EXHIBIT 10.375
SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of September 14, 2001, between
BLACK WARRIOR WIRELINE CORP., a Delaware corporation (the "Grantor") and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, individually and in its
capacity as Agent for Lenders.
W I T N E S S T H:
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WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof by and among Grantor, the other Credit Parties signatory
thereto, Agent and Lenders (including all annexes, exhibits and schedules
thereto, as from time to time amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), Lenders have agreed to make the Loans on
behalf of Grantor;
WHEREAS, in order to induce Agent and Lenders to enter into
the Credit Agreement and other Loan Documents and to induce Lenders to make the
Loans as provided for in the Credit Agreement, Grantor has agreed to grant a
continuing Lien on the Collateral (as hereinafter defined) to secure the
Obligations;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS.
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(a) All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement or in Annex A
thereto. All other terms contained in this Security Agreement, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein.
(b) "Uniform Commercial Code jurisdiction" means any
jurisdiction that has adopted all or substantially all of Article 9 as contained
in the 2000 Official Text of the Uniform Commercial Code, as recommended by the
National Conference of Commissioners on Uniform State Laws and the American Law
Institute, together with any subsequent amendments or modifications to the
Official Text.
2. GRANT OF LIEN.
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(a) To secure the prompt and complete payment, performance and
observance of all of the Obligations, Grantor hereby grants, assigns, conveys,
mortgages, pledges, hypothecates and transfers to Agent, for itself and the
benefit of Lenders, a Lien upon all of its
right, title and interest in, to and under all personal property and other
assets, whether now owned by or owing to, or hereafter acquired by or arising in
favor of Grantor (including under any trade names, styles or derivations
thereof), and whether owned or consigned by or to, or leased from or to,
Grantor, and regardless of where located (all of which being hereinafter
collectively referred to as the "Collateral"), including:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all General Intangibles (including payment
intangibles and Software);
(v) all Goods (including Inventory, Equipment and
Fixtures);
(vi) all Instruments;
(vii) all Investment Property;
(viii) all Deposit Accounts, of Grantor, including all
Blocked Accounts, Concentration Accounts, Disbursement Accounts, and
all other bank accounts and all deposits therein;
(ix) all money, cash or cash equivalents of Grantor;
(x) all Supporting Obligations and Letter-of-Credit
Rights of Grantor;
(xi) to the extent not otherwise included, all Proceeds,
tort claims, insurance claims and other rights to payments not
otherwise included in the foregoing and products of the foregoing and
all accessions to, substitutions and replacements for, and rents and
profits of, each of the foregoing.
(b) In addition, to secure the prompt and complete payment,
performance and observance of the Obligations and in order to induce Agent and
Lenders as aforesaid, Grantor hereby grants to Agent, for itself and the benefit
of Lenders, a right of setoff against the property of Grantor held by Agent or
any Lender, consisting of property described above in Section 2(a) now or
hereafter in the possession or custody of or in transit to Agent or any Lender,
for any purpose, including safekeeping, collection or pledge, for the account of
Grantor, or as to which Grantor may have any right or power.
3. AGENT'S AND LENDERS' RIGHTS: LIMITATIONS ON AGENT'S AND
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LENDERS' OBLIGATIONS.
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(a) It is expressly agreed by Grantor that, anything herein to
the contrary notwithstanding, Grantor shall remain liable under each of its
Contracts and each of its Licenses
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder. Neither Agent nor any Lender shall have any
obligation or liability under any Contract or License by reason of or arising
out of this Security Agreement or the granting herein of a Lien thereon or the
receipt by Agent or any Lender of any payment relating to any Contract or
License pursuant hereto. Neither Agent nor any Lender shall be required or
obligated in any manner to perform or fulfill any of the obligations of Grantor
under or pursuant to any Contract or License, or to make any payment, or to make
any inquiry as to the nature or the sufficiency of any payment received by it or
the sufficiency of any performance by any party under any Contract or License,
or to present or file any claims, or to take any action to collect or enforce
any performance or the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time or times.
(b) Agent may at any time after an Event of Default has
occurred and be continuing (or if any rights of set-off (other than set-offs
against an Account arising under the Contract giving rise to the same Account)
or contra accounts may be asserted with respect to the following), without prior
notice to Grantor, notify Account Debtors and other Persons obligated on the
Collateral that Agent has a security interest therein, and that payments shall
be made directly to Agent. Upon the request of Agent, Grantor shall so notify
Account Debtors and other Persons obligated on Collateral. Once any such notice
has been given to any Account Debtor or other Person obligated on the
Collateral, Grantor shall not give any contrary instructions to such Account
Debtor or other Person without Agent's prior written consent.
(c) Agent may at any time in Agent's own name, in the name of
a nominee of Agent or in the name of Grantor communicate (by mail, telephone,
facsimile or otherwise) with Account Debtors, parties to Contracts and obligors
in respect of Instruments to verify with such Persons, to Agent's satisfaction,
the existence, amount terms of, and any other matter relating to, Accounts,
payment intangibles, Instruments or Chattel Paper. If a Default or Event of
Default shall have occurred and be continuing, Grantor, at its own expense,
shall cause the independent certified public accountants then engaged by Grantor
to prepare and deliver to Agent and each Lender at any time and from time to
time promptly upon Agent's request the following reports with respect to
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts as Agent may
request. Grantor, at its own expense, shall deliver to Agent the results of each
physical verification, if any, which Grantor may in its discretion have made, or
caused any other Person to have made on its behalf, of all or any portion of its
Inventory.
4. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants that:
(a) Grantor has rights in and the power to transfer each item
of the Collateral upon which it purports to xxxxx x Xxxx hereunder free and
clear of any and all Liens other than Permitted Encumbrances.
(b) No effective security agreement, financing statement,
equivalent security or Lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public office, except
such as may have been filed (i) by Grantor in favor of Agent pursuant to this
Security Agreement or the other Loan Documents, or (ii) in connection with any
other Permitted Encumbrances.
(c) This Security Agreement is effective to create a valid and
continuing Lien on and, upon the filing of the appropriate financing statements
listed on Schedule I hereto, a perfected Lien in favor of Agent, for itself and
the benefit of Lenders, on the Collateral with respect to which a Lien may be
perfected by filing pursuant to the Code. Such Lien is prior to all other Liens,
except Permitted Encumbrances that would be prior to Liens in favor of Agent for
the benefit of Agent and Lenders as a matter of law, and is enforceable as such
as against any and all creditors of and purchasers from Grantor (other than
purchasers and lessees of Inventory in the ordinary course of business). All
action by Grantor necessary or desirable to protect and perfect such Lien on
each item of the Collateral has been duly taken.
(d) Schedule II hereto lists all Instruments, Letter of Credit
Rights and Chattel Paper of Grantor. All action by Grantor necessary or
desirable to protect and perfect the Lien of Agent on each item set forth on
Schedule II (including the delivery of all originals thereof to Agent and the
legending of all Chattel Paper as required by Section 5(b) hereof) has been duly
taken. The Lien of Agent, for the benefit of Agent and Lenders, on the
Collateral listed on Schedule II hereto is prior to all other Liens, except
Permitted Encumbrances that would be prior to the Liens in favor of Agent as a
matter of law, and is enforceable as such against any and all creditors of and
purchasers from Grantor.
(e) Grantor's name as it appears in official filings in the
state of its incorporation or other organization, the type of entity of Grantor
(including corporation, partnership, limited partnership or limited liability
company), organizational identification number issued by Grantor's state of
incorporation or organization or a statement that no such number has been
issued, Grantor's state of organization or incorporation, the location of
Grantor's chief executive office, principal place of business, offices, all
warehouses and premises where Collateral is stored or located, and the locations
of its books and records concerning the Collateral are set forth on Schedule III
hereto. Grantor has only one state of incorporation or organization.
(f) With respect to the Accounts, except as specifically
disclosed in the most recent Collateral Report delivered to Agent (i) they
represent bona fide sales of Inventory or rendering of services to Account
Debtors in the ordinary course of Grantor's business and are not evidenced by a
judgment, Instrument or Chattel Paper; (ii) there are no setoffs, claims or
disputes existing or asserted with respect thereto and Grantor has not made any
agreement with any Account Debtor for any extension of time for the payment
thereof, any compromise or settlement for less than the full amount thereof, any
release of any Account Debtor from liability therefor, or any deduction
therefrom except a discount or allowance allowed by Grantor in the ordinary
course of its business for prompt payment and disclosed to Agent; (iii) to
Grantor's knowledge, there are no facts, events or occurrences which in any way
impair the validity or enforceability thereof or could reasonably be expected to
reduce the amount payable thereunder as shown on Grantor's books and records and
any invoices, statements and Collateral Reports delivered to
Agent and Lenders with respect thereto; (iv) Grantor has not received any notice
of proceedings or actions which are threatened or pending against any Account
Debtor which might result in any adverse change in such Account Debtor's
financial condition; and (v) Grantor has no knowledge that any Account Debtor is
unable generally to pay its debts as they become due. Further with respect to
the Accounts (x) the amounts shown on all invoices, statements and Collateral
Reports which may be delivered to the Agent with respect thereto are actually
and absolutely owing to Grantor as indicated thereon and are not in any way
contingent; (y) no payments have been or shall be made thereon except payments
immediately delivered to the applicable Blocked Accounts or the Agent as
required pursuant to the terms of Annex B to the Credit Agreement; and (z) to
Grantor's knowledge, all Account Debtors have the capacity to contract.
(g) With respect to any Inventory scheduled or listed on the
most recent Collateral Report delivered to Agent pursuant to the terms of this
Security Agreement or the Credit Agreement, (i) such Inventory is located at one
of Grantor's locations set forth on Schedule III, hereto, (ii) no Inventory is
now, or shall at any time or times hereafter be stored at any other location
without Agent's prior consent, and if Agent gives such consent, Grantor will
concurrently therewith obtain, to the extent required by the Credit Agreement,
bailee, landlord and mortgagee agreements, (iii) Grantor has good, indefeasible
and merchantable title to such Inventory and such Inventory is not subject to
any Lien or security interest or document whatsoever except for the Lien granted
to Agent, for the benefit of Agent and Lenders, and except for Permitted
Encumbrances, (iv) except as specifically disclosed in the most recent
Collateral Report delivered to Agent, such Inventory is Eligible Inventory of
good and merchantable quality, free from any defects, (v) such Inventory is not
subject to any licensing, patent, royalty, trademark, trade name or copyright
agreements with any third parties which would require any consent of any third
party upon sale or disposition of that Inventory or the payment of any monies to
any third party upon such sale or other disposition, and (vi) the completion of
manufacture, sale or other disposition of such Inventory by Agent following an
Event of Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which Grantor
is a party or to which such property is subject.
