Exhibit 8
AMENDED AND RESTATED PLEDGE AGREEMENT
This AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement"), dated as of April
12, 2002, is made by Universal Equities Consolidated LLC, a Nevada limited
liability company (the "Universal Pledgor"), and Thorn Tree Resources LLC, a
Delaware limited liability company (the "Thorn Tree Pledgor," and together with
the Universal Pledgor, the "Pledgors"), to Sixth Avenue Associates LLC, a
Delaware limited liability company ("Sixth Avenue"), Equistar Consolidated
Holdings LLC, a Nevada limited liability company ("Equistar"), The Cornerhouse
Limited Partnership, a New York limited partnership ("Cornerhouse"), The Winsome
Limited Partnership, a New York limited partnership ("Winsome"), and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, an individual ("DHP," and together with Equistar, Cornerhouse and
Winsome, the "DHP Secured Parties," and together with Sixth Avenue, the "Secured
Parties"), and to DHP, in his capacity as agent for the Secured Parties (the
"Pledge Agent") amends and restates the Bank Pledge Agreements (as defined
herein). Capitalized terms used herein without definition shall have the same
meaning ascribed to such terms in the Settlement Agreement, dated April ____,
2002 (the "Settlement Agreement"), by and among Emex Corporation, a Nevada
corporation (the "Corporation"), Sixth Avenue, Cornerhouse, Winsome, DHP, the
Thorn Tree Pledgor, the Universal Pledgor, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"),
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), Equistar and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Ms.
Eweson").
A. The Universal Pledgor is the record owner of 12,257,100 shares (the
"Universal Shares") of common stock, par value $0.01 per share (the "Common
Stock"), of the Corporation.
B. The Thorn Tree Pledgor is the record owner of 12,257,100 shares (the
"Thorn Tree Shares") of Common Stock.
C. Each of the Universal Pledgor and the Thorn Tree Pledgor owns a 50%
interest in Equistar.
D. Equistar owes Sixth Avenue the Sixth Avenue Debt and (i) the Universal
Pledgor has pledged 11,957,100 shares of Common Stock and any and all stock
dividends paid and payable to the Universal Pledgor with respect to the Common
Stock (the "Universal Pledged Shares") to Sixth Avenue and (ii) the Thorn Tree
Pledgor has pledged 12,257,100 shares of Common Stock and any and all stock
dividends paid and payable to the Thorn Tree Pledgor with respect to the Common
Stock (the "Thorn Tree Pledged Shares," and together with the Universal Pledged
Shares, the "Pledged Shares") to Sixth Avenue ((i) and (ii) together, the "Sixth
Avenue Pledge").
E. The Universal Pledgor owes DHP, Winsome and Cornerhouse the DHP Debt.
F. The Universal Pledgor owes Equistar the Equistar Debt.
G. The Pledgors pledged the Pledged Shares and any and all stock dividends
paid and payable thereon to ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Bank and HSBC Bank USA as security
for the debt owed to such banks by Equistar, and Sixth Avenue was subsequently
subrogated to the rights of the banks under (i) the Stock Pledge Agreement,
dated as of September 29, 2000, from the
Universal Pledgor and the Thorn Tree Pledgor, as Grantors, to HSBC USA, as
Secured Party, (ii) the Collateral Agreement by and between The Chase Manhattan
Bank and the Thorn Tree Pledgor, dated as of September 29, 2000, and (iii) the
Collateral Agreement by and between the Universal Pledgor and The Chase
Manhattan Bank, dated as of September 29, 2000 (collectively, the "Bank Pledge
Agreements"), and is currently the secured party thereunder with respect to the
Pledged Shares.
NOW, THEREFORE, in consideration of the premises, the Pledgors hereby agree
with the Secured Parties for their benefit as follows:
ARTICLE I
PRIOR AGREEMENTS; PLEDGE
1.1 Prior Agreements. This Agreement, together with the Settlement
Agreement and the Registration Rights Agreement by and among the parties hereto,
dated the date hereof (the "Registration Rights Agreement"), shall supercede all
pledge agreements, settlement agreements and discussions relating to the subject
matter hereof. This Agreement amends and restates the Bank Pledge Agreements.
