EXHIBIT 4.10
PLEDGE AGREEMENT
(STOCK)
THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT"), dated as of December 15,
1998, made by ▇▇▇▇▇ OPERATING COMPANY, INC., a Texas corporation, (the
"PLEDGOR"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
a national banking association (the "LENDER").
W I T N E S S E T H:
WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as
of December 4, 1998 (together with all amendments and other modifications, if
any, from time to time thereafter made thereto, the "CREDIT AGREEMENT"), between
FUTURE PETROLEUM CORPORATION, a Utah corporation (the "BORROWER") and the
Lender, the Lender has extended Commitments to make Loans to, and issue Letters
of Credit at the request of, the Borrower; and
WHEREAS, the Borrower or an Affiliate (as defined in the Credit Agreement)
of the Borrower has entered into or may enter into certain Hedging Agreements
(as defined in the Credit Agreement) with the Lender or an Affiliate of the
Lender, pursuant to the terms of the Credit Agreement;
WHEREAS, as a condition precedent to the making of certain Loans and the
issuance of Letters of Credit under the Credit Agreement, and the Lender's or
such Affiliate of the Lender's obligations under the Hedging Agreements referred
to above, the Pledgor is required to execute and deliver this Pledge Agreement;
and
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lender to make Loans to, and to
issue Letters of Credit at the request of, the Borrower pursuant to the Credit
Agreement, and to induce the Lender or such Affiliate of the Lender to enter
into Hedging Agreements with the Borrower or an affiliate of the Borrower, the
Pledgor agrees, for the benefit of the Lender, as follows:
ARTICLE I
DEFINITIONS
SECTION I.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"BORROWER" is defined in the FIRST RECITAL.
"COLLATERAL" is defined in SECTION 2.1.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral, but shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"LENDER" is defined in the PREAMBLE.
"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED PROPERTY" means all Pledged Shares, and all other pledged shares
of capital stock, all other securities, all assignments of any amounts due or to
become due with respect to the Pledged Shares, all other instruments which are
now being delivered by the Pledgor to the Lender or may from time to time
hereafter be delivered by the Pledgor to the Lender for the purpose of pledge
under this Pledge Agreement or any other Loan Document, and all proceeds of any
of the foregoing.
"PLEDGED SHARE ISSUER" means each Person identified in ATTACHMENT 1 hereto
as the issuer of the Pledged Shares identified opposite the name of such Person.
"PLEDGED SHARES" means all shares of capital stock of any Pledged Share
Issuer which are delivered by the Pledgor to the Lender as Pledged Property
hereunder.
"PLEDGOR" is defined in the PREAMBLE.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURITIES ACT" is defined in SECTION 6.2.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
Illinois.
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SECTION I.2 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined herein
or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION I.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge Agreement, including its preamble and recitals, with
such meanings.
ARTICLE II
PLEDGE
SECTION II.1 GRANT OF SECURITY INTEREST. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Lender, and hereby grants to the Lender a continuing security interest in, all
of the following property (the "COLLATERAL"):
II.1.1 All issued and outstanding shares of capital stock of each
Pledged Share Issuer identified in ATTACHMENT 1 hereto.
II.1.2 All other Pledged Shares issued from time to time.
II.1.3 All other Pledged Property, whether now or hereafter
delivered to the Lender in connection with this Pledge Agreement.
II.1.4 All Dividends, Distributions, interest, and other payments
and rights with respect to any Pledged Property.
II.1.5 All proceeds of any of the foregoing.
SECTION II.2 SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
prompt payment and performance in full of (a) all Obligations now or hereafter
existing under the Credit Agreement, the Notes and each other Loan Document,
whether for principal, interest, costs, fees, expenses, or otherwise, including
without limitation, Reimbursement Obligations, and (b) all other obligations of
the Borrower or the Pledgor to the Lender or any Affiliate of the Lender, now or
hereafter owing, howsoever created, arising or evidenced, whether direct or
indirect, primary or secondary, fixed or absolute or contingent, joint or
several, regardless of how evidenced or arising, including without limitation
all Hedging Obligations (as defined in the Credit Agreement) arising under the
Hedging Agreements, between the Borrower or any other Affiliate or now or
hereafter existing or due or to become due and (c) all other obligations of the
Borrower or any Affiliate of the Borrower and the Lender or any Affiliate of the
Lender, howsoever created,
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arising or evidenced, whether direct or indirect, absolute or contingent or now
or hereafter existing or due or to become due (all such Obligations and other
obligations being the "SECURED OBLIGATIONS").
