Executive Office
5. Prior Names, Prior Chief Executive Office, Location of Tangible Assets
6. Description of Pledged Intangibles
7. Description of Deposit Accounts and Securities Accounts
ii
ANNEX:
I. Form of Assumption Agreement
II. Form of Blocked Account Control Agreement
III. Form of Securities Account Control Agreement
iii
This GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 28, 2002, is
made by EEX OPERATING, L.P., a Texas limited partnership (the "Borrower"), EEX
CORPORATION, a Texas corporation (together with the Borrower each an "Obligor",
and collectively, the "Obligors"), and each of the other signatories hereto
other than the Administrative Agent (the Obligors and each of the other
signatories hereto other than the Administrative Agent, together with any other
Subsidiary of the Obligors that becomes a party hereto from time to time after
the date hereof, the "Grantors"), in favor of JPMORGAN CHASE BANK, as
administrative agent (in such capacity, together with its successors in such
capacity, the "Administrative Agent"), for the banks and other financial
institutions (the "Lenders") from time to time parties to the Credit Agreement,
dated as of May 28, 2002 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Obligors, the Lenders, the
Administrative Agent, and the other Agents party thereto.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
ARTICLE I
Definitions
Section 1.01 Definitions.
(a) As used in this Agreement, each term defined above shall have the
meaning indicated above. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms as well as all uncapitalized terms
which are defined in the New York UCC on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Fixtures, General
Intangibles, Goods, Instruments, Inventory, Deposit Account, Investment
Property, Proceeds, Securities Account, Securities Intermediary and Supporting
Obligations.
(b) The following terms shall have the following meanings:
"Account Collateral" shall mean each Grantor's right, title and
interest, whether now existing or hereafter acquired or arising, in, to and
under, each Deposit Account and Securities Account (including any successor
accounts to any such accounts) and all amounts, investments and any other
property (including, but not limited to, securities, financial assets,
investment property, security entitlements and instruments) at anytime deposited
in or credited to any such account and all security entitlements with respect
thereto, including all income or gain earned thereon and any proceeds thereof;
provided, however, that the Excepted Accounts shall not constitute Account
Collateral.
"Agreement" shall mean this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Blocked Account Control Agreement" shall mean a Blocked Account
Control Agreement, in substantially the form set forth on Annex II attached
hereto, by and among a Grantor, the Administrative Agent and a depositary
institution.
"Collateral" shall have the meaning assigned such term in Section 3.01.
"Convertible Notes" shall mean, collectively, that certain (i) Amended
and Restated Subordinated Convertible Note Number 1, dated December 17, 1999,
made by EEX Reserves in favor of EEX in the face amount of $170,238,265.00, (ii)
Subordinated Convertible Note Number 2, dated September 30, 2000, made by EEX
Reserves in favor of EEX in the face amount of $2,638,525.00, (iii) Subordinated
Convertible Note Number 3, dated March 31, 2001, made by EEX Reserves in favor
of EEX in the face amount of $2,701,979.00, (iv) Subordinated Convertible Note
Number 4, dated June 30, 2001, made by EEX Reserves in favor of EEX in the face
amount of $13,656,517.00, (v) Subordinated Convertible Note Number 5, dated
September 30, 2001, made by EEX Reserves in favor of EEX, in the face amount of
$10,365,469.00, (vi) Subordinated Convertible Note Number 6, dated December 31,
2001, made by EEX Reserves in favor of EEX in the face amount of $10,417,972.00,
(vii) Subordinated Convertible Note Number 7, dated March 31, 2002, made by EEX
Reserves in favor of EEX, in the face amount of $12,085,990.00 and (viii)
Subordinated Convertible Note Number 8, dated April 30, 2002, made by EEX
Reserves in favor of EEX, in the face amount of $12,214,056.00.
"Guarantors" shall mean, collectively, each Grantor other than the
Borrower.
"Issuers" shall mean, collectively, each issuer of a Pledged Interest.
"New York UCC" shall mean the Uniform Commercial Code, as it may be
amended, from time to time in effect in the State of New York.
"Obligations" shall mean, collectively, the payment and performance of
all Indebtedness and other obligations of each of the Obligors under the Credit
Agreement and the Loan Documents and any Hedging Agreement entered into by any
of the Obligors or Subsidiaries with any Lender (or any Affiliate of any Lender)
while such Lender is a party to the Credit Agreement (but only to the extent
that such Hedging Agreement is permitted by the terms of the Credit Agreement),
including the unpaid principal of and interest on the Loans and LC Exposure and
all other obligations and liabilities of each of the Obligors (including,
without limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and LC Exposure and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
each of the Obligors, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agents or any
Lender (or, in the case of any Hedging Agreement, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Loan Documents, any Letter
of Credit or any Hedging Agreement entered into by any of the Obligors or
Subsidiaries with the Issuing Bank, any Lender (or any Affiliate of any Lender)
while such Lender is a party to the Credit Agreement (but only to the extent
that such Hedging Agreement is permitted by the terms of the Credit Agreement)
or any other document made, delivered or given in connection therewith, in each
case whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent or to the Lenders
that are required to be paid by each of the Obligors pursuant to the terms of
any of the foregoing agreements).
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"Pledged Intangibles" shall mean (i) the partnership, membership or
other ownership interests described or referred to in Schedule 6 to the extent
that a Grantor can grant a security interest without violating any restriction
on assignment in any agreement forming such interest; and (ii) (a) the
certificates or instruments, if any, representing such interests, (b) all
dividends and distributions (cash or otherwise), cash, instruments, rights to
subscribe, purchase or sell and all other rights and property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such interests, (c) all replacements, additions to and
substitutions for any of the property referred to in this definition, including,
without limitation, claims against third parties, (d) the proceeds, interest,
profits and other income of or on any of the property referred to in this
definition and (e) all books and records relating to any of the property
referred to in this definition.
