EXHIBIT 10.5
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AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
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Between
ST. MARY LAND & EXPLORATION COMPANY,
as Pledgor
and
WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent,
as Secured Party
Effective as of April 7, 2005
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AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
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THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT is made
effective as of April 7, 2005, by ST. MARY LAND & EXPLORATION COMPANY, a
Delaware corporation with principal offices at 1776 Lincoln Street, Suite 700,
Denver, Colorado 80203 ("Pledgor"), in favor of WACHOVIA BANK, NATIONAL
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ASSOCIATION, a national banking association with offices at 301 South College
Street, Charlotte, North Carolina 28288, as Administrative Agent (in such
capacity, the "Secured Party") for the benefit of the several lenders now or
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hereafter parties to the hereinafter defined Credit Agreement (individually, a
"Lender" and collectively, the "Lenders").
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RECITALS
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A. Pursuant to that certain Credit Agreement dated as of January 27,
2003, among Pledgor, Secured Party and the lenders party thereto (the "Existing
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Lenders") (such Credit Agreement, as amended and supplemented, the "Existing
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Credit Agreement"), Pledgor received certain loans and extensions of credit
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under a revolving credit facility made available to Pledgor under the Existing
Credit Agreement, up to the aggregate principal amount of $300,000,000.
B. The Existing Lenders conditioned their obligations under the
Existing Credit Agreement upon the execution and delivery by Pledgor of that
certain Pledge and Security Agreement dated as of January 27, 2003 (the
"Existing Pledge and Security Agreement").
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C. Pledgor, Secured Party and the Lenders have amended and restated the
Existing Credit Agreement by entering into that certain Amended and Restated
Credit Agreement dated of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), whereby, pursuant
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to which, the Lenders have agreed to make certain loans to and extend certain
credit for the account of Pledgor subject to the limitations set forth in the
Credit Agreement. The initial loans under the Credit Agreement have been used by
Pledgor to renew, rearrange, modify and extend all amounts outstanding under the
Existing Credit Agreement.
D. The Secured Party and the Lenders have conditioned their obligations
under the Credit Agreement upon the execution and delivery by Pledgor of this
Amended and Restated Pledge and Security Agreement, and Pledgor has agreed to
execute and deliver this Amended and Restated Pledge and Security Agreement.
NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies and extend credit, with or without security, to or for the
account of Pledgor in accordance with the terms of the Credit Agreement, (iii)
at the special insistence and request of the Lenders, and (iv) for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Pledgor and Secured Party hereby agree that the Existing Pledge
and Security Agreement is hereby amended and restated in its entirety to read as
follows:
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ARTICLE 1
SECURITY INTEREST
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Section 1.01 Pledge. Pledgor hereby pledges, assigns and grants to
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Secured Party a security interest in and right of set-off against the assets
referred to in Section 1.02 (the "Collateral") to secure the prompt payment and
performance of the "Obligations" (as defined in Section 2.02) and the
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performance by Pledgor of this Amended and Restated Pledge and Security
Agreement.
Section 1.02 Collateral. The Collateral consists of the following types
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or items of property which are owned by Pledgor:
(a) The securities described or referred to in Exhibit A
attached hereto and made a part hereof.
(b) (i) The certificates or instruments, if any, representing
such membership interests and such units, (ii) all dividends (cash,
stock or otherwise), cash, instruments, rights to subscribe, purchase
or sell and all other rights and property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such membership interests or such units, (iii) all
replacements and substitutions for any of the property referred to in
this Section 1.02, including, without limitation, claims against third
parties, and (iv) the proceeds, interest, profits and other income of
or on any of the property referred to in this Section 1.02.
It is expressly contemplated that additional securities or other property may
from time to time be pledged, assigned or granted to Secured Party as additional
security for the Obligations, and the term "Collateral" as used herein shall be
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deemed for all purposes hereof to include all such additional membership
interests, units and property, together with all other property of the types
described above related thereto.
