EXECUTION COPY
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as from time to time amended, modified or
supplemented, this "Agreement") dated as of February 17, 1998, is made by ▇▇▇▇▇▇
▇▇▇▇▇▇ OPERATING L.P. "A", a Delaware limited partnership (the "Pledgor"), and
FIRST UNION NATIONAL BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Lenders") parties to the Credit Agreement (as defined below).
PRELIMINARY STATEMENTS
(A) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. (the "Company"), ▇▇▇▇▇▇
▇▇▇▇▇▇ Operating L.P. "B" (the "Subsidiary Borrower"), certain other
subsidiaries of the Company, including the Pledgor (together with the Subsidiary
Borrower in its capacity as a Subsidiary Guarantor, collectively, the
"Subsidiary Guarantors"), the Lenders, the Administrative Agent and ▇▇▇▇▇▇▇
Sachs Credit Partners L.P., as syndication agent (in such capacity, the
"Syndication Agent"), are parties to a Credit Agreement dated as of the date
hereof (as the same may be amended and in effect from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Lenders to the Company and the Subsidiary
Borrower;
(B) The Pledgor is the owner of a 100% of the issued and outstanding
member interests (collectively, the "Interests") of each of the Subsidiaries
listed in Part I of Schedule I under the title "Limited Liability Company
Issuer" (all such Subsidiaries collectively, the "Limited Liability Company
Issuers");
(C) The Pledgor is the owner of 100% of the issued and outstanding
shares (collectively the "Shares") of each of the Subsidiaries listed in Part II
of Schedule I under the title "Stock Issuer" (the "Stock Issuers" and together
with the Limited Liability Company Issuers collectively, the "Issuers"); and
(D) In order to induce the Lenders to enter into the Credit Agreement
and to extend credit thereunder to the Company and the Subsidiary Borrower, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Pledgor has agreed to pledge and grant a security
interest in the Collateral (as defined below) as security for the Secured
Obligations (as defined below). Accordingly, the parties hereto agree as
follows:
SECTION 1. Defined Terms: Interpretation.
1.01 Defined Terms.
(a) The capitalized terms used herein which are defined in the Credit
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for therein.
(b) Unless otherwise defined herein or in the Credit Agreement, terms
defined in Articles 8 and 9 of the UCC are used herein as therein defined.
(c) As used in this Agreement, the following terms shall have the
following meanings:
"Administrative Agent" has the meaning specified in the Introduction
hereof.
"Agreement" has the meaning specified in the Introduction
hereof.
"Collateral" has the meaning specified in Section 3.
"Company" has the meaning specified in the Preliminary Statements.
"Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Interests" has the meaning specified in the Preliminary
Statements.
"Issuers" has the meaning specified in the Preliminary Statements.
"Lenders" has the meaning specified in the Introduction hereof.
"Limited Liability Company Issuers" has the meaning specified
in the Preliminary Statements.
"Pledged Interests" has the meaning specified in Section 3.
"Pledged Shares" has the meaning specified in Section 3.
"Pledgor" has the meaning specified in the Introduction hereof.
"Proceeds" has the meaning specified in Section 9-306 of the UCC.
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"Secured Obligations" means collectively:
(i) the payment of all indebtedness and liabilities by, and
performance of all other obligations of, the Company and the Subsidiary
Borrower in respect of the Loans;
(ii) all obligations of the Company and the Subsidiary Borrower
under, with respect to, and relating to the Letters of Credit whether
contingent or matured;
(iii) all obligations of the Company or any Restricted
Subsidiary (other than SFPP) owing to any Lender under any
Hedging Agreement;
(iv) the payment of all other indebtedness and liabilities by and
performance of all other obligations of, the Company and the Subsidiary
Borrower to the Administrative Agent, the Issuing Bank and the Lenders
under, with respect to, and arising in connection with, the Loan
Documents, and the payment of all indebtedness and liabilities of the
Company and the Subsidiary Borrower to the Administrative Agent, the
Issuing Bank and the Lenders for fees, costs, indemnification and expenses
(including reasonable attorneys' fees and expenses) under the Loan
Documents;
(v) the payment of all sums advanced and costs and expenses incurred
by the Administrative Agent or any Lender under any Loan Document (whether
directly or indirectly) in connection with the Obligations or any part
thereof or any renewal, extension or change of or substitution for the
Obligations or any part thereof, whether such advances, costs and expenses
were made or incurred at the request of any Loan Party, the Administrative
Agent, the Issuing Bank or any Lender; and
(vi) all renewals, extensions, amendments and changes of, or
substitutions or replacements for, all or any part of the items described
under clauses (i) through (v) above.