SECTION II.3 DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares, shall
be delivered to and held by or on behalf of the Lender pursuant hereto, shall be
in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.
SECTION II.4 DIVIDENDS ON PLEDGED SHARES. In the event that any Dividend
is to be paid on any Pledged Share at a time when no Default has occurred and is
continuing, such Dividend may be paid directly to the Pledgor. If any such
Default has occurred and is continuing then any such Dividend shall be paid
directly to the Lender.
SECTION II.5 CONTINUING SECURITY INTEREST. This Pledge Agreement shall
create a continuing security interest in the Collateral and shall
II.5.1 Remain in full force and effect until payment in full of all
Secured Obligations and the termination of the Commitments and any other
commitments of the Lender to the Pledgor,
II.5.2 Be binding upon the Pledgor and its successors, transferees
and assigns, and
II.5.3 Inure to the benefit of the Lender and its successors,
transferees, and assigns.
Without limiting the foregoing CLAUSE 2.5.3, the Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan to any other Person or entity,
and such other Person or entity shall thereupon become vested with all the
rights and benefits in respect thereof granted to the Lender under any Loan
Document (including this Pledge Agreement) or otherwise, subject, however, to
any contrary provisions in such assignment or transfer, and to the provisions of
SECTION 10.11 of the Credit Agreement. Upon the indefeasible payment in full of
all principal and interest comprising the Secured Obligations and the
termination of the Commitments and any other commitments of the Lender to the
Pledgor, the security interest granted herein shall terminate and all rights to
the Collateral shall revert to the Pledgor. Upon any such termination, the
Lender will, at the Pledgor's sole expense, deliver to the Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all certificates
and instruments representing or evidencing all Pledged Shares, together with all
other Collateral held by the Lender hereunder, and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1 WARRANTIES, ETC. The Pledgor represents and warrants unto
the Lender, as at the date of each pledge and delivery hereunder (including each
pledge and delivery of Pledged Shares) by the Pledgor to the Lender of any
Collateral, as set forth in this Article.
III.1.1 OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full
right and authority to pledge and assign) such Collateral, free and clear
of all liens, security interests, options, or other charges or
encumbrances, except any lien or security interest granted pursuant hereto
in favor of the Lender.
III.1.2 VALID SECURITY INTEREST. The delivery of such Collateral to
the Lender together with stock powers endorsed in blank is effective to
create a valid, perfected, first priority security interest in such
Collateral and all proceeds thereof, securing the Secured Obligations. No
filing or other action will be necessary to perfect or protect such
security interest.
III.1.3 AS TO PLEDGED SHARES. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and
constitute the percentage of the issued and outstanding shares of the
respective class of the capital stock of each Pledged Share Issuer as set
forth on Attachment 1 hereto.
III.1.4 AUTHORIZATION, APPROVAL, ETC. No authorization, approval, or
other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
(a) for the pledge by the Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by the Pledgor, or
(b) for the exercise by the Lender of the voting or other
rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares, as may be required in connection with
a disposition of such Pledged Shares by laws affecting the offering
and sale of securities generally, the remedies in respect of the
Collateral pursuant to this Pledge Agreement.
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III.1.5 COMPLIANCE WITH LAWS. The Pledgor is in compliance with the
requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders
of every governmental authority, the non-compliance with which could
materially adversely affect the business, properties, assets, operations,
condition (financial or otherwise) or prospects of the Pledgor or the
value of the Collateral or the worth of the Collateral as collateral
security.