(h) Grantor has no interest in, or title to, any Patent,
Trademark or Copyright except as set forth in Schedule IV hereto. This Security
Agreement is effective to create a valid and continuing Lien on and, upon filing
of the Copyright Security Agreements with the United States Copyright Office and
filing of the Patent Security Agreements and the Trademark Security Agreements
with the United States Patent and Trademark Office, perfected Liens in favor of
Agent on Grantor's Patents, Trademarks and Copyrights and such perfected Liens
are enforceable as such as against any and all creditors of and purchasers from
Grantor. Upon filing of the Copyright Security Agreements with the United States
Copyright Office and filing of the Patent Security Agreements and the Trademark
Security Agreements with the United States Patent and Trademark Office and the
filing of appropriate financing statements listed on Schedule I hereto, all
action necessary or desirable to protect and perfect Agent's Lien on Grantor's
Patents, Trademarks or Copyrights shall have been duly taken.
(i) All motor vehicles owned by Grantor are listed on Schedule
V hereto, by model, model year and vehicle identification number ("VIN").
Grantor shall deliver to Agent motor vehicle title certificates for all motor
vehicles from time to time owned by it and shall cause those title certificates
to be filed (with Agent's lien noted thereon) in the appropriate state motor
vehicle filing office; provided, that Grantor shall not be required to deliver
motor vehicle title certificates to the Agent for motor vehicles having a Forced
Liquidation Value of less than $500 individually so long as the aggregate Forced
Liquidation Value of all such motor vehicles is less than $100,000.
5. COVENANTS. Grantor covenants and agrees with Agent, for the
benefit of Agent and Lenders, that from and after the date of this Security
Agreement and until the Termination Date:
(a) Further Assurances: Pledge of Instruments; Chattel Paper.
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(i) At any time and from time to time, upon the written
request of Agent and at the sole expense of Grantor, Grantor shall
promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as Agent may
deem desirable to obtain the full benefits of this Security Agreement
and of the rights and powers herein granted, including (A) using its
best efforts to secure all consents and approvals necessary or
appropriate for the assignment to or for the benefit of Agent of any
License or Contract held by Grantor and to enforce the security
interests granted hereunder; and (B) filing any financing or
continuation statements under the Code with respect to the Liens
granted hereunder or under any other Loan Document as to those
jurisdictions that are not Uniform Commercial Code jurisdictions.
(ii) Unless Agent shall otherwise consent in writing
(which consent may be revoked), Grantor shall deliver to Agent all
Collateral consisting of negotiable Documents, certificated
securities, Chattel Paper and Instruments (in each case, accompanied
by stock powers, allonges or other instruments of transfer executed in
blank) promptly after Grantor receives the same.
(iii) Grantor shall, in accordance with the terms of the
Credit Agreement, obtain or use its best efforts to obtain waivers or
subordinations of Liens from landlords and mortgagees, and Grantor
shall in all instances obtain signed acknowledgements of Agent's Liens
from bailees having possession of Grantor's Goods that they hold for
the benefit of Agent.
(iv) If required by the terms of the Credit Agreement and
not waived by Agent in writing (which waiver may be revoked), Grantor
shall obtain authenticated Control Letters from each issuer of
uncertificated securities, securities intermediary, or commodities
intermediary issuing or holding any financial assets or commodities to
or for Grantor.
(v) In accordance with Annex B to the Credit Agreement,
Grantor shall obtain a blocked account, lockbox or similar agreement
with each bank or financial institution holding a Deposit Account for
Grantor.
(vi) If Grantor becomes the beneficiary of a letter of
credit, Grantor shall promptly, and in any event within two (2)
Business Days after becoming a beneficiary, notify Agent thereof and
enter into a tri-party agreement with Agent and the issuer and/or
confirmation bank with respect to Letter-of-Credit Rights assigning
such Letter-of-Credit Rights to Agent and directing all payments
thereunder to the Collection Account, all in form and substance
reasonably satisfactory to Agent.
(vii) Grantor shall take all steps necessary to grant the
Agent control of all electronic chattel paper in accordance with the
Code and all "transferable records" as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global
and National Commerce Act.
(viii) Grantor hereby irrevocably authorizes the Agent at
any time and from time to time to file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing statements
and amendments thereto that (a) indicate the Collateral (i) as all
assets of Grantor or words of similar effect, regardless of whether
any particular asset comprised in the Collateral falls within the
scope of Article 9 of the Code or such jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) contain
any other information required by part 5 of Article 9 of the Code for
the sufficiency or filing office acceptance of any financing statement
or amendment, including (i) whether Grantor is an organization, the
type of organization and any organization identification number issued
to Grantor, and (ii) in the case of a financing statement filed as a
fixture filing or indicating Collateral as as-extracted collateral or
timber to be cut, a sufficient description of real property to which
the Collateral relates. Grantor agrees to furnish any such information
to the Agent promptly upon request. Grantor also ratifies its
authorization for the Agent to have filed in any Uniform Commercial
Code jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.
