SECURITY AGREEMENT
This Security Agreement (this "Agreement") is entered as of this 20th day
of February, 1997, by and between XXXXXX PRODUCTION SERVICES, INC., a Texas
corporation ("Debtor"), whose address is 000 X.X. Xxxx 000, Xxxxx 000, Xxx
Xxxxxxx, Xxxxx 00000, and THE FROST NATIONAL BANK ("Secured Party"), whose
address is 000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxx 00000, who, for good and
valuable consideration, agree as follows:
ARTICLE I
AGREEMENT; INDEBTEDNESS
1.1 SECURITY INTEREST. Subject to the applicable terms of this Agreement,
for good and valuable consideration, the receipt and sufficiency of which Debtor
acknowledges, Debtor assigns and transfers to Secured Party, and grants to
Secured Party a continuing security interest in and lien upon, the Collateral
(as defined in Article II below) to secure the payment and the performance of
the Indebtedness (the "Security Interest").
1.2 INDEBTEDNESS. The following indebtedness and obligations (the
"Indebtedness") are secured by this Agreement:
(a) All debt, obligations, liabilities, and agreements of Debtor to
Secured Party, now or hereafter existing, arising directly between Debtor and
Secured Party or acquired outright, conditionally, or as collateral security
from another by Secured Party, absolute or contingent, joint or several, secured
or unsecured, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, including without
limitation that certain Revolving Note in the original principal amount of
$50,000,000.00, executed by XXXXXX PRODUCTION SERVICES, INC., and payable to the
order of Secured Party, and all renewals, extensions, modifications, or
rearrangements of any of the foregoing.
(b) Secured Party's participation in any debt of Debtor to another
person.
(c) All costs incurred by Secured Party to obtain, preserve,
perfect, and enforce this Agreement and the Security Interest, to collect the
Indebtedness, and to maintain, preserve, collect, and enforce the Collateral,
including but not limited to taxes, assessments, insurance premiums, repairs,
reasonable attorney's fees and legal expenses, feed, rent, storage costs, and
expenses of sale.
(d) Interest on the above amounts as agreed between Secured Party
and Debtor, or if there is no agreement, at the highest lawful rate.
(e) All debt, obligations and liabilities of XXXXXX PRODUCTION
SERVICES, INC., (such party, together with the Debtor named above, being
hereinafter referred to collectively as "Debtor") to Secured Party of the kinds
described in this Section 1.2, now existing or hereafter arising.
ARTICLE II
COLLATERAL
2.1 DESCRIPTION OF COLLATERAL. The Security Interest is granted in the
following (the "Collateral"):
(a) All accounts receivable of Debtor, including any intangible
property or right now or hereafter owned by Debtor at any time consisting, in
whole or part, of a legally enforceable right to receive from any person, or
require the payment by any person of, a certain amount of money whenever
arising, however or whenever acquired or evidenced, whether due or to become
due, and whether or not earned by performance, including, but not limited to,
obligations evidenced by notes, installment purchase agreements, accounts,
and/or contracts, and all contract rights, chattel paper, instruments and
general intangibles.
(b) All policies of insurance covering the Collateral and proceeds
thereof.
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(c) All security for the payment of any of the Collateral, and all
goods which gave or will give rise to any of the Collateral or are evidenced,
identified, or represented therein or thereby.
(d) All property similar to the above hereafter acquired by Debtor.
(e) All proceeds of the items described in subsections (a) through
(d) of this Section 2.1.
2.2 AFTER ACQUIRED CONSUMER GOODS. The Security Interest shall attach to
after acquired consumer goods only to the extent permitted by Section 9.204(b)
of the Texas Business and Commerce Code (Texas UCC).
ARTICLE III
DEBTOR'S WARRANTIES
Debtor represents and warrants to Secured Party as follows:
3.1 FINANCING STATEMENTS. No financing statement covering the Collateral
is or will be on file in any public office, except the financing statements
relating to this Security Interest. In the past five (5) years, Debtor has not
used or done business under any name other than its legal name set forth on the
first page of this Agreement.
3.2 OWNERSHIP. Debtor owns, or will use the proceeds of any loans by
Secured Party to become the owner of, the Collateral free from any setoff,
claim, restriction, lien, security interest, or encumbrance except liens for
taxes not yet due and the Security Interest.
