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EXHIBIT 4.37
TRANSTEXAS GAS CORPORATION
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement (this "Agreement") is made
and entered into as of March 15, 2000 by and between TransTexas Gas Corporation,
a Delaware corporation (the "Company"), as debtor, and Firstar Bank, N.A., in
its capacity as indenture trustee (the "Trustee") for the benefit of Holders of
TransTexas Gas Corporation"s 15% Senior Secured Notes Due 2005 (the "Holders"),
(Trustee acting as agent for the benefit of the Holders shall be called the
"Secured Party").
RECITALS
The Company, as issuer, Galveston Bay Pipeline Company and
Galveston Bay Processing Corporation, as guarantors, and the Trustee as the
indenture trustee for the benefit of the Holders have entered into that certain
Indenture dated as of March 15, 2000 (as amended, modified or supplemented from
time to time, the "Indenture");
Pursuant to and on the terms and conditions set forth in the
Indenture, Company is issuing to the Holders certain 15% senior secured notes
due 2005 in the aggregate principal amount of $200,000,000.00 (collectively, the
"Notes");
In order to secure the payment and performance in full of the
obligations of Company under the Indenture and the Notes, 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, Company 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 Indenture, 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 Pledged Property
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
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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, Exhibit D attached hereto.
"Default" and "Event of Default" shall have the meanings
assigned to those terms in Section 7(a) of this Agreement.
"Equipment" shall mean and include, as to any Person, all of
such Person's now owned or hereafter acquired equipment (as such term
in defined in the UCC), including, without limitation, Vehicles, crew
quarters, drilling rigs, workover rigs, fracture stimulation equipment,
compressors, rolling stock and related equipment and other assets
accounted for as equipment by such Person on its financial statements,
all proceeds thereof (from insurance or otherwise), 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
Company's now owned or hereafter acquired "general intangibles" 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, as to any Person, such
Person's now owned or hereafter acquired inventory (as such term is
defined in the UCC), including, without limitation, casing, drill pipe
and other supplies accounted for as inventory by the Company on its
consolidated financial statements (excluding any Hydrocarbons), all
proceeds thereof (from insurance or otherwise), and all document 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 Company's
now owned or hereafter acquired "investment property" as such term is
defined in Article 9 of the UCC.
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"Jefferies" means Jefferies Analytical Trading Group, Inc., a
Delaware Corporation.
"Jefferies Documentation" shall mean the Mortgage, Deed of
Trust, Assignment, Security Agreement and Financing Statement,
effective December 31, 1998, made by Galveston Bay Processing
Corporation in favor of Jefferies, the Promissory Note, dated December
31, 1998 in the amount of $5,650,000, made by Company in favor of
Jefferies; and any amendments or supplements to the foregoing as of the
date hereof.
"Jefferies Lien" shall mean pledge of the stock of Galveston
Bay Processing Corporation owned by Company in favor of Jefferies as
security for Company"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 Company for the benefit of Secured Party to
grant a Lien on Company"s real property and/or Hydrocarbons, or any
interest therein, to secure all of the Obligations.
"Obligations" shall mean and include (i) all obligations of
Company to the Secured Party under the Notes, whether such obligations
are now existing or hereafter arising, and all renewals, extensions,
amendments, supplements and rearrangements thereof, and (ii) payment
and performance of all covenants and conditions by Company contained
herein and in the Indenture and each of the other Security Documents in
each case whether for principal, interest, prepayment premium, taxes,
costs, losses, compensation, reimbursements, fees, expenses or any
other amount payable to the Secured Party under the terms of such
documents and/or this Agreement and whether such obligations are now
existing or hereafter arising.
"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 Company 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 Company now or hereafter situated on any of the Lands, or the
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 computer systems and equipment or other
property of whatsoever kind or nature, including, without limitation, all
buildings,
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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 Company's 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
Company for sale, exchange, distribution, consumption or transmission by
Company, including, without limitation, all system gas, drip gas and line fill.
"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 Company,
or Company's 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, Exhibit D, and the Contract Rights related thereto.
"Pledged Securities" shall have the meaning assigned to that
term in Section 2 of this Agreement.