(ix) Grantor shall promptly, and in any event within two
(2) Business Days after the same is acquired by it, notify Agent of
any commercial tort claim (as defined in the Code) acquired by it and
unless otherwise consented by Agent, Grantor shall enter into a
supplement to this Security Agreement, granting to Agent a Lien in
such commercial tort claim.
(x) If at any time the value of Grantor's Collateral
located at the leased location commonly known as the "Riverton
Wireline Shop" exceeds $1,000,000, Grantor shall, in accordance with
the terms of the Credit Agreement, obtain a waiver or subordination of
Liens from the landlord of such leased location in form and substance
acceptable to the Agent in its sole discretion.
(b) Maintenance of Records. Grantor shall keep and maintain,
at its own cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments received and any and all
credits granted with respect to the Collateral and all other dealings with the
Collateral. Grantor shall xxxx its books and records pertaining to the
Collateral to evidence this Security Agreement and the Liens granted hereby. If
Grantor retains possession of any Chattel Paper or Instruments with Agent's
consent, such Chattel Paper and Instruments shall be marked with the following
legend: "This writing and the obligations evidenced or secured hereby are
subject to the security interest of General Electric Capital Corporation, as
Agent, for the benefit of Agent and certain Lenders."
(c) Covenants Regarding Patent, Trademark and Copyright
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Collateral.
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(i) Grantor shall notify Agent immediately if it knows
or has reason to know that any application or registration relating to
any Patent, Trademark or Copyright (now or hereafter existing) may
become abandoned or dedicated, or of any adverse determination or
development (including the institution of, or any such determination
or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court)
regarding Grantor's ownership of any Patent, Trademark or Copyright,
its right to register the same, or to keep and maintain the same.
(ii) In no event shall Grantor, either itself or through
any agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency without giving Agent prior written
notice thereof, and, upon request of Agent, Grantor shall execute and
deliver any and all Patent Security Agreements, Copyright Security
Agreements or Trademark Security Agreements as Agent may request to
evidence Agent's Lien on such Patent, Trademark or Copyright, and the
General Intangibles of Grantor relating thereto or represented
thereby.
(iii) Grantor shall take all actions necessary or
requested by Agent to maintain and pursue each application, to obtain
the relevant registration and to maintain the registration of each of
the Patents, Trademarks and Copyrights (now or hereafter existing),
including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and
cancellation proceedings.
(iv) In the event that any of the Patent, Trademark or
Copyright Collateral is infringed upon, or misappropriated or diluted
by a third party, Grantor shall promptly notify Agent. Grantor shall,
unless Grantor shall reasonably determine that such Patent, Trademark
or Copyright Collateral is in no way material to the conduct of its
business or operations, promptly xxx for infringement,
misappropriation or dilution and to recover any and all damages for
such infringement, misappropriation or dilution, and shall take such
other actions as Agent shall deem appropriate under the circumstances
to protect such Patent, Trademark or Copyright Collateral.
(d) Indemnification. In any suit, proceeding or action brought
by Agent or any Lender relating to any Collateral for any sum owing with respect
thereto or to enforce any rights or claims with respect thereto, Grantor will
save, indemnify and keep Agent and Lenders harmless from and against all expense
(including reasonable attorneys' fees and expenses), loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction of
liability whatsoever of the Account Debtor or other Person obligated on the
Collateral, arising out of a breach by Grantor of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to, or in favor of, such obligor or its successors from Grantor, except in the
case of Agent or any Lender, to the extent such expense, loss, or damage is
attributable solely to the gross negligence or willful misconduct of Agent or
such Lender as finally determined by a court of competent jurisdiction. All such
obligations of Grantor shall be and remain enforceable against and only against
Grantor and shall not be enforceable against Agent or any Lender.
(e) Compliance with Terms of Accounts, etc. In all material
respects, Grantor will perform and comply with all obligations in respect of the
Collateral and all other agreements to which it is a party or by which it is
bound relating to the Collateral.
(f) Limitation on Liens on Collateral. Grantor will not
create, permit or suffer to exist, and Grantor will defend the Collateral
against, and take such other action as is necessary to remove, any Lien on the
Collateral except Permitted Encumbrances, and will defend the right, title and
interest of Agent and Lenders in and to any of Grantor's rights under the
Collateral against the claims and demands of all Persons whomsoever.
(g) Limitations on Disposition. Grantor will not sell,
license, lease, transfer or otherwise dispose of any of the Collateral, or
attempt or contract to do so except as permitted by the Credit Agreement.
(h) Further Identification of Collateral. Grantor will, if so
requested by Agent, furnish to Agent, as often as Agent requests, statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in such detail as Agent may specify.
(i) Notices. Grantor will advise Agent promptly, in reasonable
detail, (i) of any Lien (other than Permitted Encumbrances) or claim made or
asserted against any of the Collateral, and (ii) of the occurrence of any other
event which would have a material adverse effect on the aggregate value of the
Collateral or on the Liens created hereunder or under any other Loan Document.
(j) Good Standing Certificates. Not less frequently than once
during each calendar quarter, Grantor shall, unless Agent shall otherwise
consent, provide to Agent a certificate of good standing from its state of
incorporation or organization.