3.3 FIXTURES AND ACCESSIONS. None of the Collateral is affixed to real
estate or is an accession to any goods, or will become a fixture or accession,
except as expressly set out herein.
3.4 CLAIMS OF DEBTORS ON COLLATERAL. No account debtors and other obligors
whose debts or obligations are part of the Collateral have any right to setoffs,
counterclaims, or adjustments, or any defenses in connection therewith.
3.5 ACCURACY OF FINANCIAL STATEMENTS. All balance sheets, earnings
statements, and other financial data which have been or hereafter may be
furnished to Secured Party to induce it to permit the Indebtedness or to make
this Agreement or in conjunction herewith truly represent or shall truly
represent the financial condition and operations of Debtor as of the dates and
for the periods shown thereon; and all other information, reports, papers, and
data furnished to Secured Party are or shall be, at the time furnished, accurate
and correct in all respects and complete insofar as necessary to give Secured
Party a true and accurate knowledge of the subject matter.
3.6 POWER AND AUTHORITY. Debtor has full power and authority to make this
Agreement.
3.7 PRINCIPAL PLACE OF BUSINESS. Debtor's principal place of business and
chief executive office is at Debtor's address stated above in San Antonio, Bexar
County, Texas, and such address is also where Debtor keeps its books and
records.
3.8 LOCATION OF COLLATERAL. All instruments, chattel paper, securities,
and certificates of title comprising any part of the Collateral have been
delivered to Secured Party.
3.9 PERFECTION. Upon the filing of the UCC financing statements with the
Office of the Texas Secretary of State of Texas and in the offices of the County
Clerk of Bexar County, Texas, and upon Secured Party's obtaining possession of
all Debtor's documents, instruments, chattel paper, securities, and certificates
of title, and upon Secured Party's obtaining control of Debtor's Investment
Property, the Security Interest will constitute a valid and perfected lien upon
and security interest in the Collateral, subject to no equal or prior lien.
3.10 SOLVENCY. As of the date hereof, and after giving effect to this
Agreement and the completion of all other transactions contemplated by Debtor at
the time of the execution of this Agreement, (i) Debtor is
SECURITY AGREEMENT Page 2
and will be solvent, (ii) the fair saleable value of Debtor's assets exceeds and
will continue to exceed Debtor's liabilities (both fixed and contingent), (iii)
Debtor is paying and will continue to be able to pay its debts as they mature,
and (iv) if Debtor is not an individual, Debtor has and will have sufficient
capital to carry on Debtor's businesses and all businesses in which Debtor is
about to engage.
ARTICLE IV
DEBTOR'S COVENANTS
Debtor covenants and agrees that:
4.1 INDEBTEDNESS AND THIS AGREEMENT. Debtor shall pay the Indebtedness in
accordance with its terms and shall promptly perform all of his (or its)
agreements herein and in any other agreements between him (or it) and Secured
Party.
4.2 OWNERSHIP OF COLLATERAL. At the time Debtor grants to Secured Party a
security interest in any Collateral, Debtor shall be the absolute owner thereof
and shall have the right to grant such security interest. Debtor shall defend
the Collateral against all claims and demands of all persons at any time
claiming any interest therein adverse to Secured Party. Debtor shall keep the
Collateral free from all liens and security interests except those for taxes not
yet due and the Security Interest.
4.3 INSURANCE. Debtor shall insure the Collateral with companies
acceptable to Secured Party against such casualties and in such amounts as
Secured Party shall require. All insurance policies shall be written for the
benefit of Debtor and Secured Party as their interests may appear, or in other
form satisfactory to Secured Party, and such policies or certificates evidencing
the same shall be furnished to Secured Party. All policies of insurance shall
provide for written notice to Secured Party at least 10 days prior to
cancellation. Risk of loss or damage is Debtor's to the extent of any deficiency
in any effective insurance coverage. Secured Party is appointed Debtor's
attorney-in-fact to collect any return or unearned premiums or the proceeds of
such insurance and to endorse any draft or check payable to Debtor therefor.
4.4 MAINTENANCE. Debtor shall keep and maintain the Collateral in good
condition, reasonable wear and tear excepted.