ARTICLE IV
COVENANTS
SECTION IV.1 PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. The Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Lender hereunder). The Pledgor will warrant
and defend the right and title herein granted unto the Lender in and to the
Collateral (and all right, title, and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever. The Pledgor agrees
that at any time, and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Lender may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Lender to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
SECTION IV.2 STOCK POWERS, ETC. The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by the
Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed
undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Lender. The Pledgor will, from time to time upon the request
of the Lender, promptly deliver to the Lender such stock powers, instruments,
and similar documents, satisfactory in form and substance to the Lender, with
respect to the Collateral as the Lender may reasonably request and will, from
time to time upon the request of the Lender after the occurrence of any Event of
Default, promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by the Lender.
SECTION IV.3 CONTINUOUS PLEDGE. Subject to SECTION 2.4, the Pledgor will,
at all times, keep pledged to the Lender pursuant hereto all Pledged Shares and
all other shares of capital stock constituting Collateral, all Dividends and
Distributions with respect thereto, and all other Collateral and other
securities, instruments, proceeds, and rights from time to time received by or
distributable to the Pledgor in respect of any Collateral.
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SECTION IV.4 VOTING RIGHTS; DIVIDENDS, ETC. The Pledgor agrees:
IV.4.1 After any Default shall have occurred and be continuing,
promptly upon receipt thereof by the Pledgor and without any request
therefor by the Lender, to deliver (properly endorsed where required
hereby or requested by the Lender) to the Lender all Dividends,
Distributions, all interest, all principal, all other cash payments, and
all proceeds of the Collateral, all of which shall be held by the Lender
as additional Collateral for use in accordance with SECTION 6.4; and
IV.4.2 After any Event of Default shall have occurred and be
continuing and the Lender has notified the Pledgor of the Lender's
intention to exercise its voting power under this SECTION 4.4.2
(a) the Lender may exercise (to the exclusion of the Pledgor)
the voting power and all other incidental rights of ownership with
respect to any Pledged Shares or other shares of capital stock
constituting Collateral and the Pledgor hereby grants the Lender an
irrevocable proxy, exercisable under such circumstances, to vote the
Pledged Shares and such other Collateral, and
(b) promptly to deliver to the Lender such additional proxies
and other documents as may be necessary to allow the Lender to
exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Lender, shall, until delivery to the
Lender, be held by the Pledgor separate and apart from its other property in
trust for the Lender. The Lender agrees that unless an Event of Default shall
have occurred and be continuing and the Lender shall have given the notice
referred to in SECTION 4.4.2, the Pledgor shall have the exclusive voting power
with respect to any shares of capital stock (including any of the Pledged
Shares) constituting Collateral and the Lender shall, upon the written request
of the Pledgor, promptly deliver such proxies and other documents, if any, as
shall be reasonably requested by the Pledgor which are necessary to allow the
Pledgor to exercise voting power with respect to any such share of capital stock
(including any of the Pledged Shares) constituting Collateral; PROVIDED,
HOWEVER, that no vote shall be cast, or consent, waiver, or ratification given,
or action taken by the Pledgor that would cause an Event of Default, impair any
Collateral or be inconsistent with or violate any provision of the Credit
Agreement or any other Loan Document (including this Pledge Agreement).
SECTION IV.5 ADDITIONAL UNDERTAKINGS. The Pledgor will not, without the
prior written consent of the Lender, (a) sell, assign, transfer, pledge, or
encumber in any other manner Pledgor's interest in the Pledged Share Issuer, or
(b) permit any of the assets of the Pledged Share Issuer to be sold, assigned,
transferred, pledged, or encumbered in any other manner.
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ARTICLE V
THE LENDER
SECTION V.1 LENDER APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Lender the Pledgor's attorney-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 Lender's discretion, to take any action
and to execute any instrument which the Lender may deem necessary or advisable
to accomplish the purposes of this Pledge Agreement, including without
limitation:
V.1.1 After the occurrence and continuance of a Default, to ask,
demand, collect, ▇▇▇ for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral.
V.1.2 To receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with SECTION 5.1.1
above.
V.1.3 To file any claims or take any action or institute any
proceedings which the Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Lender with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
Notwithstanding the foregoing, prior to the occurrence of an Event of Default,
the Lender agrees that it shall first request that the Pledgor perform such
action and, if the Pledgor shall not have performed such action within five (5)
days following such request, the Lender shall be entitled to take such action
pursuant hereto.
