EXHIBIT 10.1 (a)
ITEM 1.(3)
SECURITY AGREEMENT FOR PLEDGE OF INSTRUMENTS
SECURITY AGREEMENT FOR PLEDGE OF INSTRUMENT
THIS SECURITY AGREENIENT FOR PLEDGE OF INSTRUMENT (hereafter the
"Agreement") is entered into effective as of the 12th day of August, 1996, by
XXXXX X. XXXXXX, XX. (hereafter referred to as the "Debtor"), an individual
residing in Xxxxxx County, Texas, in favor of PHOENIX RESOURCES TECHNOLOGIES,
INC. (hereafter referred to as the "Secured Party"), to wit:
WHEREAS, the Debtor is indebted to the Secured Parry in the amount of One
Million and NO/100 Dollars ($l,000,000.00) plus interest thereon pursuant to
that one Promissory Note (such note, together with any and all renewals,
extensions and/or rearrangements thereof is hereafter referred to as the "Note")
dated August 12, 1996, executed by the Debtor in connection with that one
certain Agreement for Purchase and Sale of Stock (the "Purchase Agreement")
between the Debtor and the Secured Parry dated August 12, 1996;
WHEREAS, the Debtor and the Secured Parry desire to have Debtor grant the
Secured Party a security interest in certain collateral as security for Debtor's
repayment of all Indebtedness to the Secured Party;
WHEREAS, the grant by Debtor to the Secured Parry of the security interests
in the collateral described below is a condition to the execution by the Secured
Parry of the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the panties hereto agree as follows.
1. Indebtedness Secured. The security interest granted hereby is to secure
the payment and performance of any and all indebtedness, obligations, and
liabilities incurred by the Debtor to the Secured Parry pursuant to the terms
and provisions of the Note (hereafter referred to as the "Indebtedness").
2. Security Interest. To secure the payment of the Indebtedness, the Debtor
hereby creates and grants to the Secured Parry a security interest in the
following collateral:
Renewal Promissory Note dated August 12, 1996 in the Original
Principal Amount of One Million and NO/100 Dollars ($1,O0O,OOO.OO)
from Southwest Holdings, Inc. to Xxxxx X. Xxxxxx, Xx.;
together with all moneys, payments, proceeds and benefits attributable or
accruing to such property including, but not limited to, all payment of
principal and accrued interest, and any other properties or benefits to which
the Debtor is or may hereafter become entitled to receive on account of such
property, and in the event that the Debtor shall receive any of such, the Debtor
shall hold the same as trustee for Secured Party and will immediately deliver
the same to Secured Party to be held hereunder in the same manner as the
1
property specifically described above is held hereunder. All of the property in
which Secured Party is hereby granted a security interest shall herein sometimes
be called the "Collateral"
3. Warranty and Representation of Debtor. The Debtor hereby warrants,
covenants and agrees that (a) the Collateral is free and clear of any security
interest (other than the security interest herein granted), liens, restrictions
or encumbrances and the Debtor has the full right and power to transfer the
Collateral to the Secured Panty free and clear thereof and to enter into and
carry out this Agreement; (0) the Debtor will not sell or offer to sell or
otherwise transfer or encumber the Collateral or any interest therein without
the prior written consent of Secured Party; and (c) the security interest
granted hereby shall in no way be affected by any indulgence or indulgences,
extension or extensions, change or changes in the form, evidence, maturity, rate
of interest or otherwise of any of the Indebtedness, nor by want of presentment,
notice, protest, suit or indulgence upon any of the Indebtedness nor shall any
release of, or failure to perfect the security interest or lien in, any security
for or, of any of the parties liable for. the payment of the Indebtedness in any
manner affect or impair this pledge, and the same shall continue in full force
and effect in accordance with the terms hereof until the Indebtedness have been
fully satisfied.