4.5 SECURED PARTY'S COSTS. Debtor shall pay all costs necessary to obtain,
preserve, perfect, defend, and enforce this Security Interest, collect the
Indebtedness, and preserve, defend, enforce, and collect the Collateral,
including but not limited to taxes, assessments, insurance premiums, repairs,
reasonable attorney's fees and legal expenses, feed, rent, storage costs, and
expenses of sales. Whether Collateral is or is not in Secured Party's
possession, and without any obligation to do so and without waiving Debtor's
default for failure to make any such payment, Secured Party at its option may
pay any such costs and expenses, discharge encumbrances on the Collateral, and
pay for insurance of Collateral, and such payment shall be a part of the
Indebtedness. Debtor agrees to reimburse Secured Party on demand for any costs
so incurred.
4.6 INFORMATION AND INSPECTION. Debtor shall (i) furnish Secured Party any
financial statements of Debtor or reports to Debtor by accountants or others
pertaining to Debtor's business as soon as available, and any information with
respect to the Collateral requested by Secured Party; (ii) allow Secured Party
to inspect the Collateral, at any time and wherever located, and to inspect and
copy, or furnish Secured Party with copies of, all records relating to the
Collateral and the Indebtedness; (iii) furnish Secured Party such information as
Secured Party may request to identify inventory, accounts, and general
intangibles in Collateral, at the time and in the form requested by Secured
Party; and (iv) deliver upon request to Secured Party shipping and delivery
receipts evidencing the shipment of goods and invoices evidencing the receipt
of, and the payment for, inventory in Collateral.
4.7 ADDITIONAL DOCUMENTS. Debtor shall sign any papers furnished by
Secured Party which are necessary in the judgment of Secured Party to obtain,
maintain, and perfect the Security Interest and to enable Secured Party to
comply with the Federal Assignment of Claims Act or any other federal or state
law in order to obtain or perfect Secured Party's interest in collateral or to
obtain proceeds of collateral.
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4.8 PARTIES LIABLE ON COLLATERAL. Debtor will preserve the liability of
all obligors on any Collateral, will preserve the priority of all security
therefor, and will deliver to Secured Party the original certificates of title
on all motor vehicles included in the Collateral. Secured Party shall have no
duty to preserve such liability or security, but may do so at the expense of
Debtor, without waiving Debtor's default.
4.9 MODIFICATION OF COLLATERAL. Without the written consent of Secured
Party, which consent shall not be unreasonably withheld, Debtor shall not agree
to any modification of any of the terms of any accounts, contracts, chattel
paper, general intangibles, or instruments constituting part of the Collateral.
4.10 RIGHT OF SECURED PARTY TO NOTIFY DEBTORS. At any time, whether Debtor
is or is not in default under this Agreement, Secured Party may notify persons
obligated on any Collateral to make payments directly to Secured Party and
Secured Party may take control of all proceeds of any Collateral. Until Secured
Party elects to exercise such rights, Debtor, as agent of Secured Party, shall
collect and enforce all payments owed on Collateral.
4.11 DELIVERY OF RECEIPTS OF SECURED PARTY; REJECTED GOODS. Debtor shall
deposit, upon receipt and in the form received, with any necessary endorsement,
all payments received as proceeds of Collateral, in a special bank account in a
bank of Secured Party's choice over which Secured Party alone shall have power
of withdrawal. The funds in said account shall secure the Indebtedness. Secured
Party is authorized to make any endorsement in Debtor's name and behalf. Pending
such deposit, Debtor shall not mingle any such payments with any of Debtor's
other funds or property, but will hold them separate and upon an express trust
for Secured Party. Secured Party may from time to time apply the whole or any
part of the funds in the special account against the Indebtedness. Unless
Secured Party notifies Debtor in writing that it dispenses with any one or more
of the following requirements, Debtor shall:
(a) inform Secured Party immediately of the rejection of goods,
delay in delivery or performance, or claim made, in regard to any Collateral;
(b) keep returned goods segregated from Debtor's other property, and
hold the goods as trustee for Secured Party until it has paid Secured Party the
amount loaned against the related account or chattel paper and deliver the goods
on demand to Secured Party; and
(c) pay Secured Party the unpaid amount of any account in Collateral
(i) if the account is not paid when due; (ii) if purchaser rejects the goods or
services covered by the account; or (iii) if Secured Party shall at any time
reject the account as unsatisfactory. Secured Party may retain the account in
Collateral. Secured Party may charge any deposit amount of Debtor with any such
amounts.
