EXHIBIT 99.6
TRANSTEXAS GAS CORPORATION
AMENDED AND RESTATED
SECURITY AND PLEDGE AGREEMENT
This Amended and Restated Security and Pledge Agreement (this
"Agreement") is entered into as of August __, 2003 by and among TRANSTEXAS GAS
CORPORATION, a Delaware corporation ("Borrower", GALVESTON BAY PIPELINE COMPANY,
a subsidiary of Borrower ("GB Pipeline"), GALVESTON BAY PROCESSING CORPORATION,
a subsidiary of Borrower ("GB Processing" and together with Borrower and GB
Pipeline (the "Companies") and THORNWOOD ASSOCIATES LP (the "Secured Party").
RECITALS
The Companies, GMAC Commercial Credit LLC and various other financial
institutions entered into that certain Oil & Gas Revolving Credit and Term Loan
Agreement dated as of March 15, 2000 (the "Oil and Gas Agreement");
On the date hereof (the "Effective Date") the Creditor's Joint Plan of
Reorganization for Debtors Under Chapter 11 of the Bankruptcy Code Submitted by
Thornwood, dated as of June 27, 2003, as modified July 8, 2003, and as may have
been modified thereafter, in Case No. 02-21926, in the United States Bankruptcy
Court for the Southern District of Texas, Corpus Christi Division (the "Plan"),
confirmed by Order of the Bankruptcy Court (the "Confirmation Order"), became
effective;
Pursuant to the Plan, as of the date hereof, each holder of an Allowed
Prepetition O&G Claim, in full satisfaction, settlement, release and discharge
of, and exchange for, such Claim received (i) Cash in a sum equal to its pro
rata share of the Allowed O&G Claim less $32.5 million and (ii) its pro rata
share of the Restructured O&G Note in principal amount of $32.5 million and
Thornwood paid to the Prepetition O&G Lenders pro rata the Cash set forth in
paragraph (i) hereto and an amount equal to the principal amount of the
Restructured O&G Note, which Note under the terms of the Plan, was issued
directly by the Reogranized Debtors to Thornwood. Pursuant to the Plan, the
Reorganized Debtors amended and restated the Oil & Gas Agreement (the
"Restructured O&Gas Agreement") and are hereby amending and restating the
Security and Pledge Agreement entered into as of March 15, 2000;
In order to continue to secure the payment and performance in full of
the obligations of the Companies under the Restructured O &G Agreement, the
parties hereto desire to set forth their mutual understanding and certain
agreements regarding the terms and conditions of the grant of a security
interest in Collateral (as defined below);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Companies and the Secured
Party hereby agree as follows:
Section 1. Definitions.
(a) As used in this Agreement, capitalized terms not otherwise
defined herein have the meanings set forth in the Restructured O&G
Agreement or the Plan, and the
following terms shall have the respective meanings set forth below
(such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Collateral" shall mean, collectively, the UCC Collateral and
the Pledged Securities.
"Contract Rights" shall mean all contracts, operating
agreements, mineral purchase agreements, rights of way, easements,
surface leases, permits, licenses, pooling or unitization agreements,
pooling designations and pooling orders and all other contracts or
agreements pertaining to or affecting the Collateral or which were
executed in connection with the drilling for, producing, processing,
treating, handling, storing, transporting or marketing oil, gas or
other minerals from the Collateral or from any properties unitized or
pooled therewith, including, but not limited to, the contracts listed
on Schedule 1(a) attached hereto.
"Default" and "Event of Default" shall have the meanings
assigned to those terms in Section 6(a) of this Agreement.
"Equipment" shall mean and include all of the now owned or
hereafter acquired "equipment" of each of the Companies as such term is
defined in Article 9 of the UCC, including without limitation, all
furniture, fixtures, goods, Vehicles, drilling rigs, workover rigs,
fracture stimulation equipment, well site compressors, rolling stock,
assets constituting part of a natural gas pipeline or the compression
or dehydration equipment used in the operation of any such pipeline and
related equipment and other assets accounted for as equipment by the
Companies on their respective financial statements, all proceeds
thereof, and all documents of title, books, records, ledger cards,
files, correspondence and computer files, tapes, disks and related data
processing software that at any time evidence or contain information
relating to the foregoing.
"GAAP" means generally accepted accounting principles of the
United States of America, consistently applied.
"General Intangibles" shall mean and include any and all of
now owned or hereafter acquired "general intangibles" of each of the
Companies as such term is defined in Article 9 of the UCC, including
without limitation, all trademarks, tradenames, tradestyles, trade
secrets, equipment formulation, manufacturing procedures, quality
control procedures, product specifications, patents, patent
applications, copyrights, registrations, contract rights, choses in
action, causes of action, tort claims, payment intangibles, letter of
credit rights, corporate or other business records, inventions,
designs, goodwill, claims under guarantees, licenses, franchises, tax
refunds, tax refund claims, computer programs, computer data bases,
computer program flow diagrams, source codes, object codes and all
other intangible property of every kind and nature.
"Hydrocarbons" shall mean oil, natural gas, condensate and
natural gas liquids.
"Inventory" shall mean and include all of now owned or
hereafter acquired "inventory" of each of the Companies as such term is
defined in the UCC, including, without limitation, all drill casing,
drill pipe and other supplies accounted for as inventory
2
by the Companies on its financial statements (excluding Hydrocarbons),
all other goods, merchandise and other personal property, wherever
located, to be furnished under any contract of service or held for sale
or lease, all proceeds thereof, and all documents of title, books,
records, ledger cards, files, correspondence, and computer files,
tapes, disks and related data processing software that at any time
evidence or contain information relating to the foregoing.
"Investment Property" shall mean and include all of the now
owned or hereafter acquired "investment property" of each of the
Companies as such term is defined in Article 9 of the UCC.
"Jefferies Documentation" shall mean the Mortgage, Deed of
Trust, Assignment, Security Agreement and Financing Statement,
effective December 31, 1998, made by GB Processing in favor of
Jefferies, the Amended and Restated Promissory Note, dated August __,
2003 in the principal amount of $3,226,872.84, made by the Companies in
favor of Jefferies; and any amendments or supplements to the foregoing
as of the date hereof.
"Jefferies" means Jefferies Analytical Trading Group, Inc., a
Delaware Corporation.
"Jefferies Lien" shall mean pledge of the stock of GB
Processing Company owned by the Companies in favor of Jefferies as
security for Borrower's obligations to Jefferies under the Jefferies
Documentation.
"Lands" shall have the meaning set forth in the Mortgage.