1.2 Pledge. The Pledgors pledge and grant, first to Sixth Avenue, and
second, with respect to the Universal Pledgor, to the DHP Secured Parties, a
continuing security interest in the following (with respect to the Universal
Pledgor, the "Universal Pledged Collateral," with respect to the Thorn Tree
Pledgor, the "Thorn Tree Pledged Collateral," and together, the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any and all of the Pledged Shares;
(b) other than the Universal Retained Shares and the Released Shares,
all additional shares of stock of the Corporation from time to time acquired by
the Pledgors as dividends (which shares shall be deemed to be part of the
Pledged Shares), and the certificates representing such additional shares, and
all dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any of the foregoing.
ARTICLE II
SECURITY FOR OBLIGATIONS
This Agreement secures and the Universal Pledged Collateral or the Thorn
Tree Pledged Collateral, as applicable, is collateral security for the prompt
payment or performance in full when due, whether at stated maturity, by
acceleration or otherwise (including the payment of
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amounts which would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)), of, first, the
Sixth Avenue Debt, and, second, with respect to the Universal Pledged Collateral
and after the satisfaction in full in cash (for the purposes of this Agreement
and the Settlement Agreement, cash shall be deemed to include any Pledged Shares
retained in satisfaction of any outstanding obligations in accordance with
Section 1(o) of the Settlement Agreement) of the portion of the Sixth Avenue
Debt which constitutes a Universal Obligation, the DHP Debt and the Equistar
Debt outstanding now or hereafter arising, whether for principal or interest
(including, without limitation, interest which, but for the filing of a petition
in bankruptcy with respect to such Pledgor, would accrue on such obligations),
or payments of fees, expenses or otherwise, and all obligations now or hereafter
arising under this Agreement (all such obligations with respect to the Universal
Pledgor being the "Universal Obligations," all such obligations with respect to
the Thorn Tree Pledgor being the "Thorn Tree Obligations" and, together, the
"Pledgor Obligations"). The parties acknowledge that all of the Pledgor
Obligations are currently due and payable and will be repaid in accordance with,
and subject to, the Settlement Agreement and this Agreement. Further, the
parties agree that the DHP Secured Parties shall not have any rights under this
Agreement until the portion of the Sixth Avenue Debt that constitutes a
Universal Obligation is satisfied in full in cash.
ARTICLE III
DELIVERY OF PLEDGED COLLATERAL
3.1 Delivery of Pledged Collateral to Sixth Avenue. (a) All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Sixth Avenue pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to Sixth Avenue.
(b) With respect to any Pledged Collateral in which any Pledgor has
any right, title or interest and that constitutes an uncertificated security,
such Pledgor shall cause the issuer thereof either (i) to register Sixth Avenue
as the registered owner of such security or (ii) to agree in writing with such
Pledgor and Sixth Avenue that such issuer will comply with instructions with
respect to such security originated by Sixth Avenue without further consent of
such Pledgor, such agreement to be in form and substance reasonably satisfactory
to Sixth Avenue.
3.2 Upon the satisfaction in full in cash of (i) the portion of the Sixth
Avenue Debt that constitutes a Universal Obligation, Sixth Avenue shall deliver
all certificates or instruments representing or evidencing the Universal Pledged
Collateral to the Pledge Agent who will hold the Universal Pledged Collateral on
behalf of the DHP Secured Parties pursuant to this Agreement and the Settlement
Agreement, and such certificates and instruments shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank and shall be accompanied by duly executed voting
proxies in blank, all in form and substance reasonably satisfactory to the
Pledge Agent and (ii) the portion of the Sixth Avenue Debt attributable to the
Thorn Tree Parties, the Thorn Tree Pledged Collateral shall be released from the
pledge established hereunder, and Sixth Avenue shall
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deliver all share certificates or instruments representing or evidencing the
Thorn Tree Pledged Collateral to the Thorn Tree Pledgor. The DHP Secured Parties
shall also have the right to appoint one or more agents for the purpose of
retaining physical possession of the Universal Pledged Collateral. In addition,
the DHP Secured Parties shall have the right to exchange certificates or
instruments representing or evidencing the Universal Pledged Collateral for
certificates or instrument evidencing larger or smaller denominations.