4.12 RECORDS OF COLLATERAL. Debtor at all times will maintain accurate
books and records covering the Collateral. Debtor immediately will xxxx all
books and records with an entry showing the absolute assignment of all accounts
in Collateral to Secured Party and Secured Party is hereby given the right to
audit the books and records of Debtor relating to Collateral at any time and
from time to time. The amounts shown as owed to Debtor on Debtor's books and on
any assignment schedule will be the undisputed amounts owing and unpaid. Debtor
shall disclose to Secured Party all agreements modifying any account,
instrument, or chattel pater.
4.13 DISPOSITION OF COLLATERAL. If disposition of any Collateral gives
rise to an account, chattel paper, or instrument, Debtor immediately shall
notify Secured Party, and upon request of Secured Party shall assign or endorse
the same to Secured Party. No Collateral may be sold, leased, manufactured,
processed, or otherwise disposed of by Debtor in any manner without the prior
written consent of Secured Party.
4.14 ACCOUNTS RECEIVABLE. Each account receivable constituting Collateral
will represent the valid and legally enforceable obligation of third parties and
shall not be evidenced by any instrument or chattel paper. In the event any
account shall give rise to any instrument or chattel paper, Debtor shall
immediately endorse the same to Secured Party and deliver all original such
instruments and chattel paper to Secured Party.
4.15 LOCATION OF ACCOUNTS. Debtor shall give Secured Party written notice
of each office of Debtor in which records of Debtor pertaining to accounts in
Collateral are kept, and of any change of any such
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location. If no such notice is given, all records of Debtor pertaining to
accounts are and shall be kept at Debtor's address shown above.
4.16 NOTICE OF CHANGES. Debtor will notify Secured Party immediately of
any material change in the Collateral, of a change in Debtor's residence or
location, of a change in any matter warranted or represented by Debtor in this
Agreement or furnished to Secured Party, and of any Event of Default.
4.17 USE AND REMOVAL OF COLLATERAL. Debtor will not use the Collateral
illegally nor permit the Collateral to be affixed to real or personal property
without the prior written consent of Secured Party. Debtor will not permit any
of the Collateral to be removed from the locations specified herein without the
written consent of Secured Party.
4.18 POSSESSION OF COLLATERAL. If the Collateral is chattel paper,
documents, instruments, or investment securities or other instruments, Secured
Party may deliver a copy of this Agreement to the broker or seller thereof, or
any person in possession thereof, and such delivery shall constitute notice to
such person of Secured Party's security interest therein and shall constitute
Debtor's instruction to such person to deliver to Secured Party certificates or
other evidence of the same as soon as available. Debtor will deliver all
investment securities, other instruments, documents, and chattel paper which are
part of the Collateral and in Debtor's possession to the Secured Party
immediately, or if hereafter acquired, immediately following acquisition,
appropriately endorsed to Secured Party's order, or with appropriate, executed
powers. Debtor waives presentment, demand, notice of dishonor, protest, and all
other notices with respect thereto.
4.19 CHATTEL PAPER. Debtor has perfected or will perfect a security
interest by means satisfactory to Secured Party in goods covered by chattel
paper in Collateral.
4.20 CONSUMER CREDIT. If any Collateral or proceeds includes obligations
of third parties to Debtor, the transactions giving rise to the Collateral shall
conform in all respects to the applicable state or federal consumer credit law.
DEBTOR SHALL HOLD HARMLESS AND INDEMNIFY SECURED PARTY AGAINST ANY COST, LOSS,
OR EXPENSE INCLUDING ATTORNEY'S FEES, ARISING FROM DEBTOR'S BREACH OF THIS
COVENANT.