"Leases" shall have the meaning set forth in the Mortgage.
"Mortgage" shall mean, collectively, those certain Mortgages,
Deeds of Trust, Assignments of Production, Security and Financing
Statements executed by any of the Companies for the benefit of Secured
Party to grant a Lien on such Real Property and/or Hydrocarbons, or any
interest therein, to secure all of the Obligations.
"Obligations" shall have the meaning set forth in the
Restructured O&G Agreement.
"Oil and Gas Leases" shall include oil, gas and mineral leases
and shall also include subleases and assignments of operating rights.
"Pipelines" shall mean the Pipeline Assets and all pipelines
owned and/or operated by any of the Companies for the gathering,
transmission or distribution of Hydrocarbons, and any interests in real
property relating thereto.
"Pipeline Assets" shall mean all parts or aspects of the gas
pipeline system of any the Companies now or hereafter situated on any
of the Lands, Rights-of-Way and Franchises, and all fixtures,
improvements, equipment, surface or subsurface machinery, facilities,
supplies, replacement parts, vehicles of every description, all process
control
3
computer systems and equipment or other property of whatsoever kind or
nature, including, without limitation, all buildings, structures,
machinery, gas processing plants, Pipelines, stations, substations,
compression or dehydration equipment, pumps, pumping stations, meter
houses, metering stations, regulator houses, ponds, tanks, scrapers and
scraper traps, fittings, valves, connections, cathodic or electrical
protection by-passes, regulators, drips, meters, pumps, pumping units,
pumping stations, storage or tankage facilities, engines, pipes, gates,
telephone and telegraph lines, electric power lines, poles, wires,
casings, radio towers, fixtures, mechanical equipment, electrical
equipment, computer equipment and software, machine shops and other
equipment, used or useful in connection therewith; together with all of
the Companies' liquid hydrocarbons, carbon dioxide, natural gas
liquids, refined petroleum products and other inventory fuels, carbon,
chemicals, electric energy and other consumable materials or products
manufactured, processed, generated, produced, transmitted, stored
(whether above or below ground) or purchased by any of the Companies
for sale, exchange, distribution, consumption or transmission by any of
the Companies, including, without limitation, all system gas, drip gas
and line fill.
"Pledged Securities" shall have the meaning assigned to that
term in Section 2(b) of this Agreement.
"Production Sale Contracts" shall mean, except to the extent
that the same constitute Receivables, all contracts now or hereafter in
effect, including, without limitation, any gas sales contracts, entered
into by any of the Companies, or the Companies' predecessors in
interest, for the production, sale, purchase, exchange or processing of
Subject Minerals (as defined in the Mortgage), including - but not
limited to - any of the foregoing contracts listed on SCHEDULE 1(a) and
the Contract Rights related thereto.
"Receivables" shall mean and include, any and all of the now
owned or hereafter acquired "accounts" of any of the Companies as such
term is defined in Article 9 of the UCC, all products and proceeds
thereof, and all books, records, ledger cards, files, correspondence,
and computer files, tapes, disks or software that at any time evidence
or contain information relating to the foregoing.
"Rights-of-Way and Franchises" shall mean all leases,
leaseholds, easements, rights-of-way, licenses, franchises, privileges,
permits, ordinances, grants, rights, consents, servitudes, surface
leases or rights, amendatory grants and interests in land for the
installation, maintenance and operation of the Pipelines or the
Pipeline Assets or any portion thereof, now owned or held by any of the
Companies, including, without limitation, those leases, leaseholds,
easements, rights-of-way, licenses, franchises, privileges, permits,
ordinances, grants, rights, consents, servitudes, surface leases or
rights, amendatory grants and interests in land applicable to the
Pipelines or the Pipeline Assets owned or held by any of the Companies
and those leases, leaseholds, easements, rights-of-way, licenses,
franchises, privileges, permits, ordinances, grants, rights, consents,
servitudes, surfaces leases or rights, amendatory grants and interests
in land owned or held by any of the Companies and described in the
Mortgage.
4
"Subject Interests" shall mean each kind and character of
right, title, interest or estate, whether now owned or hereafter
acquired, which any of the Companies has in, under or to the Leases and
all right, title, interest or estate, whether now owned or hereafter
acquired, which any of the Companies has in and to the Lands (as
defined in the Mortgage), together with each kind and character of
right, title, interest or estate now or hereafter vested in Mortgagor
in and to any and all overriding royalty interests, mineral interests,
leasehold interests, mineral rights, royalty interests, net profits
interests, oil payments, production payments, carried interests and all
other properties or interests of every kind or character which relate
to any of the Lands or Leases, whether such right, title, interest or
estate be under and by virtue of a Lease, a unitization or pooling
agreement, a unitization or pooling order, a mineral deed, a royalty
deed, an operating agreement, a revenue sharing agreement, a division
order, a transfer order, a farmout agreement, a fee simple conveyance
or any other type of contract, conveyance or instrument or under any
other type of claim or title, legal or equitable, recorded or
unrecorded, all as the same shall be enlarged by the discharge of any
payments out of production or by the removal of any charges or
encumbrances to which any of same are subject.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"UCC Collateral" shall have the meaning assigned to that term
in Section 2 of this Agreement.
"Vehicles" means all trucks, automobiles, trailers and other
vehicles covered by a certificate of title.
(b) All terms used in this Agreement which are defined in the
UCC, other than those which are defined in the Restructured O&G
Agreement or specifically defined in Section 1(a) above, shall have the
same meaning herein as in the UCC.
Section 2. Continuance of and Grant of Security Interest.
(a) The parties agree that, in accordance with the Plan and
the Confirmation Order, all liens granted hereunder shall, for all
purposes, be valid, perfected, enforceable, non-avoidable and effective
as of the Effective Date without any further action by the Thornwood or
by the Debtors and without the execution, filing or recordation of any
financing statement, security agreement, mortgage or other document.