(k) No Reincorporation. Without limiting the prohibitions on
mergers involving Grantor contained in the Credit Agreement, Grantor shall not
reincorporate or reorganize itself under the laws of any jurisdiction other than
the jurisdiction in which it is incorporated or organized as of the date hereof
without the prior written consent of Agent.
(l) Terminations; Amendments Not Authorized. Grantor
acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
without the prior written consent of Agent and agrees that it will not do so
without the prior written consent of Agent, subject to Grantor's rights under
Section 9-509(d)(2) of the Code.
(m) Authorized Terminations. Agent will promptly deliver to
Grantor for filing or authorize Grantor to prepare and file termination
statements and releases in accordance with Section 11.2(e) of the Credit
Agreement.
6. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
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On the Closing Date Grantor shall execute and deliver to Agent
a power of attorney (the "Power of Attorney") substantially in the form attached
hereto as Exhibit A. The power of attorney granted pursuant to the Power of
Attorney is a power coupled with an interest and shall be irrevocable until the
Termination Date. The powers conferred on Agent, for the benefit of Agent and
Lenders, under the Power of Attorney are solely to protect Agent's interests
(for the benefit of Agent and Lenders) in the Collateral and shall not impose
any duty upon Agent or any Lender to exercise any such powers. Agent agrees that
(a) except for the powers granted in clause (h) of the Power of Attorney, it
shall not exercise any power or authority granted under the Power of Attorney
unless an Event of Default has occurred and is continuing, and (b) Agent shall
account for any moneys received by Agent in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney provided that none
of Agent or any Lender shall have any duty as to any Collateral, and Agent and
Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers. NONE OF AGENT, LENDERS OR THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES
SHALL BE RESPONSIBLE TO GRANTOR FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF
ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR
OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
7. REMEDIES: RIGHTS UPON DEFAULT.
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(a) In addition to all other rights and remedies granted to it
under this Security Agreement, the Credit Agreement, the other Loan Documents
and under any other instrument or agreement securing, evidencing or relating to
any of the Obligations, if any Event of Default shall have occurred and be
continuing, Agent may exercise all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, Grantor expressly
agrees that in any such event Agent, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified below
of time and place of public or private sale)
to or upon Grantor or any other Person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent
permitted by the Code and other applicable law), may forthwith enter upon the
premises of Grantor where any Collateral is located through self-help, without
judicial process, without first obtaining a final judgment or giving Grantor or
any other Person notice and opportunity for a hearing on Agent's claim or action
and may collect, receive, assemble, process, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, license, assign,
give an option or options to purchase, or sell or otherwise dispose of and
deliver said Collateral (or contract to do so), or any part thereof, in one or
more parcels at a public or private sale or sales, at any exchange at such
prices as it may deem acceptable, for cash or on credit or for future delivery
without assumption of any credit risk. Agent or any Lender 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 for the benefit of Agent and Lenders,
the whole or any part of said Collateral so sold, free of any right or equity of
redemption, which equity of redemption Grantor hereby releases. Such sales may
be adjourned and continued from time to time with or without notice. Agent shall
have the right to conduct such sales on Grantor's premises or elsewhere and
shall have the right to use Grantor's premises without charge for such time or
times as Agent deems necessary or advisable.
If any Event of Default shall have occurred and be continued,
Grantor further agrees, at Agent's request, to assemble the Collateral and make
it available to Agent at a place or places designated by Agent which are
reasonably convenient to Agent and Grantor, whether at Grantor's premises or
elsewhere. Until Agent is able to effect a sale, lease, or other disposition of
Collateral, Agent shall have the right to hold or use Collateral, or any part
thereof, to the extent that it deems appropriate for the purpose of preserving
Collateral or its value or for any other purpose deemed appropriate by Agent.
Agent shall have no obligation to Grantor to maintain or preserve the rights of
Grantor as against third parties with respect to Collateral while Collateral is
in the possession of Agent. Agent may, if it so elects, seek the appointment of
a receiver or keeper to take possession of Collateral and to enforce any of
Agent's remedies (for the benefit of Agent and Lenders), with respect to such
appointment without prior notice or hearing as to such appointment. Agent shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale to the Obligations as provided in the Credit Agreement, and
only after so paying over such net proceeds, and after the payment by Agent of
any other amount required by any provision of law, need Agent account for the
surplus, if any, to Grantor. To the maximum extent permitted by applicable law,
Grantor waives all claims, damages, and demands against Agent or any Lender
arising out of the repossession, retention or sale of the Collateral except such
as arise solely out of the gross negligence or willful misconduct of Agent or
such Lender as finally determined by a court of competent jurisdiction. Grantor
agrees that ten (10) days prior notice by Agent of the time and place of any
public sale or of the time after which a private sale may take place is
reasonable notification of such matters. Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay all Obligations, including any attorneys' fees and other
expenses incurred by Agent or any Lender to collect such deficiency.
(b) Except as otherwise specifically provided herein, Grantor
hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.