Section 1.03 Transfer of Collateral. All certificates or instruments
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representing or evidencing the Pledged Securities shall be delivered to and held
pursuant hereto by Secured Party or a Person designated by Secured Party and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, or (in the case of
either certificated or uncertificated securities) Secured Party shall have been
provided with evidence that the Pledged Securities have been otherwise delivered
to Secured Party in accordance with Section 8.301 of the Code, all in form and
substance satisfactory to Secured Party. Notwithstanding the preceding sentence,
at Secured Party's discretion, all Pledged Securities must be delivered or
transferred in such manner as to permit Secured Party to meet the requirements
of Section 8.303(a)(3) of the Code to the extent of its security interest.
Secured Party shall have the right, at any time in its discretion and without
notice to Pledgor, to transfer to or to register in the name of Secured Party or
any of its nominees any or all of the Pledged Securities, subject only to the
revocable rights specified in Section 4.02. In addition, Secured Party shall
have the right at any time to exchange certificates or instruments representing
or evidencing Pledged Securities for certificates or instruments of smaller or
larger denominations.
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ARTICLE 2
DEFINITIONS
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Section 2.01 Terms Defined Above. As used in this Amended and Restated
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Pledge and Security Agreement, the terms defined above shall have the meanings
respectively assigned to them.
Section 2.02 Certain Definitions. As used in this Amended and Restated
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Pledge and Security Agreement, the following terms shall have the following
meanings, unless the context otherwise requires:
"Agreement" means this Amended and Restated Pledge and
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Security Agreement, as the same may from time to time be amended,
supplemented or otherwise modified.
"Code" means the Uniform Commercial Code as presently in
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effect in the State of Texas, Articles 1 through 9. Unless otherwise
indicated by the context herein, all uncapitalized terms which are
defined in the Code shall have their respective meanings as used in
Articles 8 and 9 of the Code.
"Event of Default" means any event specified in Section 6.01.
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"Obligations" means the collective reference to (a) all
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indebtedness, obligations and liabilities of Pledgor under or in
connection with the Loan Documents, including, without limitation, the
unpaid principal of and interest on the Loans and the LC Exposure and
all other obligations and liabilities of Pledgor (including, without
limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and the LC
Exposure and interest accruing at the then applicable rate provided in
the Credit Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to Pledgor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to Secured Party
or any Lender (or, in the case of any Swap Agreement referred to below,
any Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the other Loan Documents or any Swap Agreement
entered into by Pledgor with any Lender (or any Affiliate of any
Lender), or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all reasonable fees and
disbursements of counsel to Secured Party or to the Lenders that are
required to be paid by Pledgor pursuant to the terms of any of the
foregoing agreements), and (b) all obligations of Pledgor which may
arise under or in connection with this Agreement or any other Loan
Document to which Pledgor is a party.
The term "Obligations" shall mean all indebtedness,
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obligations and liabilities described, referred to or mentioned in the
immediately preceding paragraph of this definition, and all renewals,
rearrangements, increases, substitutions, replacements and extensions
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for any period thereof and amendments, supplements or modifications
thereto, in whole or in part.
"Obligor" means any Person, other than Pledgor, liable
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(whether directly or indirectly, primarily or secondarily) for the
payment or performance of any of the Obligations whether as maker,
co-maker, endorser, guarantor, accommodation party, general partner or
otherwise.
"Pledged Securities" means all of the securities and other
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property (whether or not the same constitutes a "security" under the
Code) referred to in Section 1.02(a) or 1.02(b) and all additional
securities, if any, constituting Collateral under this Agreement.
Section 2.03 Credit Agreement Terms. Unless otherwise defined herein,
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all terms beginning with a capital letter which are defined in the Credit
Agreement shall have the same meanings herein as therein.
