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COLLATERAL ASSIGNMENT, PLEDGE AND SECURITY AGREEMENT
This COLLATERAL ASSIGNMENT, PLEDGE AND SECURITY AGREEMENT (this
"AGREEMENT") is made as of the 21st day of June, 1996 between Regency
Affiliates, Inc., a Delaware corporation ("GRANTOR"), and Southern Indiana
Properties, Inc., an Indiana corporation (hereinafter, together with its
successors and assigns, referred to as "LENDER").
RECITALS
A. Grantor is a limited partner in Security Land and Development
Company, a Maryland limited partnership (the "PARTNERSHIP").
B. Grantor and Lender entered into that certain Credit Agreement
of even date herewith (said Credit Agreement as amended, restated, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT"). All
capitalized terms herein shall have the meanings ascribed to them in the Credit
Agreement unless otherwise defined in this Agreement.
C. Under the provisions of the Credit Agreement, Lender agreed,
subject to the terms and conditions contained therein, to make loans ("LOANS")
to Grantor as evidenced by that certain Tranche A Note and that certain Tranche
B Note of even date herewith made by Grantor to the order of Lender in the
Aggregate Initial Loan Amount of THREE MILLION AND FIVE HUNDRED THOUSAND AND
NO/100THS DOLLARS ($3,500,000) subject to increase in respect of all Additional
Principal added to the Tranche Loan Amount and Tranche B Loan Amount, as
applicable, from time to time pursuant to the Credit Agreement (said Tranche A
Note and Tranche B Note and any and all renewals, amendments, modifications,
increases and extensions thereof are hereinafter collectively called the
"NOTES").
D. As a condition precedent to Lender's making the Loans, Lender
has further required that Grantor execute and deliver this Agreement to Lender
to secure the prompt and complete performance of all of the obligations and
payment of all of the Obligations.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ACCOUNTS" shall mean all "accounts," as such term is
defined in the Code, now owned or hereafter acquired by Grantor and,
in any event, including (a) all accounts receivable, other
receivables, book debts and other forms of obligations (other than
forms of obligations evidenced by Chattel Paper, Documents or
Instruments) now owned or hereafter received or acquired by or
belonging or owing to Grantor, whether arising out of goods sold or
services rendered by it or from any other transaction (including any
such obligations which may be characterized as an account or contract
right under the Code), (b) all of Grantor's rights in, to and under
all purchase
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orders or receipts now owned or hereafter acquired by it for goods or
services, (c) all of Grantor's rights to any goods represented by any
of the foregoing (including unpaid sellers' rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), (d) all monies due or to become due
to Grantor, under all purchase orders and contracts for the sale of
goods or the performance of services or both by Grantor or in
connection with any other transaction (whether or not yet earned by
performance on the part of Grantor, as appropriate) now or hereafter
in existence, including the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral security and
guarantees of any kind, now or hereafter in existence, given by any
Person with respect to any of the foregoing.
"AGREEMENT" shall mean this Collateral Assignment, Pledge and
Security Agreement, as the same may from time to time be amended,
restated, supplemented or otherwise modified.
"CASH COLLATERAL" shall mean the cash proceeds of the Loans
funded by Lender to Grantor on the Closing Date.
"CHATTEL PAPER" shall mean any "chattel paper," as such term
is defined in the Code, now owned or hereafter acquired by Grantor,
wherever located.
"CODE" shall mean the Uniform Commercial Code as the same may
from time to time be in effect in the State of Illinois; provided,
however, in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of Lender's
security interest in any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than
the State of Illinois, the term "Code" shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"COLLATERAL" shall mean the Partnership Collateral and the
General Collateral and any property or interest provided in addition to
or in substitution for any of the foregoing.
"CONTRACTS" shall mean all "contracts," as such term is
defined in the Code, now owned or hereafter acquired by Grantor, and,
in any event, including all contracts, undertakings, or agreements
(other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which Grantor, may now or hereafter have any
right, title or interest, including any agreement relating to the terms
of payment or the terms of performance of any Account.
"COPYRIGHTS" shall mean all of the following now owned or
hereafter acquired by Grantor: (i) all copyrights and general
intangibles of like nature (whether registered or unregistered), now
owned or existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all applications in connection therewith,
including all registrations, recordings and applications in the United
States Copyright Office or in any similar office or
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agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof, and (ii) all
reissues, extensions or renewals thereof.
"DOCUMENTS" shall mean any "documents," as such term is
defined in the Code, now owned or hereafter acquired by Grantor,
wherever located.
"EQUIPMENT" shall mean all "equipment," as such term is
defined in the Code, now owned or hereafter acquired by Grantor,
wherever located and, in any event, including all Grantor's machinery
and equipment, data processing and computer equipment with software and
peripheral equipment (other than software constituting part of the
Accounts), and all engineering, processing and manufacturing equipment,
office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks,
forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, all whether now owned or hereafter
acquired, and wherever situated, together with all additions and
accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals,
drawings, instructions, warranties and rights with respect thereto, and
all products and proceeds thereof and condemnation awards and insurance
proceeds with respect thereto.
"FIXTURES" shall mean any "fixtures" as such term is defined
in the Code, now owned or hereafter acquired by Grantor.
"GENERAL COLLATERAL" is defined in Section 2(B) hereof.
"GENERAL INTANGIBLES" shall mean any "general intangibles," as
such term is defined in the Code, now owned or hereafter acquired by
Grantor, and, in any event, including, without limitation, all right,
title and interest which Grantor may now or hereafter have in or under
any Contract, all customer lists, Copyrights, Trademarks, Patents,
service marks, trade names, business names, corporate names, trade
styles, logos and other source or business identifiers, and all
applications therefor and reissues, extensions or renewals thereof,
rights in intellectual property, interests in partnerships, joint
ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information,
inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill (including the goodwill associated with
any Trademark, Trademark registration or Trademark licensed under any
Trademark license), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss and casualty,
whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business
interruption insurance, including key man life insurance, and all
unearned premiums), uncertificated securities, choses in action,
deposit, checking and other bank accounts, rights to receive tax
refunds and other payments and rights of indemnification.