"Pledged Interests" shall mean the Pledged Intangibles and the Pledged
Securities.
"Pledged Securities" shall mean: (i) the equity interests for Domestic
Subsidiaries described or referred to in Schedule 2; and (ii) (a) the
certificates or instruments, if any, representing such equity interests, (b) all
dividends (cash, stock or otherwise), cash, instruments, rights to subscribe,
purchase or sell and all other rights and property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such equity interests, (c) all replacements, additions to and substitutions
for any of the property referred to in this definition, including, without
limitation, claims against third parties, (d) the proceeds, interest, profits
and other income of or on any of the property referred to in this definition and
(e) all books and records relating to any of the property referred to in this
definition.
"Securities Account Control Agreement" shall mean a Securities Account
Control Agreement, in substantially the form set forth on Annex III attached
hereto, by and among a Grantor, the Administrative Agent and a Securities
Intermediary.
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.02 Other Definitional Provisions.
(a) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(b) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
ARTICLE II
Guarantee
Section 2.01 Guarantee.
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Lenders and their Affiliates (with respect to Hedging
Agreements constituting part of the Obligations) and each of their respective
successors, endorsees, transferees and assigns, the prompt and complete
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payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations. This is a guarantee
of payment and not collection and the liability of each Guarantor is primary and
not secondary.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors.
(c) Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Article II or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.
(d) Each Guarantor agrees that if the maturity of the Obligations is
accelerated by bankruptcy or otherwise, such maturity shall also be deemed
accelerated for the purpose of this guarantee without demand or notice to such
Guarantor. The guarantee contained in this Article II shall remain in full force
and effect until all the Obligations shall have been satisfied by payment in
full, no Letter of Credit shall be outstanding and all Hedging Agreements
secured hereby and the Credit Agreement and the Aggregate Commitments shall be
terminated, notwithstanding that from time to time during the term of the Credit
Agreement, no Obligations may be outstanding.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full, no Letter of Credit shall be outstanding, and all
Hedging Agreements secured hereby and the Credit Agreement and the Aggregate
Commitments are terminated.
Section 2.02 [Intentionally Left Blank].
Section 2.03 No Subrogation, Contribution or Reimbursement. Notwithstanding
any payment made by any Guarantor hereunder or any set-off or application of
funds of any Guarantor by the Administrative Agent or any Lender, no Guarantor
shall be entitled to be subrogated to any of the rights of the Administrative
Agent or any Lender against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Lender for the payment of the Obligations, nor shall any Guarantor
seek or be entitled to seek any indemnity, exoneration, participation,
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder.
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Section 2.04 Amendments, Etc. with respect to the Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, (a) any demand for payment of any of the Obligations
made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender and any of the Obligations continued; (b)
the Obligations, the liability of any other Person upon or for any part thereof
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by,
or any indulgence or forbearance in respect thereof granted by, the
Administrative Agent or any Lender; (c) the Credit Agreement, the other Loan
Documents, any Hedging Agreement and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders, the
Majority Lenders or all Lenders, as the case may be) may deem advisable from
time to time; (d) any collateral security, guarantee or right of offset at any
time held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released; and (e) any
other event shall occur which constitutes a defense or release of sureties
generally. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for the guarantee contained in this Article
II or any property subject thereto.
Section 2.05 Guarantee Absolute and Unconditional. Each Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon the guarantee contained in this Article II or acceptance of the
guarantee contained in this Article II; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Article II and no notice of creation of the Obligations or any extension of
credit already or hereafter contracted by or extended to the Borrower need be
given to any Guarantor; and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Article II. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Article II shall be construed as a continuing,
completed, absolute and unconditional guarantee of payment without regard to (a)
the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, (c) the insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Borrower or any other Guarantor or any other
Person at any time liable for the payment of all or part of the Obligations; or
any sale, lease or transfer of any or all of the assets of the Borrower or any
other Guarantor, or any changes in the shareholders of the Borrower or the
Guarantor; (d) the fact that any Collateral or Lien contemplated or intended to
be given, created or granted as security for
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the repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by each of the Guarantors that it is not entering into
this Agreement in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectability or value of any of the Collateral for
the Obligations; or (e) any other circumstance or act whatsoever, including any
action or omission of the typed described in Section 2.04 (with or without
notice to or knowledge of the Borrower or such Guarantor), which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of such Guarantor under the guarantee contained
in this Article II, in bankruptcy or in any other instance. When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder against
any Guarantor, the Administrative Agent or any Lender may, but shall be under no
obligation to, join or make a similar demand on or otherwise pursue or exhaust
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by the Administrative Agent or any Lender to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
Section 2.06 Reinstatement. The guarantee contained in this Article II
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
Section 2.07 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Principal Office of the Administrative Agent
specified pursuant to the Credit Agreement.
ARTICLE III
Grant of Security Interest
Section 3.01 Grant of Security Interest. Each Grantor hereby pledges,
assigns and transfers to the Administrative Agent, and grants to the
Administrative Agent, for the ratable benefit of the Lenders and their
Affiliates, a security interest in all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest and whether
now existing or hereafter coming into existence (collectively, the
"Collateral"), as collateral security for the
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prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations:
(1) all Accounts;
(2) all Chattel Paper (whether tangible or electronic);
(3) all Documents;
(4) all Goods (including, without limitation, all Inventory and all
Pledged Equipment, but excluding all Fixtures);
(5) all General Intangibles (including, without limitation, the
Intangibles and any Hedging Agreements);
(6) all Instruments (including, without limitation, the EEX Note
and the Convertible Notes);
(7) all Pledged Securities;
(8) all Investment Property;
(9) all books and records pertaining to the Collateral;
(10) all Account Collateral; and
(11) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security,
guarantees and other Supporting Obligations given with respect
to any of the foregoing.
