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EXHIBIT 4.40
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 "Borrower"), and GMAC Commercial Credit LLC
("GMACCC"), as agent for the Lenders (as hereafter defined) (GMACCC acting as
agent for the benefit of the Lenders shall be called the "Secured Party").
RECITALS
Borrower, Secured Party, GMACCC and various other financial
institutions (GMACCC and such other financial institutions which are now or
hereafter become parties to the Oil and Gas Agreement (as hereafter defined),
collectively, the "Lenders") have entered into that certain Oil & Gas Revolving
Credit and Term Loan Agreement dated as of March 15, 2000 (as amended, modified
or supplemented from time to time, the "Oil and Gas Agreement"); and
In order to secure the payment and performance in full of the
obligations of Borrower under the Oil and Gas 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, Borrower 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 Oil and Gas Agreement, 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, EXHIBIT D attached hereto.
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"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 Borrower's now owned or
hereafter acquired "equipment" 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 Borrower on its 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 Borrower'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 all of Borrower's now owned or
hereafter acquired "inventory" as such term is defined in the UCC,
including, without limitation, all drill casing, drill pipe and other
supplies accounted for as inventory by Borrower 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 Borrower's now
owned or hereafter acquired "investment property" 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 Galveston Bay Processing Corporation in favor of
Jefferies, the Promissory Note, dated
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December 31, 1998 in the amount of $5,650,000, made by Borrower 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 Galveston Bay
Processing Company owned by Borrower 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
Borrower for the benefit of Secured Party to grant a Lien on Borrower's Real
Property and/or Hydrocarbons, or any interest therein, to secure all of the
Obligations.
"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 Borrower 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 Borrower 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 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 Borrower'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 Borrower for sale, exchange, distribution,
consumption or transmission by Borrower, including, without limitation, all
system gas, drip gas and line fill.
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"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
Borrower, or Borrower'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, any and all of Borrower's now
owned or hereafter acquired "accounts" 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 Borrower, 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 Borrower 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 Borrower and described in the Mortgage.
"Subject Interests" shall mean each kind and character of right, title,
interest or estate, whether now owned or hereafter acquired, which Borrower has
in, under or to the Leases and all right, title, interest or estate, whether now
owned or hereafter acquired, which Borrower 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.
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"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 Oil and Gas Agreement 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) Borrower 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 Borrower'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, 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;
(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
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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, 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 Borrower 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 Borrower 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 Borrower, be subjected to the
lien and security interest hereof by Borrower or by anyone authorized on
Borrower's 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 Borrower or to which Borrower is
now or may hereafter be entitled at law or in equity; and
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(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) Borrower also pledges to the Secured Party, and grants to the
Secured Party a security interest in all of Borrower'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
identified on Schedule 2(b) attached hereto of any Subsidiary of
Borrower presently existing or hereafter created or acquired (the
"Pledged Subsidiaries") therein set forth;
(ii) all other shares of common stock or other equity securities
now or hereafter acquired by Borrower 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)(i) or any notes, bonds, debentures or other evidences of
indebtedness now or hereafter owned or acquired by Borrower 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 Liens in respect of First Lien Debt and the Jefferies
Lien, pursuant to the terms hereof, Borrower 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
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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
Borrower 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, Borrower
shall, subject to any Liens in respect of First Lien Debt and 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 Borrower, 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. Borrower 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.
(c) Without limiting the security interest granted hereby,
Borrower hereby grants to Secured Party a limited license in Borrower's
trade names, trademarks and service marks, together with Borrower'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 Borrower to sell, dispose of or otherwise use the Collateral
in any manner not specifically authorized hereby or under the Oil and
Gas Agreement.
(e) This Agreement secures the prompt and complete payment of
all Obligations.
Section 3. Representations and Warranties. Borrower 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 Borrower 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) Borrower 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 for the lien and security
interest created hereby, Permitted Liens and the Jefferies Lien,
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and has not made any other pledge, assignment, mortgage, hypothecation
or transfer of the Collateral except as permitted hereunder or under
the Oil and Gas 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 accurately described in Schedule
2(b) hereto and have been duly authorized and validly issued and
non-assessable.
(d) This Agreement has been duly executed and delivered by
Borrower 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 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.
(e) Borrower 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
Borrower, the performance by Borrower of its obligations hereunder,
nor the transactions herein contemplated will (i) violate Borrower's
charter or bylaws, (ii) violate the terms of any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document
to which Borrower is a party, (iii) violate any law, order, rule or
regulation applicable to Borrower of any court or any government,
regulatory body or administrative agency or other governmental body
having jurisdiction over Borrower 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 Borrower, which violation or conflict
would have a material adverse effect on the financial condition,
business, assets or liabilities of Borrower 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
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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 Borrower 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.
(i) As of the date hereof, Galveston Bay Processing Corporation
and Galveston Bay Pipeline Corporation are the only Material
Subsidiaries of Borrower.
(j) Other than clause (i) above, these representations and
warranties do not apply to TransTexas Energia de Mexico, S.A. de C.V.
or TransTexas Gas Corporation-Liberia.