Each of the Companies hereby further grants to the Secured Party, to
secure the payment and performance in full of the Obligations, a
continuing security interest in and a lien on and so pledges and
assigns to the Secured Party all of the Companies' right, title and
interest in, to and under any and all of the following described
property, assets and rights, in each case, wherever located, whether
now owned or hereafter acquired or arising, all accessions and
additions thereto, all substitutions and replacements therefor, and all
proceeds and products thereof and assigns all rights in and to all
collateral securing the following described property, assets and
rights:
(i) all Receivables;
5
(ii) all Inventory;
(iii) all Equipment;
(iv) all General Intangibles;
(v) all Investment Property;
(vi) all Subject Interests, the Subject Minerals,
Hydrocarbons;
(vii) all Contract Rights and Production Sale
Contracts;
(viii) all Leases and the Lands;
(ix) all Pipelines;
(x) all Pipeline Assets;
(xi) all Rights-of-Way and Franchises;
(xii) all unitization, communitization, operating
agreements, pooling agreements and declarations of pooled
units and the properties covered and the units created thereby
(including all units formed under orders, regulations, rules
or other official acts of any federal, state or other
governmental agency providing for pooling or unitization,
spacing orders or other well permits and other instruments)
which relate to or affect all or any portion of the Subject
Interests;
(xiii) all deposit accounts, contract rights,
operating rights, general intangibles, chattel paper,
documents and instruments whether arising under any of the
foregoing or otherwise, including without limitation, the
Production Sale Contracts and all transmission contracts or
other contracts now or hereafter in effect with respect to the
Pipelines or the Pipeline Assets;
(xiv) all subleases, farmout agreements, assignments
of interests, assignments of operating rights, contracts,
operating agreements, bidding agreements, advance payment
agreements, rights-of-way, surface leases, franchises,
servitudes, privileges, permits, licenses, easements,
tenements, hereditaments, improvements, appurtenances and
benefits now existing or in the future obtained and incident
and appurtenant to any of the foregoing;
(xv) all lease records, well records, production
records and accounting and other records and files which
relate to any of the foregoing, and all maps, data bases,
manuals, information and data which relate to any of the
foregoing, including without limitation engineering,
geological and geophysical data;
(xvi) all income, revenues, rents, profits and
proceeds arising out of the gathering, transportation,
processing or sale of Hydrocarbons through the Pipelines and
other accounts, contract rights, operating rights, general
intangibles,
6
chattel paper, documents, investment property and instruments
arising under any of the foregoing;
(xvii) any liens and security interests in the
Subject Interests in favor of any of the Companies securing
payment of proceeds from the sale of the Subject Minerals
including, but not limited to, those liens and security
interests provided for in Tex. Bus. & Com. Code Ann. Section
9.319 (Tex. UCC) (Vernon 1968), as amended;
(xviii) all other rights, titles and interests of any
of the Companies in, to and under or derived from the Lands,
the Leases, the Rights-of-Way and Franchises, the Production
Sale Contracts and/or other properties described in the
Mortgage;
(xix) any property that may from time to time
hereafter, by delivery or by writing of any kind executed by
or on behalf of any of the Companies, be subjected to the lien
and security interest hereof by any the Companies or by anyone
authorized on and of any of the Companies' behalf, and Secured
Party is hereby authorized to receive the same as additional
security;
(xx) all other property of every nature and kind and
wheresoever situated, now owned or hereafter acquired by any
of the Companies or to which any of the Companies is now or
may hereafter be entitled at law or in equity; and
(xxi) any and all proceeds, returns, rents,
royalties, issues, profits, products, revenues and other
income arising from or by virtue of the sale, lease or other
disposition of, or from any condemnation, eminent domain or
insurance payable with respect to damage, loss or destruction
of, the items described in subparagraphs (i) through (xx)
above;
together with any and all proceeds, products, increases, profits,
substitutions, replacements, renewals, additions, amendments and
accessions of, to and for all of the foregoing property. All the
aforesaid properties, rights and interests which are hereby subjected
to the lien and/or security interest of this instrument, together with
any additions thereto which may be subjected to the lien and/or
security interest of this paragraph (a) by means of supplements hereto
or otherwise shall hereinafter be referred to as the "UCC Collateral."
(b) Each of the Companies also pledges to the Secured Party,
and grants to the Secured Party a security interest in all of the
Companies's right, title and interest in, to and under any and all of
the following described property, rights and interests, in each case,
wherever located, whether now owned or hereafter acquired or arising,
all accessions and additions thereto, all substitutions and
replacements therefor, and all proceeds and products thereof
(collectively, the "Pledged Securities"):
(i) all of the issued and outstanding shares of
common stock of any Subsidiary of any of the Companies
presently existing or hereafter created or acquired (the
"Pledged Subsidiaries") therein set forth;
7
(ii) all other shares of common stock or other equity
securities now or hereafter acquired by any of the Companies
in any manner issued by the Pledged Subsidiaries, and the
certificates representing such securities, and any present or
future options, warrants or other rights to subscribe for or
purchase any property or any notes, bonds, debentures or other
evidences of indebtedness now or hereafter owned or acquired
by any of the Companies in any manner that (A) are at any time
convertible, exchangeable or exercisable into capital stock or
other equity securities of the Pledged Subsidiaries or (B)
have or at any time could by their terms have voting rights
with respect to any matter affecting the Pledged Subsidiaries
and all securities, certificates and instruments representing
or evidencing ownership of any of the property described in
Schedule 2(b) of the Oil and Gas Agreement; and
(iii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including
without limitation dividends, distributions, cash, instruments
and other property or securities, now or hereafter at any time
or from time to time received or receivable or otherwise
distributed or distributable in respect of or in exchange for
any or all of the foregoing.
Subject to any Liens in respect of the Jefferies
Lien, pursuant to the terms hereof, each of the Companies has
endorsed, assigned and delivered to the Secured Party or such
other Person that the Secured Party has designated as its
agent to hold for perfection purposes all negotiable or
non-negotiable instruments (including certificated securities)
and chattel paper pledged by it hereunder, together with
instruments of transfer or assignment duly executed in blank
as the Secured Party may have specified. In the event that any
of the Companies shall, after the date of this Agreement,
acquire any other negotiable or non-negotiable instruments
(including certificated securities) or chattel paper to be
pledged by it hereunder, such Companies shall, subject to any
Liens in respect of the Jefferies Lien, forthwith endorse,
assign and deliver the same to the Secured Party, accompanied
by such instruments of transfer or assignment duly executed in
blank as the Secured Party may from time to time specify. To
the extent that any securities are uncertificated, appropriate
book-entry transfers reflecting the pledge of such securities
created hereby have been or, in the case of uncertificated
securities hereafter acquired by the Companies, will at the
time of such acquisition be, duly made for the account of the
Secured Party or one or more nominees of the Secured Party
with the issuer of such securities or other appropriate
book-entry facility or financial intermediary, with the
Secured Party having at all times the right to obtain
definitive certificates (in the Secured Party's name or in the
name of one or more nominees of the Secured Party) where the
issuer customarily or otherwise issues certificates, all to be
held as Collateral hereunder. Each of the Companies hereby
acknowledges that the Secured Party may, in its discretion,
appoint one or more financial institutions to act as the
Secured Party's agent in holding in custodial accounts
instruments or other financial assets, including securities,
in which the Secured Party is granted a security interest
hereunder, including, without limitation, certificates of
deposit and other instruments evidencing short term
obligations.