4. Events of Default. The occurrence of any of the following events or
shall constitute an "Event of Default":
(a) Default in the payment or performance of any liability or obligation
of the Debtor to Secured Party including, without limitation, default
in the payment of the Indebtedness when due or declared due;
(0) The occurrence of any event or condition which constitutes an Event of
Default under the Note; or
(c) The levy of any attachment, execution, garnishment or other process
against all or any part of the Collateral in connection with any lien,
debt, judgment, assessment or obligation of the Debtor, or the levy of
any such process against any other property of Debtor which would tend
to have a material adverse effect upon the Debtor's ability to perform
its obligations to Secured Party.
5. Remedies of Secured Party
(a) Subject to the provision set forth in subparagraph (b) below, upon the
happening of any Event of Default specified herein, and at any time thereafter,
at the option of the holder thereof, all or any part of the Indebtedness shall
become immediately due and payable upon the failure of the Debtor, after thirty
(30) days written notice, to cure any Event of Default, and Secured Parry shall
have and may exercise with reference to the Collateral and Indebtedness any and
all of the rights and remedies of a secured party under the Uniform Commercial
Code as then in effect in the State of Texas, and as otherwise granted herein or
under any other applicable law or under any other agreements executed by the
2
Debtor, all of which rights and remedies shall be cumulative. Any holder of the
Indebtedness may be the purchaser of all or any part of the Collateral so sold
at any public sale (or if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale and thereafter hold the same
absolutely, free from any right or claim or right of whatever kind. Upon any
such sale, Secured Party shall have the right to deliver, indorse, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at any
such sale shall hold the Collateral so sold absolutely, free from any claim or
right of whatever kind. The Secured Party shall give the Debtor ten (1) days
written notice of its intention to make any such public or private sale. Such
notice, in the case of a public sale, shall state the time and place fixed for
such sale. 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. The Secured Party shall not be obligated to make any
such sale pursuant to any such notice. The Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by Secured Party
until the purchase price is paid by the purchaser thereof, but Secured Party
shall not incur any liability due to any failure of such purchaser to take up
and pay for the Collateral so sold and, upon such failure, such Collateral may
again be sold upon like notice.
b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREENIENT OR THE NOTE TO
THE CONTRARY, NEITHER THE MAKER NOR ANY OFFICER, DIRECTOR, OR SHAREHOLDER OF
XXXXXXX XXXX PRODUCTS, INC. OR HOUSTON WOODTECH, INC. SHALL HAVE ANY INDIVIDUAL
OR PERSONAL OBLIGATION OR LIABILITY FOR REPAYNIENT OF ANY AMOUNTS DUE UNDER THE
TERMS OF THE NOTE. AS SUCH, THE HOLDERS OF THIS AGREENIENT AND THE NOTE HEREBY
AGREE THAT THEY WILL NOT AT ANY TIME BRING ANY ACTION, SUIT, OR PROCEEDING
AGAINST THE MAKER, OR ANY OF THE OFFICERS, DIRECTORS, AND/OR SHAREHOLDERS OF HWP
AND/OR HWI, TO RECOVER A MONEY JUDGMENT FOR ANY SUM DUE HEREUNDER; PROVIDED,
HOWEVER, THAT THE HOLDERS MAY BRING AN ACTION, IF NECESSARY, TO FORECLOSE OR
ENFORCE ANY SECURITY INTEREST OR LIEN UNDER THIS AGREEMENT. IN THE EVENT AN
ACTION IS BROUGHT TO FORECLOSE ANY SUCH SECURITY INTEREST OR LIEN, THE HOLDER OF
THE NOTE, FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, BY THE ACCEPTANCE OF THE
RIGHTS UNDER THIS AGREEMENT AND THE NOTE, HEREBY WAIVES ANY RIGHT TO A
DEFICIENCY JUDGMENT AND AGREES TO LOOK SOLELY TO THE COLLATERAL FOR THE
SATISFACTION OF ANY AND ALL AMOUNTS DUE HEREUNDER OR ANY CLAIMS ASSERTED IN SUCH
FORECLOSURE OR ENFORCEMENT ACTION.