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"INSTRUMENTS" shall mean any "instrument," as such term is
defined in the Code, now owned or hereafter acquired by Grantor,
wherever located, and, in any event, including all certificated
securities, all certificates of deposit, and all notes and other,
without limitation, evidences of indebtedness, other than instruments
that constitute, or are a part of a group of writings that constitute,
Chattel Paper.
"INVENTORY" shall mean any "inventory," as such term is
defined in the Code, now or hereafter owned or acquired by, Grantor,
wherever located, and, in any event, including inventory, merchandise,
goods and other personal property which are held by or on behalf of
Grantor, for sale or lease or are furnished or are to be furnished
under a contract of service or which constitute raw materials, work in
process or materials used or consumed or to be used or consumed in
Grantor's businesses or in the processing, production, packaging,
promotion, delivery or shipping of the same, including other supplies.
"INVESTMENT PROPERTY" shall mean any "investment property" as
such term is defined in the Code.
"NON-OPERATING SUBSIDIARIES" shall mean TDC and RT.
"NRDC" shall mean National Resources Development Corporation,
a Nevada corporation and an 80% owned subsidiary of Grantor.
"NRDC PLEDGED SHARES" shall mean the shares of stock described
in Schedule III hereto issued by NRDC.
"PARTNERSHIP AGREEMENT" shall mean the Agreement of Limited
Partnership dated as of November 28, 1986 among 1500 Woodlawn Limited
Partnership, as general partner, Grantor, as limited partner, and the
other limited partners, as amended, restated, modified or supplemented
from time to time prior to the date hereof and as in effect as of the
Closing Date.
"PARTNERSHIP COLLATERAL" is defined in Section 2(A) hereof.
"PATENTS" shall mean all of the following in which Grantor now
holds or hereafter acquires any interest: (i) all letters patent of the
United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States
or any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State or Territory
thereof, or any other country, and (ii) all reissues, continuations,
continuations-in-part or extensions thereof.
"PLEDGED SHARES" shall mean (i) the NRDC Pledged Shares, (ii)
any additional shares of stock issued pursuant to Section 4(k) herein
and (iii) shares of stock acquired by Grantor as a result of an
Acquisition.
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"PROCEEDS" shall mean "proceeds," as such term is defined in
the Code and, in any event, shall include, but not be limited to, (i)
any and all payments (in any form whatsoever) made or due and payable
to Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of
the "Collateral" (as hereinafter defined) by any governmental body,
authority, bureau or agency (or any person acting under color of
governmental authority), (ii) any and all amounts paid or payable to
Grantor for or in connection with any sale or other disposition of
Grantor's interests in the Partnership and (iii) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral.
"RT" shall mean RegTransco, Inc., a Delaware corporation and a
100% owned subsidiary of TDC.
"SUBSIDIARY" shall mean each of those subsidiaries of Grantor
identified on Schedule II hereto individually and "Subsidiaries" shall
mean all of such subsidiaries, collectively.
"TDC" shall mean Transcontinental Drilling Company, Inc., a
Delaware corporation and an 80% owned subsidiary of Grantor.
"TRADEMARKS" shall mean all of the following now owned or
hereafter acquired by Grantor: (i) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general intangibles
of like nature (whether registered or unregistered), now owned or
existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith,
including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other
country or any political subdivision thereof and (ii) all reissues,
extensions or renewals thereof.
2. ASSIGNMENT, PLEDGE AND SECURITY INTEREST. (A) As security for
the prompt and complete payment and performance when due of the Obligations,
Grantor hereby assigns, pledges, delivers and grants to Lender a security
interest in and all of the following, whether now owned by or owing to, or
hereafter acquired by or arising in favor of Grantor (including under any
tradenames, styles or derivations thereof), and whether owned or consigned by or
to, or leased from or to, Grantor, and regardless of where located (all of which
being herein collectively called the "Partnership Collateral"):
(i) all of Grantor's right, title and interest as a limited
partner in the Partnership, including without limitation, all of
Grantor's right to receive distributions at any time or from time to
time of cash and other property, real, personal or mixed, from the
Partnership upon complete or partial liquidation or otherwise;
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(ii) all of Grantor's right, title, and interest in the
Partnership's property, including without limitation, the Project;
(iii) all of Grantor's right, title and interest, if any, to
participate in the management and voting of the Partnership;
(iv) all of Grantor's right, title and interest in and to:
(a) all rights, privileges, authority and power of
Grantor as owner and holder of the items specified in (i), (ii), and
(iii) above, including but not limited to, all contract rights related
thereto;
(b) all options and other agreements for the purchase or
acquisition of any interests in the Partnership; and
(c) any document or certificate representing or
evidencing Grantor's rights and interests in the Partnership;
(v) the Escrow Account;
(vi) to the extent not otherwise included, Investment Property
owned or held by Grantor and related to the Partnership or any interest
of Grantor therein; and
(vii) to the extent not otherwise included, all Proceeds and
products of any of the foregoing.
(B) As security for the prompt and complete payment and
performance when due of the Obligations, Grantor hereby assigns, pledges,
delivers and grants to Lender a security interest in and all of the following,
whether now owned by or owing to, or hereafter acquired by or arising in favor
of Grantor (including under any trade names, styles or derivations thereof), and
whether owned or consigned by or to, or leased from or to, Grantor, and
regardless of where located (all of which being hereinafter collectively
referred to as the "General Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures, including all trade fixtures;
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(vii) all General Intangibles;
(viii) all Instruments;
(ix) all Inventory, including the Aggregate;
(x) the Pledged Shares, including the NRDC Pledged Shares;
(xi) all money, cash or cash equivalents of Grantor, including
the Cash Collateral; and
(xii) to the extent not otherwise included, all Proceeds
and products of any of the foregoing.