8
(c) Without limiting the security interest granted
hereby, each of the Companies hereby grants to Secured Party a
limited license in such Company trade names, trademarks and
service marks, together with the Company's goodwill associated
with such trade names, trademarks and servicemarks, for
purposes of allowing Secured Party to use the same in
connection with any foreclosure sale or any other disposition
pursuant to the UCC or this Agreement.
(d) The inclusion of proceeds in this Agreement does
not authorize any of the Companies to sell, dispose of or
otherwise use the Collateral in any manner not specifically
authorized hereby or under the Restructured O&G Agreement.
(e) This Agreement secures the prompt and complete
payment of all Obligations.
Section 3. Representations and Warranties. Each of the
Companies represents and warrants, as of the date hereof, to the
Secured Party as follows:
(a) The chief executive office and principal place of
business of each of the Companies is located at 1300 N. Sam
Houston Parkway East, Suite 320, Houston, Harris County, Texas
77032. Any and all Collateral not delivered to the Secured
Party or its designated agent is and will continue to be
located only in the States of Texas, Louisiana, Alabama,
Mississippi and North Dakota.
(b) the Companies are the legal and beneficial owner
of all of the Collateral free and clear of any lien, security
interest, charge or encumbrance of any kind or nature, except
for the lien and security interest created hereby, Permitted
Liens and the Jefferies Lien, and none of the Companies has
made any other pledge, assignment, mortgage, hypothecation or
transfer of the Collateral except as permitted hereunder or
under the Restructured O&G Agreement. Except for Permitted
Liens, the Collateral taken as a whole is free from any
material credit, deduction, allowance, defense, dispute,
setoff or counterclaim and there is no material extension or
indulgence with respect thereto. The Pledged Securities are
not subject to any put, call, option or other right in favor
of any other person whatsoever.
(c) The Pledged Securities are have been duly
authorized and validly issued and non-assessable.
(i) This Agreement has been duly executed
and delivered by each of the Companies and creates a
valid security interest in, and lien on, the
Collateral securing the payment of the Obligations.
Upon the delivery of physical certificates evidencing
the Pledged Securities to the Secured Party or its
designated agent and the making of the filings and
the taking of all other actions necessary, if any, to
perfect the security interests created hereby,
including, without limitation, those actions
specified in Section 2(b) and Section 4, the security
interests created by this Agreement will be duly
perfected security interests subject to no equal or
prior lien, security interest or encumbrance of any
kind or nature other than the Jefferies Lien.
Notwithstanding anything to the contrary in this
Section, pursuant to the Confirmation Order all liens
granted
9
hereunder shall, for all purposes, be valid,
perfected, enforceable, non-avoidable and effective
as of the Effective Date without any further action
by the Thornwood or by the Debtors and without the
execution, filing or recordation of any financing
statement, security agreement, mortgage or other
document.
(d) Each of the Companies has the requisite corporate
power and authority to pledge the Collateral in the manner
hereby done or contemplated and to defend its title thereto
against the lawful claims of all persons whomsoever.
(e) Neither the execution and delivery of this
Agreement by any of the Companies, the performance by any of
the Companies of its obligations hereunder, nor the
transactions herein contemplated will (i) violate any of the
Companies' charter or bylaws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment
lease, instrument or other document to which any of the
Companies is a party, (iii) violate any law, order, rule or
regulation applicable to any of the Company of any court or
any government, regulatory body or administrative agency or
other governmental body having jurisdiction over any Company
or its properties, or (iv) result in or require the creation
or imposition of any lien (other than the lien contemplated
hereby), upon or with respect to any of the property now owned
or hereafter acquired by any of the Companies, which violation
or conflict would have a material adverse effect on the
financial condition, business, assets or liabilities of any of
the Companies or on the value of the Collateral or a material
adverse effect on the security interests hereunder.
(f) The Pledged Securities includes the issued and
outstanding shares of Common Stock of the Pledged Subsidiaries
and as of the date of execution hereof, there are no
outstanding options, warrants or other rights to subscribe for
or purchase any property of the Companies or the Pledged
Subsidiaries or any notes, bonds, debentures or other
evidences of indebtedness that (i) are at any time convertible
into capital stock of the Pledged Subsidiaries or (ii) have or
at any time could by their terms have voting rights with
respect to any matters affecting the Pledged Subsidiaries.
(g) No consent or approval which has not been
obtained prior to the date hereof of any other person or
entity and no authorization, approval or other action (other
than delivery of physical certificates evidencing the Pledged
Securities) by, and no notice to or filing with any
governmental body (other than UCC filings), regulatory
authority or securities exchange, was or is necessary as a
condition to the validity of the pledge hereunder of the
Collateral, and such pledge is effective to vest in the
Secured Party the rights of the Secured Party in the
Collateral as set forth herein. There are no restrictions on
the transferability of any of the Collateral transferred or
delivered by the Companies hereunder or, except for
restrictions related to federal and state securities laws
governing the sale of "restricted stock" or "control stock,"
with respect to the foreclosure, transfer or disposition
thereof by the Secured Party.
(h) As of the date hereof, GB Processing and GB
Pipeline are the only Material Subsidiaries of the Companies.
10
Section 4. Covenants. During the term of this Agreement and
until all the Obligations have been fully and finally paid and
discharged in full, each the Companies covenants and agrees with the
Secured Party that:
(a) Except as permitted by the Restructured O&G
Agreement or in the ordinary course of business, none of the
Companies will make any compromise or settlement with respect
to the Collateral without notice to or consent of the Secured
Party.
(b) Subject to the Jefferies Lien and the Jefferies
Documentation, each of the Companies shall deliver to the
Secured Party or its designated agent concurrently with the
execution of this Agreement or, to the extent acquired
subsequent to the date of execution hereof, including without
limitation Pledged Securities issued by a newly created or
acquired Subsidiary, immediately upon such Companies'
acquisition thereof: (i) all certificates and instruments
representing the Pledged Securities, and (ii) all certificates
and instruments representing each other item of Collateral
(including all certificates, instruments and notes
representing any such UCC Collateral). Any and all Pledged
Securities delivered to the Secured Party or its designated
agent shall be accompanied by undated duly executed powers in
blank and by such other instruments of transfer or documents
as the Secured Party may reasonably request. The Secured Party
may hold the certificates representing the Pledged Securities
delivered to it in its own name or in the name of its nominee,
all in form and substance satisfactory to the Secured Party.