Section 2.04 Section References. Unless otherwise provided for herein,
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all references herein to Sections are to Sections of this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
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In order to induce Secured Party to accept this Agreement, Pledgor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:
Section 3.01 Ownership of Collateral; Encumbrances. Except as otherwise
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permitted by the Credit Agreement, Pledgor is the record and beneficial owner of
the Collateral free and clear of any Lien except for the security interest
created by this Agreement, and Pledgor has full right, power and authority to
pledge, assign and grant a security interest in the Collateral to Secured Party.
Section 3.02 No Required Consent. No authorization, consent, approval
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or other action by, and no notice to or filing with, any governmental authority
or regulatory body (other than the filing of financing statements in favor of
Secured Party) is required for (i) the due execution, delivery and performance
by Pledgor of this Agreement, (ii) the grant by Pledgor of the security interest
granted by this Agreement or (iii) the perfection of such security interest.
Section 3.03 Pledged Securities. The Pledged Securities have been duly
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authorized and validly issued, and are fully paid and non-assessable.
Section 3.04 First Priority Security Interest. The pledge of Pledged
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Securities pursuant to this Agreement, the delivery to Secured Party of the
certificates representing the Pledged Securities accompanied by stock powers
duly executed in blank and the filing of appropriate financing statements in the
relevant locations create a valid and perfected first priority security interest
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in the Collateral, enforceable against Pledgor and all third parties and
securing payment of the Obligations.
ARTICLE 4
COVENANTS AND AGREEMENTS
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Pledgor will at all times comply with the covenants and agreements
contained in this Article 4, from the date hereof and for so long as any part of
the Obligations (other than any indemnity which is not yet due and payable) are
outstanding.
Section 4.01 Sale, Disposition or Encumbrance of Collateral. Except as
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otherwise not prohibited by the Credit Agreement or this Agreement, Pledgor will
not in any way encumber any of the Collateral (or permit or suffer any of the
Collateral to be encumbered) or sell, pledge, assign, lend or otherwise dispose
of or transfer any of the Collateral to or in favor of any Person other than
Secured Party.
Section 4.02 Voting Rights; Dividends or Distributions. Until both (i)
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an Event of Default shall have occurred and be continuing and (ii) either (a)
the Loans have become due and payable at their stated maturity and have not been
paid, (b) the Loans have been declared due and payable pursuant to Article X of
the Credit Agreement, or (c) Secured Party has given notice to Pledgor of
Secured Party's intent to exercise its rights under Section 6.02:
(a) Pledgor shall be entitled to exercise any and all voting,
management and/or other consensual rights and powers inuring to an
owner of the Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement and the other Loan
Documents.
(b) Pledgor shall be entitled to receive and retain (free and
clear of and no longer subject to this Agreement or the Lien created
pursuant to this Agreement) any and all dividends, distributions and
interest paid in respect of the Collateral, provided, however, that any
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and all
(i) dividends 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 (including, without limitation, any
certificate, share or interest purchased or exchanged in
connection with a tender offer or merger agreement), any
Collateral,
(ii) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection
with a partial or total liquidation or dissolution, or
reclassification, and
(iii) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Collateral,
shall be, and shall be promptly delivered to Secured Party to hold as,
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Collateral and shall, if received by Pledgor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of
Pledgor, and be promptly delivered to Secured Party as Collateral in the same
form as so received (with any necessary endorsement) ), provided further,
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however, in no event shall the foregoing proviso be applicable to, or prevent
the Pledgor from receiving and retaining any securities that are not pledged or
intended or required to be pledged to the Secured Party pursuant to any Security
Instrument, including this Agreement.
Section 4.03 Records and Information. Pledgor shall keep accurate and
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complete records of the Collateral (including proceeds, payments, distributions,
income and profits). Pledgor will promptly provide written notice to Secured
Party of all information which in any way affects the filing of any financing
statement or other public notices or recordings pertaining to the perfection of
a security interest in the Collateral, or the delivery and possession of items
of Collateral for the purpose of perfecting a security interest in the
Collateral.