(C) The assignment contained herein is present and absolute and,
subject to the provisions of the Credit Agreement with respect to permitted
actions by Grantor in regards to the General Collateral (other than the Cash
Collateral and the NRDC Pledged Shares), Grantor shall not take any action with
respect to the Collateral (except with respect to Excluded Distribution
Proceeds), without Lender's prior approval, including, without limitation, (a)
the enforcement of any remedies, (b) the granting of any consents, waivers or
approvals, (c) the surrender of its rights and interests under the Partnership
Agreement, (d) the modification, change, supplementation, alteration or
amendment of the Partnership Agreement or (e) the termination, cancellation or
release of any portion of the Collateral. All of the capital stock of NRDC owned
by Grantor is presently represented by the stock certificates listed on Schedule
III hereto, which stock certificates, with undated stock powers duly executed in
blank by the Grantor, are being delivered to Lender simultaneously herewith.
Lender shall maintain possession and custody of the certificates representing
the NRDC Pledged Shares.
3. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants that:
(a) Grantor is the sole legal and beneficial owner of, and has
good and marketable title to (and has full right and authority to pledge and
assign) the Collateral, free and clear of all claims, mortgages, pledges, Liens,
security interests or other encumbrances of any nature whatsoever (and no right
or option to acquire the same exists in favor of any other Person), except for
the assignment, pledge and security interest in favor of Lender created or
provided for herein, and Grantor agrees that it will not encumber or grant any
Lien in or with respect to the Collateral or any portion thereof or permit any
of the foregoing.
(b) No security agreement, financing statement, assignment,
equivalent security or lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public office or at
the records of the Partnership, except financing statements with respect to the
Collateral filed by Lender pursuant to this Agreement.
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(c) Upon the filing of all appropriate financing statements
under the Code in all applicable jurisdictions or filing offices (each of which
are identified on SCHEDULE I hereto), the execution and delivery by Grantor and
the Partnership of a Control Letter in the form attached hereto as EXHIBIT A and
the delivery to Lender of the NRDC Pledged Shares, all steps necessary to create
and perfect the security interest created by this Agreement as a valid and
continuing first lien on and first perfected security interest in the Collateral
in favor of Lender, prior to all other liens, security interests and other
claims of any sort whatsoever will have been taken. This Agreement and the
security interest created hereby are enforceable as such against creditors of
and purchasers from Grantor.
(d) The chief place of business and chief executive office of
Grantor and the office where Grantor keeps its records concerning the Collateral
and an original copy of the Partnership Agreement is located at 381 Robinwood
Lane, Wheaton, Illinois 60187. All Equipment and Inventory, if any, are also
located at such address.
(e) As of the date hereof to October 31, 2003 Grantor's interest
in the Partnership consists of a ninety-five percent (95%) limited partnership
interest in all allocations and distributions of profits and losses. After
October 31, 2003, Grantor's interest will consist of a fifty percent (50%)
limited partnership interest.
(f) Grantor has all power, statutory and otherwise, to execute
and deliver this Agreement, to perform Grantor's obligations hereunder and to
subject the Collateral to the security interest created hereby, all of which has
been duly authorized by all necessary action.
(g) The Partnership Agreement remains in effect and no party to
the Partnership Agreement is presently in default thereunder.
(h) Grantor has the right (subject, however, to the Securities
Act of 1933, as amended and/or other applicable laws regulating the sale
generally of such interests) to transfer all or any part of the Collateral free
of any lien or encumbrance.
(i) No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for Grantor's granting of a security interest in the
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by Grantor or (ii) for the exercise by Lender of
the rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement.
(j) Grantor is a Delaware corporation in good standing and duly
qualified to do business in the state of its organization.
(k) Upon the transfer of the Collateral, or any portion thereof,
to any party pursuant to Section 10 below, the Partnership shall continue in
existence and the Partnership Agreement provides for such continuation.
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(l) As of the date hereof, there are no certificates,
instruments or other documents evidencing any of the Collateral, except for the
NRDC Pledged Shares and shares of the stock of the Non-Operating Subsidiaries.
(m) SCHEDULE II sets forth all of the capital stock of the
Non-Operating Subsidiaries owned by Grantor and TDC, respectively, and the stock
certificates evidencing the same. Such shares of stock have been duly and
validly authorized and issued, are fully paid and non-assessable and represent
all, in the case of RT, and 80%, in the case of TDC, of the issued and
outstanding shares of capital stock of the Non-Operating Subsidiaries, and there
are no outstanding options, warrants or other agreements with respect to such
shares of stock. As of the date hereof, the Non-Operating Subsidiaries do not
conduct or transact business.
(n) SCHEDULE III sets forth (i) the authorized capital stock of
NRDC, (ii) the number of shares of capital stock of NRDC that are issued and
outstanding and (iii) the number of shares of capital stock of NRDC held in its
treasury.
(o) The NRDC Pledged Shares have been duly and validly
authorized and issued, are fully paid and non-assessable and represent eighty
percent (80%) of the issued and outstanding shares of the capital stock of NRDC,
and there are no outstanding options, warrants or other agreements with respect
to the NRDC Pledged Shares.
4. COVENANTS. Grantor covenants and agrees that from and after
the date of this Agreement and until the Obligations are fully satisfied
(whenever in this SECTION 4 Grantor covenants to do anything with regard to the
Partnership or the Project, Grantor shall be required to "strive to cause" the
Partnership to take such action, and Grantor agrees to exercise its voting
rights under the Partnership Agreement in support of such action and to urge the
taking of such action consistent with Grantor's status as a limited partner, not
involved in the management of the Partnership):
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS. At any time
and from time to time, upon the written request of Lender, and at the sole
expense of Grantor, Grantor will promptly and duly execute and deliver any and
all such further instruments and documents and take such further actions as
Lender may reasonably deem desirable to obtain the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the execution and filing of any financing or continuation statements
under the Code and, if otherwise required hereunder, transferring the Collateral
to the possession of Lender (if a security interest in the Collateral can be
perfect by possession). Grantor also hereby authorizes Lender to file any such
financing or continuation statement without the signature of Grantor to the
extent otherwise permitted by applicable law. If any Collateral or any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, or other instrument, such note or instrument
shall be immediately pledged hereunder and a security interest therein hereby
granted to Lender and shall be duly endorsed without recourse or warranty in a
manner satisfactory to Lender and delivered to Lender. If any Collateral at any
time constitutes Investment Property which is not certificated, Grantor will and
will cause all other applicable Persons to execute and
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deliver such Control Letters as may be necessary or appropriate to perfect
Lender's first priority Lien in such Collateral. If at any time Grantor's right
or interest in any of the Collateral becomes an interest in real property,
Grantor immediately shall execute, acknowledge and deliver to Lender such
further documents as Lender deems necessary or advisable to create a first
priority perfected mortgage lien in favor of Lender in such real property
interest.