(c) From time to time, each of the Companies shall,
at its own expense, promptly give, execute, deliver, file
and/or otherwise formalize any such notice, statement,
instrument, document, agreement or other papers, and do all
such other acts and things, as may be necessary or desirable,
or as the Secured Party may reasonably request, in order to
create, evidence, preserve, perfect, validate or continue any
lien or security interest created pursuant to this Agreement
or to enable the Secured Party to exercise or enforce its
rights hereunder with respect to such lien or security
interest, or otherwise further to effect the purposes of this
Agreement. Without limiting the generality of the foregoing,
each of the Companies shall, at any time or from time to time
upon the request of the Secured Party and at the Companies'
own expense, execute, acknowledge, witness, deliver, file
and/or record such financing and continuation statements,
notices, additional assignments and other documents or
instruments (all of which shall be in form and substance
satisfactory to the Secured Party and its counsel) as the
Secured Party may from time to time reasonably request for the
perfection of the liens and security interests created hereby.
(d) Each of the Companies shall promptly notify the
Secured Party (i) of any material changes in any fact or
circumstance represented or warranted by any of the Companies
with respect to any material portion of the Collateral, (ii)
of any material impairment of the Collateral and (iii) of any
claim, action or proceeding affecting title to all or any of
the Collateral.
(e) Except for the liens and security interests
created by this Agreement and the Permitted Liens in the
Collateral, each of the Companies shall at its own expense
11
defend the Collateral against any and all liens, claims,
security interests and other encumbrances or interests,
howsoever arising and shall maintain and preserve the security
interest granted hereunder with respect to the Collateral as
long as this Agreement shall remain in full force and effect.
None of the Companies shall make any other pledge, assignment,
mortgage, hypothecation or transfer of the Collateral except
as permitted hereunder or under the Restructured O&G
Agreement.
(f) Each of the Companies shall at all times keep
accurate and complete records with respect to the Collateral,
including, without limitation, records of all payments made,
credit granted and proceeds received in connection therewith.
(g) None of the Companies shall relocate its
principal place of business or chief executive office to a
county or state other than that specified in Section 3(a) of
this Agreement unless such Company gives 30 days' prior
written notice to the Secured Party, which notice shall
specify the county and state into which such relocation is to
be made. The Collateral, to the extent not delivered to the
Secured Party pursuant to Section 2, will be kept at those
locations listed on the Perfection Certificate delivered to
the Secured Party herewith in the form attached as Exhibit A
hereto and none of the Companies will remove the Collateral
from such locations, without providing at least 30 days' prior
written notice to the Secured Party.
(h) Each of the Companies will keep the Collateral in
good order and repair, except in situations where not to do so
would not be material, and will not use the same in violation
of law or any policy of insurance thereon. The Secured Party,
or its designee, may inspect the Collateral at any reasonable
time, wherever located.
(i) The Secured Party, or its representative, shall
at all times have full and free access during normal business
hours to all of the books, correspondence and records of each
of the Companies relating to the Collateral (other than
information that is privileged and confidential) and the
Secured Party and its representatives may examine the same,
make abstracts therefrom and make photocopies thereof, and the
Companies agrees to render to the Secured Party, at the
Companies' cost and expense, such clerical and other
assistance as may be reasonably requested by the Secured Party
with regard thereto.
(j) The Companies shall not permit any of the Pledged
Subsidiaries to issue to the Companies any securities of the
type required to be pledged hereunder unless such securities
are promptly pledged and delivered hereunder to the Secured
Party or its designated agent in accordance with Section 2(b).
(k) If, while this Agreement is in effect, any stock
dividend, stock split, reclassification, readjustment,
reorganization, merger, consolidation, exchange offer, tender
offer or other change in the capital structure, including the
creation of any subscription or other rights relating to the
Pledged Securities, is declared or made, or proposed to be
declared or made, by any of the Pledged Subsidiaries or any
other issuer of the Collateral, all substituted and additional
securities or interest issued with respect to the Collateral
and evidenced by certificates shall be endorsed in blank by
the applicable Companies promptly upon receipt thereof or
otherwise appropriately transferred to the
12
Secured Party in negotiable form, and all certificates or
instruments evidencing such securities shall be delivered to
the Secured Party to be held under the terms of this Agreement
in the same manner as, and as a part of, the Collateral. All
Pledged Securities shall be evidenced by one or more
certificates. Any securities that may be issued upon exercise
of any subscription or other rights relating to the Pledged
Securities shall be endorsed in blank and delivered to the
Secured Party with any necessary powers.
Section 5. Powers of the Secured Party.
(a) Each of the Companies hereby irrevocably
designates and appoints the Secured Party as its
attorney-in-fact, with full power of substitution, for the
purposes of carrying out the provisions of this Agreement and
taking any action and executing any instrument, including,
without limitation, any financing statement or continuation
statement, and taking any other action to maintain the
validity, perfection, priority and enforcement of the security
interest intended to be created hereunder, that the Secured
Party may reasonably deem necessary or advisable to accomplish
the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest.
(b) Without limiting the generality of Section 5(a)
hereof, each of the Companies hereby irrevocably authorizes
and empowers the Secured Party, upon the occurrence and during
the continuation of any Event of Default, at the expense of
such Companies, either in the Secured Party's own name or in
the name of any Companies, at any time and from time to time:
(i) to ask, demand, receive, issue a receipt
for, give acquittance for, settle and compromise any
and all monies which may be or become due or payable
or remain unpaid at any time or times to any of the
Companies, and any and all other property which may
be or become deliverable at any time or times to any
of the Companies, under or with respect to the
Collateral;
(ii) to endorse any drafts, checks, orders
or other instruments for the payment of money payable
to any of the Companies on account of the Collateral
(including any such draft, check, order or instrument
issued by any insurance company payable jointly to
any of the Companies and the Secured Party); and
(iii) to settle, compromise, prosecute or
defend any action, claim or proceeding, or take any
other action, all either in its own name or in the
name of any of the Companies or otherwise, which the
Secured Party may deem to be necessary or advisable
for the purpose of exercising and enforcing its
powers and rights under this Agreement or in
furtherance of the purposes hereof, including any
action which by the terms of this Agreement is to be
taken by any of the Companies.