"Secured Parties" means (i) the Lenders, (ii) the Issuing Bank and
(iii) the Administrative Agent.
"Security Interests" means the security interests granted pursuant to
Section 3, as well as all other security interests created or assigned as
additional Collateral for the Secured Obligations pursuant to the provisions of
this Agreement.
"Shares" has the meaning specified in the Preliminary Statements.
"Stock Issuers" has the meaning specified in the Preliminary
Statements.
"Subsidiary Borrower" has the meaning specified in the Preliminary
Statements.
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"Subsidiary Guarantors" has the meaning specified in the
Preliminary Statements.
"Syndication Agent" has the meaning specified in the Preliminary
Statements.
"UCC" means the Uniform Commercial Code in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, "UCC" means the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection.
1.02 Interpretation.
(a) In this Agreement, unless a clear contrary intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually,
provided that nothing in this clause (iv) is intended to authorize any
assignment not otherwise permitted by this Agreement;
(v) reference to any agreement (including this Agreement), document
or instrument means such agreement, document or instrument as amended,
supplemented or modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms hereof, and
references to any Note includes any note issued in renewal, rearrangement,
reinstatement, enlargement, amendment, modification, extension,
substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any
Section, Schedule or Exhibit means such Section hereof or such Schedule or
Exhibit hereto;
(vii) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
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(viii) with respect to the determination of any period of time, the
word "from" means "from and including" and the word "to" means "to but
excluding"; and
(ix) reference to any law, ordinance, statute, code, rule,
regulation, interpretation or judgment means such law, ordinance, statute,
code, rule, regulation, interpretation or judgment as amended, modified,
codified or reenacted, in whole or in part, and in effect from time to
time.
(b) The Section headings herein are for convenience only and shall
not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.
SECTION 2. Representations and Warranties of the Pledgor.
The Pledgor represents and warrants as follows:
(a) The Pledgor is the sole beneficial owner of the Collateral listed
on Schedule I and will be the sole beneficial owner of all of the other
member interests of each Limited Liability Company Issuer. No Lien exists
or will exist upon the Pledged Interests (and no right or option to
acquire the same exists in favor of any other Person), except for the
pledge and security interest in favor of the Administrative Agent for the
benefit of the Secured Parties created or provided for herein, which
pledge and security interest constitute a first priority perfected pledge
and security interest in and to all of the Pledged Interests.
(b) The Pledged Interests listed on in Part I of Schedule I are, and
all other member interests which any Limited Liability Company Issuer may
hereafter issue will be, duly authorized, validly existing, fully paid and
non-assessable and none of such Pledged Interests is and none of such
other member interests will be subject to any contractual restriction, or
any restriction pursuant to the operating agreement of such Issuer, upon
the transfer of such member interests or other member interests (except
for any such restriction contained herein or in the Credit Agreement).
(c) The Pledged Shares listed in Part II of Schedule I are, and all
other shares of capital stock which any Stock Issuer may hereafter issue
will be, duly authorized, validly existing, fully paid and non-assessable
and none of such Pledged Shares is and none of such other shares of
capital stock will be subject to any contractual restriction, or any
restriction pursuant to the Articles or Certificate of Incorporation of
such Issuer, upon the transfer of
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such shares of capital stock or other shares of capital stock (except for
any such restriction contained herein or in the Credit Agreement).
(d) No authorization, approval, or other action by, and no notice to
or filing with, any Governmental Authority is required either (i) for the
pledge by the Pledgor of the Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by the Pledgor or
(ii) for the exercise by the Administrative Agent of the voting or other
rights provided for in this Agreement or the remedies in respect of such
Collateral pursuant to this Agreement (except as may be required in
connection with such disposition by laws affecting the offering and sale
of securities generally).