"Receivables" shall mean and include, as to any person, any
and all of such Person's now owned or hereafter acquired Accounts, all products
and proceeds thereof, and all books, records, ledgers cards, files,
correspondence, and computer files, tapes, disks or software that at any time
evidence or contain information relating to such Person's Accounts.
"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 or
hereafter owned or held by Company, 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 Company 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 Company and described in the
Mortgage.
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"Subject Interests" shall mean each kind and character of
right, title, interest or estate, whether now owned or hereafter acquired, which
the Company has in, under or to the Leases and all right, title, interest or
estate, whether now owned or hereafter acquired, which the Company has in and to
the Lands, together with each kind and character of right, title, interest or
estate now or hereafter vested in the Company 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 Indenture or
specifically defined in Section 1(a) above, shall have the same meaning
herein as in the UCC.
Section 2. Grant of Security Interest.
(a) Company hereby grants to the Secured Party, to secure the
payment and performance in full of the Obligations, a security interest
in and a lien on and so pledges and assigns to the Secured Party all of
Company's 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, except to
the extent the same constitutes Inventory or Receivables, 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 Equipment;
(ii) all General Intangibles;
(iii) all Investment Property;
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(iv) all Subject Interests, the Subject Minerals and
Hydrocarbons;
(v) all Contract Rights and Production Sale
Contracts;
(vi) all Leases and the Lands;
(vii) all Pipelines;
(viii) all Pipeline Assets;
(ix) all Rights-of-Way and Franchises;
(x) 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;
(xi) all 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;
(xii) 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;
(xiii) 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;
(xiv) 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, chattel paper, documents, investment property and
instruments arising under any of the foregoing;
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(xv) any liens and security interests in the Subject
Interests in favor of Company 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;
(xvi) all other rights, titles and interests of
Company 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;
(xvii) any property that may from time to time
hereafter, by delivery or by writing of any kind executed by
or on behalf of Company, be subjected to the lien and security
interest hereof by Company or by anyone authorized on
Company's behalf, and Secured Party is hereby authorized to
receive the same as additional security;
(xviii) all other property of every nature and kind
and wheresoever situated, now owned or hereafter acquired by
Company or to which Company is now or may hereafter be
entitled at law or in equity; and
(xix) any and all proceeds, returns, rents,
royalties, issues, profits, products, revenues and other
income (other than Inventory or Receivables) 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 (xviii) above;
together with any and all increases, 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" (UCC Collateral excludes Inventory
and Receivables).
(b) Company also pledges to the Secured Party, and grants to
the Secured Party a security interest in all of Company'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 Company organized in the
United States, whether such Subsidiary is
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presently existing or hereafter created or acquired
(collectively the "Pledged Subsidiaries"), including without
limitation, each of the Pledged Subsidiaries and shares of
common stock identified on Schedule 2(b) attached hereto.
(ii) all other shares of common stock or other equity
securities now or hereafter acquired by Company 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 described in Schedule 2(b) or any notes, bonds,
debentures or other evidences of indebtedness now or hereafter
owned or acquired by Company 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) hereof; 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 Permitted Liens, Company 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
Company 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, Company
shall, subject to any Permitted Liens, 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 Company, 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. Company 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
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granted a security interest hereunder, including, without limitation,
certificates of deposit and other instruments evidencing short term
obligations.
(c) Without limiting the security interest granted hereby,
Company hereby grants to Secured Party a limited license in Company's
trade names, trademarks and service marks, together with Company's
goodwill associated with such trade names, trademarks and service
marks, 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 Company to sell, dispose of or otherwise use the Collateral
in any manner not specifically authorized hereby or under the
Indenture.
(e) This Agreement secures the prompt and complete payment of
all Obligations.
Section 3. Representations and Warranties. Company 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 Company is located at 1300 N. Sam Houston Parkway East, Suite 310,
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 or other states wherein the security
interests hereunder are perfected.
(b) Company is 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 with respect to all
Collateral other than the Pledged Securities for the lien and security
interest created hereby and Permitted Liens and except with respect to
the Pledged Securities, the lien and security interest created hereby,
the lien and security interest granted to the Post-Confirmation Credit
Facility Agent and the Jefferies Lien, and has not made any other
pledge, assignment, mortgage, hypothecation or transfer of the
Collateral except as permitted hereunder or under the Indenture. Except
for such 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 accurately described in
Schedule 2(b) hereto and have been duly authorized and validly issued
and are fully paid and non-assessable.