(c) Nothing in this Agreement shall be construed as
requiring or obligating the Secured Party to make any
commitment or to make any inquiry as to the nature or
sufficiency of any payment received by it, or to present or
file any claim or notice, or to take any other action with
respect to any of the Collateral or any part thereof or the
amounts due or to become due in respect thereof or any
property covered thereby, or to
13
collect or enforce the payment of any amounts assigned to it
or to which it may otherwise be entitled hereunder at any time
or times other than to account for amounts or Collateral
received.
(d) The Secured Party shall be entitled at any time
to file this Agreement, or a carbon, photographic or any other
reproduction of this Agreement, as a financing statement, but
the failure of the Secured Party to do so shall not impair the
validity or enforceability of this Agreement. The Secured
Party shall have no duty to comply with any recording, filing
or other legal requirements necessary to establish or maintain
the validity, priority or enforceability of, or the Secured
Party's rights in or to, any of the Collateral.
(e) In its discretion, the Secured Party may
discharge taxes and other encumbrances at any time levied or
placed on any of the Collateral, make repairs thereto and pay
any necessary filing fees. Each of the Companies agrees to
reimburse the Secured Party on demand for any and all
reasonable expenditures so made with interest on unpaid
amounts at the maximum rate permitted by law. The Secured
Party shall have no obligation to any of the Companies to make
any such expenditures, nor shall the making thereof relieve
any of the Companies of any default.
(f) Anything herein to the contrary notwithstanding,
each of the Companies shall remain liable under each contract
or agreement comprised in the Collateral to be observed or
performed by such Companies thereunder. The Secured Party
shall not have any obligation or liability under any such
contract or agreement by reason of or arising out of this
Agreement or the receipt by the Secured Party of any payment
relating to any of the Collateral, nor shall the Secured Party
be obligated in any manner to perform any of the obligations
of any of the Companies under or pursuant to any such contract
or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Secured Party in respect of the
Collateral or as to the sufficiency of any performance by any
party under any such contract or agreement, to present or file
any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party
may be entitled at any time or times other than to account for
amounts or Collateral received, and no action taken or omitted
shall give rise to any defense, counterclaim or right of
action against the Secured Party, unless the Secured Party's
actions are taken or omitted to be taken with gross negligence
or bad faith or constitute willful misconduct. The Secured
Party's sole duty with respect to the custody, safe keeping
and physical preservation of the Collateral in its possession,
under Section 9-207 of the UCC or otherwise, shall be to deal
with such Collateral in the same manner as the Secured Party
deals with similar property for its own account.
(g) If an Event of Default has occurred and is
continuing, the Secured Party may at any time, at its option,
transfer to itself or any nominee any securities constituting
the Pledged Securities, receive any income thereon and hold
such income as additional Collateral or apply it to the
Obligations. Regardless of whether any Obligations are due,
the Secured Party may demand, sue for, collect, or make any
settlement or compromise, which it deems desirable with
respect to the Collateral. Regardless of the adequacy of
14
Collateral or any other security for the Obligations, any
deposits or other sums at any time credited by or due from the
Secured Party to any of the Companies may at any time be
applied to or setoff against any of the Obligations.
(h) If an Event of Default has occurred and is
continuing, the Secured Party shall have all of the rights
with respect to the UCC Collateral as may be available to
secured parties under the UCC.
(i) If an Event of Default shall have occurred and be
continuing, each of the Companies shall, at the request of the
Secured Party, notify obligors on chattel paper and general
intangibles of the Companies and obligors on instruments for
which any of the Companies is an obligee of the security
interest of the Secured Party in any chattel paper, general
intangible or instrument and that payment thereof is to be
made directly to the Secured Party or to any financial
institution designated by the Secured Party as the Secured
Party's agent therefor, and the Secured Party may itself, if
an Event of Default shall have occurred and be continuing,
without notice to or demand upon the Companies, so notify said
obligors. After the making of such a request or the giving of
any such notification, each of the Companies shall hold any
proceeds of collection of chattel paper, general intangibles
and instruments received by such Companies as trustee for the
Secured Party without commingling the same with other funds of
such Companies and shall turn the same over to the Secured
Party in the identical form received, together with any
necessary endorsements or assignments. The Secured Party shall
apply the proceeds of collection of chattel paper, general
intangibles and instruments received by the Secured Party to
the Obligations, such proceeds to be immediately entered after
final payment in cash of the items giving rise to them.
Section 6. Voting Rights, Dividends, Etc.
(a) Until an Event of Default shall have occurred and
be continuing:
(i) except as otherwise provided in this
Agreement, each of the Companies shall be entitled to
exercise any and all voting or consensual rights and
powers, including subscription rights, in relation to
the Pledged Securities; provided, however, that no
vote shall be cast or consent, waiver or ratification
given or action taken which would materially impair
the securities or the value thereof or violate any
provision of this Agreement, the Restructured O&G
Agreement or any other ancillary document;
(ii) except as otherwise provided in this
Agreement, each of the Companies shall be entitled to
receive and retain any and all dividends,
distributions or other payments in respect of the
Pledged Securities and the Secured Party, upon
receipt of any of the foregoing, shall promptly pay
or distribute the same to the applicable Companies,
and, to the extent so permitted, any distributions
received by such Companies and transferred to other
persons shall pass free and clear of the lien and
security interest hereof; and
(iii) the Secured Party shall execute and
deliver to each of the Companies or cause to be
executed and delivered to such Companies, all such
15
proxies, powers of attorney, dividend orders and
other instruments as such Companies may reasonably
request for the purpose of enabling it to exercise
the voting or consensual rights and powers which such
Companies is entitled to exercise pursuant to the
foregoing Section 6(a)(i) or to receive the
dividends, distributions or other payments which such
Companies is authorized to retain pursuant to the
foregoing Section 6(a)(ii).
(b) Upon the occurrence and during the continuance of
an Event of Default, all rights of each of the Companies to
exercise the voting or consensual rights and powers which it
would otherwise be entitled to exercise pursuant to Section
6(a)(i) and to receive the dividends, distributions and other
payments which the Pledgor would otherwise be authorized to
receive and retain pursuant to Section 6(a)(ii) shall
automatically cease, and all such rights shall thereupon
become vested in the Secured Party, which shall then have the
sole and exclusive right and authority to exercise, in its
sole discretion, all such voting and consensual rights and
powers and to receive and retain as Collateral all such
dividends, distributions and other payments. Without limiting
the foregoing, in such event the Secured Party may exercise
all voting and corporate rights at any meeting of any
corporation issuing any such securities and any and all rights
of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any such securities as if
it were the absolute owner thereof, including, without
limitation, the rights to exchange at its discretion, any and
all such securities upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any
corporation issuing any such securities or upon the exercise
by any such issuer or the Secured Party of any right,
privilege or option pertaining to any such securities, and, in
connection therewith, to deposit and deliver any and all
securities with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and
conditions as it may determine, all without liability except
to account for the property actually received by it, but the
Secured Party shall have no duty to exercise any of the
aforesaid rights, privileges or options and the Secured Party
shall not be responsible for any failure to do so or delay in
so doing.