Section 3.02 Transfer of Collateral. All certificates and instruments
representing or evidencing the Pledged Interests shall be delivered to and held
pursuant hereto by the Administrative Agent or a Person designated by the
Administrative Agent and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, and accompanied by any required transfer tax stamps to effect the pledge
of the Pledged Interests to the Administrative Agent. Notwithstanding the
preceding sentence, at the Administrative Agent's discretion, all Pledged
Securities must be delivered or transferred in such manner as to permit the
Administrative Agent to be a "protected purchaser" to the extent of its security
interest as provided in Section 8-303 of the New York UCC (if the Administrative
Agent otherwise qualifies as a protected purchaser). During the continuance of
an Event of Default, the Administrative Agent shall have the right, at any time
in its discretion and without notice, to transfer to or to register in the name
of the Administrative Agent or any of its nominees any or all of the Pledged
Interests, subject only to the revocable rights specified in Error! Reference
source not found.. In addition, during the continuance of an Event of Default,
the Administrative Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Interests for
certificates or instruments of smaller or larger denominations.
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ARTICLE IV
Representations and Warranties
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder and under the Hedging Agreements, each
Grantor hereby represents and warrants to the Administrative Agent and each
Lender that:
Section 4.01 Representations in Credit Agreement. In the case of each
Guarantor other than an Obligor, the representations and warranties set forth in
Article VII of the Credit Agreement as they relate to such Guarantor (in its
capacity as a Subsidiary of an Obligor) or to the Loan Documents to which such
Guarantor is a party are true and correct in all material respects, provided
that each reference in each such representation and warranty to each Obligor's
knowledge shall, for the purposes of this Error! Reference source not found., be
deemed to be a reference to such Guarantor's knowledge.
Section 4.02 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Lenders
pursuant to this Agreement and Excepted Liens, such Grantor owns its respective
items of the Collateral free and clear of any and all Liens. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Lenders, pursuant to this Agreement, the Security Instruments or as are filed to
secure Liens permitted by Section 9.03 of the Credit Agreement.
Section 4.03 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any Collateral from such Grantor and (b) are prior to all other Liens
on the Collateral in existence on the date hereof except for Excepted Liens
which have priority over the Liens on the Collateral by operation of law.
Section 4.04 Legal Name, Organizational Status, Chief Executive Office.
On the date hereof, the correct legal name of such Grantor, such Grantor's
jurisdiction of organization, organizational number, taxpayer identification
number and the location of such Grantor's chief executive office or sole place
of business are specified on Schedule 4.
Section 4.05 Prior Names and Addresses. Schedule 5 correctly sets forth
(a) all names and trade names that such Grantor has used in the last five years
and (b) the chief executive office of such Grantor over the last five years (if
different from that which is set forth in Section 4.04 above).
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Section 4.06 Pledged Securities. Schedule 2 sets forth each and every
share of stock or other equity interest of a Domestic Subsidiary owned by a
Grantor and is true, correct and complete in all respects. The shares (or such
other interests) of Pledged Securities set forth on Schedule 2 and pledged by
such Grantor hereunder constitute all the issued and outstanding shares (or such
other interests) of all classes of the capital stock or other equity interests
of each Issuer. All the shares (or such other interests) of the Pledged
Securities have been duly and validly issued and are fully paid and
nonassessable; and such Grantor is the record and beneficial owner of, and has
good title to, the Pledged Securities pledged by it hereunder, free of any and
all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement and Excepted Liens.
Section 4.07 Pledged Intangibles. Schedule 6 sets forth each and every
partnership, limited liability company or other similar ownership interest owned
by a Grantor and is true, correct and complete in all respects. The partnership,
membership or other ownership interests making up the Pledged Intangibles set
forth on Schedule 6 and pledged by such Grantor hereunder constitute all the
issued and outstanding partnership, membership or other ownership interests of
each Issuer (other than with respect to EEX Reserves Funding LLC, 50% of which
is owned by a party not affiliated with the Grantors). Such Grantor is the
record and beneficial owner of, and has good title to, the Pledged Intangibles
pledged by it hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person, except the Security Interest created by this
Agreement and Excepted Liens. None of the Pledged Intangibles are evidenced by a
certificate or instrument, are dealt in or traded on securities exchanges or in
securities markets, have terms that expressly provide that such Pledged
Intangibles are governed by Chapter 8 of the Uniform Commercial Code or are
investment company securities.
Section 4.08 Deposit Accounts and Securities Accounts. Schedule 7 sets
forth each and every Deposit Account and Securities Account, except for the
Excepted Accounts, owned by a Grantor and is true, correct and complete in all
respects. Each Grantor is the record and beneficial owner of, and has good title
to, the Deposit Accounts and Securities Accounts pledged by it hereunder, free
of any and all Liens or option in favor or, or claims of, any other Person,
except the Security Interest created by this Agreement and Excepted Liens of the
kind defined in clause (vi) of the definition thereof.
Section 4.09 Benefit to the Guarantor. Each Obligor is a member of an
affiliated group of companies that includes each Guarantor, and each Obligor and
the other Guarantors are engaged in related businesses. Each Guarantor is a
Subsidiary of an Obligor and its guaranty and surety obligations pursuant to
this Agreement reasonably may be expected to benefit, directly or indirectly,
it; and it has determined that this Agreement is necessary and convenient to the
conduct, promotion and attainment of the business of such Guarantor and such
Obligor.