6. Waiver. No delay or omission on the part of either party in exercising
any rights hereunder shall operate as a waiver of any such right or any other
right. A waiver on any one or more occasions shall not be construed as a bar to
or waiver of any right or remedy on any future occasion.
3
7. Compliance with Applicable Laws. It is the intention of the parties
hereto to comply with applicable usury Laws; accordingly, it is agreed that
notwithstanding any provision to the contrary in this Agreement, or in any of
the instruments or documents evidencing the Indebtedness or otherwise relating
thereto, no such provision shall require the payment or permit the collection of
interest in excess of the maximum permitted by such laws. If any excess of
interest in such respect is provided for or shall be adjudicated to be so
provided for, in this Security Agreement, or in any of the instruments or
documents evidencing the Indebtedness or otherwise relating thereto, then in
such event (1) the provisions of paragraph shall govern and control, (2) neither
Debtor nor its successors or assigns or any other party liable for the payment
of me Indebtedness, shall he obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount permitted by such laws, (3)
any such excess which may have been collected shall be, at the option of the
holder or holders of the Indebtedness, either applied as a credit against the
then unpaid principal amount thereof or refunded, as applicable, to the Maker
thereof or Debtor and (4) the effective rate of interest shall be automatically
subject to reduction to the maximum lawful rate allowed to be lawfully
contracted for under applicable usury laws as now or hereafter construed by the
courts having jurisdiction.
8. Cooperation. The parties hereby agree to cooperate with and assist each
other in consummating the terms and conditions of this Agreement. The parties
further hereby agree to execute and deliver such instruments, assignments, or
other documents as may be reasonably necessary to effectuate and/or evidence the
terms of this Agreement.
9. Voluntariness; Advice of Counsel. This Agreement is fully and
voluntarily entered into by the parties hereto, and each of them, on the advice
of their counsel and have not relied upon the advice and/or direction of any
other party. Each party hereto states that they have read this Agreement,
obtained advice of counsel, understands all of its terms, and executes it
voluntarily and of their own free will and accord with the full knowledge and
understanding of its legal significance and consequences.
10. Notification of Parties. All notices, requests, demands and other
communications provided for hereunder shall be sent or communicated in writing
by certified mail, return receipt requested, courier, telex or tested telex,
telegram or cable (confirmed, in the case of a telex, telegram or cable, by a
letter delivered personally or dispatched by first class mail within twenty-four
(24) hours of the dispatch of such telex, telegram or
4
cable), or facsimile transmission telephonically confirmed, shall be mailed or
sent or delivered to the parties at their last known address. Any party may, by
notice as provided above, designate in writing a different address for the
sending of notices. Any such notice shall be effective as of the date of receipt
by the receiving party.
11. Entire Agreement: Merger. This Agreement, together with any and all
documents, instruments and agreements which may be executed in connection
herewith, embodies the entire agreement and understanding among the parties
hereto and supersedes all prior negotiations, agreements and understandings
relating to the subject matter hereof. There exists no other agreements or
understandings between the parties, explicit or implicit, with respect to the
subject matter hereof. Each party acknowledges that it has expressly bargained
for a prohibition of any implied or oral amendments or modifications of any
kind, nature or character. Each party acknowledges and agrees that this
Agreement is fully integrated and not in need of parol evidence in order to
reflect the intentions of the parties, and that the parties intend the literal
words of this Agreement to govern the transactions described herein, and for all
prior negotiations, drafts and other extraneous communications to have no
significance or evidentiary effect whatsoever.
12. Benefit. Each of the parties to this Agreement understand and agree
that this Agreement shall be binding upon and inure to the benefit of the
parties hereto as well as their respective employees, officers, directors
shareholders, agents, affiliates, subsidiaries, parent companies, legal
representatives, accountants, xxxxxxxxx, xxxxx, xxxxxxx, legal representatives,
and assigns.