Section 4.04 Certain Liabilities. Pledgor hereby assumes all liability
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for the Collateral, the security interest created hereunder and any use,
possession, maintenance, management, enforcement or collection of any or all of
the Collateral.
Section 4.05 Further Assurances. Upon the request of Secured Party,
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Pledgor shall (at Pledgor's expense) execute and deliver all such assignments,
certificates, instruments, securities, financing statements, notifications to
financial intermediaries, clearing corporations, issuers of securities or other
third parties or other documents and give further assurances and do all other
acts and things as Secured Party may reasonably request to perfect Secured
Party's interest in the Collateral or to protect, enforce or otherwise effect
Secured Party's rights and remedies hereunder.
Section 4.06 Rights to Sell. If Secured Party shall determine to
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exercise its rights to sell all or any of the Collateral pursuant to its rights
hereunder, Pledgor agrees that, upon request of Secured Party, Pledgor will, at
its own expense:
(a) execute and deliver, and use all reasonable efforts to
cause each issuer of the Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, 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 reasonable opinion of
Secured Party, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended
(the "Securities Act"), if such registration is, in the reasonable
opinion of Secured Party, necessary or advisable to effect a public
distribution of the Collateral, 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 reasonable opinion of Secured Party, 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;
(b) use all reasonable efforts to qualify the Collateral under
the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
Secured Party;
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(c) use all reasonable efforts to cause each such issuer to
make available to its security holders, as soon as practicable, an
earnings statement which will satisfy the provisions of Section 11(a)
of the Securities Act; and
(d) use all reasonable efforts to do or cause to be done all
such others 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.
Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by Secured Party by reason of the failure by
Pledgor to perform any of the covenants contained in this Section 4.06 and
consequently agrees that if Pledgor shall fail to perform any of such covenants,
it shall pay (to the extent permitted by law), as liquidated damages, and not as
penalty, an amount (in no event to exceed the amount of Obligations then
outstanding) equal to the value of the Collateral affected by Pledgor's failure
to perform any of the covenants contained in this Section 4.06 on the date the
Secured Party shall demand compliance with this Section 4.06.
ARTICLE 5
RIGHTS, DUTIES AND POWERS OF SECURED PARTY
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The following rights, duties and powers of Secured Party are applicable
irrespective of whether an Event of Default occurs and is continuing:
Section 5.01 Discharge Encumbrances. Secured Party may, at its option,
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three (3) Business Days after receipt by Pledgor of prior written notice from
Secured Party of its intent to do so, discharge any Liens at any time levied or
placed on the Collateral that are prohibited by the Credit Agreement and that
are not being contested in good faith by appropriate proceedings. Pledgor agrees
to reimburse Secured Party within five (5) days after demand for any payment so
made, plus interest thereon from the date of Secured Party's demand at the rate
per annum equal to 2% plus the rate applicable to ABR Loans as provided in
Section 3.02(a) of the Credit Agreement.
Section 5.02 Transfer of Collateral. Subject to the terms of the Credit
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Agreement, Secured Party may transfer any or all of the Obligations, and upon
any such transfer Secured Party may transfer its interest in any or all of the
Collateral and shall be fully discharged thereafter from all liability therefor.
Any transferee of the Collateral shall be vested with all rights, powers, duties
and remedies of Secured Party hereunder.
Section 5.03 Cumulative and Other Rights. The rights, powers and
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remedies of Secured Party hereunder are in addition to all rights, powers and
remedies given by law or in equity. The exercise by Secured Party of any one or
more of the rights, powers and remedies herein shall not be construed as a
waiver of any other rights, powers and remedies, including, without limitation,
any other rights of set-off.
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Section 5.04 Disclaimer of Certain Duties. The powers conferred upon
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Secured Party by this Agreement are to protect its interest in the Collateral
and shall not impose any duty upon Secured Party to exercise any such powers.