ARTICLE IV
UNCERTIFICATED SECURITIES
Notwithstanding anything to the contrary in Article I and Article III
hereof, if any of the Pledged Collateral (whether now owned or hereafter
acquired) is evidenced by an uncertificated security, the relevant Pledgor shall
promptly notify Sixth Avenue or the DHP Secured Parties, as the case may be,
thereof and shall promptly take all actions required to perfect the security
interest of such Secured Party therein under applicable law (including, in any
event, under applicable provisions of the New York Uniform Commercial Code).
Each Pledgor further agrees to take such actions as the Secured Parties deem
necessary or desirable to effect the foregoing and to permit the Secured Parties
to exercise their rights and remedies hereunder, and each Pledgor agrees to
provide an opinion of counsel satisfactory to the Secured Parties with respect
to any such pledge of uncertificated securities promptly upon request of the
Secured Parties.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Pledgor represents and warrants as follows:
5.1 Validity of Collateral. The Universal Pledged Shares or the Thorn Tree
Pledged Shares, as applicable, have been duly authorized and validly issued and
are fully paid and non-assessable.
5.2 Title to Collateral. Each Pledgor is the sole legal and beneficial
owner of the Universal Pledged Collateral or the Thorn Tree Pledged Collateral,
as the case may be, free and clear of any lien, except for the liens created
under the Bank Pledge Agreements, which liens shall be superceded by the liens
created hereunder.
5.3 Power and Authority. Each Pledgor has full power, authority and legal
right to pledge all of the Universal Pledged Collateral or the Thorn Tree
Pledged Collateral, as the case may be, pursuant to this Agreement, and the
execution and delivery of this Agreement has been duly authorized by each
Pledgor.
5.4 Perfection and Priority. (a) The pledge of the Universal Pledged
Collateral by the Universal Pledgor pursuant to this Agreement creates a valid
and perfected first priority security interest in the Universal Pledged
Collateral in favor of Sixth Avenue, securing the full satisfaction in cash of
the portion of the Sixth Avenue Debt which constitutes a Universal Obligation.
Following the full satisfaction in cash of the portion of the Sixth Avenue Debt
which constitutes a Universal
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Obligation, the pledge of the Universal Pledged Collateral by the Universal
Pledgor pursuant to this Agreement will create a valid and perfected first
priority security interest in the Universal Pledged Collateral in favor of the
DHP Secured Parties, securing the full satisfaction in cash of the DHP Debt and
the Equistar Debt.
(b) The pledge of the Thorn Tree Pledged Collateral by the Thorn Tree
Pledgor pursuant to this Agreement creates a valid and perfected first priority
security interest in the Thorn Tree Pledged Collateral in favor of Sixth Avenue,
securing the full satisfaction in cash of the portion of the Sixth Avenue Debt
attributable to the Thorn Tree Parties.
5.5 No Required Authorizations. Other than as required by Section 13(d) of
the Exchange Act of 1934, as amended, 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 the pledge by a Pledgor of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by a Pledgor, or (ii) for the exercise by the
Secured Parties of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with the disposition thereof by laws
affecting the offering and sale of securities generally, all of which
authorizations, approvals, notices or filings have been, or upon request of the
Secured Parties will be, made).
ARTICLE VI
COVENANTS OF PLEDGOR
6.1 Protection of Security and Legal Proceedings. Each Pledgor shall, at
its own expense, take any and all actions necessary to preserve, protect and
defend the security interests of the Secured Parties in the Universal Pledged
Collateral or the Thorn Tree Pledged Collateral, as the case may be, and the
perfection and priority thereof against all adverse claims, including appearing
in and defending any and all actions and proceedings which purport to affect any
of the foregoing. Each Pledgor shall promptly reimburse the Secured Parties for
all sums, including costs, expenses and actual attorneys' fees, which the
Secured Parties may pay or incur in defending, protecting or enforcing their
security interest in the Universal Pledged Collateral or the Thorn Tree Pledged
Collateral, as the case may be, or the perfection or priority thereof, or in
discharging any prior or subsequent lien or adverse claim against the Universal
Pledged Collateral or the Thorn Tree Pledged Collateral, as the case may be, or
any part thereof, or by reason of becoming or being made a party to or
intervening in any action or proceeding affecting the Universal Pledged
Collateral or the Thorn Tree Pledged Collateral, as the case may be, or the
rights of the Secured Parties therein, all of which actions each Pledgor hereby
agrees that the Secured Parties shall have the right to take in their sole and
absolute discretion.