ARTICLE V
Covenants
Each Grantor covenants and agrees with the Administrative Agent and the
Lenders that, from and after the date of this Agreement until the Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the
Aggregate Commitments shall have terminated:
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Section 5.01 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
Section 5.02 Maintenance of Perfected Security Interest; Further
Documentation.
(a) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.
(b) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably deem necessary for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
Section 5.03 Pledged Interests.
(a) If such Grantor shall become entitled to receive or shall receive
any stock certificate, partnership or membership interest certificate or other
instrument (including, without limitation, any certificate or instrument
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate or
instrument issued in connection with any reorganization), option or rights in
respect of the partnership or membership interest or capital stock or other
equity or ownership interests of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares (or such
other interests) of the Pledged Interests, or otherwise in respect thereof, such
Grantor shall accept the same as the agent of the Administrative Agent and the
Lenders, hold the same in trust for the Administrative Agent and the Lenders and
deliver the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power or other equivalent instrument of
transfer acceptable to the Administrative Agent covering such certificate or
instrument duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) unless otherwise permitted hereby or under the other
Loan Documents, vote to enable, or take any other action to permit, any Issuer
to issue any stock or other equity interests or partnership, membership or other
interests of any nature or to issue any other securities or interests
convertible into or granting the right to purchase or exchange for any stock or
other equity interests or partnership, membership or other interests of any
nature of any Issuer, (ii) sell,
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assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Pledged Interests or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (i) create, incur or
permit to exist any Lien except for Excepted Liens or option in favor of, or any
claim of any Person with respect to, any of the Pledged Interests or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or (ii) enter into any agreement or undertaking other than the
Loan Documents restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Pledged Interests or
Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Interests issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.03(a)
with respect to the Pledged Interests issued by it and (iii) the terms of
Section 6.01(c) and Section 6.03 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.01(c) or
Section 6.03 with respect to the Pledged Interests issued by it.
(d) Each Grantor shall furnish to the Administrative Agent such stock
powers and other equivalent instruments of transfer as may be required by the
Administrative Agent to assure the transferability of the Pledged Interests when
and as often as may be reasonably requested by the Administrative Agent.
(e) The Pledged Interests will at all times constitute not less than
100% of the capital stock (excluding Foreign Subsidiaries) or other equity
interests or partnership, membership or other ownership interests of the Issuer
thereof owned by any Grantor. Each Grantor will not permit any Issuer of any of
the Pledged Interests to issue any new shares (or other interests) of any class
of capital stock or other equity interests or partnership, membership or other
ownership interests of such Issuer without the prior written consent of the
Administrative Agent, except for cash-out merger transactions in which an Issuer
is sold pursuant to Section 9.12 of the Credit Agreement.
Section 5.04 Consents. The Grantors shall use their commercially
reasonable efforts to obtain within 60 days after the date of this Agreement all
consents necessary to grant a lien and security interest hereunder to the
Administrative Agent in the interest in the Starr-Zapata Pipeline Company, as
formed by that certain Partnership Agreement effective May 13, 1994, between
Tesoro Natural Gas Company and Coastal States Gas Transmission, as amended. The
Administrative Agent hereby acknowledges and agrees that it shall hold the
security interest granted hereby in the interests in the Starr-Zapata Pipeline
Company and the Starr County Gathering System (as formed by that certain Joint
Venture Agreement, effective February 1, 1991, between Tesoro Natural Gas
Company and Coastal States Gas Transmission Company, as amended) subject to all
of the terms and conditions of the aforementioned agreements relating to such
interests, and the Agent shall not have any voice in the management of the said
Starr County Gathering System and Starr-Zapata Pipeline Company.
Section 5.05 New Accounts. As of the date hereof, all Deposit Accounts
and Securities Accounts held by a Grantor with the Administrative Agent or an
Affiliate thereof are subject to a
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Blocked Account Control Agreement and a Securities Account Control Agreement, as
applicable. Within 15 days after the Closing Date, the Grantors shall with
regard to each and every other Deposit Account and Securities Account, other
than Excepted Accounts and Small Accounts, in which such Grantor has an
interest, cause such Deposit Account and Securities Account to be subject to a
Blocked Account Control Agreement or Securities Account Control Agreement, as
applicable, executed by and among the applicable Grantor, the Administrative
Agent and the requisite depositary institution or Securities Intermediary, as
the case may be. Within 30 days after the Closing Date, the Grantors shall cause
each Small Account to be subject to a Blocked Account Control Agreement or
Securities Account Control Agreement, as applicable, executed by and among the
applicable Grantor, the Administrative Agent and the requisite depositary
institution or Securities Intermediary, as the case may be. At all times
thereafter, the Grantors shall cause all of their Deposit and Securities
Accounts, other than the Excepted Accounts, to be subject to Blocked Account
Control Agreements and Securities Account Control Agreements, as applicable. All
such Blocked Account Control Agreements and Securities Account Control
Agreements shall be reasonably acceptable to the Administrative Agent and in
substantially the same form as Annex II and Annex III, as applicable, and the
Grantors shall deliver true, correct and complete and fully executed copies of
same to the Administrative Agent.
ARTICLE VI
Remedial Provisions
Section 6.01 Pledged Interests.
(a) Unless an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have given notice to the relevant Grantor of
the Administrative Agent's intent to exercise its corresponding rights pursuant
to Section 6.01(b), each Grantor shall be permitted to receive all dividends and
distributions, subject to Section 5.03(a), paid in respect of the Pledged
Interests paid in the normal course of business of the relevant Issuer, to the
extent permitted in the Credit Agreement, and to exercise all voting and
corporate, partnership or limited liability company rights with respect to the
Pledged Interests.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, distributions, payments or other
Proceeds paid in respect of the Pledged Interests and make application thereof
to the Obligations in accordance with Section 10.02 of the Credit Agreement, and
(ii) any or all of the Pledged Interests shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (x) all voting, corporate, partnership, limited
liability company and other rights pertaining to such Pledged Interests at any
meeting of shareholders (or other equivalent body) of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Interests as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Interests upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the organizational structure of any Issuer, or upon
the exercise by any Grantor or the Administrative Agent of any right, privilege
or option pertaining to such Pledged
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Interests, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Interests with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Interests pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Interests directly to the Administrative Agent.