Pledgor hereby agrees that Secured Party shall not be liable for, nor shall the
indebtedness evidenced by the Obligations be diminished by, Secured Party's
delay or failure to collect upon, foreclose, sell, take possession of or
otherwise obtain value for the Collateral.
Section 5.05 Custody and Preservation of the Collateral. Secured Party
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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 comparable secured parties accord
comparable collateral, it being understood and agreed, however, that Secured
Party shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against Persons or entities with respect to any Collateral.
ARTICLE 6
EVENTS OF DEFAULT
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Section 6.01 Events. An "Event of Default" (as defined in the Credit
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Agreement) which has occurred and is continuing shall constitute an Event of
Default under this Agreement.
Section 6.02 Remedies. Upon the occurrence and during the continuance
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of any Event of Default, Secured Party may take any or all of the following
actions without notice or demand to Pledgor (except that Secured Party will not
take any action in the case of paragraphs (b) and (f) below until five (5)
Business Days after receipt by Pledgor of written notice from Secured Party of
its intent to do so):
(a) Subject to applicable provisions contained in the Credit
Agreement, declare all or part of the indebtedness pursuant to the
Obligations immediately due and payable and enforce payment of the same
by Pledgor or any Obligor.
(b) Sell, in one or more sales and in one or more parcels, or
otherwise dispose of any or all of the Collateral in any commercially
reasonable manner as Secured Party may elect, in a public or private
transaction, at any location as deemed reasonable by Secured Party
either for cash or credit or for future delivery at such price as
Secured Party may reasonably deem fair, and (unless prohibited by the
Uniform Commercial Code, as adopted in any applicable jurisdiction)
Secured Party may be the purchaser of any or all Collateral so sold and
may apply upon the purchase price therefor any Obligations secured
hereby. Any such sale or transfer by Secured Party either to itself or
to any other Person shall be absolutely free from any claim of right by
Pledgor, including any equity or right of redemption, stay or appraisal
which Pledgor has or may have under any rule of law, regulation or
statute now existing or hereafter adopted. Upon any such sale or
transfer, Secured Party shall have the right to deliver, assign and
transfer to the purchaser or transferee thereof the Collateral so sold
or transferred. If Secured Party reasonably deems it advisable to do
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so, it may restrict the bidders or purchasers of any such sale or
transfer to Persons or entities who will represent and agree that they
are purchasing the Collateral for their own account and not with the
view to the distribution or resale of any of the Collateral. Secured
Party may, at its discretion, provide for a public sale, and any such
public sale shall be held at such time or times within ordinary
business hours and at such place or places as Secured Party may fix in
the notice of such sale. Secured Party shall not be obligated to make
any sale pursuant to any such notice. Secured Party may, without notice
or publication, adjourn any public or private sale by announcement at
any time and place fixed for such sale, and such sale may be made at
any time or place to which the same may be so adjourned. In the event
any sale or transfer hereunder is not completed or is defective in the
opinion of Secured Party, such sale or transfer shall not exhaust the
rights of Secured Party hereunder, and Secured Party shall have the
right to cause one or more subsequent sales or transfers to be made
hereunder. If only part of the Collateral is sold or transferred such
that the Obligations remain outstanding (in whole or in part), Secured
Party's rights and remedies hereunder shall not be exhausted, waived or
modified, and Secured Party is specifically empowered to make one or
more successive sales or transfers until all the Collateral shall be
sold or transferred and all the Obligations are paid. In the event that
Secured Party elects not to sell the Collateral, Secured Party retains
its rights to dispose of or utilize the Collateral or any part or parts
thereof in any manner authorized or permitted by law or in equity, and
to apply the proceeds of the same towards payment of the Obligations.
(c) Apply proceeds of the disposition of the Collateral to the
Obligations in any manner elected by Secured Party and permitted by the
Code or otherwise permitted by law or in equity. Such application may
include, without limitation, the reasonable attorneys' fees and legal
expenses incurred by Secured Party.