(d) This Agreement has been duly authorized, executed and
delivered by Company and creates a valid and enforceable security
interest in, and lien on, the Collateral securing the payment of the
Obligations. Upon the delivery of physical certificates
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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 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 are duly perfected security interests subject to no equal or
prior lien, security interest or encumbrance of any kind or nature
other than the Permitted Liens.
(e) Company 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.
(f) Neither the execution and delivery of this Agreement by
Company, the performance by Company of its obligations hereunder, nor
the transactions herein contemplated will (i) violate Company's charter
or bylaws, (ii) violate the terms of any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document
to which Company is a party, (iii) violate any law, order, rule or
regulation applicable to Company of any court or any government,
regulatory body or administrative agency or other governmental body
having jurisdiction over 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 Company, which violation or conflict
would have a material adverse effect on the financial condition,
business, assets or liabilities of Company or on the value of the
Collateral or a material adverse effect on the security interests
hereunder.
(g) The Pledged Securities includes the issued and outstanding
shares of Common Stock of the Pledged Subsidiaries as described in
Schedule 2(b) attached hereto, and as of the date of execution hereof,
there are no outstanding options, warrants or other rights to subscribe
for or purchase any property described in Schedule 2(b) 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.
(h) 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
Company 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.
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(i) As of the date hereof, Galveston Bay Processing
Corporation and Galveston Bay Pipeline Corporation are the only
Material Subsidiaries of Company.
Section 4. Covenants. During the term of this Agreement and
until all the Obligations have been fully and finally paid and
discharged in full, Company covenants and agrees with the Secured Party
that:
(a) Except as permitted by the Indenture or in the ordinary
course of business, Company will not make any compromise or settlement
with respect to the Collateral without notice to or consent of the
Secured Party.
(b) Subject to the Permitted Liens, Company 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 Pledged Subsidiary,
immediately upon Company's creation or acquisition thereof: (i) all
certificates and instruments representing the Pledged Securities and a
revised Schedule 2(b), 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, Company 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, Company shall, at any time or from time to time upon the
request of the Secured Party and at Company's 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) Company shall promptly notify the Secured Party (i) of any
material changes in any fact or circumstance represented or warranted
by Company with respect to any
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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 other Liens in the Collateral expressly
permitted by this Agreement, Company shall at its own expense 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. Company shall not make any other pledge,
assignment, mortgage, hypothecation or transfer of the Collateral
except as permitted hereunder or under the Indenture.
(f) Company 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) Company shall not 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 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 in the
Order of Furtherance of Confirmation, dated March 14, 2000, and filed
with the Court, and Company will not remove the Collateral from such
locations, without providing at least 30 days' prior written notice to
the Secured Party.
(h) Company 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 Company 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 Company
agrees to render to the Secured Party, at Company's cost and expense,
such clerical and other assistance as may be reasonably requested by
the Secured Party with regard thereto.
(j) Company shall not permit any of the Pledged Subsidiaries
to issue to Company or any other Person 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).
Security&Pledge Agmt - Indenture v.3
12
13
(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 Company
promptly upon receipt thereof or otherwise appropriately transferred to
the 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) Company 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,
Company hereby irrevocably authorizes and empowers the Secured Party,
upon the occurrence and during the continuation of any Event of
Default, at the expense of Company, either in the Secured Party"s own
name or in the name of Company, 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 Company, and any and all other property which
may be or become deliverable at any time or times to Company,
under or with respect to the Collateral;
(ii) to endorse any drafts, checks, orders or other
instruments for the payment of money payable to Company on
account of the Collateral (including any such draft, check,
order or instrument issued by any insurance company payable
jointly to Company and the Secured Party); and
Security&Pledge Agmt - Indenture v.3
13
14
(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 Company 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 Company.
(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 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.
Company 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 Company to make any such expenditures, nor shall the
making thereof relieve Company of any default.
(f) Anything herein to the contrary notwithstanding, Company
shall remain liable under each contract or agreement comprised in the
Collateral to be observed or performed by Company 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 Company 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
Security&Pledge Agmt - Indenture v.3
14
15
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 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 Company may at any time be applied to or set
off against any of the Obligations.