(e) The Interests described in Part I of Schedule I constitute 100%
of the issued and outstanding member interests of each of the Limited
Liability Company Issuers and the Shares described in Part II of Schedule
I constitute 100% of the issued and outstanding capital stock of each of
the Stock Issuers described therein. Schedule I correctly identifies, as
at the date hereof, the respective Issuers of the Pledged Interests and
the Pledged Shares.
(f) None of the operating agreements for any Limited Liability
Company Issuers provides that the member interests of such Issuer are
securities governed by Article 8 of the UCC and none of the Pledged
Interests is a "security" within the meaning of Section 8-102(a) of the
UCC.
(g) This Agreement creates a valid and perfected first priority
security interest in the Collateral, securing the payment of the Secured
Obligations.
(h) Upon the filing of a financing statement in the office of the
Secretary of State of the State of Texas, the Administrative Agent for the
benefit of the other Secured Parties will have a perfected first priority
security interest in the Limited Liability Company Interests, securing
payment of the Secured Obligations.
(i) The delivery of the Shares to the Administrative Agent pursuant
to the Agreement creates a valid and perfected first priority security
interest in the Shares, securing payment of the Secured Obligations.
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SECTION 3. The Security Interests.
(a) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, the Pledgor hereby
hypothecates, transfers and grants to the Administrative Agent for the ratable
benefit of the Secured Parties a continuing security interest in and to all
right, title and interest of the Pledgor in the following property, whether now
owned or existing or hereafter acquired or arising and regardless of where
located (all being collectively referred to as the "Collateral"):
(i) the Interests identified in Part I of Schedule I and all other
member interests of the Limited Liability Company Issuers now or hereafter
owned by the Pledgor (the Interests and all such additional member
interests, collectively, the "Pledged Interests");
(ii) the Shares represented by the certificates identified in Part II
of Schedule I and all other shares of Capital Stock of whatever class of
the Stock Issuers, now or hereafter owned by the ▇▇▇▇▇▇▇ (the Shares and
all such additional shares collectively, the "Pledged Shares");
(iii) all shares, securities, moneys or other property representing
or constituting the Pledged Interests or Pledged Shares or representing a
distribution or dividend in respect of any of the Pledged Interests or
Pledged Shares, or representing a return of capital upon or in respect of
the Pledged Interests or Pledged Shares, or resulting from a split-up,
revision, reclassification or other like change of the Pledged Interests
or otherwise received in exchange therefor, and any subscriptions
warrants, rights or options issued to the holders of, or otherwise in
respect of, the Pledged Interests or Pledged Shares;
(iv) without affecting the obligations of the Pledgor under any
provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger in which an Issuer is not the
surviving entity, all of the Capital Stock of the successor entity formed
by or resulting from such consolidation or merger, in which event only
such Capital Stock shall be included as Collateral excluding (A) in the
case of a corporation, directors' qualifying shares, (B) in the case of a
limited partnership, a 1.5% general partner interest and (C) in the case
of a limited liability company, a 1.5% member interest; and
(v) all Proceeds of and to any of the property of the Pledgor
described in the preceding clauses of this Section 3 (including all causes
of action, claims and warranties now or hereafter held by the Pledgor in
respect of any of the items listed above) and, to the extent related to
any property described in said clauses or such Proceeds, all books,
correspondence, credit files, records, invoices and other papers.
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All certificates or instruments representing or evidencing the
Collateral shall be delivered to and held by or on behalf of the Administrative
Agent 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 satisfactory to the Administrative Agent. The
Administrative Agent shall have the right, at any time in its sole discretion
and without notice to the Pledgor, to transfer to or to register in the name of
the Administrative Agent or any of its nominees any or all of the Collateral,
subject only to the revocable rights specified in Section 4.03(b) and (c)
hereof.
(b) The inclusion of Proceeds in this Agreement does not authorize
the Pledgor to sell, dispose of or otherwise use the Collateral in any manner
not specifically authorized hereby or by the Credit Agreement.