13. Waiver. The failure of either party to insist in any one or more
instances upon performance of any term or condition of this Agreement or any
applicable contracts hereunder shall not be construed as a waiver of its future
performance or rights thereunder. The obligations of either parry with respect
to such term, covenant, or condition shall continue in force and effect.
14. Modification of Agreement. The parties further acknowledge and agree
that no waiver, amendment, modification, supplement, termination or other change
to this Agreement shall be effective unless the same shall be in writing and
signed by the party against whom such waiver or other modification is sought to
be enforced.
15. Severability. In the event any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not in any
manner affect the remaining provisions hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
5
16. Merger of Documents. This Agreement and all agreements and documents
contemplated hereby constitute one agreement and are interdependent upon each
other in all respects.
17. Governing Law. This Agreement and the other agreements executed in
connection herewith shall be enforced, construed, and interpreted pursuant to
the laws of the State of Texas. This Agreement shall be performable in Xxxxxx
County, Texas.
18. Headings. Headings and captions are included solely for convenience of
reference and if there is any conflict between captions and the text of this
Agreement, the text shall control.
19. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original for all purposes, but
all of which together shall constitute the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year set forth above.
DEBTOR:
/s/ Xxxxx X. Xxxxxx, Xx.
------------------------
XXXXX X. XXXXXX, XX.
SECURED PARTY:
PHOENIX RESOURCES TECHNOLOGIES, INC.
By /s/ Xxxxx X. Xxx
-------------------------
Name: Xxxxx X. Xxx
Title: President
6
COUNTY OF {} RICHIE
STATE OF {} WEST VIRGINIA
ASSIGNMENT
This Agreement of Assignment is made the 31st day of January, 1996, by and
between Xxxxx X. Xxxxxx, an individual, and a resident of the State of Texas,
with offices at Xxxxxx Texas and Xxxxxx Resources, Inc a Nevada Corporation,
with offices at 0000 X. Xxxxxx xxxxx 000, Xxxxxxxxxx, XX. 00000.
For in consideration of the mutual covenants and conditions stated herein and
the consideration, the sufficiency of such is hereby acknowledged and agreed to
by both Assignor and Assignee, they agree as follows:
The assignor hereby assigns, transfers and sets over to the assignee, all its
right, title and interest in the oil and as xxxxx on attached Exhibit A, and all
equipment necessary to operate the w xxxx appurtenant thereto and the lease on
the Properties listed in attached Exhibit A and made a part hereof as though
fully set for the herein and subject only to the existing agreement of
operation.
Assignee has thirty days to Provide a proper and valid bond acceptable by the
State of West Virginia and transfer all xxxxx listed in Exhibit "A" of this
agreement at the expense of the Assignee.
Executed and delivered as of the 31st day of January, 1996.
By /s/ Xxxxx X. Xxxxxx
----------------------
Assignor
By /s/ Xxxxx X. Xxx
----------------------
Assignee
0
Xxxxx xx Xxxxx
Xxxxxx xx Xxxxxx
Xx the 31st day of January 1996, Xxxxx X Xxxxxx Xx. personally came before me
and, being duly sworn, did state that he is the person described in the above
document and that he signed the above document in my presence.
Notary Public, for the County of Xxxxxx
State of Texas /s/ La Xxxxx Xxxxxx
-------------------
My commission expires 7/2/97
------
(Seal)
Xxxxx xx Xxxxx
Xxxxxx xx Xxxxxx
Xx the 31st day of January 1996, Xxxxx X. Xxx personally came before me and
being duly sworn, did state that he is the person described in the above
document and that he signed the above document in my presence
Notary Public, for the county of Xxxxxx
State of Texas /s/ La Xxxxx Xxxxxx
My Commission expires 7/2/97
------
(Seal)
8
Well Permit No.