(d) Appoint any Person as agent to perform any act or acts
necessary or incident to any sale or transfer by Secured Party of the
Collateral.
(e) Receive, change the address for delivery, open and dispose
of mail addressed to Pledgor, and to execute, assign and endorse
negotiable and other instruments for the payment of money, documents of
title or other evidences of payment, shipment or storage for any form
of Collateral on behalf of and in the name of Pledgor.
(f) Exercise all other rights and remedies permitted by law or
in equity.
Section 6.03 Attorney-in-Fact. Pledgor hereby irrevocably appoints
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Secured Party as Pledgor's attorney-in-fact, with full authority in the place
and stead of Pledgor and in the name of Pledgor or otherwise, from time to time
in Secured Party's discretion upon the occurrence and during the continuance of
an Event of Default, but at Pledgor's cost and expense, three (3) Business Days
after receipt by Pledgor of written notice from Secured Party of its intent to
do so, to take any action and to execute any assignment, certificate, financing
statement, stock power, notification, document or instrument which Secured Party
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 Pledgor representing any dividend, interest payment or other
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distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
Section 6.04 Liability for Deficiency. If any sale or other disposition
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of Collateral by Secured Party in compliance with the Loan Documents and
applicable law or any other action of Secured Party hereunder in compliance with
the Loan Documents and applicable law results in reduction of the Obligations,
such action will not release Pledgor from its liability to Secured Party for any
unpaid Obligations, including (to the extent permitted by law) costs, charges
and expenses incurred in the liquidation of Collateral, together with interest
thereon until paid at the rate per annum equal to 2% plus the rate applicable to
ABR Loans as provided in Section 3.02(a) of the Credit Agreement, and the same
shall be immediately due and payable to Secured Party at Secured Party's address
set forth in the opening paragraph hereof.
Section 6.05 Reasonable Notice. If any applicable provision of any law
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requires Secured Party to give reasonable notice of any sale or disposition or
other action, Pledgor hereby agrees that ten days' prior written notice shall
constitute reasonable notice thereof. Such notice, in the case of public sale,
shall state the time and place fixed for such sale and, in the case of private
sale, the time after which such sale is to be made.
Section 6.06 Pledged Securities. Upon both (i) the occurrence and
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during the continuance of an Event of Default and (ii) either (a) the Loans
becoming due and payable at their stated maturity and not paid, (b) the Loans
being declared due and payable pursuant to Article X of the Credit Agreement, or
(c) Secured Party giving prior written notice to Pledgor of Secured Party's
intent to exercise its rights under Section 6.02:
(a) All rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and
retain pursuant to Section 4.02 shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the
sole right to receive and hold as Collateral such dividends and
interest payments, but Secured Party shall have no duty to receive and
hold such dividends and interest payments and shall not be responsible
for any failure to do so or delay in so doing.
(b) All dividends and interest payments which are received by
Pledgor contrary to the provisions of this Section 6.06 shall be
received in trust for the benefit of Secured Party, shall be segregated
from other funds of Pledgor and shall be promptly paid over to Secured
Party as Collateral in the same form as so received (with any necessary
endorsement).
(c) Secured Party may exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Securities as if it were the
absolute owner thereof, including without limitation, the right to
exchange at its discretion, any and all of the Pledged Securities upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of any issuer of such Pledged Securities or upon the
exercise by any such issuer or Secured Party of any right, privilege or
option pertaining to any of the Pledged Securities and in connection
therewith, to deposit and deliver any and all of the Pledged Securities
with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine,
all without liability except to account for property actually received
by it, but Secured Party shall have no duty to exercise any of the
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aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing.
Section 6.07 Non-judicial Enforcement. To the extent permitted by law,
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Secured Party may enforce its rights hereunder without prior judicial process or
judicial hearing, and to the extent permitted by law Pledgor expressly waives
any and all legal rights which might otherwise require Secured Party to enforce
its rights by judicial process.