SECTION 4. Further Assurances; Remedies.
In furtherance of the grant of the Security Interest, the Pledgor
hereby agrees with each Lender and the Administrative Agent as follows:
4.01 Delivery and Other Perfection. The Pledgor shall:
(a) deliver to the Administrative Agent prior to or concurrently with
the execution and delivery of this Agreement all certificates, if any,
representing the Interests or the Shares identified in Schedule I,
endorsed in blank accompanied by undated stock powers duly executed in
blank.
(b) if any of the shares, securities, instruments, moneys or other
property required to be pledged by the Pledgor under Section 3(a) are
received by the Pledgor, forthwith either (x) transfer and deliver to the
Administrative Agent such securities or instruments so received by the
Pledgor duly endorsed in blank or accompanied by undated powers duly
executed in blank), all of which thereafter shall be held by the
Administrative Agent pursuant to the terms of this Agreement, as part of
the Collateral or (y) take such other action as the Administrative Agent
shall deem necessary or appropriate to duly record the Lien created
hereunder in such securities, instruments, moneys or other property in
said clauses (i), (ii) and (iii); and
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be reasonably requested by the Administrative Agent in order to
create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Administrative Agent to exercise and
enforce its rights hereunder with respect to such pledge and security
interest, including causing any or
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all of the Collateral to be transferred of record into the name of the
Administrative Agent or its nominee (and the Administrative Agent agrees
that if any Collateral is transferred into its name or the name of its
nominee, the Administrative Agent will thereafter promptly give to the
Pledgor copies of any notices and communications received by it with
respect to the Collateral). The Pledgor hereby authorizes the
Administrative Agent to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of the Pledgor where permitted by law. A
carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
4.02 Other Financing Statements and Liens; Additional Shares. (a)
Without the prior written consent of the Administrative Agent (granted with the
authorization of the Lenders as specified in Section 11.02 of the Credit
Agreement), the Pledgor shall not file or suffer to be on file, or authorize or
permit to be filed or to be on file, in any jurisdiction, any financing
statement or like instrument with respect to the Collateral in which the
Administrative Agent is not named as the sole secured party for the benefit of
the other Secured Parties.
(b) The Pledgor agrees that it will (i) cause the Issuers not to
issue any Capital Stock in addition to or in substitution for the Interests or
the Shares, as the case may be, except to the Pledgor and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, the Pledgor
will execute such documentation as requested by the Administrative Agent
pledging, and evidencing the pledge hereunder of, such Interests or Shares or
other securities.
(c) The Pledgor agrees that, from time to time upon the written
request of the Administrative Agent, the Pledgor will execute and deliver such
further documents and do such other acts and things as the Administrative Agent
may reasonably request in order fully to effect the purposes of this Agreement.
4.03 Collateral.
(a) The Pledgor will cause the Pledged Limited Liability Company
Interests or the Pledged Shares to constitute at all times 100% of the Capital
Stock of each Issuer then outstanding.
(b) Unless an Event of Default shall have occurred and be continuing
and the Administrative Agent has notified the Pledgor to the contrary, the
Pledgor shall have the right to exercise all voting, consensual and other powers
of ownership pertaining to the Collateral for all purposes not inconsistent with
the terms of this Agreement, the Credit Agreement, the other Loan Documents or
any other instrument or agreement referred to herein or therein, provided that
the Pledgor agrees that it will not vote the Collateral in any manner that is
inconsistent with the terms
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of this Agreement, the Credit Agreement, the other Loan Documents or any such
other instrument or agreement; and the Administrative Agent shall execute and
deliver to the Pledgor or cause to be executed and delivered to the Pledgor all
such proxies, powers of attorney, dividend and other orders, and all such
instruments, without recourse, as the Pledgor may reasonably request for the
purpose of enabling the Pledgor to exercise the rights and powers that it is
entitled to exercise pursuant to this Section 4.03(b).