---- ----------
Xxxxxxxxxx #1 85 5234
Xxxxx #1 85 5393
Xxxx #1 85 5591
Xxxxxx 85 5611
Xxxxxxx #1 85 5720
A Xxxxxxx #1 85 5735
A Xxxxx 85 5844
F Xxxxx #1 85 5845
S Bird #1 85 5902
Xxxxxxxxx #1 85 5956
Wince #6 85 6114
Xxxxxxxxx #4 85 6150
Xxxxxxx #1 85 6238
Xxxxxx 85 6281
Xxxxxxxxx 85 6309
Xxxxxx 85 6367
Xxxxxx 85 6414
Xxxxxxx #1 85 6500
Xxxxxxx 85 6538
Xxxxxx/Xxxxxxx 85 6552
Sohofield 85 6596
Xxxxxxxx #1 85 6653
X. Xxxx #0 00 0000
Xxxxxxxxx 85 6872
Xxxxxxxxxx 85 6928
X. Xxxxx #2 85 7122
Xxxxxxx #2 85 7131
Xxxxxxx 85 7228
Goodnight 85 7239
COUNTY OF {} PLEASANT
STATE OF {} WEST VIRGINIA
ASSIGNMENT
This Agreement of Assignment is made the 3lst day of January, 1996, by and
between Xxxxx X. Xxxxxx, an individual, and a resident of the State of Texas,
with offices at Xxxxxx Texas and Xxxxxx Resources, Inc a Nevada Corporation,
with offices at 0000 X. Xxxxxx xxxxx 000, Xxxxxxxxxx, XX. 00000.
For in consideration of the mutual covenants and conditions stated herein and
the consideration, the sufficiency of such is hereby acknowledged and agreed to
by both Assignor and Assignee, they agree as follows:
The assignor hereby assigns, transfers and sets over to the assignee, all its
right, title and interest in the oil and gas xxxxx on attached Exhibit A, and
all equipment necessary to operate the xxxxx appurtenant thereto and the lease
on the properties listed in at attached Exhibit A and made a part hereof as
though fully set for the herein and subject only to the existing agreement of
operation.
Assignee has thirty days to provide a proper and valid bond acceptable by the
State of West Virginia and transfer all xxxxx listed in Exhibit 'A" of this
agreement at the expense of the Assignee.
Executed and delivered as of the 31st day of January, 1996.
By /s/ Xxxxx X. Xxxxxx
-------------------
Assignor
By /s/ Xxxxx X. Xxx
-------------------
Asignee
State of Texas
County of Xxxxxx
On the 31st day of January 1996, Xxxxx X. Xxxxxx Xx. personally came before me
and, being duly sworn, did state that he is the person described in the above
document and that he signed the above document in my presence
Notary Public, for the count of Newton
State of Texas /s/ La Xxxxx Xxxxxx
My commission expires 7/2/97
(Seal)
Xxxxx xx Xxxxx
Xxxxxx xx Xxxxxx
Xx the 31st day of January 1996, Xxxxx X. R came before me and being duly sworn,
did state he is the person described in the above document and the above
document in my presence
Notary Public, for the County of Xxxxxx
State of Texas /s/ La Xxxxx Xxxxxx
My Commission expires 7/2/97
(Seal
Exhibit A
Xxxxxxxxx County
Well Permit No.
---- ---------
Xxxxxx #l 73 1260
Xxxxxxx #1 73 1298
Xxxx #1 73 1381
Xxxxxx #1 73 1384
Austin /Xxxxx #1 73 1404
Austin /Xxxxx #2 73 1405
X Xxxxxxx #0 00 0000
Xxxxx #1 73 0000
Xxxxx #0 00 0000
Xxxxxx #1 73 1481
Xxxxxxxx #1 73 1493
White #1 73 1501
Xxxxxxx #1 73 1585
Severn #S-l 73 1714
Plum #5-i 73 1863
Severn #5-1 73 1869
Barnhant #S-l 73 1870
J Greggs #1 73 1872
Xxxxxxxxx #0 00 0000
Xxxxxxxxx ~3 73 1916