(c) To the extent that applicable law imposes duties on the
Agent to exercise remedies in a commercially reasonable manner, Grantor
acknowledges and agrees that it is not commercially unreasonable for the Agent
(i) to fail to incur expenses reasonably deemed significant by the Agent to
prepare Collateral for disposition or otherwise to complete raw material or work
in process into finished goods or other finished products for disposition, (ii)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (iv) to exercise
collection remedies against Account Debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other Persons, whether or not in the
same business as Grantor, for expressions of interest in acquiring all or any
portion of such Collateral, (vii) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of
a specialized nature, (viii) to dispose of Collateral by utilizing internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than
retail markets, (x) to disclaim disposition warranties, such as title,
possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements
to insure the Agent against risks of loss, collection or disposition of
Collateral or to provide to the Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the
Agent, to obtain the services of other brokers, investment bankers, consultants
and other professionals to assist the Agent in the collection or disposition of
any of the Collateral. Grantor acknowledges that the purpose of this Section
7(c) is to provide non-exhaustive indications of what actions or omissions by
the Agent would not be commercially unreasonable in the Agent's exercise of
remedies against the Collateral and that other actions or omissions by the Agent
shall not be deemed commercially unreasonable solely on account of not being
indicated in this Section 7(c). Without limitation upon the foregoing, nothing
contained in this Section 7(c) shall be construed to grant any rights to Grantor
or to impose any duties on Agent that would not have been granted or imposed by
this Security Agreement or by applicable law in the absence of this Section
7(c).
(d) Neither the Agent nor the Lenders shall be required to
make any demand upon, or pursue or exhaust any of their rights or remedies
against, Grantor, any other obligor, guarantor, pledgor or any other Person with
respect to the payment of the Obligations or to pursue or exhaust any of their
rights or remedies with respect to any Collateral therefor or any direct or
indirect guarantee thereof. Neither the Agent nor the Lenders shall be required
to marshal the Collateral or any guarantee of the Obligations or to resort to
the Collateral or any such guarantee in any particular order, and all of its and
their rights hereunder or under any other Loan Document shall be cumulative. To
the extent it may lawfully do so, Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against the Agent or any Lender, any valuation, stay,
appraisement, extension, redemption or similar laws and any and all rights or
defenses it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under the
judgment, order or decree of any court, or privately under the power of sale
conferred by this Security Agreement, or otherwise.
8. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY COLLATERAL.
For the purpose of enabling Agent to exercise rights and remedies under Section
7 hereof (including, without limiting the terms of Section 7 hereof, in order to
take possession of, hold, preserve, process, assemble, prepare for sale, market
for sale, sell or otherwise dispose of Collateral) at such time as Agent shall
be lawfully entitled to exercise such rights and remedies, Grantor hereby grants
to Agent, for the benefit of Agent and Lenders, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to
Grantor) to use, license or sublicense any Intellectual Property now owned or
hereafter acquired by Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof.
9. LIMITATION ON AGENT'S AND LENDERS' DUTY IN RESPECT OF
COLLATERAL. Agent and each Lender shall use reasonable care with respect to the
Collateral in its possession or under its control. Neither Agent nor any Lender
shall have any other duty as to any Collateral in its possession or control or
in the possession or control of any agent or nominee of Agent or such Lender, or
any income thereon or as to the preservation of rights against prior parties or
any other rights pertaining thereto.
10. REINSTATEMENT. This Security Agreement shall remain in
full force and effect and continue to be effective should any petition be filed
by or against Grantor for liquidation or reorganization, should Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
11. NOTICES. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give and serve upon any other party any communication with respect to this
Security Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be given in the
manner, and deemed received, as provided for in the Credit Agreement.
12. SEVERABILITY. Whenever possible, each provision of this
Security Agreement shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Credit Agreement and the other Loan Documents which, taken together,
set forth the complete understanding and agreement of Agent, Lenders and Grantor
with respect to the matters referred to herein and therein.
13. NO WAIVER; CUMULATIVE REMEDIES. Neither Agent nor any
Lender shall by any act, delay, omission or otherwise be deemed to have waived
any of its rights or remedies hereunder, and no waiver shall be valid unless in
writing, signed by Agent and then only to the extent therein set forth. A waiver
by Agent of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Agent would otherwise have had
on any future occasion. No failure to exercise nor any delay in exercising on
the part of Agent or any Lender, any right, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by law.
None of the terms or provisions of this Security Agreement may be waived,
altered, modified or amended except by an instrument in writing, duly executed
by Agent and Grantor.
14. LIMITATION BY LAW. All rights, remedies and powers
provided in this Security 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 Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable, in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
15. TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section
10 hereof, this Security Agreement shall terminate upon the Termination Date.
16. SUCCESSORS AND ASSIGNS. This Security Agreement and all
obligations of Grantor hereunder shall be binding upon the successors and
assigns of Grantor (including any debtor-in-possession on behalf of Grantor) and
shall, together with the rights and remedies of Agent, for the benefit of Agent
and Lenders, hereunder, inure to the benefit of Agent and Lenders, all future
holders of any instrument evidencing any of the Obligations and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or instrument
evidencing the Obligations or any portion thereof or interest therein shall in
any manner impair the Lien granted to Agent, for the benefit of Agent and
Lenders, hereunder. Grantor may not assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Security Agreement.