6.2 Notification. Each Pledgor shall promptly notify the Secured Parties in
writing of any event which affects the value of the Universal Pledged Collateral
or the Thorn Tree Pledged Collateral, as the case may be, the ability of each
Pledgor or the Secured Parties to dispose of the Universal Pledged Collateral or
the Thorn Tree Pledged Collateral, as the case may be, or the rights and
remedies of the Secured Parties in relation thereto, including, but not limited
to, the levy of any legal process against the Universal Pledged Collateral or
the Thorn Tree Pledged
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Collateral, as the case may be, and the adoption of any order, arrangement or
procedure affecting the Universal Pledged Collateral or the Thorn Tree Pledged
Collateral, as the case may be, whether governmental or otherwise.
6.3 Further Assurances. Each Pledgor shall at any time and from time to
time, at the expense of such Pledgor, promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Secured Parties may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Secured Parties to exercise and to enforce their rights
and remedies hereunder with respect to any of the Universal Pledged Collateral
or the Thorn Tree Pledged Collateral, as the case may be.
ARTICLE VII
VOTING RIGHTS; DIVIDENDS; ETC.
7.1 Voting Rights. During the term of this Agreement, Sixth Avenue and the
Pledge Agent, on behalf of the DHP Secured Parties, as the case may be, shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Collateral or any part thereof for any purpose pursuant to those
certain Irrevocable Proxies concurrently executed with the Settlement Agreement.
7.2 Dividends. Any and all
(i) dividends paid or payable other than in cash or cash
equivalents in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral;
(ii) dividends and other distributions paid or payable in cash or
cash equivalents in respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus; and
(iii) cash or cash equivalents paid, payable or otherwise
distributed in respect of any Pledged Collateral, subject to the Settlement
Agreement;
shall be forthwith delivered to Sixth Avenue or the DHP Secured Parties, as
applicable, to hold as Pledged Collateral, and shall, if received by a Pledgor,
be received in trust for the benefit of the Secured Parties, be segregated from
the other property or funds of such Pledgor, and be forthwith delivered to Sixth
Avenue or the DHP Secured Parties, as applicable, as Pledged Collateral in the
same form as so received (with any necessary endorsements).
7.3 Transfer of Collateral. Upon the occurrence of an Event of Default,
Sixth Avenue or the DHP Secured Parties, as applicable, shall have the right to
have the Universal Pledged Collateral or the Thorn Tree Pledged Collateral, as
the case may be, transferred into the names of Sixth Avenue or the DHP Secured
Parties, as applicable, to be disposed of in accordance with Article XIII of
this Agreement.
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ARTICLE VIII
TRANSFERS AND OTHER LIENS
Except pursuant to the Settlement Agreement, a Pledgor shall not (i) sell,
assign, transfer, exchange, lease, lend or otherwise dispose of (directly or
indirectly, voluntarily, involuntarily, by operation of law or otherwise), or
grant any option with respect to, any of the Pledged Collateral or (ii) create
or permit to exist any lien on or with respect to any of the Pledged Collateral,
except for the lien in favor of the Secured Parties. The inclusion of "proceeds"
as a component of the Pledged Collateral shall not be deemed a consent by the
Secured Parties to any sale, assignment, transfer, exchange, lease, loan,
granting of an option with respect to or disposition of all or any part of the
Pledged Collateral.
ARTICLE IX
SECURED PARTIES APPOINTED ATTORNEY-IN-FACT
Each Pledgor hereby appoints the Secured Parties the Pledgor's
attorneys-in-fact with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time in the Secured
Parties' sole and absolute discretion to take any action and to execute any
instrument which the Secured Parties may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to a Pledgor
representing any dividend or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same in
accordance with the terms of the Settlement Agreement. Each Pledgor acknowledges
that the foregoing grant of power of attorney is coupled with an interest and is
irrevocable.
ARTICLE X
SECURED PARTIES MAY PERFORM
If a Pledgor fails to perform any agreement contained herein, the Secured
Parties may perform or cause the performance of such agreement, and the expenses
of the Secured Parties incurred in connection therewith shall be payable by such
Pledgor under Article XV. However, nothing in this Agreement shall obligate the
Secured Parties to so act.