(b) PRIORITY OF LIENS. Grantor will defend the right, title and
interest hereunder of Lender, (i) as a first priority security interest in the
Partnership Collateral, the Cash Collateral and the NRDC Pledged Shares and (ii)
as a first or, in accordance with Section 3.1 of the Credit Agreement, a second
security interest, as applicable, in the General Collateral (other than the Cash
Collateral and the NRDC Pledged Shares) against the claims and demands of all
persons whomsoever.
(c) FURTHER IDENTIFICATION OF COLLATERAL. Grantor will furnish
to Lender from time to time such reports in connection with the Collateral as
Lender may request.
(d) NOTICES. Grantor will advise Lender promptly, in reasonable
detail, (i) of any lien, security interest, encumbrance or claim made or
asserted against any of the Collateral, (ii) of any distribution of cash or
other property by the Partnership, whether in complete or partial liquidation or
otherwise and of any other change in the composition of the Collateral, Grantor
or the Partnership, and (iii) of the occurrence of any other event which would
have an adverse effect on the aggregate value of the Collateral or on the
security interest created hereunder.
(e) CONTINUOUS PERFECTION. Grantor will not change Grantor's
name, in any manner which might make any financing or continuation statement
filed hereunder seriously misleading within the meaning of Section 9-402(7) of
the Code (or any other then-applicable provision of the Code) unless Grantor
shall have given Lender at least thirty (30) days prior written notice thereof
and shall have taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take such
action in advance) necessary or reasonably requested by Lender to amend such
financing statement or continuation statement so that it is not seriously
misleading.
(f) PLACE OF BUSINESS. Grantor will not change Grantor's
principal place of business unless Grantor has taken such action as is necessary
to cause the security interest of Lender in the Collateral to continue to be
perfected. Grantor will not change Grantor's principal place of business or
locations where the Collateral is kept without giving at least 30 days prior
written notice thereof to Lender, and any such new location shall in any event
be located in the continental United States.
(g) TRANSFER OF ASSETS. Grantor will not directly or indirectly
sell, pledge, mortgage, assign, transfer, or otherwise dispose of or create or
suffer to be created any lien, security interest, charging order, or encumbrance
on any of the Collateral or the assets of the Partnership, except (i) Grantor
may use the Cash Collateral for those purposes permitted under Section 1.2 of
the Credit Agreement, and (ii) with respect to the General Collateral (other
than Cash Collateral and the
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NRDC Pledged Shares) for the sale, lease, sublease, transfer or disposal thereof
in bona fide transactions for fair value in the ordinary course of business, and
with respect to the Aggregate, sales in a commercially reasonable manner
PROVIDED; HOWEVER, that the Net Proceeds of any disposition of the Aggregate
shall be directed to Lender as specified in the Credit Agreement.
(h) PERFORMANCE OF OBLIGATIONS. Subject to the provisions of the
Credit Agreement, including without limitation, Section 3.7 thereof, Grantor
will perform all of Grantor's obligations under the Partnership Agreement or
otherwise in respect of the Collateral, prior to the time that any interest or
penalty would attach against Grantor or any of the Collateral as a result of
Grantor's failure to perform any of such obligations, and Grantor will strive to
cause to maintain the Partnership as a limited partnership under the laws of the
jurisdiction of organization and to maintain Grantor's interest as limited
partner in Partnership in full force and effect without diminution.
(i) PARTNERSHIP AGREEMENT. As more fully set forth in Section
3.7 of the Credit Agreement, Grantor shall strive to cause the Partnership
Agreement in any manner not to be modified, amended, restated or terminated,
without the prior written consent of Lender, which consent in any and all
circumstances may be withheld in the sole and absolute discretion of Lender.
Without limiting the foregoing prohibitions, Grantor shall not authorize or
consent to the admission of any additional partners to the Partnership except
for Lender nor shall Grantor cease to be a member of the Partnership nor shall
Grantor consent to the winding up or dissolution of the Partnership nor to the
liquidation or other similar disposition of the assets of the Partnership
without the prior written consent of Lender, which consent in any and all
circumstances may be withheld in the sole and absolute discretion of Lender.
(j) STAY OR EXTENSION LAWS. Grantor will not at any time claim,
take, insist upon or invoke the benefit or advantage of or from any law now or
hereafter in force providing for the valuation or appraisement of the Collateral
prior to any sale or sales thereof to be made pursuant to the provisions hereof
or pursuant to the decree, judgment, or order of any court of competent
jurisdiction; nor, after such sale or sales, claim or exercise any right under
any statute now or hereafter made or enacted by any state to redeem the property
so sold or any part thereof, and Grantor hereby expressly waives, on behalf of
Grantor and each and every person claiming by, through and under Grantor, all
benefit and advantage of any such law or laws, and covenants that Grantor will
not invoke or utilize any such law or laws or otherwise hinder, delay or impede
the execution of any power, right or remedy herein or hereby granted and
delegated to Lender, but will authorize, allow and permit the execution of every
such power, right or remedy as though no such law or laws had been made or
enacted. Lender shall act in a commercially reasonable manner with respect to
any such sale of the Collateral.