4.21 CHANGE OF NAME. Debtor shall not change its name (or any assumed name
or other name under which Debtor does business) or its corporate structure
unless at least thirty (30) days prior to the effective date of any such name
change, Debtor gives Secured Party written notice of such intended name change
and the new name or any change in its corporate structure. Debtor will not
change its principal place of business, chief executive office, or the place
where it keeps its books and records unless Debtor (i) shall have given Secured
Party thirty (30) days prior written notice thereof, and (ii) shall have taken
all action deemed necessary or desirable by Secured Party to cause the Security
Interest to be and remain perfected with the priority required by this
Agreement. Debtor shall execute all such documents and agreements (including
without limitation security agreements, financing statements, and amendments to
financing statements) as Secured Party may reasonably request in connection with
any such name change
4.22 NOTATION ON TITLE CERTIFICATES. If certificates of title are issued
or outstanding with respect to any of the Collateral, Debtor will cause the
Security Interest to be properly noted therein.
4.23 POWER OF ATTORNEY. Debtor appoints Secured Party as Debtor's
attorney-in-fact with full power in Debtor's name and behalf to do every act
which Debtor is obligated to do or may be required to do hereunder; however,
nothing in this section shall be construed to obligate Secured Party to take any
action hereunder.
4.24 DEBTOR'S WAIVERS. Debtor waives notice of the creation, advance,
increase, existence, extension, or renewal of, and of any indulgence with
respect to, the Indebtedness; waives notice of intent to accelerate, notice of
acceleration, notice of intent to demand, presentment, demand, notice of
dishonor, and protest; waives notice of the amount of the Indebtedness
outstanding at any time, notice of any change in financial condition of any
person liable for the Indebtedness or any part thereof, notice of any Event of
Default, and all other notices respecting the Indebtedness; and agrees that
maturity of the Indebtedness and any part thereof may be accelerated, extended,
or renewed one or more times by Secured Party in its discretion, without notice
to Debtor.
SECURITY AGREEMENT Page 5
4.25 OTHER PARTIES AND OTHER COLLATERAL. No renewal or extension of or any
other indulgence with respect to the Indebtedness or any part thereof, no
release of any security, no release of any person (including any maker,
endorser, guarantor, or surety) liable on the Indebtedness, no delay in
enforcement of payment, and no delay or admission or lack of diligence or care
in exercising any right or power with respect to the Indebtedness or any
security therefor or guaranty thereof or under this Agreement shall in other
manner impair or affect the rights of Secured Party under the law, under this
Agreement, or under any other agreement pertaining to the other security for the
Indebtedness, before foreclosing upon the Collateral for the purpose of paying
the Indebtedness. Debtor waives any right to the benefit of or to require or
control application of any other security or proceeds thereof, and Debtor agrees
that Secured Party shall have no duty or obligation to Debtor to apply to the
Indebtedness any such other security or proceeds thereof.
ARTICLE V
RIGHTS AND POWERS OF SECURED PARTY
5.1 GENERAL. Secured Party before or after default without liability to
Debtor may: obtain from any person information regarding Debtor or Debtor's
business, which information any such person also may furnish without liability
to Debtor; require Debtor to give possession or control of any Collateral to
Secured Party; endorse as Debtor's agent any instruments, documents, or chattel
paper in Collateral or representing proceeds of Collateral; contact account
debtors directly to verify information furnished by Debtor; take control of
proceeds; release Collateral in its possession to any Debtor temporarily or
otherwise; require additional collateral; reject as unsatisfactory any property
hereafter offered by Debtor as Collateral; set standards from time to time to
govern what may be used as after-acquired collateral; designate, from time to
time, a certain percent of the Collateral as the loan value and require Debtor
to maintain the Indebtedness at or below such figure; take control of funds
generated by the Collateral, such as cash dividends, interest, and proceeds or
refunds from insurance, and use same to reduce any part of the Indebtedness and
exercise all other rights which an owner of such Collateral may exercise, except
the right to vote or dispose of Collateral before an Event of Default; at any
time transfer any of the Collateral or evidence thereof into its own name of
that of its nominee; and demand, collect, convert, redeem, receipt for, settle,
compromise, adjust, xxx for, foreclose, or realize upon Collateral, in its own
name or in the name of Debtor, as Secured Party may determine in its sole and
absolute discretion. Secured Party shall not be liable for failure to collect
any account or instrument, or for any act or omission on the part of the Secured
Party, its officers, agents, or employees, except willful misconduct. The
foregoing rights and powers of Secured Party will be in addition to, and not a
limitation upon, any rights and powers of Secured Party given by law, elsewhere
in this Agreement, or otherwise. If Debtor fails to maintain any required
insurance, to the extent permitted by applicable law Secured Party may (but is
not obligated to) purchase single interest insurance coverage for the Collateral
which insurance may at Secured Party's option (i) protect only Secured Party and
not provide any remuneration or protection for Debtor directly and (ii) provide
coverage only after the Indebtedness has been declared due as herein provided.