(c) The Pledgor shall be entitled to receive and retain any and all
distributions and dividends paid in respect of the Collateral, provided,
however, that any and all (A) distributions and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral, (B) distributions or dividends paid or payable in cash in respect of
any 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
(other than distributions or dividends paid by KMNGL to the Pledgor in
connection with the dissolution and liquidation of KMNGL), and (C) cash paid,
payable or otherwise distributed in redemption of, or in exchange for any
Collateral, shall be, and shall be forthwith delivered to the Administrative
Agent to hold as, Collateral and shall, if received by the Pledgor, be received
in trust for the benefit of the Administrative Agent, be segregated from the
other property or funds of the Pledgor, and be forthwith delivered to the
Administrative Agent as Collateral in the same form as so received (with any
necessary endorsement).
(d) If any Event of Default shall have occurred, then so long as such
Event of Default shall continue, and whether or not the Administrative Agent or
any other Secured Party exercises any available right to declare any Secured
Obligation due and payable or seeks or pursues any other relief or remedy
available to it under applicable law or under this Agreement, the Credit
Agreement, the other Loan Documents or any other agreement relating to such
Secured Obligation, and the Administrative Agent so requires by notice to the
Pledgor, all distributions and other dividends received by the Pledgor on the
Collateral shall be paid directly by the Pledgor to the Administrative Agent and
retained by it as part of the Collateral, subject to the terms of this
Agreement, and, if the Administrative Agent shall so request in writing, the
Pledgor agrees to execute and deliver to the Administrative Agent appropriate
additional dividend, distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such distribution or
dividend theretofore paid to the Administrative Agent shall, upon request of the
Pledgor (except to the extent theretofore applied to the Secured Obligations),
be returned by the Administrative Agent to the Pledgor.
4.04 Events of Default, Etc. During the period during which an Event
of Default shall have occurred and be continuing:
(a) the Administrative Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the UCC
(to the extent permitted by law
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whether or not the UCC is in effect in the jurisdiction where the rights
and remedies are asserted) and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any
jurisdiction including if the Administrative Agent has notified the
Pledgor that it intends to exercise such right, the right, to the maximum
extent permitted by law, to exercise all voting, consensual and other
powers of ownership pertaining to the Collateral as if the Administrative
Agent were the sole and absolute owner thereof (and the Pledgor agrees to
take all such action as may be appropriate to give effect to such right);
(b) upon and during the continuance of an Event of Default, the
Administrative Agent in its discretion may, in its name or in the name of
the Pledgor or otherwise, demand, ▇▇▇ for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so; and
(c) the Administrative Agent may, upon not less than ten Business
Days' prior written notice to the Pledgor of the time and place, with
respect to the Collateral or any part thereof that shall then be or shall
thereafter come into the possession, custody or control of the
Administrative Agent, the other Secured Parties or any of their respective
agents, sell, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Administrative Agent deems
best, and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, and the
Administrative Agent or any Lender or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so disposed
of at any public sale (or, to the extent permitted by law, at any private
sale) and thereafter hold the same absolutely, free from any claim or
right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Pledgor, any such demand, notice and
right or equity being hereby expressly waived and released. The Pledgor
agrees that such ten Business Days' notice constitutes "reasonable
notification" within the meaning of Section 9-504 of the UCC. The
Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
4.04 shall be applied in accordance with Section 4.08 hereof.
The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Administrative Agent may be compelled, with respect to any
sale of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sales may be at prices lower than at
a public sale without such restrictions, and notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been
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made in a commercially reasonable manner and that the Administrative Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Collateral for the period of time necessary to permit the respective
Issuer thereof to register it for public sale.
4.05 Deficiency. Without limiting the obligations of the Pledgor to
pay the Secured Obligations, if the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 4.04 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Pledgor shall remain liable for any
deficiency.
4.06 Removals, Etc. Without at least 30 days' prior written notice to
the Administrative Agent, the Pledgor shall not (a) maintain any of its books
and records with respect to the Collateral at any office or maintain its
principal place of business at any place other than at the address indicated for
the Pledgor in the Credit Agreement or (b) change its name, or the name under
which it does business, from the name shown on the signature pages hereto.