(d) After the occurrence and during the continuation of an Event of
Default, if the Issuer of any Pledged Interests is the subject of bankruptcy,
insolvency, receivership, custodianship or other proceedings under the
supervision of any Governmental Authority, then all rights of the Grantor in
respect thereof to exercise the voting and other consensual rights which such
Grantor would otherwise be entitled to exercise with respect to the Pledged
Interests issued by such Issuer shall cease, and all such rights shall thereupon
become vested in the Administrative Agent who shall thereupon have the sole
right to exercise such voting and other consensual rights, but the
Administrative Agent shall have no duty to exercise any such voting or other
consensual rights and shall not be responsible for any failure to do so or delay
in so doing.
Section 6.02 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement, the other Loan Documents and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the New York UCC or any other applicable law or otherwise
available at law or equity. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender 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 the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. If an Event of
Default shall occur and be continuing, each Grantor further agrees, at the
Administrative Agent's request, to
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assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor's premises or elsewhere. Any such sale or transfer by the Administrative
Agent either to itself or to any other Person shall be absolutely free from any
claim of right by Grantor, including any equity or right of redemption, stay or
appraisal which Grantor has or may have under any rule of law, regulation or
statute now existing or hereafter adopted. Upon any such sale or transfer, the
Administrative Agent shall have the right to deliver, assign and transfer to the
purchaser or transferee thereof the Collateral so sold or transferred. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.02, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in accordance with Section 10.02 of the
Credit Agreement, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615 of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Lender arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.
In the event that the Administrative Agent elects not to sell the
Collateral, the Administrative Agent retains its rights to dispose of or utilize
the Collateral or any part or parts thereof in any manner authorized or
permitted by law or in equity, and to apply the proceeds of the same towards
payment of the Obligations. Each and every method of disposition of the
Collateral described in this Agreement shall constitute disposition in a
commercially reasonable manner.
The Administrative Agent will not submit an "Exclusive Control Notice"
under a Blocked Account Control Agreement or a Securities Account Control
Agreement, as applicable, unless an Event of Default has occurred and is
continuing.
The Administrative Agent may appoint any Person as agent to perform any act
or acts necessary or incident to any sale or transfer of the Collateral.
Section 6.03 Private Sales of Pledged Interests. Each Grantor recognizes
that the Administrative Agent may be unable to effect a public sale of any or
all the Pledged Interests, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Interests for the period of time necessary to
permit the Issuer
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thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so. Each Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may reasonably be necessary to make such sale or sales of
all or any portion of the Pledged Interests pursuant to this Section 6.03 valid
and binding and in compliance with any and all other applicable Governmental
Requirements. Each Grantor further agrees that a breach of any of the covenants
contained in this Section 6.03 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.03 shall
be specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
Section 6.04 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under the New York UCC.
Each Grantor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay its Obligations
and the fees and disbursements of any attorneys employed by the Administrative
Agent or any Lender to collect such deficiency.
Section 6.05 Non-Judicial Enforcement. The Administrative Agent may enforce
its rights hereunder without prior judicial process or judicial hearing, and to
the extent permitted by law, each Grantor expressly waives any and all legal
rights which might otherwise require the Administrative Agent to enforce its
rights by judicial process.
ARTICLE VII
The Administrative Agent
Section 7.01 Administrative Agent's Appointment as Attorney-in-Fact, Etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all reasonably appropriate action and to execute
any and all documents and instruments which may be reasonably necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Administrative
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:
(i) unless being disputed under Section 8.03(a) of the Credit
Agreement, pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(ii) execute, in connection with any sale provided for in Error!
Reference source not found. or Error! Reference source not found., any
endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and
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(iii) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (B) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (C)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (D) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate; and (G) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute
owner thereof for all purposes, and do, at the Administrative Agent's
option and such Grantor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent's and
the Lenders' security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.01(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.01(a) unless an Event of Default
shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its agreements
contained herein within the applicable grace periods, the Administrative Agent,
at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 7.01, together with interest
thereon at the Post-Default Rate from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue and in compliance hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
Section 7.02 Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account and 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 substantially equal to
that which comparable
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secured parties accord comparable collateral. Neither the Administrative Agent,
any Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct. To the fullest extent
permitted by applicable law, the Administrative Agent shall be under no duty
whatsoever to make or give any presentment, notice of dishonor, protest, demand
for performance, notice of non-performance, notice of intent to accelerate,
notice of acceleration, or other notice or demand in connection with any
Collateral or the Obligations, or to take any steps necessary to preserve any
rights against any Grantor or other Person or ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not it has or is deemed to have knowledge
of such matters. Each Grantor, to the extent permitted by applicable law, waives
any right of marshaling in respect of any and all Collateral, and waives any
right to require the Administrative Agent or any Lender to proceed against any
Grantor or other Person, exhaust any Collateral or enforce any other remedy
which the Administrative Agent or any Lender now has or may hereafter have
against each Grantor, any Grantor or other Person.