The premiums for any such insurance purchased by Secured Party shall be a part
of the Indebtedness and shall bear interest as provided in Section 1.2(d) above.
ARTICLE VI
DEFAULT
6.1 EVENTS OF DEFAULT. The following are events of default under this
Agreement ("Events of Default"):
(a) default in the timely payment of any part of the Indebtedness or
in performance or observance of the terms and conditions herein or in any other
agreement between Debtor and Secured Party, including any default under the
terms of that certain Credit Agreement dated February 20th, 1997, between Debtor
and Secured Party, relating to the Indebtedness;
(b) any warranty, representation, or statement made or furnished to
Secured Party by Debtor proves to have been false in any material respect when
made or furnished;
(c) acceleration of the maturity of debt of Debtor to any other
person;
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(d) substantial change in any fact warranted or represented in this
Agreement or in any other agreement between Debtor and Secured Party or in any
statement, schedule, or other writing furnished in connection therewith;
(e) sale, loss, theft, destruction, encumbrance, or transfer of any
Collateral in violation hereof, or substantial damage to any Collateral;
(f) belief by Secured Party that the prospect of payment of the
Indebtedness or performance of this Agreement is impaired;
(g) death, incapacity, dissolution, merger, or consolidation,
termination of existence, insolvency or business failure of Debtor or any person
liable on the Indebtedness; commencement of proceedings for the appointment of a
receiver for any property of Debtor; commencement of any proceeding under any
bankruptcy or insolvency law by or against Debtor (or any corporate action shall
be taken to effect same), or any partnership of which Debtor is a partner, or by
or against any person liable upon the Indebtedness or any part thereof, or
liable upon Collateral;
(h) levy on, seizure, or attachment of any property of Debtor;
(i) a judgment against Debtor in excess of $500,000.00 becomes
final; or
(j) any liability or agreement of third parties to Debtor or on the
Collateral shall not be paid or performed in accordance with the terms thereof.
6.2 REMEDIES OF SECURED PARTY UPON DEFAULT. When an Event of Default
occurs, and at any time thereafter, Secured Party without notice or demand may
declare the Indebtedness in whole or part immediately due and may enforce
payment of the same and exercise any rights under the Texas UCC, rights and
remedies of Secured Party under this Agreement, or otherwise. Secured Party may
require Debtor to assemble the Collateral and make it available to Secured Party
at a place which is reasonably convenient to both parties. Unless the Collateral
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Secured Party will give Debtor
reasonable notice of the time and place of any public sale thereof or of the
time after which any private sale or other intended disposition thereof is to be
made. Expenses of retaking, holding, preparing for sale, selling, leasing, or
the like shall include Secured Party's reasonable attorney's fees and legal
expenses. Secured Party shall be entitled to immediate possession of all books
and records evidencing any accounts or general intangibles or pertaining to
chattel paper covered by this Agreement and shall have the authority to enter
upon any premises upon which any of the same, or any Collateral, may be situated
and remove the same therefrom without liability. Secured Party may surrender any
insurance policies in Collateral and receive the unearned premium thereon.
Debtor shall be entitled to any surplus after payment of the Indebtedness and
shall be liable to Secured Party for any deficiency. The process of any
disposition after default available to satisfy the Indebtedness shall be applied
to the Indebtedness in such order and in such manner as Secured Party in its
discretion shall decide. If, in the opinion of Secured Party, there is any
question that a public sale or distribution of any Collateral will violate any
state or federal securities law, Secured Party (i) may offer and sell securities
privately to purchasers who will agree to take them for investment purposes and
not with a view to distribution and who will agree to imposition of restrictive
legends on the certificates representing the security, or (ii) may sell such
securities in an intrastate offering under Section 3(a)(11) of the Securities
Act of 1933, and no sale so made in good faith by Secured Party shall be deemed
to be not "commercially reasonable" because so made.