4.07 Private Sale. The Administrative Agent and the other Secured
Parties shall incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 4.04 hereof conducted
in a commercially reasonable manner and in compliance with all applicable
securities laws. The Pledgor hereby waives any claims against the Administrative
Agent or any other Secured Party arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale was less than the
price that might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations.
4.08 Application of Proceeds. Except as otherwise herein expressly
provided or as otherwise required by law, the proceeds of any collection, sale
or other realization of all or any part of the Collateral pursuant hereto, and
any other cash at the time held by the Administrative Agent under this Section
4, shall be applied by the Administrative Agent as provided in Section 7.03 of
the Credit Agreement. The Administrative Agent may make distributions hereunder
in cash or in kind or on a ratable basis or in any combination thereof.
4.09 Attorney-in-Fact. Without limiting any rights or powers granted
by this Agreement to the Administrative Agent, while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default, the Administrative Agent is hereby appointed the
attorney-in-fact of the Pledgor for the purpose of carrying out the provisions
of this Section 4 and taking any action and executing any instruments that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Administrative Agent shall be entitled under this Section 4 to make collections
in respect of the Collateral, to the extent permitted by law, the Administrative
Agent shall have the right and power to receive, endorse and collect all checks
made payable to the order of the Pledgor
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representing any distribution or other payment in respect of the Collateral or
any part thereof and to give full discharge for the same.
SECTION 5. Administrative Agent.
5.01 Limitation on Duty of Administrative Agent in Respect of
Collateral.
The powers conferred on the Administrative Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. Except for reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral. The Administrative
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Administrative Agent accords its
own property, it being understood that the Administrative Agent shall not have
any responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, tenders or other matters relative to any Collateral,
whether or not the Administrative Agent has or is deemed to have knowledge of
such matters, or (b) taking any necessary steps to preserve rights against any
parties with respect to any Collateral.
5.02 Concerning the Administrative Agent.
The provisions of Article VIII of the Credit Agreement shall inure to
the benefit of the Administrative Agent in respect of this Agreement and shall
be binding upon the parties to the Credit Agreement in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Administrative Agent therein set forth:
(A) The Administrative Agent is authorized to take all such action as
is provided to be taken by it as the Administrative Agent hereunder and all
other action reasonably incidental thereto. As to any matters not expressly
provided for herein (including the timing and methods of realization upon the
Collateral) the Administrative Agent shall act or refrain from acting in
accordance with written instructions from the Required Lenders or, in the
absence of such instructions, in accordance with its discretion.
(B) The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder. The Administrative Agent shall have no
duty to ascertain or inquire as to the performance or observance of any of the
terms of this Agreement by the Pledgor.
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5.03 Appointment of Agents and Attorneys-in-Fact.
The Administrative Agent may employ agents and attorneys-in-fact in
connection herewith and shall not be responsible for the negligence or
misconduct (except for gross negligence, willful misconduct or unlawful conduct)
of any such agents or attorneys-in-fact selected by it in good faith. Without
limiting the foregoing, at any time or times, in order to comply with any legal
requirement in any jurisdiction, the Administrative Agent may appoint another
bank or trust company or one or more other Persons, either to act as co-agent or
co-agents, jointly with the Administrative Agent, or to act as separate agent or
agents on behalf of the Secured Parties with such power and authority as may be
necessary for the effective operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of the Credit Agreement referred to in
Section 5.02).
SECTION 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Administrative Agent or
any other Secured Party to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by the
Administrative Agent or any other Secured Party of any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by the Administrative Agent or any other Secured Party of any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein are cumulative
and are not exclusive of any remedies provided by law.
6.02.Notices. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient
pursuant to Section 11.01 of the Credit Agreement and shall be deemed to have
been given at the times specified in that Section 11.01.
6.03.Expenses. Without duplication of the obligations of Pledgor set
forth in the Credit Agreement, the Pledgor agrees to reimburse the
Administrative Agent and each other Secured Party for all reasonable costs and
expenses of the Administrative Agent and each other Secured Party (including the
reasonable fees and expenses of legal counsel) in connection with (a) any Event
of Default and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (i) performance by the Administrative Agent of any obligations
of the Pledgor in respect of the Collateral that the Pledgor has failed or
refused to perform, (ii) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any of
the Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Administrative Agent in respect thereof, by litigation
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or otherwise, (iii) judicial or regulatory proceedings and (iv) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (b) the
enforcement of this Section 6.03, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral security provided
pursuant to Section 3 hereof.