ARTICLE XI
EVENT OF DEFAULT
For purposes of this Agreement, "Event of Default" with respect to either
the Universal Pledgor or the Thorn Tree Pledgor shall mean: (i) the completion
of the Standstill Period prior to the satisfaction in full in cash in accordance
with the Settlement Agreement of the Universal Obligations or the Thorn Tree
Obligations, as the case may be, and (ii) a material breach by either Pledgor of
any provision of this Agreement or the Settlement Agreement.
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ARTICLE XII
REASONABLE CARE
The Secured Parties shall be deemed to have exercised reasonable care in
the custody and preservation of the Pledged Collateral in their possession if
the Pledged Collateral is accorded treatment substantially equal to that which
the Secured Parties accord their own property, it being understood that the
Secured Parties shall not have responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Secured
Parties have or are deemed to have knowledge of such matters, or (b) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.
ARTICLE XIII
REMEDIES UPON DEFAULT
If any Event of Default shall have occurred, subject to the requirements of
the Settlement Agreement and the Secured Parties' obtaining any necessary
governmental approvals:
13.1 Exercise of Rights. The Secured Parties may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided for herein
or otherwise available to them, all the rights and remedies of a secured party
under the Uniform Commercial Code (the "Code") in effect in the State of New
York at that time, and the Secured Parties may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Secured Parties' offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Secured Parties in their sole and
absolute discretion may deem commercially reasonable. Each Pledgor agrees that,
to the extent notice of sale shall be required by law, at least five days'
notice to the Pledgors of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Secured Parties shall not be obligated to make any sale of the
Pledged Collateral regardless of notice of sale having been given. The Secured
Parties may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Pledgor hereby
waives any claims against the Secured Parties arising by reason of the fact that
the price at which any Pledged Collateral may have been sold at such a private
sale was less than the price which might have been obtained at a public sale,
even if the Secured Parties accept the first offer received and do not offer
such Pledged Collateral to more than one offeree, and in all events such sale
shall be deemed to be commercially reasonable. At any such public sale, the
Secured Parties may be the purchasers of the Pledged Collateral.
13.2 Securities Laws. The Pledgor recognizes that by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, (the
"Securities Act") and applicable state securities laws, the Secured Parties may
be compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who will agree, among other things, to
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acquire the Pledged Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Secured Parties than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Secured Parties shall have
no obligation to engage in public sales and no obligation to delay the sale of
any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
Pledgor would agree to do so.
13.3 Further Information. If the Secured Parties determine to exercise
their right to sell any or all of the Pledged Collateral, upon written request,
each Pledgor shall, and shall cause each issuer of any Pledged Collateral to be
sold hereunder, from time to time, to furnish to the Secured Parties all such
information as the Secured Parties may request in order to determine the number
of shares and other instruments included in the Pledged Collateral which may be
sold by the Secured Parties as exempt transactions under the Securities Act and
the rules of the Securities Exchange Commission thereunder, as the same are from
time to time in effect.
13.4 Cash Collateral. Prior to any Event of Default, all cash proceeds
received by the Secured Parties in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral may, in the
discretion of the Secured Parties, be held by the Secured Parties as collateral
for, and/or then or at any time thereafter applied (after payment of any amounts
payable to Secured Parties pursuant to Article XV) in whole or in part by the
Secured Parties against all or any part of the Pledgor Obligations in such order
as the Secured Parties shall elect. After such application and after payment by
the Secured Parties of any other amount required by law, any surplus of such
cash or cash proceeds held by the Secured Parties and then remaining shall be
paid over to such Pledgor or to whomsoever may be lawfully entitled to receive
such surplus.
13.5 Other Remedies. Subject to the Settlement Agreement, the Secured
Parties shall not be obligated to resort to their rights or remedies with
respect to any other security for or guaranty or payment of the Pledgor
Obligations before resorting to their rights and remedies against the relevant
Pledgor hereunder. All rights and remedies of the Secured Parties shall be
cumulative and not in the alternative.