ARTICLE VII
GENERAL
7.1 PARTIES BOUND. Secured Party's rights under this Agreement and the
Security Interest shall inure to the benefits of its successors and assigns, and
in the event of any assignment or transfer of any of the Indebtedness or the
Collateral, Secured Party thereafter shall be fully discharged from any
responsibility with respect to the Collateral so assigned or transferred, but
Secured Party shall retain all rights and powers hereby given with respect to
any of the Indebtedness or Collateral not so assigned or transferred. All
representations,
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warranties, and agreements of Debtor if more than one are joint and several, and
all shall be binding upon the personal representatives, heirs, successors, and
assigns of Debtor.
7.2 WAIVER. No delay of Secured Party in exercising any power or right
shall operate as a waiver thereof; nor shall any single or partial exercise of
any power or right preclude other or further exercise thereof or the exercise of
any other power or right. No waiver by Secured Party of any right hereunder of
any default by Debtor shall be binding upon Secured Party unless in writing, and
no failure by Secured Party to exercise any power or right hereunder or waiver
of any default by Debtor shall operate as a waiver of any other or further
exercise of such right or power of any further default.
7.3 AGREEMENT CONTINUING. This Agreement shall constitute a continuing
agreement, applying to all future as well as existing transactions, whether or
not of the character contemplated at the date of this Agreement, and if all
transactions between Secured Party and Debtor shall be closed at any time, shall
be equally applicable to any new transactions thereafter. Provisions of this
Agreement, unless by their terms exclusive, shall be in addition to other
agreements between the parties.
7.4 DEFINITIONS. Unless the context indicates otherwise, definitions in
the Texas UCC apply to words and phrases in this Agreement; if Texas UCC
definitions conflict, Chapter 9 definitions apply.
7.5 NOTICE. Notice shall be deemed reasonable if mailed postage prepaid at
least 5 days before the related action (or if the Texas UCC elsewhere specifies
a longer period, such longer period) to Debtor's address shown above.
7.6 INTEREST. No agreement relating to the Indebtedness shall be construed
to be a contract for or to authorize charging or receiving, or require the
payment or permit the collection of, interest at a rate or in an amount above
that authorized by law. Interest payable under any agreement above that
authorized by law shall be reduced automatically to the highest amount permitted
by law.
7.7 MODIFICATIONS. No provision hereof shall be modified or limited except
by a written agreement expressly referring hereto and to the provisions so
modified or limited and signed by Debtor and Secured Party, nor by course of
conduct, usage of trade, or by the law merchant.
7.8 SEVERABILITY. The unenforceability of any provision of this Agreement
shall not affect the enforceability or validity of any other provision.
7.9 GENDER AND NUMBER. Where appropriate, the use of one gender shall be
construed to include the others or any of them; and the singular number shall be
construed to include the plural, and vice versa.
7.10 APPLICABLE LAW AND VENUE. THIS AGREEMENT SHALL BE CONSTRUED ACCORDING
TO THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA
APPLICABLE TO TRANSACTIONS IN THE STATE OF TEXAS. Except at otherwise stated,
this Agreement and the Security Interest shall be construed in accordance with
the Texas Uniform Commercial Code [Texas Business and Commerce Code ss. 1.01, ET
SEQ. ("Texas UCC"). This Agreement is performable by Debtor in the county of
Secured Party's address set out above.
7.11 FINANCING STATEMENT. A carbon, photographic, or other reproduction of
this security agreement or any financing statement covering the Collateral shall
be sufficient as a financing statement.
7.12 LIMITATIONS OF LAW. If any law prohibits or limits any charge or
expense provided for in this Agreement in connection with any loan secured
hereby, such charge or expense will not be made or incurred in connection with
such loan beyond the limits permitted by such law.
EXECUTED as of the 20th day of February, 1997.
SECURITY AGREEMENT Page 8
DEBTOR:
XXXXXX PRODUCTION SERVICES, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Its:Xxxxxxx X. Xxxxxx, President
SECURED PARTY:
THE FROST NATIONAL BANK
By:/s/ Xxx Xxxxxx
Its:__________________________________
SECURITY AGREEMENT Page 9