17. COUNTERPARTS. This Security Agreement may be authenticated
in any number of separate counterparts, each of which shall collectively and
separately constitute one agreement. This Security Agreement may be
authenticated by manual signature, facsimile or, if approved in writing by
Agent, electronic means, all of which shall be equally valid.
18. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. GRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK, SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN GRANTOR, AGENT
AND LENDERS PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND GRANTOR
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK COUNTY, AND, PROVIDED, FURTHER, NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT. GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE
TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO GRANTOR AT THE ADDRESS SET FORTH ON
ANNEX I TO THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
19. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, LENDERS,
AND GRANTOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.
20. SECTION TITLES. The Section titles contained in this
Security Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
21. NO STRICT CONSTRUCTION. The parties hereto have
participated jointly in the negotiation and drafting of this Security Agreement.
In the event an ambiguity or question of intent or interpretation arises, this
Security Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Security
Agreement.
22. ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Security Agreement and,
specifically, the provisions of Section 18 and Section 19, with its counsel.
23. BENEFIT OF LENDERS. All Liens granted or contemplated
hereby shall be for the benefit of Agent, individually, and Lenders, and all
proceeds or payments realized from Collateral in accordance herewith shall be
applied to the Obligations in accordance with the terms of the Credit Agreement.
24. PRIORITY OF PURCHASE MONEY LIENS. Agent acknowledges that
Liens in Equipment arising in favor of third parties after the Closing Date (i)
by conditional sale or other title retention agreements (including Capital
Leases), or (ii) in connection with purchase money Indebtedness, in each case to
the extent permitted under the Credit Agreement, shall have priority over the
Liens in such Equipment granted hereunder to Agent, for itself and the benefit
of the Lenders.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
BLACK WARRIOR WIRELINE CORP.
By:
-------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, AS AGENT
By:
-------------------------
Xxxx Xxxxxx
Duly Authorized Signatory
SCHEDULE I
----------
to
SECURITY AGREEMENT
------------------
FILING JURISDICTIONS
--------------------
1. Alabama, Secretary of State
2. Delaware, Secretary of State
3. Louisiana, Iberia Parish
4. Mississippi , Secretary of State
5. New Mexico, Secretary of State
6. Texas, Secretary of State
7. Wyoming, Secretary of State
SCHEDULE II
-----------
to
SECURITY AGREEMENT
------------------
INSTRUMENTS
-----------
CHATTEL PAPER
-------------
AND
---
LETTER OF CREDIT RIGHTS
-----------------------
None
SCHEDULE III
------------
to
SECURITY AGREEMENT
------------------
SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
--------------------------------------------
AND RECORDS CONCERNING GRANTOR'S COLLATERAL
-------------------------------------------
I. Grantor's official name: Black Warrior Wireline Corp.
II. Type of entity (e.g. corporation, partnership, business trust, limited
partnership, limited liability company): corporation
III. Organizational identification number issued by Grantor's state of
incorporation or organization or a statement that no such number has
been issued: 2136338
IV. State or Incorporation or Organization of Grantor: Delaware
V. Chief Executive Office and principal place of business of Grantor:
0000 Xxxxxxx 00 Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
VI. Corporate Offices of Grantor:
0000 Xxxxxxx 00 Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
VII. Warehouses: None
VIII. Other Premises at which Collateral is Stored or Located: See
Schedule 3.2 attached
IX. Locations of Records Concerning Collateral: See Schedule 3.2 attached
SCHEDULE IV
-----------
to
SECURITY AGREEMENT
------------------
PATENTS, TRADEMARKS AND COPYRIGHTS
----------------------------------
BLACK WARRIOR WIRELINE CORP.
INTELLECTUAL PROPERTY
SUMMARY
---------------------------------------------------------------------------------------------------------
TRADEMARK OWNER SERIAL/ FILING/ STATUS
REGISTRATION REGISTRATION
NO. DATE
---------------------------------------------------------------------------------------------------------
Black Warrior Xxxxx Wireline 91030406 03/04/91 Registered
Wireline Corp. Co., Inc.
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
PATENT OWNER SERIAL/ FILING/ STATUS
PATENT NO. ISSUE DATE
---------------------------------------------------------------------------------------------------------
Apparatus for arcuate Black Warrior 5,368,109 11/29/94 Issued
drilling Wireline Corp.
(Assignee: Coast
Business Credit -
Security Interest)
---------------------------------------------------------------------------------------------------------
Adjustable bent sub Canadian 5,125,463 06/30/92 Issued
Downhole Drill
Systems, Inc.
(Black Warrior
Wireline Corp.
noted as Assignee
in Fleet Capital
Corporation
Release)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Directional drilling Black Warrior 4,185,704 01/29/80 Issued
apparatus Wireline Corp.
(Note: No record of
assignment from
Becfield Horizontal
Drilling Services to
Phoenix Drilling
Services)
---------------------------------------------------------------------------------------------------------
Rotor-to-rotor Black Warrior 5,588,818 12/31/96 Issued
coupling Wireline Corp.
(Assignee: Coast
Business Credit -
Security Interest)
---------------------------------------------------------------------------------------------------------
Steering sub for Black Warrior 5,396,966 03/14/95 Issued
flexible drilling Wireline Corp.