Section 7. Default.
(a) It shall constitute a Default or an Event of
Default under this Agreement if a "Default" or an "Event of
Default" shall occur under the Restructured O&G Agreement.
(b) If an Event of Default shall have occurred and is
continuing and if the Obligations are accelerated under the
provisions of the Restructured O&G Agreement, in addition to
any other rights and remedies that may be available to the
Secured Party under the UCC or the Restructured O&G Agreement
or under Section 5 of this Agreement or otherwise under this
Agreement or at law, the Secured Party shall also have the
following rights and powers:
(i) The Secured Party may, without being
required to give any notice except as hereinafter
provided, sell the Collateral, or any part thereof,
at public or private sale, for cash, upon credit or
for future delivery and at such price or prices
16
as the Secured Party deems satisfactory, and the
Secured Party and/or its collateral agent may be the
purchaser of any or all of the Collateral so sold and
thereafter hold the same absolutely free from any
right or claim of whatsoever kind, and the
Obligations or any portion of the Obligations may be
applied as a credit against the purchase price.
(ii) Upon any such sale, the Secured Party
shall have the right to deliver, assign and transfer
to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the property
sold absolutely free from any claim or right of
whatsoever kind by or on behalf of any of the
Companies, including any equity or rights of
redemption of any of the Companies, and each of the
Companies hereby specifically waives, to the full
extent permitted by applicable law, all rights of
redemption, stay or appraisal which it has or may
have under any rule or law or statute now existing or
hereafter adopted.
(iii) The Secured Party shall give each of
the Companies ten (10) business days' written notice
(which each of the Companies agrees is reasonable
notification within the meaning of Section 9-611 of
the UCC) of its intention to make any such public or
private sale. Such notice, in case of public sale,
shall state the time and place fixed for such sale
and, in case of a private sale, shall state the date
after which such sale is to be made.
(iv) Any such public sale shall be held at
such time or times within ordinary business hours and
at such places as the Secured Party may fix in the
notices of such sale. At any such sale the Collateral
may be sold in one lot as an entirety or in separate
parcels, as the Secured Party may, in its sole
discretion, determine.
(v) The Secured Party shall not be obligated
to make any sale of the Collateral of any part
thereof if it shall determine not to do so,
regardless of the fact that notice of sale of the
Collateral may have been given. The Secured Party
may, without notice or publication, adjourn any
public or private sale or cause the same to be
adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may,
without further notice, be made at any time or place
to which the same shall be so adjourned.
(vi) In case of any sale of all or any part
of the Collateral on credit or for future delivery,
the Collateral so sold may be retained by the Secured
Party until the selling price is paid by the
purchaser thereof, but the Secured Party shall not
incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such
Collateral may again be sold upon like notice.
(vii) The Secured Party, instead of
exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at law or in
equity to exercise its remedies regarding the
Collateral and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
17
(viii) Each of the Companies agrees that if
any Event of Default shall have occurred and be
continuing, then the Secured Party shall have the
right to take possession of the Collateral, and for
that purpose the Secured Party may, so far as any of
the Companies can give authority therefor, enter upon
any premises on which the Collateral may be situated
and remove the same therefrom with or without notice
or process of law. Each of the Companies waives any
and all rights that it may have to a judicial hearing
in advance of the enforcement of any of the Secured
Party's rights hereunder, including, without
limitation, its right following an Event of Default
to take immediate possession of the Collateral and to
exercise its rights with respect thereto.
(ix) If under mandatory requirements of
applicable law, the Secured Party shall be required
to make disposition of the Collateral within a period
of time that does not permit the giving of notice to
the Companies as hereinbefore provided, the Secured
Party need give each of the Companies only such
notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of
law.
(x) The Secured Party may instruct the
obligor or obligors on any agreement, instrument or
other obligation constituting the Collateral to make
any payment or render any performance required by the
terms of such agreement, instrument or obligation
directly to the Secured Party or its designee.
(c) The Secured Party shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at
any private sale other than for its own gross negligence,
willful misconduct or bad faith. Each of the Companies hereby
waives, to the maximum extent permitted by applicable law, any
claims against the Secured Party arising by reason of the fact
that the price at which the Collateral may have been sold at
such private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate
amount of the Obligations, even if the Secured Party accepts
the first offer received and does not offer such Collateral to
more than one offeree.
(d) The Secured Party shall not be obligated to
pursue or exhaust its rights and remedies against any
particular Collateral or other security for the Obligations
before pursuing or enforcing its rights and remedies against
any other Collateral or other security for the Obligations.
(e) To the extent permitted by law, each of the
Companies hereby waives (i) any rights to require the Secured
Party to proceed first against any other Person, to exhaust
its rights in the Collateral or other security for the
Obligations or to pursue any other right that the Secured
Party might have, (ii) with respect to the Note, presentment
and demand for payment, protest, notice of protest and
nonpayment, notice of dishonor, notice of the intention to
accelerate and notice of acceleration (except as otherwise set
forth in the Restructured O&G Agreement), and (iii) all rights
of marshaling in respect of any and all of the Collateral.
(f) Without precluding any other methods of sale,
each of the Companies acknowledges that the sale of the
Collateral shall have been made in a commercially
18
reasonable manner if conducted in conformity with reasonable
commercial practices of institutional lenders disposing of
similar property. The Secured Party shall not be liable for
any depreciation in the value of the Collateral.
(g) Each of the Companies agrees that its obligation
to deliver the Collateral is of the essence of this Agreement
and that accordingly, upon application to a court of equity
having jurisdiction, the Secured Party shall be entitled to a
decree requiring specific performance by the Companies of such
obligation.
(h) Remedies of the Secured Party are cumulative and
the exercise of any one or more of the remedies provided
herein shall not be construed as a waiver of any of the other
remedies of the Secured Party.