Section 7.03 Execution of Financing Statements. Pursuant to the New York
UCC and any other applicable law, each Grantor authorizes the Administrative
Agent to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
such Grantor in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. Additionally, each Grantor authorizes
the Administrative Agent to file or record such financing statements that
describe the collateral covered thereby as "all assets of the Grantor", "all
personal property of the Grantor" or words of similar effect. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
Section 7.04 Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
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ARTICLE VIII
Subordination of Indebtedness
Section 8.01 Subordination of All Guarantor Claims. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Borrower or
any other Grantor to any Grantor, whether such debts and obligations now exist
or are hereafter incurred or arise, or whether the obligation of the debtor
thereon be direct, contingent, primary, secondary, several, joint and several,
or otherwise, and irrespective of whether such debts or obligations be evidenced
by note, contract, open account, or otherwise, and irrespective of the Person or
Persons in whose favor such debts or obligations may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or may
hereafter be acquired by. After and during the continuation of an Event of
Default, no Grantor shall receive or collect, directly or indirectly, from any
obligor in respect thereof any amount upon the Guarantor Claims.
Section 8.02 Claims in Bankruptcy. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief or other insolvency
proceedings involving any Grantor, the Administrative Agent on behalf of the
Administrative Agent and the Lenders shall have the right to prove their claim
in any proceeding, so as to establish their rights hereunder and receive
directly from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Guarantor Claims. Each Grantor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Lenders for application against the
Obligations as provided under Section 10.02 of the Credit Agreement. Should any
Agent or Lender receive, for application upon the Obligations, any such dividend
or payment which is otherwise payable to any Grantor, and which, as between such
Grantor, shall constitute a credit upon the Guarantor Claims, then upon payment
in full of the Obligations, the intended recipient shall become subrogated to
the rights of the Administrative Agent and the Lenders to the extent that such
payments to the Administrative Agent and the Lenders on the Guarantor Claims
have contributed toward the liquidation of the Obligations, and such subrogation
shall be with respect to that proportion of the Obligations which would have
been unpaid if the Administrative Agent and the Lenders had not received
dividends or payments upon the Guarantor Claims.
Section 8.03 Payments Held in Trust. In the event that notwithstanding
Section 8.01 and Section 8.02 any Grantor should receive any funds, payments,
claims or distributions which is prohibited by such Sections, then it agrees:
(a) to hold in trust for the Administrative Agent and the Lenders an amount
equal to the amount of all funds, payments, claims or distributions so received,
and (b) that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions except to pay them promptly to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders; and each Grantor covenants promptly to pay the same to the
Administrative Agent.
Section 8.04 Liens Subordinate. Each Grantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any Liens securing payment of the Obligations, regardless of
whether such encumbrances in favor of such Grantor, any Administrative Agent or
Lender presently exist or are hereafter created or attach. Without the prior
written consent of the Administrative Agent, no Grantor, during the period in
which any of
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the Obligations are outstanding or the Aggregate Commitments are in effect,
shall (a) exercise or enforce any creditor's right it may have against any
debtor in respect of the Guarantor Claims, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien held by it.
Section 8.05 Notation of Records. Upon the request of the Administrative
Agent, all promissory notes and all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by any Grantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Agreement.
ARTICLE IX
Miscellaneous
Section 9.01 Waiver. No failure on the part of the Administrative Agent
or any Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under any of the Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under any of the Loan Documents preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law. The exercise by the Administrative Agent of any one or
more of the rights, powers and remedies herein shall not be construed as a
waiver of any other rights, powers and remedies, including, without limitation,
any rights of set-off.
Section 9.02 Notices. All notices and other communications provided for
herein shall be given in the manner and subject to the terms of Section 12.02 of
the Credit Agreement; provided that any such notice, request or demand to or
upon any Grantor shall be addressed to such Grantor at its notice address set
forth on Schedule 1 or at such other address as shall be designated by such
Grantor in a notice to the Administrative Agent pursuant to this Section 9.02.
Section 9.03 Payment of Expenses, Indemnities, Etc.
(a) Each Guarantor agrees to pay or reimburse each Lender and the
Administrative Agent for all its reasonable costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Article II or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of counsel to each Lender and
of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions,
-19-
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement to the extent the Obligors would be required to
do so pursuant to Section 12.03 of the Credit Agreement.
Section 9.04 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 12.04 of the Credit Agreement.
Section 9.05 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Administrative Agent and the Lenders and their successors and assigns;
provided that except as set forth in Section 8.12 or Section 9.11 of the Credit
Agreement, no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent and the Lenders.
Section 9.06 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any of the Loan Documents to which
a Grantor is a party shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or such other Loan
Document.
Section 9.07 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 9.08 References. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
Section 9.09 Survival. The obligations of the parties under Section 9.03
shall survive the repayment of the Loans and the termination of the Letters of
Credit, Hedging Agreements, Credit Agreement and Aggregate Commitments. To the
extent that any payments on the Obligations or proceeds of any Collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Indebtedness so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent's and the
Lenders' Liens, security interests, rights, powers and remedies under this
Agreement and each Security Instrument shall continue in full force and effect.
In such event, each Security Instrument shall be automatically reinstated and
each Grantor shall take such action as may be reasonably requested by the
Administrative Agent and the Lenders to effect such reinstatement.
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Section 9.10 Captions. Captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
Section 9.11 No Oral Agreements. The Loan Documents (other than the
Letters of Credit) embody the entire agreement and understanding between the
parties and supersede all other agreements and understandings between such
parties relating to the subject matter hereof and thereof. The Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
Section 9.12 Governing Law; Submission to Jurisdiction.
(a) This Agreement shall be construed in accordance with and governed by
the law of the State of New York.