6.04.Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the Pledgor
and the Administrative Agent (with the consent of the Lenders as specified in
Section 11.02 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Administrative Agent, each Lender, each holder of any of the
Secured Obligations and the Pledgor.
6.05 Certain Documents. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to the Administrative Agent or any other Secured
Party, the determination of such satisfaction shall be made by the
Administrative Agent or such Secured Party in their or its sole and exclusive
judgment.
6.06 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Pledgor,
the Administrative Agent, the other Secured Parties and each holder of any of
the Secured Obligations (provided, however, that the Pledgor shall not assign or
transfer its rights hereunder without the prior written consent of the
Administrative Agent). In the event of an assignment of all or any of the
Secured Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Pledgor and its successors and assigns.
6.07 Marshaling of Assets. All rights to marshaling of assets of the
Pledgor, including any such right with respect to the Collateral, are hereby
waived by the Pledgor.
6.08 Termination. When all Secured Obligations shall have been paid
in full and all of the Commitments of the Lenders shall have been terminated,
this Agreement shall terminate, and the Administrative Agent shall forthwith
cause to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or upon the order of the Pledgor.
6.09 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Administrative
Agent and the other Secured Parties in order to carry out the intentions of the
parties hereto as nearly as may be possible and (b) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
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6.10 Waivers. The Pledgor hereby expressly waives, to the extent
permitted by applicable law (a) notice of the acceptance by the Administrative
Agent or any other Secured Party of this Agreement, (b) notice of the existence
or creation or non-payment of all or any of the Secured Obligations, (c)
presentment, demand, notice of dishonor, protest, intent to accelerate,
acceleration and all other notices whatsoever, and (d) all diligence in
collection or protection of or realization upon the Secured Obligations or any
thereof, any obligation hereunder, or any security for or guaranty of any of the
foregoing.
6.11 Rescission. The Pledgor agrees that, if at any time all or any
part of any payment theretofore applied by the Administrative Agent or any other
Secured Party to any of the Secured Obligations is or must be rescinded or
returned by the Administrative Agent or such Secured Party for any reason
whatsoever (including the insolvency, bankruptcy or reorganization of the
Pledgor or any of its Affiliates), such Secured Obligations shall, for the
purposes of this Agreement, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by the Administrative Agent, and the Security Interest granted
hereunder shall continue to be effective or be reinstated, as the case may be,
as to such Secured Obligations, all as though such application by the
Administrative Agent or such Secured Party had not been made.
6.12 Limitation by Law. All rights, remedies and powers provided in
this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and which may not be effectively waived by the
Pledgor and to be limited to the extent necessary so that they will not render
this Agreement invalid, unenforceable, in whole or in part, or not entitled to
be recorded, registered or filed under the provisions of any applicable law.
6.13 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
6.14 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York except as
required by mandatory provisions of law and except to the extent that the
validity or perfection of the Security Interests, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of New York.
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IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed by the authorized officer of its general partner as of the day and year
first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇ OPERATING L.P. "A"
By: Kinder ▇▇▇▇▇▇ ▇.▇., Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman
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Schedule I
Part I
PERCENTAGE INTEREST
LIMITED LIABILITY IN LIMITED LIABILITY
COMPANY ISSUER TYPE OF INTEREST COMPANY ISSUER
▇▇▇▇▇▇ ▇▇▇▇▇▇ CO2, LLC Member Interest 100%
Part II
PERCENTAGE
CERTIFICATE CERTIFICATE NO. OF INTEREST IN
STOCK ISSUER NO. DATE SHARES STOCK ISSUER
▇▇▇▇▇▇ ▇▇▇▇▇▇ 4 August 6, 1992 200 100%
Natural Gas Liquids
Corporation (formerly
Enron Natural Gas
Liquids Corporation)