PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of February 21, 1997, made by Xxxxxxx X.
Xxxxx (the "EXECUTIVE") in favor of Domain Energy Corporation, a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company has agreed to make a loan (the "Loan") to the
Executive for the acquisition of Investor Shares (as defined in the Management
Investor Subscription Agreement of even date herewith between the Company and
the Executive (the "Management Investor Subscription Agreement")), to be
evidenced by a note substantially in the form of Exhibit A to the Management
Investor Subscription Agreement (the "Note");
WHEREAS, the Executive will be the legal and beneficial owner of the
shares of Pledged Stock (as hereinafter defined) issued by the Company; and
WHEREAS, it is a condition precedent to the obligation of the Company to
make the Loan to the Executive that the Executive shall have executed and
delivered this Pledge Agreement to the Company.
NOW, THEREFORE, in consideration of the premises and to induce the Company
to make the Loan, the Executive hereby agrees with the Company, as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, terms defined in
the Note or the Management Investor Subscription Agreement and used herein shall
have the meanings assigned to them in the Note and the Management Investor
Subscription Agreement, respectively.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Pledge Agreement, as the same may be amended, modified
or otherwise supplemented from time to time.
"CODE": the Uniform Commercial Code from time to time in effect in the
State of New York.
"COLLATERAL": the Pledged Stock and all Proceeds.
"COLLATERAL ACCOUNT": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Company.
"DEFAULT": any event that is or with the passage of time or the giving of
notice or both would be an Event of Default under the Note.
"OBLIGATIONS": the collective reference to the unpaid principal of and
interest on the Note and all other obligations and liabilities of the Executive
to the Company (including, without limitation, interest accruing at the then
applicable rate provided in the Note after the maturity of the Loan and interest
accruing at the then applicable rate provided in the Note after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Executive, whether or not a
claim for post-filing or postpetition interest is allowed in such proceeding),
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 Note and this Agreement or any other document made, delivered or given
in connection therewith, in each case whether on account of principal, interest,
costs, expenses or otherwise.
"PERSON": any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PLEDGED STOCK": the shares of capital stock listed on SCHEDULE 1 hereto,
together with all stock certificates received upon exercise of any such options
or rights of any nature whatsoever that may be issued or granted by the Company
to the Executive while this Agreement is in effect.
"PROCEEDS": all "proceeds" as such term is defined in Section 9-306(l) of
the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon or distributions with
respect thereto.
"SECURITIES ACT": the Securities Act of 1933, as amended.
(a) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
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(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Executive hereby delivers to
the Company all the Pledged Stock and hereby grants to the Company a first
security interest in the Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
3. STOCK POWERS. Concurrently with the delivery to the Company of each
certificate representing one or more shares of Pledged Stock to the Company, the
Executive shall deliver an undated stock power covering such certificate, duly
executed in blank by the Executive with, if the Company so requests, signature
guaranteed.
4. COVENANTS. The Executive covenants and agrees with the Company that,
from and after the date of this Agreement until this Agreement is terminated and
the security interests created hereby are released:
(a) If the Executive shall (i) as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof or
(ii) acquire ownership of shares of Common Stock upon the exercise of stock
options, the Executive shall accept the same as the agent of the Company, hold
the same in trust for the Company, and deliver the same forthwith to the Company
in the exact form received, duly endorsed by the Executive to the Company, if
required, together with an undated stock power covering such certificate duly
executed in blank by the Executive and with, if the Company so requests,
signature guaranteed, to be held by the Company, subject to the terms hereof, as
additional collateral security for the Obligations.
(b) Without the prior written consent of the Company, the Executive
will not (1) sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Collateral, (2) create, incur or permit to exist
any lien or option in favor of, or any claim of any Person with respect to, any
of the Collateral, or any interest therein, except for the security interests
created by this Agreement or (3) enter into any agreement or undertaking
restricting the right or
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ability of the Executive or the Company to sell, assign or transfer any of the
Collateral.
(c) The Executive shall maintain the security interest created by
this Agreement as a first, perfected security interest and shall defend such
security interest against claims and demands of all Persons whomsoever. At any
time and from time to time, upon the written request of the Company, and at the
sole expense of the Executive, the Executive will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Company may reasonably request for the purposes of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein granted.
If any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be immediately delivered to the
Company, duly endorsed in a manner satisfactory to the Company, to be held as
Collateral pursuant to this Agreement.
(d) The Executive shall pay, and save the Company harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.
5. CASH DIVIDENDS; VOTING RIGHTS. Unless an Event of Default shall have
occurred and be continuing and the Company shall have given notice to the
Executive of the Company's intent to exercise its corresponding rights pursuant
to Section 6 below, the Executive shall be permitted to receive all cash
dividends paid in respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock.
6. RIGHTS OF THE COMPANY. If an Event of Default shall occur and be
continuing and the Company shall give notice of its intent to exercise such
rights to the Executive the Company shall have the right to receive any and all
cash dividends paid in respect of the Pledged Stock and make application thereof
to the Obligations in such order as the Company may determine.
7. REMEDIES. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Company's election, the Company may apply all or
any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the Company may elect.
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(b) If an Event of Default shall have occurred and be continuing,
the Company may exercise, in addition to all other rights and remedies granted
in this Agreement and in any other instrument or agreement securing, evidencing
or relating to the obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the Company, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Executive or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or office of Company or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Company shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in the
Executive, which right or equity is hereby waived or released. The Company shall
apply any Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Company hereunder,
including, without limitation, reasonable attorneys' fees and disbursements of
counsel to the Company, to the payment in whole or in part of the Obligations,
in such order as the Company may elect, and only after such application and
after the payment by the Company of any other amount required by any provision
of law, including, without limitation, Section 9-504(l)(c) of the Code, need the
Company account for the surplus, if any, to the Executive. To the extent
permitted by applicable law, the Executive waives all claims, damages and
demands it may acquire against the Company arising out of the exercise by it of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. The
Executive shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by the Company to collect such
deficiency.
8. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of the
Code, the Executive authorizes the Company to file financing statements with
respect
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to the Collateral without the signature of the Executive in such form and in
such filing offices as the Company reasonably determines appropriate to perfect
the security interests of the Company under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
9. NOTICES. All notices, requests and demands to or upon the Company or
the Executive to be effective shall be in writing (or by telex, facsimile or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (1) when delivered by hand or (2) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (3) if by
telex, facsimile or similar electronic transfer, when sent and receipt has been
confirmed, addressed to the Company or the Executive at its address or
transmission number for notices provided on the signature page hereto. The
Company and the Executive may change their addresses and transmission numbers
for notices by notice in the manner provided in this Section 9.
10. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None of the
terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Executive and
the Company, PROVIDED that any provision of this Agreement may be waived by the
Company in a letter or agreement executed by the Company or by telex or
facsimile transmission from the Company.
(b) The Company shall not by any act (except by a written instrument
pursuant to paragraph 11(a) hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default ot Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of the
Company, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Company of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Company would otherwise have on any future occasion.
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(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
12. SECTION HEADINGS. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of the Executive and shall inure to the benefit of the
Company and their successors and assigns.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
Spouse: /s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
Address for Notices:
00000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Fax: (____) ____-______
Accepted this 21st day of February, 1997
DOMAIN ENERGY CORPORATION
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx
Vice President and Chief Financial Officer
Address for Notice:
Domain Energy Corporation
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
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SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
1. Stock Certificate No. 0002, representing 237.9868 shares of Common Stock,
par value $.01 per share, of Domain Energy Corporation.