13.6 Further Assurances. Subject to the Settlement Agreement, each Pledgor
further agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make any sale or sales of all or any portion of the
Pledged Collateral pursuant to this Article XIII valid and binding and in
compliance with any and all applicable requirements of law. Each Pledgor further
agrees that a material breach of any of its covenants contained in this Article
XIII will cause irreparable injury to the Secured Parties, that the Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Article XIII shall
be specifically enforceable against such Pledgor. Each Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred.
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ARTICLE XIV
LIABILITY AND INDEMNIFICATION
The Secured Parties shall not be liable to a Pledgor for any act or
omission by the Secured Parties unless the Secured Parties' conduct constitutes
willful misconduct or gross negligence. Each Pledgor shall indemnify and hold
the Secured Parties harmless from and against all losses, liabilities, claims,
damages, costs and expenses (including actual attorneys' fees and disbursements)
with respect to (i) any action taken or any omission by the Secured Parties with
respect to this Agreement, provided that the Secured Parties conduct does not
constitute willful misconduct or gross negligence and (ii) any claims arising
out of such Pledgor's ownership of the Universal Pledged Collateral or the Thorn
Tree Pledged Collateral, as the case may be, or the Secured Parties' security
interest therein.
ARTICLE XV
EXPENSES
Each Pledgor shall upon demand pay to the Secured Parties the amount of any
and all expenses, including the fees and expenses of their counsel and of any
experts and agents except as otherwise provided in the Registration Rights
Agreement, which the Secured Parties may incur in connection with (i) the sale
of, collection from, or other realization upon, any of the Universal Pledged
Collateral or the Thorn Tree Pledged Collateral, as the case may be; (ii) the
exercise or enforcement of any of the rights of the Secured Parties hereunder;
and (iii) the failure by a Pledgor to perform or observe any of the provisions
of this Agreement. All obligations of each Pledgor hereunder shall be several
and not joint, including, without limitation, obligations relating to
indemnification and expenses.
ARTICLE XVI
SECURITY INTEREST ABSOLUTE
All rights of the Secured Parties and security interests hereunder, and all
the Pledgor Obligations of the Pledgors hereunder, shall be absolute and
unconditional irrespective of: (i) any lack of validity or enforceability of the
Settlement Agreement, the Pledgor Obligations or any other agreement or
instrument relating thereto; (ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Pledgor Obligations, or
any other amendment or waiver of or any consent to any departure from the
Settlement Agreement or any other agreement or instrument relating thereto;
(iii) any exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to departure from any guaranty for
all or any of the Pledgor Obligations; or (iv) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, a Pledgor
or a third party pledgor.
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ARTICLE XVII
AMENDMENTS, WAIVER
No amendment or waiver of any provision of this Agreement nor consent to
any departure by a Pledgor herefrom shall in any event be effective unless the
same shall be in writing and signed by each of the Secured Parties, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
ARTICLE XVIII
NOTICES
All notices, requests and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered by courier or other
means of personal service, or if sent by telex or telecopy or mailed first
class, postage prepaid, by certified mail, return receipt requested, or by
overnight courier, addressed to:
if to the Universal Pledgor:
Universal Equities Consolidated LLC
Twin Bridges Closters Dock Road
Alpine, New Jersey 07620
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: 212-757-3990
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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if to the Thorn Tree Pledgor:
Thorn Tree Resources LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: 212-489-2002
with a copy to:
Kronish ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to Sixth Avenue:
c/o Keswick Management Inc.
1330 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Reade ▇. ▇▇▇▇, ▇▇., Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: 212-848-7179
if to the DHP Secured Parties:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
Kronish ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
All notices, requests and other communications shall be deemed received on the
date of actual receipt as evidenced by written receipt, acknowledgement or other
evidence of actual receipt. Any party may change its address for notices by
notice to the other parties as provided in this Article.
ARTICLE XIX
CONTINUING SECURITY INTEREST; ASSIGNMENT OF OBLIGATIONS
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until satisfaction in
full in cash of the Pledgor Obligations as set forth herein and in accordance
with the Settlement Agreement; (ii) be binding upon each Pledgor and each
Pledgor's successors and assigns; (iii) inure, together with the rights and
remedies of the Secured Parties hereunder, to the benefit of the Secured Parties
and their successors, transferees and assigns; (iv) constitute, along with the
Settlement Agreement and the Registration Rights Agreement, the entire agreement
between the Pledgors and the Secured Parties with respect to the pledges created
hereunder; and (v) be severable in the event that one or more of the provisions
herein is determined to be illegal or unenforceable. Without limiting the
generality of the foregoing clause (iii), the Secured Parties may, in accordance
with the Settlement Agreement, assign or otherwise transfer any portion of the
Pledgor Obligations to any other person or entity, and such other person or
entity shall thereupon become, subject to the terms and provisions hereof and of
the Settlement Agreement, vested with all the benefits in respect thereof
granted to the Secured Parties herein or otherwise.