ARTICLE 7
MISCELLANEOUS PROVISIONS
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Section 7.01 Notices. Any notice required or permitted to be given
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under or in connection with this Agreement shall be in writing and shall be
mailed by first class or express mail, postage prepaid, or sent by telex,
telegram, telecopy or other similar form of rapid written transmission or
personally delivered to the receiving party. All such communications shall be
mailed, sent or delivered at the address respectively indicated in the opening
paragraph hereof or at such other address as either party may have furnished the
other party in writing. Any communication so addressed and mailed shall be
deemed to be given upon receipt, any notice so sent by rapid written
transmission shall be deemed to be given when receipt of such transmission is
acknowledged by the receiving operator or equipment, and any communication so
delivered in person shall be deemed to be given when receipted for or actually
received by Pledgor or Secured Party, as the case may be.
Section 7.02 Amendments and Waivers. Secured Party's acceptance of
-----------------------
partial or delinquent payments or any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy hereunder shall not be deemed a
waiver of any obligation of Pledgor or any Obligor, or of any right, power or
remedy of Secured Party; and no partial exercise of any right, power or remedy
shall preclude any other or further exercise thereof. Secured Party may remedy
any Event of Default hereunder or in connection with the Obligations without
waiving the Event of Default so remedied. Pledgor hereby agrees that if Secured
Party agrees to a waiver of any provision hereunder, or an exchange of or
release of the Collateral, or the addition or release of any Obligor or other
Person, any such action shall not constitute a waiver of any of Secured Party's
other rights or of Pledgor's obligations hereunder. This Agreement may be
amended only by an instrument in writing executed jointly by Pledgor and Secured
Party and may be supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
Section 7.03 Copy as Financing Statement. A photocopy or other
------------------------------
reproduction of this Agreement may be delivered by Pledgor or Secured Party to
any financial intermediary or other third party for the purpose of transferring
or perfecting any or all of the Pledged Securities to Secured Party or its
designee or assignee.
Section 7.04 Possession of Collateral. Secured Party shall be deemed to
------------------------
have possession of any Collateral in transit to it or set apart for it (or, in
either case, any of its agents, affiliates or correspondents).
11
Section 7.05 Redelivery of Collateral. If any sale or transfer of
--------------------------
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Pledgor such excess proceeds in a commercially
reasonable time; provided, however, that Secured Party shall not have any
liability for any interest, cost or expense in connection with any delay in
delivering such proceeds to Pledgor.
Section 7.06 Governing Law; Jurisdiction. This Agreement and the
-----------------------------
security interest granted hereby shall be construed in accordance with and
governed by the laws of the State of Texas (except to the extent that the laws
of any other jurisdiction govern the perfection and priority of the security
interests granted hereby).
Section 7.07 Continuing Security Agreement.
-----------------------------
(a) Except as otherwise provided by applicable law (including,
without limitation, Section 9.620 of the Code), no action taken or
omission to act by Secured Party hereunder, including, without
limitation, any exercise of voting or consensual rights pursuant to
Section 6.06 or any other action taken or inaction pursuant to Section
6.02, shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full satisfaction
of the Obligations, and the Obligations shall remain in full force and
effect, until Secured Party shall have applied payments (including,
without limitation, collections from Collateral) towards the
Obligations in the full amount then outstanding or until such
subsequent time as is hereinafter provided in subsection (b) below.
(b) To the extent that any payments on the Obligations or
proceeds of the Collateral are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent the
Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received by Secured Party, and Secured
Party's security interests, rights, powers and remedies hereunder shall
continue in full force and effect. In such event, this Agreement shall
be automatically reinstated if it shall theretofore have been
terminated pursuant to Section 7.08.