(k) DELIVERY OF CERTIFICATES. Grantor agrees (i) immediately to
deliver to Lender, or Lender's designee, the NRDC Pledged Shares and any other
Pledged Shares (unless Lender has taken a second priority position pursuant to
Section 3.1 of the Credit Agreement), and all certificates, instruments or other
documents evidencing any of the Collateral which may at any time come into the
possession of Grantor, together with such endorsements or assignments separate
from the certificate as Lender may request, and (ii) to execute and deliver a
notice of Lender's security
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interest in the Collateral (which notice shall be satisfactory to Lender in form
and substance and which may request acknowledgment from the addressee) to any
Person which either has possession of the Collateral or any certificates
evidencing any of the Collateral or otherwise has the ability under applicable
law or the terms of any agreement to record transfers or transfer ownership of
any of the Collateral (whether at the direction of Grantor or otherwise). If,
while this Agreement is in effect, Grantor shall become entitled to receive or
shall receive any stock certificate (including, without limitation, any
certificate representing a stock dividend or a stock distribution in connection
with any reclassification, increase or reduction of capital, or issued in
connection with any reorganization), or any options or rights, whether as an
addition to; in substitution for, in exchange for or a distribution in respect
of any of the NRDC Pledged Shares and any other Pledged Shares (unless Lender
has taken a second priority position pursuant to Section 3.1 of the Credit
Agreement), Grantor agrees to accept the same as Lender's agent and to hold the
same in trust for Lender, and to deliver the same forthwith to Lender, in the
exact form received, with the endorsement of Grantor when necessary and/or
appropriate undated stock powers duly executed in blank, to be held by Lender
subject to the terms hereof, as additional collateral security for the
Obligations. Grantor hereby appoints Lender as Grantor's attorney-in-fact, with
authority at any time or times to take any of the foregoing actions on behalf of
Grantor. Grantor agrees that this Agreement or a photocopy of this Agreement
shall be sufficient as a financing statement.
(l) PARTNERSHIP'S RECORDS. Grantor shall cause the Partnership
to make a notation on the records of Partnership indicating the security
interest granted hereby.
(m) PROCEEDS OF COLLATERAL. Grantor shall instruct the
Partnership to make all payments in respect of the Distribution Proceeds or
proceeds of Partnership Collateral to which Grantor is entitled directly to
Lender, (or, if any Escrow Account is established pursuant to Section 2.4 of the
Credit Agreement, to such Escrow Account) who shall apply such Distribution
Proceeds or proceeds of Partnership Collateral in accordance with the Credit
Agreement; PROVIDED, HOWEVER, as long as no Default or Event of Default shall
have occurred and be continuing, and provided the Aggregate Insurance Costs and
Capital Expenditures as of the last day of any calendar year do not exceed the
Permitted Amount in effect as of the last day of such year, Lender will remit to
Grantor the Excluded Distribution Proceeds when and as received by Lender. In
addition to the foregoing, Grantor agrees that if any Distribution Proceeds or
proceeds of Partnership Collateral shall be received by it, Grantor shall as
promptly as possible forward such proceeds to Lender (or into the Escrow
Account, if applicable). Until so forwarded or deposited, all such proceeds
shall be held in trust by Grantor for and as the property of Lender and shall
not be commingled with any other funds or property of Grantor.
(n) MAINTENANCE, INSURANCE. Grantor shall maintain the
Collateral and maintain insurance coverage with respect thereto in accordance
with the terms of the Credit Agreement.
(o) BLOCKED ACCOUNT.
(a) On or prior to the Closing Date, Lender and Grantor
shall entered into a blocked account agreement ("Blocked Account Agreement")
substantially in the form of Exhibit
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B hereto with each financial institution with which Grantor maintains from time
to time any deposit accounts (general or special). Pursuant to the Blocked
Account Agreement and pursuant hereto, Grantor grants and shall grant to Lender,
a continuing lien upon, and security interest in, all such accounts and all
funds at any time paid, deposited, credited or held in such accounts (whether
for collection, provisionally or otherwise) or otherwise in the possession of
such financial institutions, and each such financial institution shall act as
Lender's agent in connection therewith. Following the Closing Date, Grantor
shall not establish any deposit account with any financial institution unless
prior thereto Lender and Grantor shall have entered into a Blocked Account
Agreement with such financial institution and Grantor shall have notified Lender
of the establishment of such account, except Grantor may maintain in its name,
two accounts at a bank reasonably acceptable to Lender without executing a
Blocked Account Agreement, PROVIDED that the average daily balance in each such
account may not exceed $25,000.
(b) On or prior to the Closing Date, Grantor shall
establish a special account solely for the deposit of the Cash Collateral on the
Closing Date (the "Cash Collateral Account"). Lender shall have a first priority
security interest in the Cash Collateral Account to the extent the Cash
Collateral is not used by Grantor.
(p) NON-OPERATING SUBSIDIARIES. The Non-Operating Subsidiaries
of Grantor shall not conduct nor transact any business without the prior written
consent of Lender.
5. GRANTOR'S POWERS.
-----------------
(a) So long as an "Event of Default" (as hereinafter defined)
shall not then exist, Grantor shall be the sole party entitled to exercise for
any purpose any and all voting rights and powers arising from or relating to the
Partnership Collateral and the Pledged Shares; PROVIDED, HOWEVER, that Grantor
shall not exercise such rights or powers, or consent to any action of the
Partnership or the Subsidiaries, as applicable, that would be in contravention
of the provisions of, or constitute an Event of Default under, this Agreement or
any of the other Loan Documents, including without limitation Section 3.7 of the
Credit Agreement.
(b) Upon the occurrence of an Event of Default, unless Lender
designates in writing to Grantor to the contrary, all rights of Grantor provided
in Section 5(a) hereof shall cease, and all voting rights and powers and rights
to distributions included in the Partnership Collateral or Pledged Shares in
which Lender has a first perfected security interest or otherwise described in
such Section 5(a) shall thereupon become vested in Lender, and Lender shall
thereafter have the sole and exclusive right and authority to exercise such
voting rights and powers. Grantor shall execute such documents and instruments,
including but not limited to, statements that Grantor no longer has the right to
act as a limited partner or stockholder, as applicable, or otherwise relating to
such change as Lender may request. Grantor agrees that the Partnership and any
partner in the Partnership and each Subsidiary and any stockholder thereof, as
applicable, may rely conclusively upon any notice from Lender that Lender has
the right and authority to exercise all rights and powers of Grantor as a
limited partner under the Partnership Agreement or stockholder of a Subsidiary.