SECTION V.2 LENDER MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein after being requested in writing to so perform, the
Lender may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Lender incurred in connection therewith shall be
payable by the Pledgor pursuant to SECTION 6.5.
SECTION V.3 LENDER HAS NO DUTY. The powers conferred on the Lender
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for the reasonable
care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Lender
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shall have no duty as to any Collateral or responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Pledged Property, whether or not the
Lender has or is deemed to have knowledge of such matters, or (b) taking any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION V.4 REASONABLE CARE. The Lender is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its possession;
PROVIDED, HOWEVER, the Lender shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral, if it takes such
action for that purpose as the Pledgor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Lender to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION VI.1 CERTAIN REMEDIES. If any Event of Default shall have occurred
and be continuing:
VI.1.1 The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Lender's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Lender may
deem commercially reasonable. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' prior notice
to the Pledgor 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 Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Lender 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.
VI.1.2 The Lender may
(a) transfer all or any part of the Collateral into the name
of the Lender or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder;
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(b) notify the parties obligated on any of the Collateral to
make payment to the Lender of any amount due or to become due
thereunder;
(c) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature
of any party with respect thereto;
(d) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral;
(e) take control of any proceeds of the Collateral; and
(f) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION VI.2 SECURITIES LAWS. If the Lender shall determine to exercise
its right to sell all or any of the Collateral pursuant to SECTION 6.1, the
Pledgor agrees that, upon request of the Lender, the Pledgor will, at its own
expense:
VI.2.1 Execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver (in each case to the extent required by law), all such
instruments and documents, and do or cause to be done all such other acts
and things, as may be necessary or, in the opinion of the Lender,
advisable to register such Collateral under, or otherwise permit the
Collateral to be privately sold or transferred in compliance with, the
provisions of the Securities Act of 1933, as from time to time amended
(the "SECURITIES ACT"), and to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus which, in
the opinion of the Lender, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations
of the Securities and Exchange Commission applicable thereto.
VI.2.2 Use its best efforts to qualify the Collateral under, or to
permit the Collateral to be privately sold or transferred in compliance
with, the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by the
Lender.
VI.2.3 Cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy
the provisions of Section 11(a) of the Securities Act.
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VI.2.4 Do or cause to be done all such other acts and things as may
be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
SECTION VI.3 COMPLIANCE WITH RESTRICTIONS. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Lender is hereby authorized to comply with any limitation
or restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Lender be liable nor accountable to the Pledgor
for any discount allowed by the reason of the fact that such Collateral is sold
in compliance with any such limitation or restriction.
SECTION VI.4 APPLICATION OF PROCEEDS. All cash proceeds received by the
Lender in respect of any sale of, collection from, or other realization upon,
all or any part of the Collateral may, in the discretion of the Lender, be held
by the Lender as additional collateral security for, or then or at any time
thereafter be applied (after payment of any amounts payable to the Lender
pursuant to SECTIONS 10.3 and 10.4 of the Credit Agreement and SECTION 6.5
hereof) in whole or in part by the Lender against, all or any part of the
Secured Obligations in such order as the Lender shall elect. Any surplus of such
cash or cash proceeds held by the Lender and remaining after payment in full of
all the Secured Obligations, and the termination of all Commitments and any
other commitments by the Lender to the Pledgor, shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
SECTION VI.5 INDEMNITY AND EXPENSES. The Pledgor hereby indemnifies and
holds harmless the Lender from and against any and all claims, losses, and
liabilities arising out of or resulting from this Pledge Agreement (including
enforcement of this Pledge Agreement), except claims, losses, or liabilities
resulting from the Lender's gross negligence or wilful misconduct. Upon demand,
the Pledgor will pay to the Lender the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its counsel and of
any experts and agents, which the Lender may incur in connection with:
(a) the exercise or enforcement of any of the rights of the
Lender hereunder; or
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(b) the failure by the Pledgor to perform or observe any of
the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION VII.1 LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION VII.2 AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement nor consent to any departure by the Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.