(b) Each party hereto hereby agrees that any suit, action or proceeding
with respect to this Agreement or any judgment entered by any court in respect
thereof may be brought in the United States District Court for the Southern
District of New York, in the Supreme Court of the State of New York sitting in
New York County (including its Appellate Division), or in any other appellate
court in the State of New York, as the party commencing such suit, action or
proceeding may elect in its sole discretion; and each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of such courts for the
purpose of any such suit, action, proceeding or judgment. Each party hereto
further submits, for the purpose of any such suit, action, proceeding or
judgment brought or rendered against it, to the appropriate courts of the
jurisdiction of its domicile.
(c) Each Grantor hereby agrees that service of all writs, process and
summonses in any such suit, action or proceeding brought in the State of New
York may be made upon CT Corporation System, presently located at 111 Eighth
Avenue, 13th Floor, New York, New York 10011, U.S.A. (the "Process Agent"), and
each Grantor hereby confirms and agrees that the Process Agent has been duly and
irrevocably appointed as its agent and true and lawful attorney-in-fact in its
name, place and stead to accept such service of any and all such writs, process
and summonses, and agrees that the failure of the Process Agent to give any
notice of any such service of process to any Grantor shall not impair or affect
the validity of such service or of any judgment based thereon. Each Grantor
hereby further irrevocably consents to the service of process in any suit,
action or proceeding in such courts by the mailing thereof by any Lender or the
Administrative Agent by registered or certified mail, postage prepaid, at its
address set out beneath its signature hereto.
(d) Nothing herein shall in any way be deemed to limit the ability of
any Lender or the Administrative Agent to serve any such writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over any Grantor in such other jurisdictions, and in such manner,
as may be permitted by applicable law.
(e) Each Grantor hereby irrevocably waives any objection that it may now
or hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or
-21-
relating to this Agreement brought in the Supreme Court of the State of New
York, County of New York or in the United States District Court for the Southern
District of New York, and hereby further irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 9.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO: (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.13.
Section 9.14 Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Lenders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
(d) Each of the parties hereto specifically agrees that it has a duty
to read this Agreement and the Security Instruments and agrees that it is
charged with notice and knowledge of the terms of this Agreement and the
Security Instruments; that it has in fact read this Agreement and is fully
informed and has full notice and knowledge of the terms, conditions and effects
of this Agreement; that it has been represented by independent legal counsel of
its choice throughout the negotiations preceding its execution of this Agreement
and the Security Instruments; and has received the advice of its attorney in
entering into this Agreement and the Security Instruments; and that it
recognizes that certain of the terms of this Agreement and the Security
Instruments result in one party assuming the liability inherent in some aspects
of the transaction and relieving the other party of its responsibility for such
liability. Each party hereto agrees and covenants that it will not contest the
validity or enforceability of any exculpatory provision of this Agreement and
the Security Instruments on the basis that the party had no notice or knowledge
of such provision or that the provision is not "conspicuous."
-22-
Section 9.15 Additional Grantors. Each Subsidiary of each Obligor that
is required to become a party to this Agreement pursuant to Section 8.09 of the
Credit Agreement and is not a signatory hereto shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex I hereto.
Section 9.16 Set-Off. Each Grantor agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have, each Lender shall have the right and be entitled
(after consultation with the Administrative Agent), at its option, to offset (i)
balances held by it for account of any Grantor or any Subsidiary at any of its
offices, in Dollars or in any other currency, and (ii) amounts due and payable
to such Lender (or any Affiliate of such Lender) under any Hedging Agreement,
against any principal of or interest on any of such Lender's Loans, or any other
amount due and payable to such Lender hereunder, which is not paid when due
(regardless of whether such balances are then due to such Person), in which case
it shall promptly notify the Borrower and the Administrative Agent thereof,
provided that such Lender's failure to give such notice shall not affect the
validity thereof.
Section 9.17 Releases.
(a) Release Upon Payment in Full. The grant of a security interest
hereunder and all of rights, powers and remedies in connection herewith shall
remain in full force and effect until the Administrative Agent has (i)
retransferred and delivered all Collateral in its possession to the Grantors,
and (ii) executed a written release or termination statement and reassigned to
the Grantors without recourse or warranty any remaining Collateral and all
rights conveyed hereby. Upon the complete payment of the Obligations, the
termination of the Letters of Credit, Hedging Agreements secured hereby, Credit
Agreement and the Aggregate Commitments and the compliance by the Grantors with
all covenants and agreements hereof, the Administrative Agent, at the written
request and expense of the Borrower, will promptly release, reassign and
transfer the Collateral to the Grantors and declare this Agreement to be of no
further force or effect.
(b) Partial Releases. If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Grantor in a transaction permitted
by the Credit Agreement, then the Administrative Agent, at the request and sole
expense of such Grantor, shall promptly execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the release of
the Liens created hereby on such Collateral and the capital stock of such
Grantor. At the request and sole expense of the Borrower, a Grantor shall be
released from its obligations hereunder in the event that all the capital stock
of such Grantor shall be sold, transferred or otherwise disposed of in a
transaction permitted by the Credit Agreement; provided that the Borrower shall
have delivered to the Administrative Agent, at least ten Business Days prior to
the date of the proposed release, a written request for release identifying the
relevant Grantor and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents.
(c) Retention in Satisfaction. Except as may be expressly applicable
pursuant to Section 9.620 of the New York UCC, no action taken or omission to
act by the Administrative Agent or the Lenders hereunder, including, without
limitation, any exercise of voting or consensual rights or any other action
taken or inaction, shall be deemed to constitute a retention
-23-
of the Collateral in satisfaction of the Obligations or otherwise to be in full
satisfaction of the Obligations, and the Obligations shall remain in full force
and effect, until the Administrative Agent and the Lenders shall have applied
payments (including, without limitation, collections from Collateral) towards
the Obligations in the full amount then outstanding or until such subsequent
time as is provided in Section 9.17(a).