Grantor irrevocably waives any claim or cause of action against the Partnership
or any partner in the
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Partnership or any Subsidiary or stockholder thereof, as applicable, who deals
directly with Lender following receipt of such notice from Lender.
6. Lender's Appointment as Attorney-in-Fact.
-----------------------------------------
(a) Grantor hereby irrevocably constitutes and appoints Lender
and each officer or agent of Lender with full power of substitution, as
Grantor's true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of Grantor and in the name of Grantor or in
such attorney-in-fact's own name, from time to time in the discretion of each
such attorney-in-fact following the occurrence of an Event of Default, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives each such
attorney-in-fact the power and right, from and after an Event of Default, on
behalf of Grantor, without notice to or assent by Grantor, to do the following:
(i) to collect and otherwise take possession of and title to
any and all distributions of cash or other property due or
distributable at any time after the date hereof to Grantor as a limited
partner from the Partnership, including without limitation, all
Distribution Proceeds, whether in complete or partial liquidation or
otherwise, and to prosecute or defend any action or proceeding in any
court of law or equity or otherwise deemed appropriate by such
attorney-in-fact for the purpose hereof,
(ii) to ask, demand, collect, receive and give acceptances and
receipts for any and all moneys due and to become due under any
Collateral and, in the name of Grantor or such attorney-in-fact's own
name or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment
of moneys due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise
deemed appropriate by such attorney-in-fact for the purpose of
collecting any and all such moneys due under any Collateral whenever
payable;
(iii) to pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for with
respect to any of the Collateral by the terms of this Agreement and to
pay all or any part of the premiums therefor and the costs thereof; and
(iv) (A) to direct any Person liable for any payment under any
of the Collateral to make payment of any and all moneys due and to
become due thereunder directly to Lender or as such attorney-in-fact
shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in
respect of or arising out of any Collateral; (C) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (D) to defend any suit, action or proceeding brought
against Grantor with respect
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to any Collateral; (E) to settle, compromise or adjust any suit, action
or proceeding described above and, in connection therewith, to give
such discharges or releases as such attorney-in-fact may deem
appropriate; and (F) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though such attorney-in fact were the
absolute owner thereof for all purposes, and to do, at the option of
such attorney-in-fact at Grantor's expense, at any time, or from time
to time, all acts and things which such attorney-in-fact reasonably
deems necessary to protect, preserve or realize upon the Collateral and
the security interest of Lender therein, in order to effect the intent
of this Agreement, all as fully and effectively as Grantor might do.
Grantor hereby ratifies, to the extent permitted by law, all that said attorney
shall lawfully do or cause to be done by virtue hereof. This power of attorney
is a power coupled with an interest and shall be irrevocable.
(b) The powers conferred on each attorney-in-fact hereunder are
solely to protect the interest in the Collateral of Lender and shall not impose
any duty upon any such attorney-in-fact to exercise any such powers. Each such
attorney-in-fact shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its
officers, directors, employees or agents shall be responsible to Grantor for any
act or failure to act unless such action or failure to act constitutes gross
negligence.
(c) Grantor also authorizes Lender and each officer or agent of
Lender at any time and from time to time upon the occurrence of any Event of
Default, to execute, in connection with the sale provided for in Section 10 of
this Agreement, any endorsements, Agreements or other instruments of conveyance
or transfer with respect to any of the Collateral.
(d) Lender's right to act as Grantor's attorney-in-fact pursuant
to this Section 6 with respect to the General Collateral (other than the Cash
Collateral and the NRDC Pledged Shares) shall be subject to the provisions of
any subordination agreement entered into by Lender pursuant to Section 3.1 of
the Credit Agreement and shall be subordinate to any Permitted Liens.
7. DISTRIBUTIONS. Grantor hereby grants Lender full irrevocable power
and authority to receive and hold cash and non-cash distributions (including
without limitation, all Distribution Proceeds) by the Partnership or any
Subsidiary on account of any of the Collateral (together with all interest, if
any, earned thereon), which may be held free and clear of the liens created
hereby, and to convert any such non-cash distributions to cash, and to apply any
such cash distributions, interest or proceeds of conversion in the manner
specified in the Credit Agreement.
8. PERFORMANCE BY LENDER OF GRANTOR'S OBLIGATIONS. If Grantor fails to
perform or comply with any of Grantor's agreements contained herein and Lender
as provided for by the terms of this Agreement shall itself perform or comply,
or otherwise cause performance or compliance, with such agreement, the expenses
of Lender incurred in connection with such performance or
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compliance, together with interest thereon at the Default Rate shall be payable
by Grantor to Lender on demand and shall constitute Obligations secured hereby.
9. DEFAULT. Any of the following shall constitute an "EVENT OF DEFAULT"
hereunder:
(a) A failure by Grantor to observe or perform any obligation,
covenant, condition, or agreement hereof which involves the payment of money and
such failure continues for a period of fifteen (15) days after receipt by
Grantor of notice from Lender of such default; provided that there shall not be
any grace period or notice requirement with respect to any and all Obligations
due and owing on the Expiry Date;
(b) A failure by Grantor to observe or perform any nonmonetary
obligation, covenant, condition, or agreement hereof (which is not otherwise
included in Section 9(a), (c), or (d)) which is not cured within fifteen (15)
days after written notice thereof to Grantor;
(c) Any representation or warranty made by Grantor in this
Agreement is not true and correct in any material respect; or
(d) The occurrence of any "Event of Default" under any Loan
Document.