SECTION VII.3 PROTECTION OF COLLATERAL. The Lender may from time to time,
at its option, perform any act which the Pledgor agrees hereunder to perform and
which the Pledgor shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Lender may
from time to time take any other action which the Lender reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION VII.4 ADDRESSES FOR NOTICES. All notices and other communications
provided to any party hereto under this Pledge Agreement shall be in writing and
shall be hand delivered or sent by a nationally recognized overnight courier,
certified mail (return receipt requested), or telecopy to such party at its
address or telecopy number set forth on the signature pages hereof or at such
other address or telecopy number as may be designated by such party in a notice
to the other party. Without limiting any other means by which a party may be
able to provide that a notice has been received by the other party, a notice
shall be deemed to be duly received (a) if sent by hand, on the date when left
with a responsible person at the address of the recipient; (b) if sent by
certified mail, on the fifth business day after delivery to the U.S. Post
Office; (c) if sent by overnight courier, on the first business day after
delivery to such courier; or (d) if sent by telecopy, on the date of receipt by
the sender of an acknowledgment or transmission reports generated by the machine
from which the telecopy was sent indicating that the telecopy was sent in its
entirety to the recipient's telecopy number.
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SECTION VII.5 SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION VII.6 SEVERABILITY. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION VII.7 THE LENDER AS AGENT FOR ITS AFFILIATES. As described above,
certain Affiliates of the Lender are or may become parties to certain Hedging
Agreements with the Pledgor and/or Affiliates of the Pledgor. This Pledge
Agreement secures the obligations of the Pledgor and such Affiliates, as the
case may be, under such Hedging Agreements, and the parties hereto acknowledge
for all purposes that the Lender acts as agent on behalf of such Affiliates of
the Lender which are so entitled to share in the rights and benefits accruing to
the Lender under this Pledge Agreement.
SECTION VII.8 GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
ILLINOIS. THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
SECTION 7.9 NON-RECOURSE NATURE OF LIABILITY.
(a) Notwithstanding anything to the contrary contained or implied in this
Pledge Agreement, the Pledgor shall not be personally liable under any theory
for any amount due under the Credit Agreement, the Notes or such other Loan
Documents, and the Lender shall not seek a deficiency or personal judgment
against the Pledgor for payment of the Obligations evidenced by the Credit
Agreement, the Notes or such other Loan Documents. No property or assets of the
Pledgor, other than the Collateral pledged pursuant to this Pledge Agreement,
shall be sold, levied upon or otherwise used to satisfy any judgment rendered in
connection with any action brought against the Borrower or its Subsidiaries with
respect to this Pledge Agreement, the Credit Agreement, the Notes or such other
Loan Documents.
13
(b) Notwithstanding the provisions of SECTION 7.9(A) to the contrary,
nothing contained in this Pledge Agreement, the Credit Agreement or any other
Loan Document shall be construed to (i) impair or limit the rights of the Lender
arising under this Pledge Agreement, or any other Security Document or other
documents to which the Pledgor is a party thereto in its individual capacity;
(ii) impair or limit any of the Obligations of the Borrower or its Subsidiaries
under any Loan Document to which it is a party; (iii) impair or limit the
validity of the indebtedness evidenced by this Pledge Agreement, the Credit
Agreement, the Notes or the other Loan Documents or prevent the taking of any
action permitted by law against the Borrower or its Subsidiaries or the assets
of the Borrower or its Subsidiaries or the proceeds of such assets; or (iv)
prevent the commencement of any action, suit or proceeding against any Person
(or prevent the service of papers under any Person) for the purpose of obtaining
jurisdiction over the Borrower or its Subsidiaries.
14
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
▇▇▇▇▇ OPERATING COMPANY INC.,
a Texas corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
15
ATTACHMENT 1
to
Pledge Agreement
PLEDGED SHARES
-----------------------
PLEDGED SHARE ISSUER CONVERTIBLE PREFERRED, SERIES A
----------------------- ------------------------------------------------------------
AUTHORIZED OUTSTANDING NUMBER OF SHARES % OF SHARES
SHARES SHARES PLEDGED PLEDGED
---------- ----------- ---------------- ------------
Future Petroleum Corporation, 200,000 100,000 1,000 1%
a Utah corporation