(i) If an Event of Default shall have occurred and be
continuing, the proceeds of any sale of or other realization
upon all or any part of the Collateral and any other amounts
held by the Secured Party under this Agreement shall be
applied by the Secured Party as provided in the Restructured
O&G Agreement.
Any amounts remaining after such applications and the
payment in full of the Note with respect to the Obligations
shall be remitted to the Companies, its successors or assigns,
or as a court of competent jurisdiction may otherwise direct.
Section 8. General Provisions.
(a) Continuing Security Interest; Binding Effect.
This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect
until termination of the obligations of the Companies under
the Restructured O&G Agreement and the indefeasible payment in
full thereafter of the Obligations; (ii) be binding upon each
of the Companies and its successors and assigns; and (iii)
inure to the benefit of the Secured Party and its successors,
transferees and assigns. Without limiting the generality of
the foregoing clause (iii), the Secured Party may assign or
otherwise transfer any of its rights under this Agreement to
any other Person, and such Person shall thereupon become
vested with all the benefits in respect thereof granted herein
or otherwise to the Secured Party. Upon the termination of the
obligations of the Secured Party under the Restructured O&G
Agreement and the indefeasible payment in full thereafter of
the Obligations, each of the Companies shall be entitled to
the return, upon its request and at its expense, of such of
the Collateral as is in the Secured Party's possession and as
shall not have been sold or otherwise disposed of pursuant to
the terms hereof.
(b) Security Interest Absolute. The lien and security
interest created hereunder and the Companies' obligations
hereunder and the Secured Party's rights hereunder shall not
be released, diminished, impaired or adversely affected by the
occurrence of any one or more of the following events:
(i) The taking or accepting of any other
security or assurance for any or all of the
Obligations;
19
(ii) Any release, surrender, exchange,
subordination or loss of any security or assurance at
any time existing in connection with any or all of
the Obligations;
(iii) The modification of, amendment to, or
waiver of compliance with any terms of the
Restructured O&G Agreement or the Note;
(iv) Any renewal, extension and/or
rearrangement of the payment of any or all of the
Obligations or any statement, indulgence, forbearance
or compromise that may be granted or given by the
Secured Party to any of the Companies or any other
Person;
(v) any neglect, delay, omission, failure or
refusal of the Secured Party to take or prosecute any
action in connection with any agreement, document or
other instrument evidencing, securing or assuring the
payment of any or all of the Obligations;
(vi) the illegality, invalidity or
unenforceability of all or any part of the
Restructured O&G Agreement or the Note; or
(vii) any other circumstance (other than
payment in full of the Obligations) that might
otherwise constitute a defense available to, or a
discharge of, the Companies or any party to any
document in respect of the Obligations.
(c) Amendments. This Agreement or any term hereof may
be amended or changed only by an instrument in writing
executed jointly by each of the Companies and the Secured
Party and in accordance with the Restructured O&G Agreement.
(d) Remedies Cumulative. Each right, power and remedy
herein specifically granted to the Secured Party or otherwise
available to it or now or hereafter existing in law or in
equity shall be cumulative and concurrent, and shall be in
addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in
equity, or otherwise (including, without limitation, all
rights, powers and remedies granted to a secured party under
the UCC), and each such right, power and remedy, whether
specifically granted herein or otherwise existing, may be
exercised at any time and from time to time as often and in
such order as may be deemed expedient by the Secured Party in
its sole and complete discretion. The provisions of this
Agreement may only be waived by an instrument in writing
signed by the Secured Party, and no failure on the part of the
Secured Party to exercise, and no delay in exercising, and no
course of dealing with respect to, any such right, power or
remedy, shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise
of any other right. No notice to or demand on any of the
Companies hereunder shall, of itself, entitle any of the
Companies to any other or further notice or demand in the same
or similar circumstances.
(e) Assignment. Neither this Agreement nor any
interest herein or in the Collateral, or any part thereof, may
be assigned by any of the Companies without the
20
prior written consent of the Secured Party, except as
expressly permitted herein or in the Restructured O&G
Agreement.
(f) Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of
any of the provisions hereof.
(g) Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity of
enforceability or such provision in any other jurisdiction.
(h) Survival. All representations and warranties
contained herein, in the Restructured O&G Agreement or made in
writing by any of the Companies in connection herewith or
therewith, shall survive the execution and delivery of this
Agreement, the Restructured O&G Agreement and any documents
executed in connection herewith or therewith.
(i) Counterparts; Facsimiles. This Agreement may be
executed in any number of counterparts and by different
parties in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but
all of which when taken together shall constitute one and the
same instrument. A complete set of counterparts shall be
lodged with the Secured Party. Any signature delivered by fax
shall be deemed an original signature hereto.
(j) Waiver. To the extent permitted by applicable law
each of the Companies hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any
of the Restructured O&G Agreement obligations and this
Agreement and any requirement that the Secured Party protect,
secure, perfect or insure any security interest or any
property subject thereto or exhaust any right or take any
action against any of the Companies or any other person or
entity; provided however, that the Secured Party shall in any
event take such care in the handling of any Collateral in its
possession as it takes with respect to its own property of a
similar nature in its possession.
(k) Notices. Any notices or other communications
required or permitted hereunder shall be made in the manner
provided in the Restructured O&G Agreement.
(l) Conflicting Terms. In the event of any conflict
or inconsistency between the terms, covenants, conditions and
provisions set forth in this Agreement and the terms,
covenants, conditions and provisions set forth in the
Restructured O&G Agreement, the terms, covenants, conditions
and provisions of the Restructured O&G Agreement shall
prevail.
(m) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW
EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
21
EACH OF THE COMPANIES HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF
THE COMPANIES IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE COMPANIES IRREVOCABLY
CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE COMPANIES AT ITS SAID ADDRESS, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE SECURED PARTY TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OF
THE COMPANIES IN ANY OTHER JURISDICTION.
[SIGNATURE PAGE FOLLOWS]
22
IN WITNESS WHEREOF, the Companies and the Secured Party have executed
this Amended and Restated Agreement as of the date first above written.
TRANSTEXAS GAS CORPORATION
By:
------------------------------
Name:
Title:
GALVESTON BAY PIPELINE COMPANY
By:
------------------------------
Name:
Title:
GALVESTON BAY PROCESSING CORPORATION
By:
------------------------------
Name:
Title:
THORNWOOD ASSOCIATES LP
By: Barberry Corp., General Partner
By:
------------------------------
Name:
Title:
EXHIBIT A (PERFECTION CERTIFICATE) - to be provided by the Debtors
SCHEDULE 1(a) - to be provided by the Debtors