10. REMEDIES, RIGHTS UPON DEFAULT. (a) Upon the occurrence of any Event
of Default, Lender or Lender's designee may, at Lender's option, elect to become
a substituted limited partner in the Partnership and Grantor shall execute or
cause to be executed all documents necessary to evidence Lender so becoming a
substituted limited partner. If any Event of Default shall occur, Lender or
Lender's designee may exercise in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, Grantor expressly agrees that in any such event Lender, without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private sale)
to or upon Grantor or any other Person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or sell or otherwise dispose of and deliver the Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker's board or at any of Lender's
offices or elsewhere at such prices as it may deem best, for cash or on credit
or for future delivery without the assumption of any credit risk. Grantor
expressly acknowledges that private sales may be less favorable to a seller than
public sales but that private sales shall nevertheless be deemed commercially
reasonable and otherwise permitted hereunder. In view of the fact that federal
and state securities laws and/or other applicable laws may impose certain
restrictions on the method by which a sale of the Collateral may be effected,
Grantor agrees that upon the occurrence of an Event of Default, Lender may, from
time to time, attempt to sell all or any part of the Collateral by means of a
private placement, restricting the prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, Lender may solicit offers to buy the
-16-
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Collateral, or any part thereof, for cash, from a limited number of investors
deemed by Lender in its judgment, to be financially responsible parties who
might be interested in purchasing the Collateral, and if Lender solicits such
offers, then the acceptance by Lender of the highest offer obtained therefrom
shall be deemed to be a commercially reasonable method of disposing of the
Collateral.
Lender or Lender's designee shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption, which equity of redemption Grantor hereby
releases. Grantor further agrees, at the request of Lender, to assemble the
Collateral and make it available to Lender at places which Lender shall
reasonably select, whether at Grantor's premises or elsewhere. Lender shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale as provided in Section 10(d) of this Agreement. Only after
so paying over such net proceeds and after the payment by Lender of any other
amount required by any provision of law, including Section 9-504(l)(c) of the
Code, need Lender account for the surplus, if any, to Grantor. To the extent
permitted by applicable law, Grantor waives all claims, damages, and demands
against Lender arising out of the repossession, retention or sale of the
Collateral except in each case such as arise out of the gross negligence or
wilful misconduct of Lender. Grantor agrees that Lender need not give more than
ten (10) days' notice (which notification shall be deemed given when mailed or
delivered on an overnight basis, postage prepaid, addressed to Grantor at
Grantor's address referred to in Section 12 hereof) of the time and place of any
public sale or of the time after which a private sale may take place and that
such notice is reasonable notification of such matters. Lender shall act in a
commercially reasonable manner with respect to any such sale or purchase of the
Collateral.
(b) Grantor also agrees to pay all costs of Lender, including
reasonable attorneys fees and expenses, incurred with respect to the collection
of any of the Obligations and the enforcement of any of Lender's rights
hereunder.
(c) Grantor hereby waives presentment, demand, or protest (to
the extent permitted by applicable law) of any kind in connection with this
Agreement or any Collateral. Except for notices provided for herein, Grantor
hereby waives notice (to the extent permitted by applicable law) of any kind in
connection with this Agreement.
(d) Except as otherwise expressly provided herein, the proceeds
of any sale of all or any part of the Collateral pursuant hereto, and any other
cash at the time held by Lender under this Agreement shall be applied by Lender
as provided in the Credit Agreement.
(e) Lender's right to exercise the remedies provided for herein
with respect to the General Collateral (other than the Cash Collateral and the
NRDC Pledged Shares) shall be subject to the provisions of any subordination
agreement entered into by Lender pursuant to Section 3.1 of the Credit Agreement
and shall be subordinate to any Permitted Liens.
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Grantor agrees to indemnify and hold harmless Lender, any of its parent
or subsidiaries or other affiliates, and their respective directors, officers,
employees, agents (each, an "Indemnitee") and each of them, from and against any
and all liabilities, obligations, claims, damages, or expenses incurred by any
of them arising out of or by reason of entering into this Agreement or the
consummation of the transactions contemplated by this Agreement and to pay or
reimburse each Indemnitee for the fees and disbursements of counsel incurred in
connection with any investigation, litigation or other proceedings (whether or
not Lender is a party thereto) arising out of or by reason of any of the
aforesaid. Lender will promptly give Grantor written notice of the assertion of
any claim which it believes is subject to the indemnity set forth in this
Section 10 and will upon the request of Grantor promptly furnish Grantor with
all material in its possession relating to such claim or the defense thereof to
the extent that Lender may do so without breach of duty to others. Any amounts
properly due under this Section 10 shall be payable to Lender or the applicable
Indemnitee immediately upon demand.
11. LIMITATION ON LENDER'S DUTY IN RESPECT OF COLLATERAL. Except as
expressly provided in the Code, Lender shall have no duty as to any Collateral
in its possession or control or in the possession or control of any agent or
nominee of Lender or as to any income thereon or as to the preservation of
rights against prior parties or any other lights pertaining thereto.
12. NOTICES. Any notice or other communication required or permitted to
be given shall be in writing addressed to the respective party as set forth
below and may be personally served, telecopied or sent by overnight courier or
U.S. Mail and shall be deemed given: (a) if served in person, when served; (b)
if telecopied, on the date of transmission if before 3:00 p.m. (Evansville,
Indiana time) on a Business Day; PROVIDED that a hard copy of such notice is
also sent pursuant to clause (c) or (d) below; (c) if by overnight courier, on
the first Business Day after delivery to the courier; or (d) if by U.S. Mail,
on the fourth (4th) day after deposit in the mail, postage prepaid, certified
mail, return receipt requested.
Notices to Grantor: REGENCY AFFILIATES, INC.
381 Robinwood Lane
Wheaton, Illinois 60187
Attention: Gary K. Nuttall
Telecopy: (708) 690-3823
With copy to: GALLAGHER, SHARP, FULTON & NORMAN
1501 Euclid Avenue
Cleveland, Ohio 44115
Attention: James F. Koehler, Esq.
Telecopy: (216) 241-1608
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19
Notices to Lender: SOUTHERN INDIANA PROPERTIES, INC.
100 NW Second Street
Suite 310
Evansville, Indiana 47708
Attention: Vice President and General Manager
Telecopy: (812) 422-3270
INVESTMENT MANAGEMENT ADVISORS
800 East Northwest Highway
Suite 203
Mount Prospect, Illinois 60056
Attention: Portfolio Administrator
Telecopy: (847) 670-5805
With a copy to: WINSTON & STRAWN
35 West Wacker Drive
Chicago, Illinois 60601
Attention: Timothy J. Oxley, Esq.