(Assignee: Coast
Business Credit -
Security Interest)
(Note: No record of
assignment from
Slimdril
International Inc. to
Phoenix Drilling
Services)
---------------------------------------------------------------------------------------------------------
Steering sub for Black Warrior 5,320,179 06/14/94 Issued
flexible drilling Wireline Corp.
(Assignee: Coast
Business Credit -
Security Interest)
---------------------------------------------------------------------------------------------------------
Tool for drilling Black Warrior 4,442,908 04/17/84 Issued
curved sections of Wireline Corp.
well holes (Assignee: Coast
Business Credit -
Security Interest)
---------------------------------------------------------------------------------------------------------
SCHEDULE V
----------
to
SECURITY AGREEMENT
------------------
Vehicles
--------
See Attached
EXHIBIT A
---------
POWER OF ATTORNEY
This Power of Attorney is executed and delivered by Black
Warrior Wireline Corp., a Delaware corporation ("Grantor") to General Electric
Capital Corporation, a Delaware corporation (hereinafter referred to as
"Attorney"), as Agent for the benefit of Agent and Lenders, under a Credit
Agreement and a Security Agreement, both dated as of September 14, 2001, and
other related documents (the "Loan Documents"). No person to whom this Power of
Attorney is presented, as authority for Attorney to take any action or actions
contemplated hereby, shall be required to inquire into or seek confirmation from
Grantor as to the authority of Attorney to take any action described below, or
as to the existence of or fulfillment of any condition to this Power of
Attorney, which is intended to grant to Attorney unconditionally the authority
to take and perform the actions contemplated herein, and Grantor irrevocable
waives any right to commence any suit or action, in law or equity, against any
person or entity which acts in reliance upon or acknowledges the authority
granted under this Power of Attorney. The power of attorney granted hereby is
coupled with an interest, and may not be revoked or canceled by Grantor without
Attorney' s written consent.
Grantor hereby irrevocably constitutes and appoints Attorney
(and all officers, employees or agents designated by Attorney), with full power
of substitution, as Grantor's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in the
name of Grantor or in its own name, from time to time in Attorney's discretion,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of the Loan Documents and, without limiting the generality of the
foregoing, Grantor hereby grants to Attorney the power and right, on behalf of
Grantor, without notice to or assent by Grantor, and at any time, to do the
following: (a) change the mailing address of Grantor, open a post office box on
behalf of Grantor, open mail for Grantor, and ask, demand, collect, give
acquittances and receipts for, take possession of, endorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, and notices in connection with any property
of Grantor; (b) effect any repairs to any asset of Grantor, or continue or
obtain any insurance and pay all or any part of the premiums therefor and costs
thereof, and make, settle and adjust all claims under such policies of
insurance, and make all determinations and decisions with respect to such
policies; (c) pay or discharge any taxes, liens, security interests, or other
encumbrances levied or placed on or threatened against Grantor or its property;
(d) defend any suit, action or proceeding brought against Grantor if Grantor
does not defend such suit, action or proceeding or if Attorney believes that
Grantor is not pursuing such defense in a manner that will maximize the recovery
to Attorney, and settle, compromise or adjust any suit, action, or proceeding
described above and, in connection therewith, give such discharges or releases
as Attorney may deem appropriate; (e) file or prosecute any claim, litigation,
suit or proceeding in any court of competent jurisdiction or before any
arbitrator, or take any other action otherwise deemed appropriate by Attorney
for the purpose of collecting any
and all such moneys due to Grantor whenever payable and to enforce any other
right in respect of Grantor's property; (f) cause the certified public
accountants then engaged by Grantor to prepare and deliver to Attorney at any
time and from time to time, promptly upon Attorney's request, the following
reports: (1) a reconciliation of all accounts, (2) an aging of all accounts, (3)
trial balances, (4) test verifications of such accounts as Attorney may request,
and (5) the results of each physical verification of inventory; (g) communicate
in its own name with any party to any Contract with regard to the assignment of
the right, title and interest of Grantor in and under the Contracts and other
matters relating thereto; (h) to file such financing statements with respect to
the Security Agreement, with or without Grantor's signature, or to file a
photocopy of the Security Agreement in substitution for a financing statement,
as the Agent may deem appropriate and to execute in Grantor's name such
financing statements and amendments thereto and continuation statements which
may require Grantor's signature; and (i) execute, in connection with any sale
provided for in any Loan Document, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral and to
otherwise direct such sale or resale, all as though Attorney were the absolute
owner of the property of Grantor for all purposes, and to do, at Attorney's
option and Grantor's expense, at any time or from time to time, all acts and
other things that Attorney reasonably deems necessary to perfect, preserve, or
realize upon Grantor's property or assets and Attorney's Liens thereon, all as
fully and effectively as Grantor might do. Grantor hereby ratifies, to the
extent permitted by law, all that said Attorney shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney is executed by
Grantor, and Grantor has caused its seal to be affixed pursuant to the authority
of its board of directors this ______ day of September, 2001.
BLACK WARRIOR WIRELINE CORP.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
NOTARY PUBLIC CERTIFICATE
On this _____ day of September, 2001, ________________ who is
personally known to me appeared before me in his/her capacity as the
______________ of Black Warrior Wireline Corp. ("Grantor") and executed on
behalf of Grantor the Power of Attorney in favor of General Electric Capital
Corporation to which this Certificate is attached.
------------------------------
Notary Public