ARTICLE XX
RETURN OF COLLATERAL
Subject to any duty imposed by law or otherwise to the holder of any
subordinate lien on the Pledged Collateral known to the Secured Parties, and
subject to the direction of a court of competent jurisdiction, upon satisfaction
in full in cash in accordance with the Settlement Agreement of the Pledgor
Obligations as set forth herein and in accordance with the Settlement Agreement,
the Pledgors shall be entitled to return of the Pledged Collateral in the
possession of the Secured Parties; provided, however that while a petition in
bankruptcy is pending with respect to the Corporation or any of the Pledgors,
the Secured Parties shall not be obligated to return to the Pledgors or deliver
to the holder of any subordinate lien any such Pledged Collateral until they are
satisfied that all amounts with respect to the Pledgor Obligations are no longer
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subject to being recaptured under applicable bankruptcy or insolvency laws or
otherwise; provided, further, that if creditors of the Corporation or any of the
Pledgors assert claims in writing with respect to the Pledged Collateral, the
Secured Parties shall deposit the Pledged Collateral with the Clerk of the Court
of any federal or state court then having jurisdiction over an interpleader
action with respect to the Pledged Collateral. Sixth Avenue or the DHP Secured
Parties, as applicable, shall give written notice of any such deposit to the
Universal Pledgor and the Thorn Tree Pledgor. Upon such deposit in accordance
with the provisions of this Article XX, Sixth Avenue and/or the DHP Secured
Parties, as applicable, shall be relieved and discharged of all further
obligations with respect to the Pledged Collateral and all further obligations
and liability to the Pledgors with respect to its obligations under this
Agreement.
The return of the Pledged Collateral, however effected, shall be without
recourse to the Secured Parties, and the Secured Parties shall be entitled to
receive appropriate documentation to such effect. The return of the Pledged
Collateral shall be effected without representation or warranty and shall not
entitle a Pledgor to any right to any endorsement, except that if any of the
Pledged Collateral has been transferred into the name of any Secured Party such
Secured Party shall endorse it without recourse.
ARTICLE XXI
APPOINTMENT OF PLEDGE AGENT
The DHP Secured Parties hereby appoint DHP as Pledge Agent and authorize
DHP to exercise all power and authority granted to the DHP Secured Parties
pursuant to this Agreement. The Pledge Agent shall not incur liability for any
action or omission to act by him unless the Pledge Agent's conduct constitutes
willful misconduct or gross negligence. The Secured Parties shall jointly and
severally indemnify and hold the Pledge Agent harmless from and against all
judgments, costs, claims, losses, liability and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, incurred in connection
with the Pledge Agent's actions or inactions with respect to this Agreement.
ARTICLE XXII
GOVERNING LAW; VENUE
This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York. Any suit brought herein shall be brought in the
state or federal courts sitting in New York, New York, the parties hereto
waiving any claim or defense that such forum is not convenient or proper. Each
party hereby agrees that any such court shall have in personam jurisdiction over
such party and consents to service of process by any means authorized by New
York law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
PLEDGORS
UNIVERSAL EQUITIES CONSOLIDATED
LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
THORN TREE RESOURCES LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
SECURED PARTIES
SIXTH AVENUE ASSOCIATES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
EQUISTAR CONSOLIDATED HOLDINGS
LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager
15
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE CORNERHOUSE LIMITED
PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
THE WINSOME LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
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ACKNOWLEDGEMENT AND CONSENT
The Corporation referred to in the foregoing Pledge Agreement hereby
acknowledges receipt of a copy thereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. The
Corporation agrees to notify the Secured Parties promptly in writing of the
occurrence of any of the events described in Section 7.2 of the Pledge
Agreement.
EMEX CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
Address for Notices:
Emex Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
17