Section 7.08 Termination. The grant of a security interest hereunder
-----------
and all of Secured Party's rights, powers and remedies in connection therewith
shall remain in full force and effect until Secured Party has (i) retransferred
and delivered all Collateral in its possession to Pledgor, and (ii) executed a
written release or termination statement and reassigned to Pledgor without
recourse or warranty any remaining Collateral and all rights conveyed hereby.
Upon (i) the complete payment of the Obligations (other than any indemnity which
is not yet due and payable), (ii) the expiration of all outstanding Letters of
Credit, and (iii) the termination of the Commitments, Secured Party, at the
written request and expense of Pledgor, will release, reassign and transfer the
Collateral to Pledgor and declare this Agreement to be of no further force or
effect. Notwithstanding the foregoing, Section 4.04 and the provisions of
subsection 7.07(b) shall survive the termination of this Agreement.
12
Section 7.09 Counterparts; Effectiveness. This Agreement may be
-----------------------------
executed in two or more counterparts. Each counterpart is deemed an original,
but all such counterparts taken together constitute one and the same instrument.
This Agreement becomes effective upon the execution hereof by Pledgor and
delivery of the same to Secured Party, and it is not necessary for Secured Party
to execute any acceptance hereof or otherwise signify or express its acceptance
hereof.
Section 7.10 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 to be limited to the extent
necessary so that they shall 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.
Section 7.11 Interest. It is the intention of the parties hereto to
--------
conform strictly to usury laws applicable to Secured Party or any Lender.
Accordingly, if the transactions contemplated hereby would be usurious under
applicable state or federal law, then, notwithstanding anything to the contrary
in this Agreement or in any other Loan Document, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to Secured Party or any Lender that is contracted for, taken,
reserved, charged or received under the Obligations, this Agreement or under any
other Loan Document or otherwise in connection with the Obligations shall under
no circumstances exceed the maximum amount allowed by such applicable law, (ii)
in the event that the maturity of the Obligations is accelerated for any reason,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to Secured Party or any Lender
may never include more than such maximum amount, and (iii) excess interest, if
any, provided for in this Agreement, any other Loan Document or otherwise shall
be cancelled automatically and, if theretofore paid, shall be credited by
Secured Party on the principal amount of the Obligations (or, to the extent that
the principal amount of the Obligations shall have been or would thereby be paid
in full, refunded by Secured Party to Pledgor). The right to accelerate the
maturity of the Obligations does not include the right to accelerate any
interest which has not otherwise accrued on the date of such acceleration, and
neither Secured Party nor any Lender intend to collect any unearned interest in
the event of acceleration. All sums paid or agreed to be paid to Secured Party
or any Lender for the use, forbearance or detention of sums included in the
initial Obligations shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of the
Obligations until payment in full so that the rate or amount of interest on
account of the initial Obligations does not exceed the applicable usury ceiling,
if any.
[Signatures begin on next page]
13
PLEDGOR: ST. MARY LAND & EXPLORATION COMPANY
- -------
By: /S/ DAVID W. HONEYFIELD
-----------------------
David W. Honeyfield
Vice President - Finance, Secretary and Treasurer
SECURED PARTY: WACHOVIA BANK, NATIONAL ASSOCIATION, as
- ------------- Administrative Agent
By: /S/ PHILIP J. TRINDER
---------------------
Name: Philip J. Trinder
Title: Vice President
14
EXHIBIT A
PLEDGED SECURITIES
------------------
1. St. Mary Energy Company, a Delaware corporation ("SMEC") -- 100 shares
----
of the common stock of SMEC, registered in the name of St. Mary Land
& Exploration Company ("Pledgor") on the books of SMEC, as
-------
represented by Certificate No. 001.
2. Nance Petroleum Corporation, a Montana corporation ("Nance") -
-----
a. 20,000 shares of the common stock of Nance, registered in the
name of Pledgor on the books of Nance, as represented by
Certificate No. 034.
b. 5,000 shares of the common stock of Nance, registered in the
name of Pledgor on the books of Nance, as represented by
Certificate No. 015.