(h) If an Event of Default shall have occurred and be
continuing, Company shall, at the request of the Secured Party, notify
obligors on chattel paper and general intangibles of Company and
obligors on instruments for which Company 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 Company, so notify said obligors.
After the making of such a request or the giving of any such
notification, Company shall hold any proceeds of collection of chattel
paper, general intangibles and instruments received by Company as
trustee for the Secured Party without commingling the same with other
funds of Company 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,
Company 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 Indenture or any other ancillary document;
Security&Pledge Agmt - Indenture v.3
15
16
(ii) except as otherwise provided in this Agreement,
Company 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
Company, and, to the extent so permitted, any distributions
received by Company 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
Company or cause to be executed and delivered to Company, all
such proxies, powers of attorney, dividend orders and other
instruments as Company may reasonably request for the purpose
of enabling it to exercise the voting or consensual rights and
powers which Company is entitled to exercise pursuant to the
foregoing Section 6(a)(i) or to receive the dividends,
distributions or other payments which Company 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 Company to exercise the voting or consensual
rights and powers which Company 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, subject, however, to the
rights of the holders of Permitted Liens. 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.
Security&Pledge Agmt - Indenture v.3
16
17
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 Indenture.
(b) If an Event of Default shall have occurred and is
continuing and if the Obligations are accelerated under the provisions
of the Indenture and the Security Documents, in addition to any other
rights and remedies that may be available to the Secured Party under
the UCC, the Indenture, or any other Security Documents or under
Section 5(a) or 5(b) 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 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 Company,
including any equity or rights of redemption of Company, and
Company 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 Company ten (10)
business days' written notice (which Company agrees is
reasonable notification within the meaning of Section 9.504 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
Security&Pledge Agmt - Indenture v.3
17
18
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.
Security&Pledge Agmt - Indenture v.3
18
19
(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.
(viii) Company 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 Company 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. Company 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. To
the extent that any of the Obligations are to be paid or
performed by a person other than Company, Company waives and
agrees not to assert any rights or privileges which it may
have under Section 9-112 of the UCC.
(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 Company as hereinbefore provided, the
Secured Party need give Company 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. Company 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.
Security&Pledge Agmt - Indenture v.3
19
20
(e) To the extent permitted by law, Company 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 Notes, 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 Indenture), and (iii) all rights
of marshalling in respect of any and all of the Collateral.
(f) Without precluding any other methods of sale, Company
acknowledges that the sale of the Collateral shall have been made in a
commercially 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) Company 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
Company 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 Indenture.
Any amounts remaining after such applications and the payment
in full of the Notes with respect to the Obligations shall be remitted to
Company, 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 (a) remain in full force and effect until termination of the
obligations of Company under the Indenture and the indefeasible payment
in full thereafter of the Obligations; (b) be binding upon Company and
its successors and assigns; and (c) inure to the benefit of the Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), 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
Security&Pledge Agmt - Indenture v.3
20
21
Secured Party under the Indenture and the indefeasible payment in full
thereafter of the Obligations, Company 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 Company's 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;
(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 Indenture or the Notes;
(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 Company 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 Indenture or the Notes; 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, Company 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
Company and the Secured Party and in accordance with the Indenture.
(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,
Security&Pledge Agmt - Indenture v.3
21
22
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 Company
hereunder shall, of itself, entitle Company 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 Company
without the prior written consent of the Secured Party, except as
expressly permitted herein or in the Indenture.
(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 Indenture or made in writing by Company in connection
herewith or therewith, shall survive the execution and delivery of this
Agreement, the Indenture and any documents executed in connection
herewith or therewith.
(i) Counterparts and 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 Company
hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Indenture 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
Security&Pledge Agmt - Indenture v.3
22
23
right or take any action against Company 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
Indenture.
(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 Indenture, the terms, covenants, conditions
and provisions of the Indenture 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. THE COMPANY 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. THE COMPANY 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. THE COMPANY 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
COMPANY 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 THE COMPANY
IN ANY OTHER JURISDICTION.
IN WITNESS WHEREOF, Company and the Secured Party have
executed this Agreement as of the date first above written.
Security&Pledge Agmt - Indenture v.3
23
24
TRANSTEXAS GAS CORPORATION
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIRSTAR BANK, N.A., as TRUSTEE
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Security&Pledge Agmt - Indenture v.3
24