Section 4. Covenants. During the term of this Agreement and until all
the Obligations have been fully and finally paid and discharged in full,
Borrower covenants and agrees with the Secured Party that:
(a) Except as permitted by the Oil and Gas Agreement or in the
ordinary course of business, Borrower 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 Jefferies Lien and the Jefferies
Documentation, Borrower 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 Borrower's
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, Borrower 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, Borrower shall, at any time or from time to time upon the
request of the Secured Party and at Borrower's own expense, execute,
acknowledge, witness, deliver, file and/or record such
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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) Borrower shall promptly notify the Secured Party (i) of any
material changes in any fact or circumstance represented or warranted
by Borrower 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, Borrower 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. Borrower shall
not make any other pledge, assignment, mortgage, hypothecation or
transfer of the Collateral except as permitted hereunder or under the
Oil and Gas Agreement.
(f) Borrower 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) Borrower 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 Borrower 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 Borrower will not remove the
Collateral from such locations, without providing at least 30 days'
prior written notice to the Secured Party.
(h) Borrower 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 Borrower 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 Borrower agrees to render to the Secured Party, at
Borrower's cost and expense, such clerical and other assistance as may
be reasonably requested by the Secured Party with regard thereto.
(j) Borrower shall not permit any of the Pledged Subsidiaries to
issue to Borrower any securities of the type required to be pledged
hereunder unless such
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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 Borrower
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) Borrower 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,
Borrower hereby irrevocably authorizes and empowers the Secured Party,
upon the occurrence and during the continuation of any Event of
Default, at the expense of Borrower, either in the Secured Party's own
name or in the name of Borrower, 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 Borrower, and any and all other property which may be or
become deliverable at any time or times to Borrower, under or
with respect to the Collateral;
(ii) to endorse any drafts, checks, orders or other
instruments for the payment of money payable to Borrower on
account of the Collateral (including any such draft, check, order
or instrument issued by any insurance company payable jointly to
Borrower 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 Borrower or otherwise, which the
Secured Party may deem to be necessary or
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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 Borrower.
(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.
Borrower 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 Borrower to make any such expenditures, nor shall the
making thereof relieve Borrower of any default.
(f) Anything herein to the contrary notwithstanding, Borrower
shall remain liable under each contract or agreement comprised in the
Collateral to be observed or performed by Borrower 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 Borrower 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.
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(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 Borrower 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,
Borrower shall, at the request of the Secured Party, notify obligors
on chattel paper and general intangibles of Borrower and obligors on
instruments for which Borrower 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 Borrower, so notify said
obligors. After the making of such a request or the giving of any such
notification, Borrower shall hold any proceeds of collection of
chattel paper, general intangibles and instruments received by
Borrower as trustee for the Secured Party without commingling the same
with other funds of Borrower 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, Borrower
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 Oil and Gas
Agreement or any other ancillary document;
(ii) except as otherwise provided in this Agreement,
Borrower 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
Borrower, and, to the extent so permitted, any distributions
received by Borrower 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
Borrower or cause to be executed and delivered to Borrower, all
such proxies, powers of attorney, dividend orders and other
instruments as Borrower may reasonably request for the
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purpose of enabling it to exercise the voting or consensual
rights and powers which Borrower is entitled to exercise pursuant
to the foregoing Section 6(a)(i) or to receive the dividends,
distributions or other payments which Borrower 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 Borrower to exercise the voting or consensual
rights and powers which Borrower 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 Oil and Gas Agreement.
(b) If an Event of Default shall have occurred and is continuing
and if the Obligations are accelerated under the provisions of the Oil
and Gas Agreement, in addition to any other rights and remedies that
may be available to the Secured Party under the UCC or the Oil and Gas
Agreement 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.
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(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 Borrower, including any equity
or rights of redemption of Borrower, and Borrower 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 Borrower ten (10)
business days' written notice (which Borrower 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 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.
(viii) Borrower 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 Borrower 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. Borrower waives any and all
rights that it may have to a judicial hearing in
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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 Borrower, Borrower 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 Borrower as hereinbefore provided, the
Secured Party need give Borrower 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.
Borrower 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, Borrower 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 Oil and Gas
Agreement), and (iii) all rights of marshaling in respect of any and
all of the Collateral.
(f) Without precluding any other methods of sale, Borrower
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) Borrower 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
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having jurisdiction, the Secured Party shall be entitled to a decree
requiring specific performance by Borrower 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 Oil and Gas Agreement.
Any amounts remaining after such applications and the payment in
full of the Notes with respect to the Obligations shall be remitted to Borrower,
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 Borrower under the Oil and Gas Agreement and the
indefeasible payment in full thereafter of the Obligations; (b) be
binding upon Borrower 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 Secured Party under the Oil and Gas
Agreement and the indefeasible payment in full thereafter of the
Obligations, Borrower 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 Borrower'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 Oil and Gas Agreement or the
Notes;
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(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 Borrower 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 Oil and Gas Agreement 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, Borrower 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
Borrower and the Secured Party and in accordance with the Oil and Gas
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 Borrower hereunder shall, of itself, entitle Borrower 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 Borrower
without the prior written consent of the Secured Party, except as
expressly permitted herein or in the Oil and Gas 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
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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 Oil and Gas Agreement or made in writing by Borrower in
connection herewith or therewith, shall survive the execution and
delivery of this Agreement, the Oil and Gas 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 Borrower
hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Oil and Gas 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 Borrower 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 Oil
and Gas 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 Oil and Gas Agreement, the terms,
covenants, conditions and provisions of the Oil and Gas 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. 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
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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.
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SECURITY AND PLEDGE AGREEMENT
IN WITNESS WHEREOF, Borrower and the Secured Party have executed this
Agreement as of the date first above written.
TRANSTEXAS GAS CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GMAC COMMERCIAL CREDIT LLC, AS AGENT
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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