Section 9.18 Acceptance. Each Grantor hereby expressly waives notice of
acceptance of this Agreement, acceptance on the part of the Administrative Agent
and the Lenders being conclusively presumed by their request for this Agreement
and delivery of the same to the Administrative Agent.
[Signature pages follow.]
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
OBLIGORS: EEX OPERATING, L.P.
By: EEX Corporation, its general partner
By: /s/ J.T. Leary
--------------------------------------
J.T. Leary
Vice President, Finance
and Treasurer
EEX CORPORATION
By: /s/ J.T. Leary
------------------------------------------
J.T. Leary
Vice President, Finance
and Treasurer
EEX OPERATING LLC; EEX CAPITAL, INC.; CORPUS
CHRISTI HYDROCARBONS COMPANY; CORPUS CHRISTI
ENERGY COMPANY; EEX INTERNATIONAL, INC.;
ENSERCH INTERNATIONAL OIL & GAS, INC.; EEX
NATURAL GAS COMPANY; EEX GATHERING COMPANY
By: /s/ J.T. Leary
------------------------------------------
J.T. Leary
Vice President and Authorized Person
EEX PIPELINE COMPANY, L.P.
By: EEX Natural Gas Company, its general
partner
By: /s/ J.T. Leary
--------------------------------------
J.T. Leary
Vice President
SIGNATURE PAGE
GUARANTEE AND COLLATERAL AGREEMENT
Acknowledged and Agreed to
as of the date hereof by:
ADMINISTRATIVE AGENT: JPMORGAN CHASE BANK
By: /s/ Robert C. Mertensotto
-----------------------------------------
Robert C. Mertensotto, Managing Director
SIGNATURE PAGE
GUARANTEE AND COLLATERAL AGREEMENT
Schedule 1
NOTICE ADDRESSES OF GRANTORS
1. _____________________, a __________________
Notice Address:
Attn: __________
[Address]
Telephone: __________
Facsimile: ___________
2. _____________________, a ___________________
Notice Address:
Attn: __________
[Address]
Telephone: __________
Facsimile: ___________
Schedule 1-1
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Owner Issuer Class of Stock or No. of Certificated or
other Equity Interest Shares Uncertificated
- --------------------------------------------------------------------------------
[INFORMATION TO COME]
Schedule 2-1
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[INFORMATION TO COME]
Delivery to Administrative Agent of Pledged Interests
Account Collateral
Schedule 3-1
Schedule 4
CORRECT LEGAL NAME, LOCATION OF JURISDICTION OF ORGANIZATION, ORGANIZATIONAL
IDENTIFICATION NUMBER, TAXPAYER IDENTIFICATION NUMBER AND CHIEF EXECUTIVE OFFICE
1. EEX Operating L.P., a Texas limited partnership
Organizational Identification Number:
Taxpayer Identification Number:
Chief Executive Office:
2. EEX Corporation, a Texas corporation
Organizational Identification Number:
Taxpayer Identification Number:
Chief Executive Office:
3. _____________________, a __________________
Organizational Identification Number:
Taxpayer Identification Number:
Chief Executive Office:
4. _____________________, a ___________________
Organizational Identification Number:
Taxpayer Identification Number:
Chief Executive Office:
Schedule 4 - 1
Schedule 5
PRIOR NAMES AND PRIOR CHIEF EXECUTIVE OFFICE
1. EEX Operating L.P.
Prior Names:
Prior Chief Executive Office:
2. EEX Corporation
Prior Names:
Prior Chief Executive Office:
3. ___________________
Prior Names:
Prior Chief Executive Office:
4. ___________________
Prior Names:
Prior Chief Executive Office:
Schedule 5 - 1
Schedule 6
DESCRIPTION OF PLEDGED INTANGIBLES
Class of No. of
Partnership, Partnership,
Membership or Membership or
Other Other Certificated or
Owner Issuer Ownership Ownership Uncertificated
Interest Interest
- --------------------------------------------------------------------------------
[INFORMATION TO COME]
Schedule 6 - 1
Schedule 7
DESCRIPTION OF DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS
Schedule 7 - 1
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of May 28, 2002 (the "Agreement"), made by the
Grantors parties thereto for the benefit of JPMORGAN Chase Bank, as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The terms of Sections 6.01(c) and 6.03 of the Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Sections 6.01(c) or 6.03 of the Agreement.
[NAME OF ISSUER]
By: _______________________________
Title: _______________________________
Address for Notices:
______________________________________
______________________________________
______________________________________
Fax:
_______________________________
- --------------------------------------------------------------------------------
*This consent is necessary only with respect to any Issuer which is not also a
Grantor. This consent may be modified or eliminated with respect to any Issuer
that is not controlled by a Grantor.
Acknowledgment and Consent
Annex I
Assumption Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of JPMORGAN CHASE BANK as administrative agent (in such
capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.
W I T N E S S E T H:
WHEREAS, EEX Corporation and EEX Operating L.P. (each an "Obligor" and
together, the "Obligors"), the Lenders, the Administrative Agent and the other
Agents, have entered into a Credit Agreement, dated as of May 28, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, in connection with the Credit Agreement, the Obligors and
certain of their Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of May 28, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to become
a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 9.15 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder and expressly grants to the Administrative Agent, for the
benefit of the Lenders, a security interest in all Collateral owned by such
Additional Grantor to secure all of such Additional Grantor's obligations and
liabilities thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules 1 through 5 to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Article IV of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
Annex I - 1
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: _______________________________
Name: _______________________________
Title: _______________________________
Annex I - 2
Annex II
Blocked Account Control Agreement
Attached
Annex II - 1
Annex III
Securities Account Control Agreement
Attached
Annex III - 1