Telecopy: (312) 558-5700
Any party may change its respective address for the giving of notice to another
address by giving at least 10 business days' notice of such change.
13. SEVERABILITY. Any provision of this Agreement which 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. NO WAIVER; CUMULATIVE REMEDIES. Lender shall not, by any
act, delay, omission or otherwise, be deemed to have waived any of its rights or
remedies hereunder. No waiver hereunder shall be valid except to the extent
therein set forth. A waiver of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which Lender would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of Lender any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. Except to the
extent that Lender has specifically and expressly waived such remedies in this
Agreement or otherwise, the rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law. Lender may resort to and realize on the
Collateral simultaneously with any acts or proceedings initiated by Lender in
its sole and conclusive discretion to resort to or realize upon any other
sources of repayment of the Obligations, including, but not limited to,
collateral granted by other security agreements and the personal liability of
Grantor and any person or corporation which has guaranteed repayment of the
Liabilities.
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None of the terms or provisions of this Agreement may be waived, altered,
modified or amended except by an instrument in writing, duly executed by Grantor
and Lender.
15. SUCCESSORS AND ASSIGNS. This Agreement and all obligations
of Grantor hereunder shall be binding upon the successors and assigns of Grantor
(except that Grantor shall not have the right to assign its rights hereunder or
any interest herein without the prior written consent of Lender) and shall,
together with the rights and remedies of Lender hereunder, inure to the benefit
of Lender and its respective successors and assigns. Neither this Agreement nor
anything set forth herein is intended to, nor shall it, confer any rights on any
Person or entity other than the parties hereto and all third party rights are
expressly negated.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL
LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF
ILLINOIS.
17. TERMINATION. This Agreement, and the agreements, pledges and
security interests created or granted hereby, shall terminate when the
Obligations shall have been fully and irrevocably paid and satisfied, at which
time Lender shall release and reassign (without recourse upon, or any warranty
whatsoever by, Lender), and deliver to Grantor all Collateral and related
documents then in the custody or possession of Lender, including termination
statements under the Code, all without recourse upon, or warranty whatsoever, by
Lender and at the sole cost and expense of Grantor; PROVIDED HOWEVER, that if
(i) the Tranche B Loan is not used for the purpose of making the Permitted
Capital Payments prior to the Tranche B Loan Prepayment Date but for the
purposes permitted under Section 1.2 of the Credit Agreement, then on the
Tranche B Loan Prepayment Date or (ii) the Tranche B Loan Amount, together with
any and all accrued but unpaid Regular Interest not previously added to the
Tranche B Loan Amount as Additional Principal, is paid in full prior to the
Tranche B Loan Prepayment Date, then on such payment date, Lender agrees to
release its Liens on the General Collateral.
18. NO JOINT VENTURE OR PARTNERSHIP. Grantor and Lender intend
that the relationship created hereunder be solely that of debtor and creditor.
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Grantor and Lender nor
grant Lender any interest in the Collateral other than that of secured party or
lender.
19. INJUNCTIVE RELIEF. Grantor recognizes that in the event
Grantor fails to perform, observe or discharge any of Grantor's obligations
hereunder, no remedy of law will provide adequate relief to Lender, and agrees
that Lender shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
20. WAIVER OF SUBROGATION. Grantor shall have no rights of
subrogation as to any of the Collateral until full and complete performance
and payment of the Obligations.
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21. WAIVER OF JURY TRIAL. GRANTOR AND LENDER, BY ITS ACCEPTANCE
OF THIS AGREEMENT, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
AGREEMENT AND THE BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER
IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY GRANTOR AND LENDER, AND
GRANTOR ACKNOWLEDGES THAT NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF OF
LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO INCLUDE THIS WAIVER OF TRIAL BY
JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
GRANTOR AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH OF THEM WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. GRANTOR AND LENDER FURTHER
ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE
REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL.
22. VENUE. GRANTOR AGREES THAT ALL ACTIONS OR PROCEEDINGS
ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONNECTION WITH, OUT OF, RELATED TO
OR FROM THIS AGREEMENT SHALL BE LITIGATED, AT LENDER'S SOLE DISCRETION AND
ELECTION, ONLY IN COURTS HAVING A SITUS WITHIN THE CITY OF CHICAGO, STATE OF
ILLINOIS. GRANTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE.
23. COUNTERPARTS. This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.
* * *
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IN WITNESS WHEREOF, Grantor has executed this Agreement as of
the date first above written.
REGENCY AFFILIATES, INC.
By: /s/ Gary L. Nuttall
------------------------------
Name: Gary L. Nuttall
----------------------------
Title: President
---------------------------
SOUTHERN INDIANA PROPERTIES, INC.
By: /s/ N. P. Wagner
------------------------------
Name: N. P. Wagner
----------------------------
Title: President
---------------------------
By: /s/ Glenn E. Jurgen
------------------------------
Name: Glenn E. Jurgen
----------------------------
Title: VP & General Manager
---------------------------
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SCHEDULE I
----------
FILING JURISDICTIONS
Illinois
Maryland
-23-
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SCHEDULE II
-----------
NON-OPERATING SUBSIDIARIES
--------------------------
Stock Certificate
Grantor Stock Issuer Class of Stock Number(s) Number of Shares
------- ------------ -------------- --------- ----------------
Regency Affili- Transcontinental Common 800 (of 1000 total)
ates, Inc. Drilling Company,
Inc.
Transcontinental Regtransco, Inc. Class A 20,000 (of 20,000 total)
Drilling Company, Common
Inc.
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SCHEDULE III
------------
NRDC PLEDGED SHARES
-------------------
Authorized Stock Minority Number of
Number Class of Certificate Issued Number Shares Treasury
Stock Issuer of Shares Stock Number of Shares Outstanding Shares
------------ --------- -------- ----------- ------------- ----------- ---------
National Resource 100 Common #3 (for 100 20 0
Development Cor- 80 shares)
poration (Nevada)
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